The 14 firms named in the complaints are all “specialists,” trading firms that have a specific duty to maintain orderly markets by matching buyers and sellers and standing ready to conduct trades when buyers or sellers are scarce. They include units or subsidiaries of well-known Wall Street names, including E*Trade Capital Markets, Goldman Sachs Execution and Clearing, Knight Financial Products and TD Options.14 Trading Firms Settle Charges for $69 Million - NYTimes.com
Regulators said the firms had engaged in various types of “front-running,” which involves trading ahead of customer orders or timing their own trades to seize profits. For instance, specialists that had a big order to buy a stock would first buy it from a seller themselves and then illegally bid up the price moments before selling it to profit on the transaction.
Thursday, March 5, 2009
14 Trading Firms Settle Charges for $69 Million - NYTimes.com
Posted by Anthony J. Pennings, PhD at 10:48 PM