Dave,
The primary evidence behind that charge was statistical. The activities that market makers were accused of were never found to be explicitly collusive, but were found to be anticompetitive. Big, big difference. The records showed that market pricing conventions were followed that were not the result of natural economic forces, but that same charge was made against major airline companies in the mid and late 1980s.
The government alleged antitrust activities by those airlines NOT because they were on the phones coordinating with one another, etc., but because it was suspected that these companies "signaled" one another through computerized reservation and fare systems.
Were some market makers discouraged from tightening the spreads? Yes, sure. But, of the tens and hundreds of millions of trades in the class period between 1989 and 1996, how many of these were mentioned in the SEC/DoJ 21(a) report? A handful.
Backing away? Still goes on today.
Flashing quotes on ECN's? I know lots of proprietary and retail daytraders who do the same thing and have for some time.
Delaying trade reports for the maximum allowed time (90 seconds)? Hey - I don't like it, tell those in charge it to change it. When I was a boxer, I was told that if I ever got knocked down, no matter whether ok or not, stay down 'til the count of 8 to get some "free rest." I don't like it - but at the same time don't blame and will accept a market maker who is injecting his own capital into the mix (lots of people forget this is a business, after all) waiting until the 85 second mark to report a trade he's done.
Most of the traders I know need someone or something to blame for bad trades and phenomena they can't explain, so long as it isn't themselves. The market makers, both by their high-profile position and the bubble-gum, standard chat room propaganda, bear the brunt of that blame, most of which is not justified. (I'm not talking specifically to you, Dave, on that point.)
LPS5 |
