U.S. exchanges to face class-action claims for high-frequency trading

Seven U.S. stock exchanges are going to face class-action claims that have previously been dismissed, Reuters writes. The exchanges are accused of offering high-frequency traders better prices and faster trades, unbeknownst to ordinary traders. Therefore, ordinary investors might have lost on their investments due to unfavourable prices.

Although in 2015, U.S. District Judge Jesse Furman dismissed the claims, he now says they have “nudged themselves across the line from conceivable to plausible,” and therefore, they should be explored.

The seven exchanges, including BATS Global Markets, Nasdaq, and the New York Stock Exchange stand accused of violating federal securities law. Besides offering special treatment to high-frequency traders, the exchanges also allegedly provided them with access  “to enhanced data feeds, a greater ability to process complex orders, and permission to locate their servers near the exchanges’ own servers so trading signals would be sent faster.”