Very nice article on MM manipulation,
definitely a lesson to be learned in reading this.
These amazed me:
Numerous market makers collaborated without disclosure
to their customers in ways that misled and
disadvantaged their customers and other market
participants. These market makers coordinated their
price quotations, their transactions in securities, and
their trade reports. For example, the investigation
found that some market makers have displayed quotations
at prices at which they did not intend to trade in
order to help another market maker trade, have
orchestrated artificial increases or decreases in
prices of trades, and have improperly delayed the
reporting of trades to the Nasdaq market for their
benefit or that of another market maker.
ù Some market makers, without disclosure to their
customers, shared information with each other about
their customers' orders, including the size of the
order and, on occasion, the identity of the customer.
They also shared information about their inventory
positions, trading strategies, and the prices they
planned to quote.
ù Numerous market makers frequently have failed to honor
their price quotations in violation of Commission and
NASD rules requiring firm quotations and prohibiting
misleading or fictitious quotations. Certain market
makers have also refused to honor their firm quote
obligations in a selective and discriminatory fashion
as a means of punishing certain market participants.
This conduct was anticompetitive, inconsistent with the
operation of a free and open market, and resulted in
unfair discrimination between and among market
participants.
Susie
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