Series 24: Anti-Intimidation/Coordination/Collusion Rules

Anti-Intimidation/Coordination/Collusion Rules

In the late 1990s, the U.S. Department of Justice launched an investigation into a number of NASDAQ market makers on charges of collusion, coordination, and market manipulation. The Justice Department filed an antitrust suit naming 24 separate NASDAQ market makers. The case was eventually settled in 1996 and heavy sanctions were imposed. The fallout from this case put greater pressure on NASD/FINRA to police any activity that could be considered intimidation, collusion, or other forms of market manipulation. FINRA now has a general set of “red flags” it considers when deciding whether or not to investigate potential manipulation or collusion. Some of these red flags include:

• • Price patterns that are not the result of standard econo