In investigating the root cause of inexplicable stock movements like the 14,000% rise in the Iridium-linked security, TheStreet contacted major U.S. stock exchanges, FINRA and the SEC, who initially declined to comment on the record, leaving many basic questions on enforcement unanswered.
After a correspondence, NYSE spokesperson Keara Everdell allowed FINRA's Gira to discuss how the agency goes about work contracted from the exchange.
Two exchange executives, who weren't authorized to speak on the record, and Gira of FINRA expressed confidence that as rules such as Market Access become entrenched and new rules are implemented, erroneous trading is likely to decline sharply.
One exchange executive noted the Market Access rule sets clearer precedent against manipulative or irregular trading, and holds brokers more accountable for a wide range of possible violations.Another exchange official pointed to soon to be implemented 'limit up-limit down' rules as providing a kill switch that could preemptively stop erroneous executions before they happen. Gira of FINRA echoed those sentiments and added that because most brokers under FINRA's jurisdiction now face second reviews, future rule violations are more likely to lead to sanctions. He also expressed confidence that a next set of post-crash rules will further arrest erroneous trading and help to stabilize markets. "The probability of
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