High-speed algorithmic trading allows for massive numbers of transactions to occur at warp speed, using powerful computer programs that gather and analyze information much faster than human traders. But regulators have expressed some concerns about its potential risks and have brought enforcement actions against companies that they believe have used algorithmic trading to manipulate markets or mislead investors.
In October 2014, the U.S. Securities and Exchange Commission settled a case for $1 million against Athena Capital Research in which it alleged that the high-frequency trading firm used an algorithm that bought and sold large numbers of shares near the market close to manipulate stock prices in its favor.
