Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : From the Trading Desk -- Ignore unavailable to you. Want to Upgrade?

To: David Smith who wrote (2011)	1/16/1998 11:43:00 PM
From: Dan Duchardt	Respond to of 4969

I came across your posts this evening, and read all of them from the most recent back to this one, and I guess that's almost all of them. Want to add my thanks for the insight from the MM's side of the equation. However, this post of yours raises a question. I've had what I can only describe as some BAD experiences with underwriters who have sworn up and down that they would protect my interests above all if I invested money with them. When push came to shove, my interests have not been protected, and I have lost a lot of money. I have since learned that these underwriters are also the principal market makers in the securities of the companies they underwrite. In a real sense these MMs ARE doing something for these companies. As I understand it, they are obligated to do something for them- get some guaranteed number of shares into the market. If they can sell more, up to a maximum authorized, so much the better. They make more money, and the company gets more working capital. It seems to me there is an inherent conflict of interest, and some, shall we say, less than forthright dealings with clients here. The underwriters sell gullable clients (I was one) on the idea they will help them make money, and will even recommend solid securities of well established companies to open an account and gain confidence. Then they recommend "their" companies, which serves their interests and the companies' interests, ahead of the clients. I don't mind being sold a used car that is represented as a used car. I resent promises to look out for my interests being followed by manipualation and then dismissed with a "sorry, but nothing is guaranteed". I don't know how you decouple the "MM perspective" from the marketing that is done on behalf of these companies, but I would welcome your perspective on this company-Underwriter/MM-client relationship.