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The following is text from a letter which I sent to NDB regarding their unethical trading practices: Dear National Discount Brokers: I think your market makers, Sherwood, should be put in prison. The few trades I have done with you have been front run by these bucket shop operators and cost me thousands in bad, untimely executions. Unless you credit my account in the sum of $10,000 (the amount your firm has cost me in dishonest trading practices and aggravation) I will be forced to take you to arbitration, and will press criminal charges against Sherwood. One example of a bad execution is when I placed an order in PowerBroker to sell 1,000 shares of UFEM at the market. At the time, the bid was 16 3/8. Rather than being instantly filled at 16 3/8 (like your ads claim), my order wasn't executed until seven minutes later when the bid had moved down to 16. There is absolutely no valid excuse for me to receive such a poor execution. When I contested this with a broker at your firm, it took two days for him to conclude that the order was held for seven minutes before execution, and that no adjustment would be made. This blatantly obvious delay in my order is only one example of how your market makers manipulate customer orders to their advantage, rather than working in the customer's best interest. Your firm claims instant execution on most orders, but I guess that doesn't apply to my orders since I never had an instant execution. No wonder you call it an execution! Another example of a trade I did with NDB proves how your firm front runs customer orders by improving prices by 1/64th. This abusive practice angers me so much, that I am determined to seek monetary compensation from you. I placed an order to sell a stock at the market which was quoted in quarters. I was filled 1/64th higher than the publicly quoted bid. The only reason anyone would pay me 1/64th higher than the bid, would be if the market maker had a customer order to buy stock at the bid price. By paying me 1/64th higher than your other customer's buy limit, you have effectively gotten in front of the other customer's order. It is ironic how an actively traded stock quoted in 1/4 point increments can consistently trade 1/64th above the bid, and 1/64th below the offer. Since I have a real-time quote machine, I am able to observe this criminal practice on a daily basis, and have determined that it has cost me thousands in unfilled orders. These are only two examples of many which your firm is guilty of. Unless you take immediate action to refrain from these deceptive practices, and compensate me for the poor executions which I have suffered as a result, I will not only take you to arbitration, but will also complain to the NASDAQ, SEC, and the press to see that justice is served. I read with great interest, an article in the Wall Street Journal last week, which stated that Sherwood is lobbying in Washington to prevent a securities reform bill which would prevent such abuses, and give investors fair executions. It is obvious from reading this, that Sherwood does not have any interest in acting in the best interest of its customers. Sherwood's practices of trading against their customers rather than for them need to be dealt with soon. Frank Badini 13 Roosevelt Avenue Old Greenwich, CT 203-698-1560 | ||||||||||||
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