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Politics : The Left Wing Porch -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (4198)	3/2/2001 9:42:04 AM
From: Win Smith	Read Replies (2) \| Respond to of 6089

Ray, somewhat on that topic, there is an interesting pair of compare and contrast articles in the Times today. In the first one NASDAQ is shocked, shocked! that there is daytrading going on, and couldn't possibly have been guilty of a ridiculous blunder itself. Floyd Norris: At the Nasdaq Casino, the Winners Get Stiffed nytimes.com The stock was Axcelis Technologies, although Mr. Parsons did not know the name. Nor did he know why it was moving: because a hedge fund trader had entered an order to buy the stock at any price from $10 to $95. The trader meant $9.50, not $95, but decimals can be confusing. The electronic network he used, RediBook, sprayed the orders all over Wall Street, driving the price as high as $93. The rising price started takeover speculation, which hit the rumor sites on the Internet. Mr. Parsons bought stock to cover his short position. He made $145,908. He got the bad news at 11 a.m. Tuesday. Most of his sales had been canceled, on the ground that the prices were "clearly erroneous." But his purchases stood. He owned 14,500 shares, bought at an average price of $19.03. With the stock now down to $10.06, his profit has turned into a loss of $130,065. Behind the scenes, there was chaos on Monday. Brokerage firms called Nasdaq, which had no answers until it consulted with officials from the Securities and Exchange Commission. Eventually, Nasdaq decided to cancel trades above the arbitrary price of $22, but only if the buyer complained and if the trade had gone through a Nasdaq system. It did not consider adjusting trade prices. Richard G. Ketchum, Nasdaq's president, did not know that was allowed by Nasdaq rules. What a joke. Meanwhile, off of Bloomberg, there was this SEC story where they seemed to actually be going after some real fraud, and not just trying to intimidate a kid. The S.E.C. Accuses 23 of Internet Fraud nytimes.com Mr. Walker said the new cases represented a "virtual checklist" of common securities fraud techniques. In one case filed against PinkMonkey.com and its founder, Patrick R. Greene, the S.E.C. said a company news release claimed that PinkMonkey.com would "quickly reach a significant market share in the $400- million-plus study aids market." The company's share price nearly tripled within an hour, eventually jumping more than 1,000 percent within two days to $17 a share, the S.E.C. said. Internally, the company, based in Houston, projected that it would take a year to reach, at most, a 5 percent market share of the $160 million study aids market, the S.E.C. said. The company had $30 in gross sales during the 14 months before it issued the release, the S.E.C. said. Without admitting or denying wrongdoing, PinkMonkey.com and Mr. Greene settled the case by agreeing to be subject to stiffer penalties if they committed similar violations in the future. Mr. Greene agreed to pay a $20,000 civil penalty, the S.E.C. said. A lawyer for the defendants could not reached for comment. $20k doesn't seem particularly significant compared to the money involved here. I like the $30 in gross sales part, though. -Win.