Is it illegal to make profits through latency arbitrage in forex? Would a bank be able to sue?
I am not sure whether latency arbitrage is illegal but I believe that a bank/broker cannot sue you for doing it. My point of view is that any broker/bank should take the needed measures to protect itself from such actions. If you get caught (which is 99.9% certain :D) it will most probably be considered as “market abusing” action resulting in voiding all your trades and profits done in this way. IMO the worse that could happen in such situation is getting your account terminated.
Would depend on the brokers policy and the regulations of that country.