The online platform E*TRADE, a subsidiary of Morgan Stanley, was fined USD 350,000 by the Financial Industry Regulatory Authority (FINRA) for failing to set up and maintain supervisory systems. FINRA claims that several violations have been committed by the company. It failed to detect manipulative trade due to gaps in surveillance systems.
In addition, E*TRADE was accused of modifying the parameters in its monitoring reports, as well as of shortcomings of the design of this system, which could not efficiently identify the artificially increased or decreased price of lightly traded shares. E*TRADE has already agreed to the order of FINRA.
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