Any individual or institution who runs high-frequency trading programs on the stock markets cannot be allowed to keep winnings and then *also* be forgiven any losses (see Knight Capital and the NSYE canceling trades which cost them money). To give such perferential treatment is to violate the free-market assumptions of a fair exchange. Additionally, it is also unfair that firms with HFT algorithms are given preferential information (e.g., the ability to see individual non-HFT trades before they are active), which alows them to make money in arbitrage positions. If HFT firms are given preferential treatment based upon outcome or preferential information, then the markets are no longer fair place for individual investing.
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