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Pastimes : Brokerage-Chat Site Securities Fraud: A Lawsuit
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To: JustTradeEm who wrote (382)6/30/2001 10:55:03 AM
From: Brandon  Read Replies (3) of 3143
 
During the time I have been in this industry I have had relationships with two brokerage firms. The first, while I was at Mtrader was with MBTrading. During that time I talked with Steve on numerous occasions about the nature of advertising relationships between brokers and sites. He was always emphatic in stating that paying any non licensed entity order flow(and none of the sites are licensed) is against both SEC and NASD rules. Because of this, it was also against his policies. To the best of my knowledge MBTrading has never paid any site for order flow. They certainly have never paid Mtrader or me for it.

In December of 2000 I left Mtrader to pursue another opportunity. At this time Toni and I had one of the larger fee based rooms (about 110 members). Steve offered to help in any way that he could, mostly this would have come in the form of banner swaps on our respective sites, and none would come in the form of MBTrading paying us.

Currently we refer our members to Mavericktrading, a TerraNova branch office. When you look at the activity in other chatrooms (the number of calls) I would suspect we could hardly be qualified as a catch for them. Toni has not been in the room much lately, but David and I probably give 3 to 8 trades a day and sometimes none at all. I would guess each member takes perhaps ½ to 1/3 of the calls. We spend a good deal of time explaining that being a trader is not about trading often, but its about trading smart and when the odds are in your favor. Mavericktrading does not pay us to give trades, nor do they pay us per any advertising agreement.

I suspect that our manner of operation is similar to what most people have. I am aware of two sites that have in the past taken payment for order flow. One is out of business now and the other is a shadow of what it once was. Most of the people that I have run across who run both the sites and the brokerage firms are normal, law abiding people who want do to do what is best for the clients. In the end, keeping your clients interest in the forefront is actually keeping your own right up there with theirs anyway.

Brandon
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