During the final ten minutes of the trading day, a trader at a broker-dealer executes a series of small buy orders for an illiquid stock at progressively higher prices to push the closing price upward, thereby artificially inflating the collateral value of the firm's equity portfolio. Which of the following prohibited practices has the trader committed?
- Marking the close, because the orders were intentionally placed near market end to manipulate the security's official closing price.Cevap
- BWash trading, because the trades were placed to create a misleading appearance of active trading without changing beneficial ownership.
- CUnauthorized dealer conversion, because executing proprietary trades converts an agency broker obligation into an undisclosed principal trade.
- DViolating SRO criminal statutes, because self-regulatory organizations like FINRA exercise statutory federal criminal prosecution powers over trading abuses.
Cevap
Marking the close, because the orders were intentionally placed near market end to manipulate the security's official closing price.
Marking the close is an illegal market manipulation practice where a trader enters orders near the end of the trading day to artificially manipulate the closing price of a security. This is often done to inflate margin account balances or portfolio valuations.
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Anahtar Kavram
Marking the Close Prohibited Practice