Bank Of America Is Reportedly Being Investigated For One Of The Oldest Trading Tricks In The Book Regulators are investigating Bank of America for front running its clients large trading orders: Front running is a pretty simple trick. You (the bank) know your client is going to place a big order for a security. Since you know the price of the security will go up after that big buy, you place the banks order ahead of your clients order. Sometimes this results in the price of the security going up for your client. In this case, according to Reuters, that client was Fannie Mae and Freddie Mac. This was disclosed in a BrokerCheck filing on regulator FINRAs website. BrokerChecks allow anyone to look at a specific traders professional background, and this report was filed with a former Bank of America trader named Eric Beckwith based in NYC. A bank spokesperson said the trader left the bank in July 2013. The filing dates back to June 2013. Heres a screenshot of the section of Beckwiths report explaining the investigation: Read more: businessinsider/bank-of-america-accused-of-front-unning-2014-1#ixzz2rXkZHTGI
Posted on: Sun, 26 Jan 2014 21:45:14 +0000