This is very similar to "front running" , but because a) this happens privately and in small quantities, and b) it is not necessarily privileged information, it's considered legal by the SEC. But it is highly questionable for sure.
"Flash Boys", by Michael Lewis  is a great read, and goes into detail on the world of high frequency traders, and how they operate.
The problem I suppose is the poor chaps don't know this is what is happening.
No, they are quite clear on how they make money and that is not it. They, officially, make money on interests and a subscription service .