Is it illegal to hit your own order?

Robert Morse said:
https://www.nasdaq.com/investing/glossary/p/painting-the-tape

https://www.sec.gov/fast-answers/answerschurninghtm.html

Painting the Tape sounds like it requires you to trade with yourself or any trade where there is no change of ownership.
Churning sounds like what a broker does to a customer when they have trading authority.
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What about doing Norbert's gambit? It appears that it's done somewhat routinely to convert between CAD and USD and if you want to be risk free about it you'd need to simultaneously enter a long and short on the same stock, albeit on the U.S. and Canadian listed versions.
 
Sig said:
What about doing Norbert's gambit? It appears that it's done somewhat routinely to convert between CAD and USD and if you want to be risk free about it you'd need to simultaneously enter a long and short on the same stock, albeit on the U.S. and Canadian listed versions.
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That's not self-dealing. And certainly not if inter-exchange.
 
There was an investigation in the late 90s involving two FCMs. The aggressor hired family/friends to lease seats and clear through the target firm in an effort to leave them with a large debit balance.
 
athlonmank8 said:
Absolutely. If both the accounts are in your name, you will get a call from the compliance department and will need to submit a response (i've had a few accidents).

If not, you'd have people/funds driving up the volume on illiquid/thinly traded stocks for purposes of manipulation.
Exactly what the pump & dump scam is all about..they all have "family" :)) they work the low volume pink-slip companies "stocks" created by their Nevada lawyers specifically for the pump & dump scam.

Professional silver tongued pump & dump salesmen rip unsuspecting investors off and walk away. The salesmen are usually owners of a couple million shares they own for less than a .01 anything above that pure profit....the latest versions are via cold calls to "traders"..they show the trader a little green profit...have him buy more & more then they "dump" in one or two days the stock falls back below .01

Now if you had a cousin/ close family member do it, i'm not quite sure how that works legally. I know for sure (not saying how) you CAN get away with it if you do it a handful of times a year. If it becomes a pattern, I'm sure that would be a different story. Technically if the legal entity is an arms length apart you really don't know where those orders are resting so the SEC would have a hard time trying to convict you until it became a trend.
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No. It's nothing to do with pump & dump scams. It's bidding $0.01 and hitting the bid in another account you control. Or bidding vol as a portfolio manager and crossing the trade in your personal account.

Silver, you don't really need to exercise your 1st A rights in shit you know absolutely nothing about.
 
@Sig "What about doing Norbert's gambit? It appears that it's done somewhat routinely to convert between CAD and USD and if you want to be risk free about it you'd need to simultaneously enter a long and short on the same stock, albeit on the U.S. and Canadian listed versions."

There is the AML issue - potentially.
 
I’d argue that intent matters, because SEC may ask questions but if they can’t determine market manipulation then I’m not sure which laws and regulations they’d use. But what do I know.

Here is just a related case from 2008:
https://www.sec.gov/news/digest/2008/dig082808.htm
“The complaint alleged that the defendants artificially raised and maintained the price of CTT's stock and created a false or misleading appearance with respect to the market for CTT stock through manipulative practices such as placing buy orders at or near the close of the market in order to inflate the reported closing price (marking the close), placing successive buy orders in small amounts at increasing prices (painting the tape), and using accounts they controlled or serviced to place pre-arranged buy and sell orders in virtually identical amounts (placing "matched trades").”
 
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ajacobson said:
@Sig "What about doing Norbert's gambit? It appears that it's done somewhat routinely to convert between CAD and USD and if you want to be risk free about it you'd need to simultaneously enter a long and short on the same stock, albeit on the U.S. and Canadian listed versions."

There is the AML issue - potentially.
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You do it in the same account so you can journal over the stock, so if done that way I think you would avoid the AML concern. However if there is a concern that you're "printing the tape" with a self-dealing transaction where you took no market risk (if that's the "really bad thing"), then you would be entering simultaneous opposite positions on the same CUSIP although as @desterio points out you would not be buying the exact share you sold because the trades are on different exchanges.
 
athlonmank8 said:
Now if you had a cousin/ close family member do it, i'm not quite sure how that works legally. I know for sure (not saying how) you CAN get away with it if you do it a handful of times a year. If it becomes a pattern, I'm sure that would be a different story. Technically if the legal entity is an arms length apart you really don't know where those orders are resting so the SEC would have a hard time trying to convict you until it became a trend.
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I have a relative who trades and also has an Interactive Brokers account. There was an instance where we were trading the same security unknowingly and our orders crossed. Weeks (or months I can't remember) later I will got an e-mail from IB requesting an explanation for the trade and I had no clue what they were talking about until I talked with my relative and we figured out what happened. So at least IB monitors this stuff.
 
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