Meet Gene, a NASDAQ Market Maker Message Board

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Non-Tech : Meet Gene, a NASDAQ Market Maker

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To: Don Pueblo who wrote (349)	8/1/2000 8:26:53 AM
From: LPS5	Read Replies (1) of 1426

Underwriters are bound by the same rules that restrict corporate insiders (plus companies' attorneys, etc.) from profiting from the privileged information which they are privy to in the process of conducting their businesses. Specifically, insiders, underwriters, and the like cannot: 1. Make "short-swing" profits (trades with a shorter holding period than 6 months) 2. Execute short sales in the issue (whether against the box or not) In addition, if the underwriting firm gets stock in the issue, it must be held for a period of one year following the effective date of registration of the securities. Warrants, options, and the like acquired by an underwriter in connection with the offering may be exercised at any time, but the securities they are converted into are subject to the one year wait to be sold. Finally, one last thing: an NASD registered individual or the account of an NASD member firm may not profit from a "hot issue" (an IPO where the price the security trades at in the secondary market is at a premium to the offering price) unless it is their own firm's offering. LPS5

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