A compliance officer at a broker-dealer is conducting a trade surveillance review of recent transactions. Which of the following scenarios describe activities that constitute prohibited market manipulation or fraudulent trading practices under SEC rules and FINRA standards? (Select all that apply.)
- A trader enters matching buy and sell orders of equal size and price across two colluding accounts to generate artificial trading volume without changing beneficial ownership.Cevap
- A market participant submits non-bona fide orders that are intended to be canceled before execution in order to temporarily distort market prices and deceive other traders.Cevap
- CFINRA self-regulatory examiners file criminal charges and directly impose federal imprisonment terms on individuals caught engaging in wash sales.
- DA broker-dealer executing an equity trade from its own inventory as a dealer principal is required to charge a broker commission rather than a mark-up.
Cevap
The scenarios describing matching buy and sell orders across colluding accounts to create artificial trading volume, as well as submitting non-bona fide orders intended for cancellation to distort prices, represent prohibited market manipulation practices.
The scenarios involving matched orders to artificially boost trading volume and spoofing by submitting quotes intended for cancellation both involve deceptive tactics that manipulate supply, demand, and pricing in violation of securities laws.
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Anahtar Kavram
Prohibited Market Manipulation and Fraudulent Practices