On: For the Love of Money

[yummyfajitas]

Front running is when a broker trades in front of his client. The broker has a fiduciary duty to act in his client's best interests. If I trade ahead of you because I can guess your actions, that's just me kicking your ass.

Incidentally, if it's acceptable for Charlie Munger to sell in such a way that others will suffer the price impact of his trade, why is it not acceptable for HFTs to do the same thing? In both cases, it's just one trader playing short term games against other traders in order to make money.

[ezl → yummyfajitas]

brokers often do not fulfill their fiduciary responsibility.

It's not uncommon at all and I've seen it happen quite openly in many situations. It's tricky business outside of the pure electronic game.