Man, it must be tough to make a loonie up there in Canada if a trading firm has to resort to this... http://www.nasdr.com/news/pr2002/release_02_027.html
These guys are getting squeezed in a major way. I wouldn't be surprised if they go under. Their offices are empty. I walked into one last year and there were four traders and around 36 empty stations. I repeat...last year! I don't want to imagine what the numbers may be this year. They started a hedge fund to provide an alternative revenue stream but I don't know how palatable it would be for sophisticated Canadian investors to give their money to traders who make a chiauaua look serene. The hedge fund is still mired in regulatory filings (or so they say). Since ST pushes over-trading, I think with the arrival of IB into Canada they will probably lose traders who believe a drastic commission cut would offset other benefits they derive from ST. But still what they are alleged to have done is simply stupid. Not only is the NASD not too happy with them and will probably ask that they disgorge all ill-gotten gains but I somehow don't think Island will have warm & fuzzy feelings for them either. All this for $19k a month? Wow! They must really be desperate.
Babak....just to clear things up here... ST has resorted to a new business model in the past 6 months...in addition to the hedge fund, they have hired and trained hundreds of prop. traders since theit client based has dwindled susbstantially. Their offices are jammed now with prop traders. By the way, what's IB? When does it come to Canada. Secondly, the payout is 30% of gross for prop traders, not 20.....their website is not updated. Finally, Island is saying that ST didnt do anything wrong, and they even paid ST the 19k. Their top traders last month grossed over 100k, and took home 30k US for one month.....BTW that was the ROtterdam, Holland branch.
One more thing, prop traders pay zero commissions (just ECN pass throughs), and put up zero capital, and gave buying power up to 300k each.
"By the way, what's IB? When does it come to Canada." Do a search for "IB" in this forum. You are guaranteed to get at least 10 hits. heehee
Silver Interactive Brokers is in Canada now. You pay a one cent commission and keep 100%. On trades over 500 shares, you pay 1/2 cent commission. For all the guys making 30K per month, jumping to their own account should be a snap. I got a few doubts that Island is pleased about being finessed out of 19K.
I think NASD will come down very hard on ST. Now is not the time to be cute and fight them. They have to prove that they are tough and may even go farther than what is called for just to prove it to the media and investors. Based on the info available, I have no doubt that ST did indeed break NASD regulations. But new info may come to light. Lets wait and see. btw, SilberBullet, how do you know more than that which has been made public? do you have a relationship with ST? do you work for them?