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Warning from FINRA

Colleen MacFarlane

FINRA 2025 report. Partial info requiring firms to demonstrate written procedures. Here are some potential deficiencies being monitored:

  Surveillance Deficiencies: 

  • Not establishing and maintaining a surveillance system reasonably designed to monitor for potentially manipulative trading (e.g., potential layering, spoofing, wash trades, prearranged trades, marking the close, odd-lot manipulation) with parameters that are reasonably designed and documented. 

  • Not adequately monitoring customer activity for patterns of potential manipulation, including potential prearranged trading across customers.

  • Not considering external sources for red flags (e.g., inquiries from regulators or service providers or publicly available information about known manipulators).

  • Not performing the timely review of surveillance alerts or exception reports.

  • Not dedicating sufficient resources and training to the review of surveillance alerts or exception reports. 

  • Not documenting alert review findings.



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