Business Week says this is an open secret on Wall Street: Prime brokers with access to information on big trades are tipping off their other traders and their hedge fund clients, allowing them to do a bit of front-running. Does this really go on? Well, it's going to be hard to prove. I am sure it goes on to an extent, especially if the prime brokerage operation and a hedge fund are owned by the same company. The people who are really suspicious are mutual funds. They stand to lose a lot as the bid and ask moves against them subtly but enough to really affect their P&L over the long-term. You have got to think that buyside players with real clout have made this an issue. If it goes on. Do prime brokers really have advance word on mutual fund orders?  

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