SEC mulls tightening up process for stock orders
US regulators are probing certain practices around “quote stuffing,” where large numbers of rapid-fire stock orders are placed and cancelled almost immediately, Securities and Exchange Commission (SEC) chairman Mary Schapiro said yesterday.
“The SEC and other regulators are looking carefully at certain practices in this area to assess whether they violate existing rules against fraudulent or other improper behaviour,” Schapiro said in remarks to be delivered at the Economic Club of New York.
Regulators were also looking at quote stuffing in connection with the mysterious 6 May flash crash, when the Dow Jones industrial average dropped dramatically before quickly recovering.
However, it is not seen as the cause of the dramatic market drop, sources have said. A report that may explain the flash crash is expected toward the end of the month, Schapiro said.