From ACT Wiki
Jump to navigationJump to search

Conduct risk - financial markets

In financial services, front-running is the unethical and likely criminally fraudulent practice of buying securities or making other trades to take advantage of private/confidential knowledge of a future event, for example a large purchase order from a client - an order for currency, shares, commodities, etc.

Distinguishing front-running (unacceptable, probably illegal) from pre-hedging (probably acceptable, even legal) is important for all concerned, but can be very difficult.

See also