An Illinois judge rejected Citadel’s bid to compel Jump to identify ex-employees who joined the firm since 2005, and any strategies they later developed. The case was dismissed in October 2012.

At Jump, James Chiu -- whom ex-employees said was in the trading firm’s Oceans group -- broke CME Group rules in 2010, according to a CME Group disciplinary memo from 2014.

A CME Group panel found that from Aug. 30 through Sept. 15, 2010, Chiu manually entered orders, supplementing trades that he had already placed, then canceling them before his other orders could be executed, the exchange said in a March 3, 2014, notice on its website. His actions potentially disrupted the market, the panel said.

The exchange said Chiu was employed as a proprietary trader by a member firm, but didn’t name Jump in the disciplinary action. The panel found that Chiu broke the exchange’s rule prohibiting “dishonorable or uncommercial conduct,” among others. Chiu, whose LinkedIn Corp. profile says he was a former team leader at Jump, settled with the CME Group without admitting or denying wrongdoing. He was ordered to pay a $155,000 fine and was suspended from any trading on the exchange’s markets for two months.

David Fuller's view

It is a form of progress, I guess, and inevitable although that does not mean that it is working for the benefit of everyone, which we see with so much technological progress.  HFT sails close to the wind, to put it mildly, in terms of ethics.  Too much of it is based on seeing what most other people are trying to do, or where they are positioned, and moving before the crowd.  It has changed the nature of trading for everyone, and most individuals and firms cannot compete with that.  With a significant edge in information and order processing, HFT does not need to attract investors, unlike fund management companies.  And it only fears HFT rivals and market regulators.

I certainly cannot compete with the fastest HFT traders, although I think I can still make some money trading, albeit at a higher risk.  So presumably can any of you who are experienced traders.  However, while trading was my main source of income twenty to forty years ago, and financed most of my other investments, today it is just a hobby to help keep me alert.     

Fortunately, HFT firms have minimal interest in medium to longer-term investment. Their game is based on speed so their time horizon is often little more than microseconds.  Low turnover, buy-low-sell-high long-term investors have little to fear from HFT firms.  They may even benefit from some of the extra volatility.  Additionally, they will sometimes be investing in markets that are of less interest to HFT firms, especially if volume is moderate to low.