FINRA Targets High-Frequency Traders For Investigation

Law360, New York (July 19, 2013, 12:57 PM EDT) -- The Financial Industry Regulatory Authority on Thursday revealed it was investigating whether high-frequency trading firms have adequate controls over their algorithms and other automated trading technology, fulfilling a pledge set out in a priorities document earlier this year.

In a targeted examination letter posted to the self-regulatory organization’s website, FINRA said its Trading Examination Unit would conduct a review of controls and processes for the development and use of trading algorithms within high-frequency trading firms, as well as firms' controls over automated trading technology.

FINRA spokeswoman Nancy Condon told Law360 Friday that the letter has been sent to about 10 firms...

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