A Chicago-based trader has been suspended from the securities industry for 16 months and fined $175,000 by the Financial Industry Regulatory Authority for allegedly engaging in manipulative trading.
Robert T. Bunda, 32, a former trader at Chicago-based Great Point Capital LLC, is also required to pay $171,740 in restitution to Finra's Market Regulation Department in Rockville, Md., Finra officials disclosed today.
Finra accused Bunda of "spoofing," which involves placing small limit orders that improve the National Best Bid or Offer for a security, allowing the trader to profit from the higher prices by executing larger orders at another firm that guarantees execution at the NBBO. Once the larger order is executed, the trader cancels the initial limit orders.
In settling the matter, Bunda neither admitted nor denied the charges, but consented to the entry of Finra's findings. Bunda's alleged spoofing was referred to FINRA by NASDAQ's MarketWatch Department.
FINRA found that Bunda entered over 4,000 small share orders on the Nasdaq market through his trading account at Great Point to raise the NBBO on certain securities. He then executed the larger order and collected the profits in a personal brokerage account. He subsquently canceled the orders in his Great Point account.The scheme involved 4,303 price limit orders in November 2006 that allowed Bunda to reap $171,740 in gains, according to Finra.
"This case underscores FINRA's commitment to aggressively pursue disciplinary actions for manipulative trading schemes that undermine legitimate trading activity," said Thomas Gira, Executive Vice President, FINRA Market Regulation. "Bunda's conduct was designed to artificially move the market for his own personal gain and demonstrates an unsuccessful attempt to conceal improper trading activity through non-disclosure of outside brokerage accounts."