A compliance officer is reviewing trading activities conducted by registered representatives at a broker-dealer. Which of the following actions constitute prohibited market manipulation or fraudulent practices under securities regulations? Select all that apply.
- Entering quote orders with the intentional plan to cancel them prior to execution in order to create a false impression of market demandCevap
- Executing simultaneous buy and sell transactions in a security across accounts controlled by the exact same beneficial owner to artificially inflate trading volumeCevap
- CSubmitting a standard limit order on behalf of a retail customer that improves the current national best bid
- DReporting trade details to FINRA's Trade Reporting Facility within the required post-execution timeframe
Cevap
Entering quotes with no intention of executing them (spoofing) and executing offsetting transactions with no change in beneficial ownership (wash trading) are both illegal market manipulation practices.
Submitting quotes without intent to execute to artificially move prices (spoofing) and buying and selling securities with no change in beneficial ownership to fake volume (wash trading) are prohibited forms of market manipulation designed to mislead investors.
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Prohibited Market Manipulation and Fraudulent Practices