A compliance officer is reviewing activity logs at a broker-dealer firm. Which of the following practices represent prohibited market manipulation or fraudulent activities under securities regulations? (Select all that apply)
- Entering non-bona fide orders with the intention of canceling them prior to execution to artificially move security pricesCevap
- Purchasing and selling shares simultaneously with no change in beneficial ownership to simulate active trading volumeCevap
- CExecuting a trade on behalf of a retail customer in an agency capacity and charging a disclosed commission
- DInitiating formal criminal prosecution proceedings against a manipulator directly through FINRA enforcement officers
Cevap
Entering non-bona fide orders intended to be canceled prior to execution (spoofing) and entering matching buys and sells without a change in beneficial ownership (wash trading) are both illegal market manipulation tactics.
Placing non-bona fide orders intended for cancellation (spoofing) and executing pre-arranged trades without changing beneficial ownership (wash trading) are fraudulent practices that mislead investors and distort market pricing.
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Prohibited Market Manipulation Tactics