Politics and Money

[properlynumb]

High Frequency Trading and price manipulation by 'quote stuffing'

Dow Jones News Wire-----

The Financial Industry Regulatory Authority said it had censured and fined Trillium Brokerage Services LLC $1 million and fined and suspended 11 of its employees in connection with using an “illicit high-frequency trading strategy and related supervisory failures” to gain an advantage.

The financial regulator said that through nine proprietary traders, Trillium entered “numerous” layered, market-moving orders that generated selling or buying interest in specific stocks. By entering those orders, Trillium traders “created a false appearance of buy- or sell-side pressure,” Finra said, noting that because of the strategy, the traders got advantageous prices that otherwise wouldn’t have been available to them on 46,000 occasions.

Finra said it fined the traders, Trillium’s director of trading and its chief compliance officer a total of $802,500 and ordered a combined $292,000 of disgorgements. The 11 people were suspended from the securities industry or as principals for periods ranging from six months to two years.

In settling the case, the small New York brokerage and the employees didn’t admit or deny the charges but consented to the entry of Finra’s findings.

BLOOMBERG LINK----
http://www.bloomberg.com/news/2010-09-13/trillium-brokerage-fined-1-million-by-finra-over-illegal-trading-strategy.html