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with one another, furthering their proprietary interests at the expense of investors and other market participants. This coordinated conduct had included: |
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| Arrangements under which these market makers agreed to move their published quotes at the request of other market makers, or assist one another in executing trades. | | 2. | Agreements to delay reporting specific trades likely to have a negative impact on the value of the requesting market maker's trading position or to obscure the true sequence of trades from customers or other market participants. | | 3. | The routine sharing of information by these market makers concerning customer orders, securities positions, trading strategies, and intended quote movements. Although many market makers attempted to coordinate their activities on a widespread basis, such coordination was particularly pronounced among market makers that had regular and close contact in the course of trading the same securities. When testifying before the SEC, some traders had referred to these cooperative traders as "friendly competitors." |
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Delayed Reporting Of Trades |
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The SEC uncovered instances in which some market makers entered into explicit agreements to delay reporting trades. The following transcript from the SEC report is an example of market makers' agreeing to delay a print to hide it from a customer. |
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TRADER 1: I just sold 25 at ¼, 1/8 for any part of whatever you want. |
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TRADER 2: Oh, that's ******* beautiful, buddy. |
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TRADER 1: |
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TRADER 2: Why don't I sell youThis sounds so horribleI'm gonna sell you, is 10 G's okay? |
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TRADER 1: |
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TRADER 2: I'd love to sell you 10, I owe you one. |
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