A compliance officer at a broker-dealer is conducting a trade surveillance review of several equity trading accounts. Which of the following trading activities represent prohibited market manipulation under securities regulations? (Select ALL that apply.)
- Entering offsetting buy and sell orders for the same security across accounts under common beneficial ownership to create a misleading appearance of active trading volume.Cevap
- BSubmitting a limit order below the current market bid price with a genuine intent to purchase the security if market prices decline.
- Entering non-bona fide orders that are intended to be canceled prior to execution to create a false impression of market depth and induce price movement.Cevap
- DRouting routine customer order execution disputes directly to FINRA's enforcement division for guaranteed execution.
Cevap
The correct activities are entering offsetting buy and sell orders without changing beneficial ownership (wash trading) and entering non-bona fide orders intended to be canceled before execution (spoofing).
Entering offsetting transactions without altering beneficial ownership (wash trading) and submitting quotes with no intention of execution to trick market participants (spoofing) are both prohibited fraudulent manipulations under SEC Section 10(b) rules and FINRA standards.
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Prohibited Market Manipulation (Wash Trading and Spoofing)
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