After investigations launched by the SEC and the Department of Justice, FINRA is now joining the party.
According to Reuters, the self regulator is looking at “abusive trades” executed on mathematical algorithms. They currently have 170 open investigations on this.
Specifically, FINRA is reviewing cases where?brokerage firms may have utilized algorithms to “engage in abusive trades, or failed to supervise the use of algorithms by their advisers,” said the regulator’s chairman and chief executive, Rick Ketchum, on Monday at an annual conference..
This comes on the heels of last week’s actions by FINRA that brought a market manipulation case jointly with CBOE Holdings?Inc,?NASDAQ?OMX Group Inc and IntercontinentalExchange Group Inc. “involving what they alleged was an algorithmic-trading scheme where waves of equity trades were used to artificially affect options pricing,”?reported Reuters.
Ketchum said that FINRA’s investigations have already resulted in some enforcement including last week’s CBOE?complaint. Furthermore,?FINRA expects to announce more enforcement cases during the coming year, Ketchum said.