February 18, 2010
Please read the attached white paper. It demonstrates how HFT's use of flash orders and server co-location at the exchanges has created an unequal marketplace, most notably by allowing firms who pay a fee to see the NBBO quote before the rest of the investing public.
Copyrighted material redacted. Author cites S. Arnuk and J. Saluzzi, "Latency Arbitrage: The Real Power Behind Predatory High Frequency Trading", Dec. 4, 2009 at http://www.themistrading.com/article_files/0000/0519/THEMIS_TRADING_White_Paper_--_Latency_Arbitrage_--_December_4__2009.pdf