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Recent civil and criminal enforcement action involving high frequency trading

Matthew Rossi (Mayer Brown LLP (owner of the intellectual property) Washington D.C. USA)
Greg Deis (Mayer Brown LLP (owner of the intellectual property), Chicago, Illinois, USA)
Jerome Roche (Mayer Brown LLP (owner of the intellectual property), Washington D.C. USA)
Kathleen Przywara (Mayer Brown LLP (owner of the intellectual property), Chicago, Illinois, USA)

Journal of Investment Compliance

ISSN: 1528-5812

Article publication date: 5 May 2015

554

Abstract

Purpose

To alert high frequency trading firms to the increased regulation and prosecution of manipulative trading practices during 2014 and early 2015.

Design/methodology/approach

Reviews four significant proceedings against high frequency trading firms (and/or individuals employed by such firms) and other developments from the relevant government agencies as a possible preview of the enforcement and prosecution of high frequency trading practices in 2015. Provides advice to high frequency trading firms on how to decrease the risk of regulatory or criminal actions against them in this changing environment.

Findings

Although the focus on high frequency trading has only recently begun to intensify, firms should be aware of the increased enforcement activity of the past year. These actions, both regulatory and criminal, have already resulted in large penalties and have helped initiate a strengthening of rules and regulations regarding manipulative trading practices, of which firms need to be aware and stay current.

Practical implications

High frequency trading firms should be aware of the recent regulatory and criminal actions in order to better evaluate their own practices and controls, to ensure that their trading patterns do not resemble manipulative practices, and to avoid similar actions.

Originality/value

Practical guidance from experienced litigators and securities regulatory lawyers, including a former SEC Assistant Chief Litigation Counsel and a former federal prosecutor, that consolidates and describes several recent actions and developments in one piece.

Keywords

Acknowledgements

© 2015 Mayer Brown LLP 2015

Citation

Rossi, M., Deis, G., Roche, J. and Przywara, K. (2015), "Recent civil and criminal enforcement action involving high frequency trading", Journal of Investment Compliance, Vol. 16 No. 1, pp. 5-12. https://doi.org/10.1108/JOIC-01-2015-0017

Publisher

:

Emerald Group Publishing Limited

Copyright © 2015, Authors

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