According to the report in HuffPo Regulators are reportedly
looking into whether high-frequency traders engaged in an illegal practice
known as wash trading.
U.S. regulators are reportedly probing whether
high-frequency trading firms have been conducting transactions with themselves
in a potentially illegal practice known as "wash trading" that may
distort market prices.
The Securities and Exchange Commission and the Commodity
Futures Trading Commission are looking into whether high-frequency traders have
been buying and selling contracts to themselves, according to Bloomberg, which
cited two people with knowledge of the matter. Wash trading is a particular
risk for high-frequency traders, which use computer algorithms to quickly trade
stocks, bonds and derivatives contracts, because these firms often have
multiple trading algorithms working at once….
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