FINRA RULING: BUNDA TO PAY FINES AND RESTITUTION

by Christopher J. Gray on August 26, 2011

in Arbitration,FINRA,Stock Manipulation

Securities arbitration for Frankfort, Ill., trader Robert T. Bunda ended with a sixteen-month suspension and a total penalty of $346,740. The payment order includes $171,740 in restitution and a $175,000 fine. The restitution total is equal to his total personal gain that resulted from his misconduct. The Financial Industry Regulatory Authority (FINRA) found that Bunda engaged in manipulative trading and attempted to conceal that trading by using one of his undisclosed outside brokerage accounts. Bunda’s manipulative trading included “spoofing that artificially impacted the market price of a NASDAQ security,” according to FINRA’s August 18th announcement.

Finra ruling: bunda to pay fines and restitution

While Bunda neither admitted nor denied the allegations against him, he did consent to FINRA’s ruling.

“This case underscores FINRA’s commitment to aggressively pursue disciplinary actions for manipulative trading schemes that undermine legitimate trading activity,” says FINRA Executive Vice President of Market Regulation Thomas Gira. “Bunda’s conduct was designed to artificially move the market for his own personal gain and demonstrates an unsuccessful attempt to conceal improper trading activity through non-disclosure of outside brokerage accounts.”

“Spoofing” involves improving the National Best Bid or Offer for a security by placing small limit orders at certain prices. This allowed Bunda to take advantage of improved prices by placing larger orders at one of his other eleven firms and then canceling the initial order. According to FINRA’s findings, Bunda entered more than 4,000 of the initial small share orders using his Great Point Capital LLC trading account and bought and sold shares in his undisclosed accounts over 400 times. His total gain was $171,740.

Though Bunda will be able to return to trading after 16 months, FINRA’s disciplinary ruling will be recorded and available to anyone who searches for Bunda using FINRA’s BrokerCheck. BrokerCheck is a free service that provides investors with the disciplinary record of any FINRA-registered broker or firm. BrokerCheck is available toll-free by phone or online at www.finra.org/brokercheck.

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