NYSE 'investigation'

Discussion in 'Order Execution' started by chasinfla, Apr 18, 2003.

  1. Oh I'm very surprised. I remember also that some say it is impossible wharf wharf wharf.

    But don't be fooled, they just catch theses two to make people believe that it is an exception practice whereas it is not :D:D:D. As usual there is the apparent law that forbid a practice and another one unknown to the public that restablishes something nearly equivalent. The brokers can be a direct counterpart of the clients so what happens: they don't put your bid and your ask directly into the market THAT'S WHY THE SPREADS AND LIQUIDITY ON ARE SOMETIMES SO UGLY especially on options market. As a consequence the market is no more a FREE TRUE market which is a redundancy since a market by conception is to be free. They should create a word for a market which is not free wharf !

    In 1929 the brokers weren't even allowed to be a counterpart of their clients. Nevertheless the law didn't forbid their spouse and children accounts wharf wharf. LAWS AND LACK OF JUDGEMENT: THAT'S WHAT THEY USE TO FOOL THE MAJORITY OF PEOPLE. So today's law is even less strict than in 1929 so imagine...

    #41     Apr 21, 2003
  2. Babak


    #42     Apr 21, 2003
  3. Anyone find it funny that these guys get busted relativly soon after ECN's gain in popularity and decimalization hits their wallets....?

    The boys down at LaBranche/Fleet/Etc. have had gotten used to the huge money of the past, and have a lifestyle to maintain..

    These guys are used to making multi millions and now are being limited to maybe a million or so/year (my guess).. Rather than adapt to it, they chose to roll the dice and push the legal envelope to rake in some more $$$ and this is what happenend..
    #43     Apr 21, 2003
  4. a $150,000 fine to Fleet-Meehan is <i>really</i> :eek: going to deter them. That's about how much these games cost a single active trader over the course of a year.

    there is a potential conflict of interest in every business transaction. people don't have to abuse their privileges, and true competition is a great motivation to honesty.
    #44     Apr 21, 2003
  5. possibly, but repeated offenses will stiffen penalties, and bring on further legal repurcussions and new exchange rules (ie order handling rules) over time..

    What you say is true in the short term, but a further crackdown will ensue if the traders treat it like a slap on the wrist..
    #45     Apr 22, 2003
  6. CalTrader

    CalTrader Guest

    Just thought I would chime in and perhaps add some perspective .....

    I trade NYSE, NASDAQ, related indexes and futures.

    In my ten years at CME there were some notable investigations involving the futures market equivalents to the NYSE situation, some of which I was personally involved with as a representative of the exchange. The futures markets survived and the individuals caught were removed. The Merc attempted to improve their compliance systems. However, I believe that some of the affected markets were hurt and over time we saw quite a bit of consolidation in the futures business. Things are better today with more automated compliance systems / survelance in place.

    While there were many honest folks in the futures business there were quite a few questionable operators: The situation is no different in new york.

    The specialist system may simply be modified with additional compliance through automated systems improvements: this is how the merc proceeded to address the problems at the time and I think we will see it in new york as a result of these problems.
    #46     Apr 22, 2003
  7. DaveN


    #47     Apr 22, 2003
  8. Well, I do not trade (NYSE) stocks, but could it be
    there are less 1x1 sized quotes recently ? so it appears to me...

    Maybe they are at least temporarily pretending to be fair ??

    what are your latest experiences ?
    #48     Apr 22, 2003
  9. how widespread would you guess this is, then and now of how many so called bad apples there are on the floor, in say % terms
    #49     Apr 22, 2003
  10. I recently read an article on this problem and they made the rather startling point that 1/3 of the NYSE's employees are involved in compliance issues. The exchange was trumpeting that fact as evidence that they were on the job, but an institutional manager had another take on it. He said it shows how massive the problem really is.

    Personally, I see no reason to allow the specialist to trade the liquid stocks. Does GE really need their liquidity? For some of the slow movers, maybe it is helpful. If the institutions would shift their business to ecn's, they could make their displeasure known pretty quickly and force the NYSE to do something.
    #50     Apr 22, 2003