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Non-Tech : DATEK Market Maker -- Ignore unavailable to you. Want to Upgrade?

To: gbh who wrote (7)	8/18/1998 3:12:00 PM
From: INFO_DART	Read Replies (1) \| Respond to of 48

I get a slow one (3-5 minutes) about every 15 to 20 trades. All others are virtually instantaneous, 1-5 seconds. There is some reason that I never see fills in between these time ranges. I think its software.<i/> I too have observed this bimodal distribution of trade latencies. This is telling us something important about how the system is actually structured. Any hypotheses that might explain this observed behavior?

To: gbh who wrote (7)	8/18/1998 3:16:00 PM
From: INFO_DART	Read Replies (1) \| Respond to of 48

I think these slow fills are just software related order routing problems. I think you are touching on an important point. However, I would emphasize that they are "software related." Software is how everything is controlled. Who controls the software? The people who own Datek control the software. Who controls the Island software? The same people who own Datek also own Island. And, who controls the Datek trading for its own account activity. Of course, the same people. They have a lot of control. It is like they are judge, jury and yes executioner of my orders. Furthermore, they also play the role of prosecutor, to the extent they trade against me for their own account. Clearly there are issues raised here. Keep in mind that we are in a new era of profound deregulation of financial markets. It is up to each of us to be on the alert for potential problems. It seems a perilous market structure that allows the same controlling interest to broker retail clients, operate an ECN and trade for their own account! Talk about insiders, WOW!

To: gbh who wrote (7)	8/18/1998 3:18:00 PM
From: INFO_DART	Respond to of 48

Isn't it true that all large brokerages trade their own account? I believe that these guys typically screw their retail clients on trades First, I'm still learning in this area. However, I am a research methodologist trained in techniques for discovering the truth. That being said here is what I think. Yes, with some important exceptions. That is one of the reasons we don't trade with them. However, I had thought that Datek was different. In this regard, it appears that they are not.

To: gbh who wrote (7)	8/18/1998 3:20:00 PM
From: INFO_DART	Respond to of 48

Datek has also told me that market orders also first look for ISLD matches (although I'm not sure this is quite legal per SEC rules stating MMs having to be "ahead" of ECNs). There are 3 possibilities that concern me. One, they are engaging in an illegal practice violating SEC rules. Seems unlikely, but let's keep an open mind. Two, they did not tell you the truth about how the orders are handled. They may not even know themselves. Three, they do it exactly the way they told you and it is perfectly legal. My guess is number 2. Perhaps, another SI member can lay it all out for us.

To: gbh who wrote (7)	8/18/1998 3:21:00 PM
From: INFO_DART	Respond to of 48

I think you believe DATK has some role in our occasional slow fills, and that maybe they use DATK to work against us, their retail clients. I don't know if they have a role in slow fills. But, I think it is an important question. It has been raised many times by others on the Datek thread. Most recently, including surprising behavior when the trader tries to cancel their order.

To: gbh who wrote (7)	8/18/1998 3:23:00 PM
From: INFO_DART	Respond to of 48

I would like to better understand what role the DATK market maker plays, buts I don't think they play any role in my trades with Datek. I too would like to understand how Datek's own trading activity might effect my trade execution. Anyone out there know? Also, NASD says Datek is a "Non-registered Market Maker." What is a "Non-registered Market Maker?"

To: gbh who wrote (7)	8/19/1998 4:47:00 PM
From: INFO_DART	Respond to of 48

8/18/98 NASD ARBITRATION NASD Member Firm: DATEK ONLINE BROKERAGE SERVICES CORP BD Number: 5209 SUBJECT OF AN NASD ARBITRATION AWARD. THE ARBITRATION INVOLVED A PUBLIC CUSTOMER AND WAS FILED BECAUSE OF THE FOLLOWING DISPUTE(S): UNAUTHORIZED TRADING; BRCH OF FIDUCIARY DT; ACCOUNT RELATED-BREACH OF CONTRACT. THE AWARD INCLUDED: ACTUAL/COMPENSATORY DAMAGES, AMOUNT ASKED BY CUSTOMER-$2,432.56, AMOUNT AWARDED TO CUSTOMER-$2,432.56; OTHER COSTS, AMOUNT ASKED BY CUSTOMER-$6,086.12, AMOUNT AWARDED TO CUSTOMER-$504.66; PUNITIVE/EXEMPLARY DAMAGES, AMOUNT ASKED BY CUSTOMER-$4,865.12, AMOUNT AWARDED TO CUSTOMER-$0.00. [NASD ARBITRATION CASE NO. 97-02419] I wonder if this means Datek is liable for executing our orders after we have sent in a cancel order command?