“In a market dominated by electronic trading, investors are having their pockets picked—and individual investors and mutual fund shareholders are among the likely victims.

“The securities exchanges’ practice of selling early access to their trading data to insiders—as the term “insiders” suggests—is a practice that looks like illegal insider trading (I also use the term in place of HFT because, as former SEC Chairman Arthur Levitt has noted, not all HFTs are predatory).

“Broad policy questions about high-frequency trading will be on the regulatory agenda for years to come. However, the next major development is likely to go to the narrower question of what is legal and whether government lawyers will have a way, and the will, to prosecute, as they did Galleon Group founder Raj Rajaratnam.

“In fact, Attorney General Eric Holder told lawmakers on Friday the Justice Department is investigating high-speed trading for potential insider trading. “I can confirm that we at the Justice Department are investigating this practice to determine whether it violates insider trading laws,” Holder told a House panel at a hearing on the Justice Department’s budget.”

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Read full CNBC op-ed here.