UPDATE 1-Securities watchdog examining erratic U.S. share moves

(Recasts; adds FINRA comment, background)

By Rodrigo Campos

NEW YORK, Oct 9 (Reuters) - Securities industry watchdogFINRA is reviewing transactions in at least 10 U.S.-tradedsecurities that saw sudden, big moves on Tuesday before resumingnormal trading in the latest case of odd gyrations by stocks.

An unidentified firm reported trades to the FINRA/NASDAQTrade Reporting Facility "at prices away from the currentmarket," Nancy Condon, a spokeswoman for the Financial IndustryRegulatory Authority, said in an email.

She said the trades are being reviewed to determine ifcancellations are necessary.

Trades cleared through the Nasdaq-operated trading facilitysparked sharp moves in either direction in a handful ofseemingly unrelated stocks, including Pandora Media , Nokia

and the Select Sector Financial SPDR exchange-tradedfund .

Shares dropped or rose rapidly anywhere from 1 percent to 18percent between 10:30 a.m. and 11 a.m., without triggering anytrading halts. Most of the trades were on New York StockExchange-listed securities.

The NYSE was looking into the matter, a spokesman said. ANasdaq spokesman declined to comment.

The unusual trades are reminiscent of a technology glitch atKnight Capital Group in early August that generatedrapid price changes and volume spikes, as well as the infamous"flash crash" on May 6, 2010. These and other technologyproblems have heightened concerns that stock markets need moretransparency.

A source familiar with the matter said Tuesday's odd tradescould have been generated in so-called dark pools, tradingmarkets that do not show their order feed publicly.

While no trade halts were triggered, one stock, MEMCElectronic Materials , had a down-and-up move of about 20percent in less than a second. Two trades in MEMC took place atless than $2 a share when the stock had just been trading at$2.41, according to Thomson Reuters data.

The unusual behavior of the stocks "definitely is raising anissue. There is chatter along the Street that the exchanges havelost control," said Sal Arnuk, co-manager of trading at ThemisTrading in Chatham, New Jersey.

Other securities with unusual moves included Las Vegas Sands, Two Harbors Investment and Hatteras Financial.

(Reporting by Rodrigo Campos and Chuck Mikolajczak; editing byDavid Gaffen, Clive McKeef and Kenneth Barry)


Messaging: rodrigo.campos.thomsonreuters.com@reuters.net))