Other Trading Practices

What this video covers

• Why coordinated buys at successively higher prices are legal or illegal depending entirely on purpose and intent, not merely the trading pattern
• What a wash trade is under the Financial Industry Regulatory Authority (FINRA) manipulative-trading rule: no change in beneficial ownership with intent to create false activity
• How the FINRA wash trade differs completely from the Internal Revenue Code (IRC) wash sale, which is a 61-day tax loss disallowance rule
• The exact 30-day before and 30-day after window that creates the 61-day IRC wash sale period, and why repurchase of a substantially identical security matters
• What other conduct the manipulative-trading rule prohibits: excessive trading where a rep has an interest, manipulative pools, false statements, undisclosed joint account interests, and offers to influence closing prices
• Why a Series 6 representative must recognize manipulative patterns, refuse the order, and escalate to a supervisor rather than execute transactions as principal
• The exam's favorite trap: baiting you to confuse wash trade and wash sale because they share a word, when the rules, regulators, and rationales differ completely