Fleck has a modest proposition to cure tape painting and window dressing (from the Rap tonight):
grantsinvestor.com
Disclosure With A Big 'D' I have a couple of suggestions that should take care of the problem. They are as follows: We all know that if one has a position over 5.3%, one is forced to file a 13D and must amend it if any further changes are made in the holdings. Investment firms are exempt from this rule. I suggest we lift that exemption. Therefore, any fund group, investment firm or hedge fund that holds over 5.3% (including derivative positions) of a company would have to amend its filing any time it transacted in the particular security. That disclosure would probably remedy the shenanigans designed to monkey with the tape. The disclosure may also show if certain large fund groups were getting heads-up on information due to large positions that violated full disclosure, i.e., they tiptoed into or out of certain names repeatedly at just the right juncture.
My second suggestion concerns the issue of buying stock. If a fund held a certain position over a threshold size of the portfolio, whether it be 5.3% (or some other number like 7% or 8% or 10%), then it would be barred from buying the stock on an uptick in the last three days of the month. This would also apply to anyone who was under these "13D regulations," i.e., anyone with a position big enough to be capable of affecting the tape.
When you can't lift offers and bid over the offering price, it makes it difficult to mark up a position. Now, that may seem complicated, but remember, any time one wants to sell even 100 shares of stock short, one must get an uptick. Those of us who operate on the short side have to deal with that restriction all the time (and we manage). People seem to be so worried about "bear raids," but no seems to mind when stocks are jammed higher, apparently not understanding that this practice costs them money.
Obviously, these are just suggestions, not meant to be final solutions, and can almost certainly be improved upon. But basically, I think people can see the general thrust of the idea. If you have a big enough position, you have the ability to mark up a stock, and if it's a big enough piece of your portfolio, you have the incentive. So, making these sorts of changes would go a long way toward advancing the cause of fairness -- by eliminating the temptations.
Lastly, corporations should not be permitted to operate in their own puts and calls, as many tech companies have done. The potential for conflict there is so obvious that I can't believe it's been allowed to take place. Rap readers, unite. Let's spread these thoughts, and maybe we can effect some changes. |
