This is not to say, not for a moment, that there weren't violations. But to characterize them as some huge, Street-wide conspiracy is nothing short of ignorance - a form of ignorance, I'd personally add, that leaves true violators in place, unaffected.)
"Street-wide conspiracy." I didn't say that; you did. I would add that SEC did in fact call this activity "conspiracy to defraud." My only comment would be as follows: well over 30 of Wall Street's top investment banks were implicated in this scandal. Call it what you wish, that seems to me quite a large number of firms involved in what you term to be "isolated violations."
"Ignorance." Oh, really? "Leaves true violators in place." Oh yes, of course targeting the actual Nasdaq market-makers making markets where by sheer coincidence customer orders were almost never published if they were between the curiously and regularly wide spreads would be silly. SEC should have gone after the real culprits! Maybe they were Montana ranchers fixing the spreads?
Please read the following:
sec.gov
The evidence indicates that instead of dealing as
competitors at arms length, certain Nasdaq market makers have coordinated particular trade and quote activities with one another, furthering their proprietary interests at the expense of investors and other market participants. This coordinated conduct has included:
(a) arrangements under which these market makers agree to move their published quotes at the request of other market makers, or assist one another in executing trades;
(b) agreements to delay reporting specific trades likely to have a negative impact on the value of the requesting market maker's trading position or to obscure the true sequence of trades from customers or other market participants; and
(c) the routine sharing of information by these market makers concerning customer orders, securities positions, trading strategies, and intended quote movements.
Although many market makers attempt to coordinate their activities on a widespread basis, such coordination is particularly pronounced among market makers that have regular and close contact in the course of trading the same securities. Some traders in testimony have referred to these cooperative traders as "friendly competitors." |
