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

To: Dominick who wrote (2354)	1/20/1998 3:32:00 PM
From: steve goldman	Read Replies (2) \| Respond to of 4969

As an example of "jimmying" the prints....lets say me and my buddies have 10 accounts between us. We want to make xyza look stronger. We start trading it between one another, he to me, me to him, each at succeedingly greater prices....to everyone else, the stock has moved higher. Someone could do this between their retail and IRA account or between retail accounts of the same person....One account has a gain, the other a loss...the net is zero...the effect is that times, sales and quotes are jimmied. I could also print reports to ACT for trades that never occur. Lets say I was a market maker (which we arent' and I crossed the trade between my inventory and client abc.) Its an inhouse cross, I make the spread, but I still hav to report the trade. Trades done on SOES, selectnet, are right on the nasdaq circuit and so they sort of "report" themselves. As soon as the trade goes off, the print goes up electornically, immediately. But what about the cross in house. The firm has to print it to the tape. Ever notice late prints, where the prices loook absurd? The firm, in the end, might not do the trade at all, might not cross anything, bt simply hits a few keys and wholla la, prints to the tape...looks like action where there isnone.... You might think safeguards and other measure would prevent this. The nasdaq gets kudos for trying but is still far from there. It happens, I don't know the frequency but to think it might not is thinking too highly of the firms that are continuously sanctioned and fined millions of dollars. AMENDMENT OF PREVIOUS POST: After looking at the NASD newsletters, let me state that in Jan of 1997, one month after the 100 million dollar cencure, the SEC started collecting the % fee on OTC and other NASDAQ securities whereas they had only done so on listed stocks previously. If I mistated thatthey were collecting this fee to cover the 100million, I was wrong in my statement, yet my sentiment remains. Believe me, you pay for the 100 million one way or the other, prehaps more expensive soes trades, more expensivecommissions, whatever it is, you end up footing the bill. Very rarely does any company have additional expenses and not pass them along to the client. regards, steve@yamner.com