The sophisticated Bob fund is trying to fool the markets into thinking that demand for AAPL has not increased. I.e., Bob is trying to keep inside information hidden and trade in such a way that he captures all the profits from this information himself. A predatory trader (algorithm or human) will bid up the prices, thereby capturing part of the gains of trade for themselves and part of it for the other market participants.
So basically, while Bob pays more, the retail investor Bob is buying from receives more (and of course, the predator takes a cut).
Ah, but your point is more philosophical than technical.
Who should SEC and public interests side with? Bob, the retail investors Bob trades with, or the HFT/professional broker-dealers that Bob trade with?
Bob would argue that public interests should ultimately place the highest priority with him, as he represents the "pension fund and 401(k) accounts of the hard working American public." (Never mind the fund fees, soft dollars & insider trading)
The retail investors argue that public interests should ultimately rest with them. What how do you define retail investors? The long-term investors that trade blue chips and the day-traders with IB accounts? How are the day-traders with IB accounts different from professional broker-dealer except that they are typically less sophisticated but both out for blood? Should you really let the inmates run the asylums.
The broker-dealers argue that public interests should side with them. Because they are the psychiatrists of the asylum that could orderly organize the inmates, make that the mental hospital is well-run and efficient place. But can you trust people when they have so much more leverage and power at a place? And but if you do away with them, wouldn't mental asylum collapse?
The sophisticated Bob fund is trying to fool the markets into thinking that demand for AAPL has not increased. I.e., Bob is trying to keep inside information hidden and trade in such a way that he captures all the profits from this information himself. A predatory trader (algorithm or human) will bid up the prices, thereby capturing part of the gains of trade for themselves and part of it for the other market participants.
So basically, while Bob pays more, the retail investor Bob is buying from receives more (and of course, the predator takes a cut).