FINRA fines Trillium over illicit high frequency trades

14 September 2010

Trillium Brokerage Services has received a fine of $1 million for using inappropriate trading strategies.

The Financial Industry Regulatory Authority (FINRA) issued the penalty to the firm as well as a number of fines and bans to 11 employees including traders, the director of Trading and chief compliance officer.

According to the regulator, executives used 'layered' trades to generate investor interest in certain stocks.

These fake orders created a false impression of buy-side and sell-side market movement which subsquently encouraged other investors to enter orders.

Thomas R Gira, executive vice-president of FINRA Market Regulation, said: ““Trillium’s trading conduct was designed to improperly bait unsuspecting market participants into executing trades at illegitimately high or low prices for the advantage of Trillium’s traders.

“FINRA will continue to aggressively pursue disciplinary action for illegal conduct, including abusive momentum ignition strategies and high frequency trading activity that inappropriately undermines legitimate trading activity, in addition to related supervisory failures.”

The improper high-frequency trading strategy took place on the NASDAQ Stock Market and NYSE Arca exchange.

By Jim Ottewill

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