According to Haim Bodek, a former HFT trader, some HFT insider uses special order types in their line of code to be prioritized in the execution of pending limit orders.
As far as I remember, the problem was not with using special order types, but with not knowing about them. They weren't documented. SEC fined some firm(s) and now they're documented. Although the game is never fair and there is always someone trying to gain unfair advantages. Haim is very interesting and smart guy, but that story is old, tired and recycled. It's even gotten bizarre with the latest stunt when his story was being sang by a choir after he recited it:
Years ago, I had two beers with Haim - and by the end of the first beer I understood he had a screw loose somewhere... He had a decent OMM firm called Trading Machines IIRC, but didn't quite understand delta-hedging and pegged orders - and didn't know to just ask. Which led to the downfall of his firm, the book, the movie and (now) the choir.. I guess he's never been on a "deep dive" with an exchange software team.
Is that so. Yet he is so intelligent. very clever. I saw several intervieuw from him .... but the idea of the choir was bad.