tailgating (redirected from tailgate)

Tailgating

The action of a broker or advisor purchasing or selling a security for his or her client(s) and then immediately making the same transaction in his or her own account.

Notes:

This is not illegal like front running, but it is not looked upon favorably because the broker is mostly likely placing a trade for his or her own account based on what the client knows (like inside information).

See also: Front Running, Inside Information

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Tailgating

Purchase of a security by a broker after the broker places an order for the same security for a customer. The broker hopes to profit either because of information which the customer has or because the customer's purchase is of sufficient size to affect security prices. This is an unethical practice.

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tailgating

The placement of an order by a registered representative for the registered representative's own account on the basis of an order that has been received from a client. Suppose a customer calls a registered representative with an order to sell 1,000 shares of stock. If the representative sells the stock for the customer and follows it by selling additional shares of the same stock for his or her own personal account, the representative is tailgating.