A broker-dealer compliance officer is reviewing trading desk activity logs for potential violations of FINRA and SEC rules regarding prohibited market manipulation and fraudulent practices. Match each market practice scenario on the left with its corresponding regulatory term on the right.
- A broker-dealer unnecessarily routes a customer order through a third-party firm, resulting in an additional commission fee without offering any execution advantage to the customer.Interpositioning
- Immediately after executing a large client order that is expected to drive up the stock price, a registered representative buys shares of the same security for their personal account.Tailgating
- A group of traders colludes to execute small buy transactions at the start of the trading session to artificially raise the published opening price of a stock.Marking the Open
- An options trader repeatedly submits buy orders for an underlying equity near the expiration date specifically to prevent its price from dropping below an option strike price.Pegging
Cevap
Routing orders through an unnecessary third party matches Interpositioning; trading personal accounts immediately after executing a client trade matches Tailgating; executing transactions to distort opening prices matches Marking the Open; and entering orders to hold a security price at a specific level matches Pegging.
Each scenario illustrates a distinct regulatory violation: unnecessarily inserting a third-party broker to add costs is interpositioning; trading for personal accounts after a client's trade is tailgating; placing orders to manipulate the opening market benchmark is marking the open; and entering orders to hold a price at a desired level is pegging.
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Anahtar Kavram
Prohibited Market Practices and Trading Violations under FINRA/SEC Rules