The New York State Attorney General’s office is ramping up its investigation of high-frequency trading, and eyeing potential enforcement actions as early as this summer, people with direct knowledge of the matter tell FOX Business.

These people say the focus of the investigation hasn’t changed since New York Attorney General Eric Schneiderman launched his probe, namely the intersection between high frequency trading firms and the private markets they often trade through known as dark pools. HFT firms and dark pools are under scrutiny, the people say.

But Schneiderman’s office has found evidence that some dark pools give preferential treatment to certain high-frequency trading firms based on various arrangements, these people say. If those arrangements are considered unfair, that could be the basis of the possible enforcement action, they said.

The evidence is such that Schneiderman’s office is increasingly confident it could file an enforcement action, or force either a dark pool or a trading firm to settle as early as this summer, these people add.

A spokesman for Schneiderman's office declined to comment on the matter.

High-frequency trading has been mired in controversy since these firms -- which use computer programs to trade in and out of stocks in a rapid-fire manner -- became significant players in the markets over the past five years. Critics say they often “front-run” other investors, using non-public information about trading positions to jump head of orders and earn huge profits. 

Supporters say that these firms add much needed liquidity to the markets, and as a result, have driven down the cost of trading for all investors.

In a March speech at New York Law School, Schneiderman labeled high-frequency trading a “new breed of predatory behavior (that) gives a small segment of the industry an enormous advantage over all other competitors and allows them to use new technologies to reap huge profits based on very, very minor, but nonetheless unfair, advantages.” 

His office has since issued subpoenas to several high-frequency firms and asked for information from other participants.

The investigation picked up steam following the publication of business author Michael Lewis’ book “Flash Boys,” which contends that such trading has “rigged” the markets. Market participants such as CME Group chairman Terrence Duffy and even regulators like Securities and Exchange Commission chairman Mary Jo White have disputed Lewis’ contention.

Even so, the immediate fallout has been costly to the high-frequency trading business. One big firm, Virtu, has been forced to delay indefinitely its planned initial public offering in part because of the investigation by Schneiderman’s office. Other firms are fearful of higher costs as they face likely increased regulations.

A Virtu spokesman had no comment.

Charles Gasparino joined FOX Business Network (FBN) in February 2010 as Senior Correspondent.