Re: Manipulation > FINRA Steps Up Surveillance
Maybe, just maybe, help is on the way with all the various forms of manipulation ... fake order sizes, wash trading, phony momo, the list goes on. FINRA's OATS (Order Audit Trail System) has been ramping up for a while and, yes, includes OTC/Pinks. The software doesn't care what markets it surveils. The games have gone on too long and have taken way too much money out of the system, IMO.
http://www.tradersmagazine.com/issues/26_347/...817-1.html
FINRA Steps Up Surveillance
February 2013
The Financial Industry Regulatory Authority has begun to implement a new set of computer programs that watch for illicit trading patterns across national exchanges, dark pools and brokers' internal pools of orders, as well as alternative trading systems.
FINRA is broadening its surveillance in two ways: the number of markets it can and will watch at the same time, with each pattern; and its ability to watch multiple trading firms, at the same time, that may be acting in concert.
In effect, the independent regulator of brokers can now keep track of the actions of multiple parties working across multiple markets at the same time.
What FINRA Will Be Looking For
In particular, the Financial Industry Regulatory Authority will be looking for trading patterns that try to create the false impression that there is "momentum" in a stock. Among the practices-conducted by individual traders and individual firms, but also in arrangements between multiple traders and multiple firms-are layering, spoofing and "marking the close" programs.
Layering: This is where trading firm or firms send out waves of false orders intended to give the impression that the market for shares of a particular security at that moment is deep. The traders then take advantage of the market's reaction to the layering of orders.
Spoofing: The trader or traders involved will send out an order with a corresponding cancellation, often at the opening or close of the market, in order to get a particular market reaction.
Marking the close: A firm or firms can have a sell order execute at the end of the day and exhibit aggressive buying behavior in the run-up, to drive up a stock's price, said Thomas Gira, executive vice president and head of market regulation at FINRA.
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