The Wall Street Journal | By: Dave Michaels | WASHINGTON | May 17, 2017 1:32 p.m. ET:
Finra to expand use of report cards to reduce manipulation.
Wall Street is cracking down on a common, manipulative trading technique after its self-regulatory organization began grading brokers on how much bad behavior flows through their systems.
The Financial Industry Regulatory Authority, a private organization that polices the brokerage industry, began issuing report cards to brokers last year detailing potentially manipulative trading.
Since then, Finra’s surveillance department has seen 68% fewer alerts for “layering,” a ruse that involves entering phony buy or sell orders with the goal of pushing the price in a direction that benefits a trader’s positions.
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