they are not literally front-running, that is, using explicit knowledge of other incoming orders to place themselves ahead of the market. that is explicitly illegal.

instead, they use complicated algorithms to predict what the market will do in the next few seconds, then they beat others to the punch by relying on their fast connections.

an example might be on the day of a fed announcement, if the market suddenly starts to swing up at the time of the expected announcement, the first in with a "buy" are the winners. the dow might go up 100 points in a manner of seconds. for most of us it's too late by the time you get your order in, you're buying when the market is already 100 points up. but these guys can detect it when the market is only maybe 10 points up and get in near the bottom and sell a few second later and pick up most of the 100 points gain.

you could call it front-running in the aggregate but it's not done with specific knowledge of specific incoming buy orders.

from an economic and moral sense, there's not much difference. they're gaining because they have an unfair advantage, faster access to the markets. but from a legal sense, they probably have a good defense.

You want to eliminate this crap,adopt the full cent or nickel rule. The allowing of fractional cent rule just caused all kinds of possible price manipulations.