Is there evidence of suppression of the frontal cortex during herding behavior? Phenomena such as large-scale stock market sell-offs and financial panic in general are often explained in terms of herding behaviors.  

At how primitive of a level does one actually "follow the herd"?  In other words, does this behavior elicit a strong response at the brainstem level (particularly in the tectum, i.e., the colliculi) at some cost to frontal cortical processing?

Obviously, it's a difficult task to run an EEG or have a subject in for an MRI during a real panic, so results based on simulations are certainly acceptable.
This is probably not a complete answer to your question.

There have been a few studies on this relationship.

This article from the Journal of Neuroscience "Downregulation of the Posterior Medial Frontal Cortex Prevents Social Conformity" (Klucharev et al. 2011) approach the research (from their abstract):


  Here we demonstrate that the transient downregulation of the posterior medial frontal cortex by theta-burst transcranial magnetic stimulation reduces conformity, as indicated by reduced conformal adjustments in line with group opinion.


This article may also be of interest