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Zorluk: OrtaProhibited Market Manipulation and Fraudulent Practices

During the final minutes of the trading day, a registered representative executes a series of small buy orders for a thinly traded stock at successively higher prices. The representative's intent is to artificially inflate the stock's closing price so that a client can avoid a margin call. Which prohibited market manipulation practice has the representative committed?

  1. Marking the closeCevap
  2. B
    Wash trading
  3. C
    Interpositioning
  4. D
    SRO stabilization privilege

Cevap

The prohibited practice committed by the representative is marking the close.
The representative committed marking the close. This prohibited practice involves entering orders shortly before the close of trading to manipulate the closing price of a security, often to protect margin requirements or inflate portfolio values.

Adım Adım Çözüm

1
Analyze the timing and objective of the trading activity described in the scenario.
The representative placed orders specifically near the end of the trading day to influence the official closing price.
Timing trades right before market close to drive prices up or down constitutes market manipulation.
2
Identify the regulatory definition corresponding to manipulating closing security prices.
Marking the close is defined by FINRA and SEC rules as executing trades near market close to push the settlement price to an artificial level.
Closing prices are widely monitored for portfolio valuations and collateral margin calculations, making artificial price movement fraudulent.

Anahtar Kavram

Marking the Close Prohibited Practice
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Konular

Prohibited Market Manipulation and Fraudulent Practices