The fact that financial institutions are privy to information from which they could profit, if they were allowed to, lies at the heart of much of the regulation and legislation regarding their activities. Like its better-known cousin insider trading, “front-running” has been an issue for clients of firms’ brokerage arms.

Front-running involves traders using information on coming trades on the behalf of clients to make profits for their firm on a proprietary basis. This often has the effect of making client trades more expensive.