A DAY LATE & a Dollar SHORT..or is it the grass roots movement ..that is making a difference?
Hmmmmmmmmm....................
BN NASD Will Step Up `Spoofing' Surveillance of Canceled Quotes
Feb 28 2000 8:31
NASD Will Step Up `Spoofing' Surveillance of Canceled Quotes
Washington, Feb. 28 (Bloomberg) -- The National Association
of Securities Dealers will step up its surveillance to better
detect the quick placement and cancellation of quotes, in a
potentially manipulative practice known as ``spoofing.'
Spoofing involves placing quotes for only a few seconds on
the Nasdaq Stock Market, in an attempt to spark a market movement
that a trader then can take advantage of to buy or sell.
A market participant that owns a stock ``may flash a large
buy order' on an electronic trading network `` for a matter of
seconds, cancel the order, and thereafter sell its stock to market
participants who raised their bids in response,' Mary Schapiro,
head of NASD's regulatory unit, said in a letter to Representative
John Dingell, a Michigan Democrat. NASD Regulation believes
``spoofing, with the right set of facts, constitutes market
manipulation because it is premised on disseminating misleading
pricing information,' the letter said.
NASD Regulation is developing a mechanism in its electronic
surveillance to generate alerts if there are large quotes or
orders for brief periods, followed by market movement consistent with the quote and by activity on the other side of the market by
those who generated the quote, Schapiro's letter said. Details of
the NASD plan were reported today in the Wall Street Journal.
``We expect an initial version of this surveillance program
to be implemented within the next four to six weeks,' Schapiro's
letter said.
Some argue that ``spoofing' isn't manipulative because a
``ghost' quote, regardless of how brief its duration, is
immediately executable and exposes the market participant behind
the quote to the real and substantial risk of buying or selling a
large quantity of stock, Schapiro wrote.
``As such, some may view `spoofing' as indicative of the
typical gamesmanship engaged in by traders,' her letter said.
Schapiro's staff and the Securities and Exchange Commission
have identified ``several suspicious instances' of possible
spoofing, according to a memo by SEC market-regulation director
Annette L. Nazareth. For example, in 1998 the SEC brought an
enforcement action involving spoofing, the memo said. Other
inquiries now underway into possible spoofing ``cannot be
described in detail in a memorandum that may be made public,'
Nazareth wrote.
Nazareth's memo, which also was released by Dingell,
cautioned that ``many recent instances of rapid order v |
