The city of Providence, RI, USA claims Bank of America and the New York Stock Exchange among others rigged securities markets to divert billions of dollars from buyers and sellers of shares to themselves.

One defendant in today’s complaint, Virtu Financial Inc., a high-frequency trader that delayed its initial public offering, has received inquiries from the office of New York’s attorney general, Eric Schneiderman, according to a person familiar with the matter. Schneiderman announced last month that he’s investigating high-frequency traders.

Last month, U.S. Attorney General Eric Holder promised Congress a full investigation into whether high-frequency traders violated laws against trading on inside information. The FBI has said it’s looking into whether firms that engage in high-speed trades get an improper jump on other investors by using information about their trading to make profits.

Providence claims the exchanges, the biggest brokerage firms and a group of high-speed trading firms allowed some traders to gain access to non-public data about investors’ trades. The scheme allegedly included electronic front-running, in which high-frequency traders learned of bids and offers, made transactions at better prices and then profited from the investors that made the original orders.

Providence named as defendants 14 brokerages, 16 securities exchanges and 12 high-speed traders.  “Public investors are entitled to be treated fairly and honestly by brokers and exchanges,” Providence said in its complaint. “In addition to destroying trust in the U.S. capital markets, the misconduct alleged herein has siphoned off billions of dollars from private and public pension funds and individual retirement accounts that millions of Americans depend on.”

The Case:  City of Providence, Rhode Island v. Bats Global Markets Inc., 14-cv-02811, U.S. District Court, Southern District of New York (Manhattan).