C: No I did not plant this WSJ story:
From the Wall Street Journal, Thursday, July 29, 1999
Headline: " Big Board Slaps Large Fines on 3 of Its 'Specialist" Firms
"the New york Stock Exchange has slapped three of its floor "specialist" firms with big penalties for allegedly failing to do their jobs.
The penalties announced yesterday, the first of their kind in almost three years, include two of the three largest fines evermeted out against specialists.
Specialists are the floor traders assigned to manage the trading of specific stocks on the exchange floor, matching buyers and sellers and using their own capital as necessary to keep price movements fair and orderly.
The most extensive penalties were levied against M.J. Meehan & Co. and three of its specialists for allegedly failing on eight separate occassions from October, 1996 to September 1998, to maintain
fair and orderly markets in CapMAC Holdings, Inc. Citicorp, Colgate-Palmolive Co., Donaldson,Lufkin & Jenrette, Inc., Eaton Vance Corp. and Unibanco-Uniao de Bancos Brasileiros, SA.
On Monday. October 27, 1997, the market tumbled amid the Asian crisis, and the next day Citicorp opened at $113, down $10 from Monday's close. As the market rallied it soared to $127.50
by day's end, leading some to accuse the specialist of setting the opening price too low and failing to curb its rise. On both days the exchange alleged the firm and Mr. McMullin "failed to participate
adequately as a dealer against a market trend during certain periods of significant price movement."
That's what separates trading on the NASDAQ where MM's are free to bid and offer stock at whatever price they choose as long as they don't conspire with one another to control trading in any
specific issue or group of issues. An auction market such as exists on the NYSE, the ASE, the PCE,the MWE and other listed exchanges does not operate as a free for all market as the NASDAQ does. That's why you didn't get the execution you thought you were entitled to. |
