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To: mishedlo who wrote (142149)	1/8/2002 1:04:51 AM
From: mishedlo	Respond to of 436258

I forgot to add that I think they will do anything they can to gain advantage and if they get caught and pay a fine, well that is the price of doing business. If one is guilty I am sure more than one is guilty. They do not want someone else to gain advantage over them so others do it too. Kinda like cheating in high school, or elbowing somone in the head in basketball if the ref isn't looking, or speeding on the highway (go as fast as the guy in front of you). Its OK until you are caught. M

To: mishedlo who wrote (142149)	1/8/2002 11:32:23 AM
From: GraceZ	Read Replies (1) \| Respond to of 436258

The fines were a settlement, which means we'll never know whether the accusations could be proven. They could all be true or there could be far more wrong doing than they were accused of. If I sue you in a nuisance suit I can guarantee that your insurance company will settle with me regardless of the merits behind the suit. I'm not saying this is a case just that you have to understand that settlements occur for many reasons not all of which mean that they guilty. What is funny is that I owned Onsale during the period that a bulk of the accusations occurred against NITE. If you remember back to the day after Thanksgiving 1999, shortened session. Onsale rose 39 points in 3 hours, 57 to 96 . The next trading day Dec 1 it gapped up to 108 and then went into freefall down to 80. I remember the action quite well. The parabolic rise was primarily a short squeeze and it wasn't the kind of short squeeze that you are accustomed to hearing about. It was caused by the MMs going naked short to the public buying and then trying to replace when there was no supply because so many market participants were simply not trading that day on account of the holiday. The public was in a frenzy because they thought Onsale was the next EBAY and EBAY had blown everyone away by hitting such ridiculous heights. The speculation was at its most frenzied. At any rate, everyone was complaining about execution December 1, there was no way you could get a reliable quote that morning and Selectnet bogged down to the point where the MMs weren't getting confirmations, you can't trade something where there is no confirmation that you own it. When this happens in a fast moving market the MMs tend to step away and stepping away for a primary MM is illegal. This is what NITE is accused of, do I doubt they did this? No, because its a nightmare to make a market when Selectnet goes down and this happened repeatedly during the frenzied days of the mania. NITE just happened to be the MM that handled the bulk of trades on Onsale because back then they handled the majority of the trades from retail investors. I'm not saying that what they did was right, they just happen to be the ones who took the fall over what might have been a far more widespread problem, a problem that was caused by an inadequate system. The system was never set up to handle the volume and speed of small orders that occurred during that particular craziness.