Regulators are after firms, not traders. Period. I've been at firms that have completely disregarded uptick in ALL stocks that have been audited. They pay their fine, show that they can be in compliance and that's it. Especially if you trade volume, these guys aren't going to waste their time going through thousands of trade sheets. They just want to catch firms, and them make sure that they implement the necessary software so that future audits are easier. I'm hoping single stock fut's will get big so that there will be pressure to stop the uptick bs that costs me thousands of dollars a month in bullet fees. Don't let any one scare you into thinking that you will face any wrath for uptick violations, unless they've got a real bone to pick with you. (Sex with an auditor's wife, etc.........; )
Would the illegal shorting be an arbitration issue? I would have thought that if the NASD or SEC does an investigation and finds some funny shit that they would lay charges and possibly even suspend your licence until a hearing. I don't know, never been through anything like that so I don't have a clue.
Mac If there is suffiecient evidience of violations, the NASD files a complaint. They exchange a ton of info and finally they will issue either a letter of caution or a AWC (acceptence wiaver consent) witht he evidence against the firm...basically , you admit you violated conduct rules and accept some sort of sanction or fine or both...In this case, who knows because i don't think violating the Downtick rule is the biggest of problems thsi or other firms encounter...there is one caveat to the whol mater...oftwn times a typical awc will be 5-10k in fines plus a written adjustment to your WSP's...however, if you have been hit for something before and then break it again...WATCH OUT! that's when they double and triple the fines and in some cases close you down, although most every trading firm on the street has been hit for short sale rules at least once or twice.
Boy I didn't realize that the regulators took everything so lightly. I mean it's not like short sale violations are the Fastow/Skilling gang or anything, but there is breaking laws and then there is breaking laws! By the descriptions given it sounds like ST was deliberately and flagrantly violating the downtick rule. In fact it sounds as though they do it as a normal course of business. Getting busted for going 10 MPH over the posted speed limit deserves a slap on the wrist, but doing 80 MPH over the speed limit is a whole different ass whoopin'
Damn those liquidity-illegal-short-swift-traders. Look what they did to WCOM, MFNX and other companies - shorted them to death and they ran out of business! Poor PALM even had to do this embarassing 20:1 reversal split to escape from those bastards!
OK OK I'll admit it. I'm Peter Beck. I make 99% of everything that comes in. The other 1% is divided among the prop guys. LOL