FINRA Rule 5240 Anti-Intimidation/Coordination

Posted on September 1st, 2016 at 4:03 PM
FINRA Rule 5240 Anti-Intimidation/Coordination

From the Desk of Jim Eccleston at Eccleston Law LLC:

FINRA Rule 5240 was enacted to stop fraudulent and manipulative actions in order to protect investors and the public interest.

FINRA Rule 5240(a) specifically identifies three general types of conduct inconsistent with just and equitable principles of trade. Two relate to trading: “(i) coordinating activities by members involving quotations, prices, trades and trade reporting (e.g., agreements to report trades inaccurately or maintain certain minimum spreads); and (ii) “directing or requesting” another member to alter prices or quotations”. A third contains a general and broad prohibition against unethical behavior. It reads: “engaging in conduct that threatens, harasses, coerces, intimidates or otherwise attempts improperly to influence another member or person associated with a member.” (FINRA Rule 5240)

FINRA Rule 5240:

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