Perhaps you should try using such sources as www.nyse.com for your references instead of you those of Australian stock exchange. No he did not commit a wash trade since he did not hit his own bids. He submitted the order to the specialist who then in turn routed the order to INET and executed them against the trader's own bids, which was not his intention at all. For all anyone knows, he had them out there to get long again and believed into the specialist's supposed duties of supplying liquidity. I stand by my comment that you are totally clueless. Placing bids & offers all over market depth book is not manipulation no matter what the great all knowing entity of Australian Stock Exchange says. The fact is that even if your intention is to "persuade" others to help you push the price in your favor, you are placing an order out there that is executable and will be executed if you do not cancel in time (unless you are a specialist or MM).
The appropriate sources would be the SEC and the NYSE... Not the NYSE (and not the ASX) (the SEC has regulatory oversight of the NYSE). However, the descriptions on the ASX were more appropriate for this message board than those I found at the SEC. I am aware of the SEC documentation. --- a. Transactions relating to purchase or sale of security 1. It shall be unlawful for any person, directly or indirectly, by the use of the mails or any means or instrumentality of interstate commerce, or of any facility of any national securities exchange, or for any member of a national securities exchange-- For the purpose of creating a false or misleading appearance of active trading in any security registered on a national securities exchange, or a false or misleading appearance with respect to the market for any such security, (A) to effect any transaction in such security which involves no change in the beneficial ownership thereof, or (B) to enter an order or orders for the purchase of such security with the knowledge that an order or orders of substantially the same size, at substantially the same time, and at substantially the same price, for the sale of any such security, has been or will be entered by or for the same or different parties, or (C) to enter any order or orders for the sale of any such security with the knowledge that an order or orders of substantially the same size, at substantially the same time, and at substantially the same price, for the purchase of such security, has been or will be entered by or for the same or different parties. --- PS, the specialist is not required to supply liquidity in normal markets. I appreciate your "honesty." However, my intention wasn't to persuade you that I'm not clueless. Rather, it was to suggest that you might want to consider a more constructive method of communication. "In essence, a manipulation is the intentional interference with the free forces of supply and demand." ...See: In the Matter of Pagel, Inc., et al., SEC Release No. 34-22280 (1985). ------------------------------- I hope the above information clears up your misunderstandings. If you want further clarification or guidance that you can be assured of, please see a securities lawyer; I am not one.
so, if he places orders that are excecutable at the bid and or ask to fill his orders in a way that's benefitial to his intentions. Is he manipulating the stock, or not? Any lawyers in the house?
if the intent was to deceipt it's considered manipulation and therefore illegal, that nyse bastids do it all the time and the fact that madnum wont be found out it's another matter altogether.
I guess you just don't get it, my guess is cause you never actively daytraded and watched how market depths move. You are attempting to apply what you consider is breaking the law from you derived from those paragraphs to what is normal everyday trading action. Most of such situations have no intentions of manipulating. Just because someone posts a big bid and then cancels it, does not mean that there is manipulation going on. Even if it is nothing more than "fake" bid, there is no manipulation of free market supply & demand, because, as I have mentioned before, you can get hit on your order without a problem. Your demand will be filled with someone's supply. To cross into true manipulation, you have to really step over the line. You have to take these practices to the level of penny pump & dumps. There is a clear difference between those operations and the way that any hedge fund, mutual fund, intisutions, etc fill orders in equities. How about window dressing by mutual funds, this is a well known and accepted practice, why is that not labeled manipulation by the book? Think about it for a moment, it does not take a lawyer to understand why what madmunny did is not considered manipulation, in fact, even if someone tried to report that as manipulation and ask to break the trade, the SEC, NYSE and anyone else would just laugh. Specialists and MMs are on another level thats why they have their own level of "regulation" (aka license to steal). Key differences between a specialist posting a fake bid and a regular traderâthe latter has to accept the execution if his bid gets hit.
nothing in the Australian text that says you can't place bids and offers at diff prices. Or place bids and offers all over the place as long as you dont trade with YOURSELF or a confederate. Hilarious how some folks talk about 'manipulation' as if its something that isn't an integral part of the market on a daily basis. Can't imagine any of them make a nickle, but you never know,
I agree. Incorrect. What, exactly, is the difference between manipulation and "true manipulation?" It is not an accepted practice. It is not legal. They would shrug it off because it is not substantial enough. That doesn't make it legal or ethically acceptable (it is neither).
The question we should ask ourselves isn't wether or not manipulation happened. But wether or not they can prove it...
No because it is regular practice. If you have ever watched an order progs operate you would understand that working the bid/offers is part of the process. A fund wants a lot of stock and they don't want to get killed on the price. That's why they hire either a group of ppl or a top tier trading firm to work the order. Often, that requires working the market depth with various orders to not show your hand and hopefully show the complete opposite. To use your logic is to say that every institution trying to get a good order fill is immoral & unethical. So basically, when these guys hire a MM or specialist to do a large order fill and then the MM or specialist spends a day accumulating stock by running his games of making the stock look weak as much as possible, they are all breaking the law. Come on, be reasonable.
<img src=http://www.mascotcoalition.org/education/movies/training_day_images/denzel_intro.jpg> "It's not what you know, it's what you can prove!"