SEC Charges New York-Based High-Frequency Trading Firm with Fraudulent Trading to Manipulate Closing Prices

The SEC sanctioned a high-frequency trading firm for placing a large number of rapid-fire trades in the final two seconds of almost every trading day during a six-month period to manipulate the closing prices of thousands of NASDAQ-listed stocks.

An SEC investigation found that Athena Capital Research used an algorithm to engage in "marking the close"; i.e., stocks were either bought or sold near the close of trading to affect the closing price. The massive volumes of Athena's last-second trades allowed the firm to overwhelm the market's available liquidity, and to push the market price and, given the time of day, the closing price artificially in its own favor.

See: SEC Order; SEC Press Release.