Back in July, Barclays was hit with a major lawsuit by New York Attorney General Eric Schneiderman, who alleged the bank “favored high-frequency traders in its dark pool and then lied to clients about their participation in the trading venue.” It wasn’t a great look for the Brits and it came at an especially awkward […]
What to Eric Schneiderman’s naked eye appears as fraud, Barclays customers apparently understand is just totally legitimate ways of doing business, according to the bank. Therefore, it wants this dark pools lawsuit dismissed and never mentioned again. Not once!
Having already put the mysterious, opaque platforms on notice, Mary Jo White & Co. are beginning to undress them. One’s already in the soup for taking a little too much pride in the folks it was quietly and very untransparently trading for. The rest are now having some light shone upon the disclosures they’re supposed […]
Chad Johnson, head of New York’s Investor Protection Bureau, told a conference today that while Attorney General Eric Schneiderman examines trading practices, Wall Street should help by suggesting ways to change for the better. It would be a mistake to think concerns about stock-market fairness are just bad publicity or extreme language used by critics, […]
Looks like Jamie Dimon isn’t the only banker who isn’t reading Flash Boys.
One problem that people with a lot of time on their hands like to get worked up about is that academic economists sometimes write papers advocating positions that benefit organizations that give them money, while being coy about that relationship. On the other hand this newish paper about dark pools, which compete for stock trading […]
Much success in financial innovation is due to coming up with a sexy name; “dark pool” just grabs the imagination more than “alternative trading system with undisplayed orders.” The downside, though, is that it also seems to have grabbed the SEC’s imagination, which I suspect is part of the explanation for the SEC’s rather odd […]
Regardless of what you think of the Securities and Exchange Commission, a good rule of thumb is that if you are regulated by the agency, you probably don’t want to go out of your way to unnecessarily insult and/or anger it. In fact, to play it safe, you might want to just show the place complete and total deference, whether you’re violating its rules or not. This is an attitude that many a hedge fund manager has adopted over the years, some of their own volition, others by strong advisement. Then you have Sheldon Maschler. The former chief trader of Datek Online, who in 2003 paid a $29.2 million fine and was banned from the securities industry, took a different approach. From Wall Street Journal reporter Scott Patterson’s new book, Dark Pools:
During the hearings, Maschler displayed a stunning irrevenerce toward the regulators. One day, he showed up in bathing trunks and a T-shirt that read NASDAQ SUCKS. The judge, outraged, tossed him out, telling him to come back in a different shirt the following day. Maschler did as ordered– wearing a T-shirt that read NASDAQ SUCKS in different colors.
Regulators were quickly crawling all over Maschler’s ragtag office. One day, a typical one in the market for Datek, each trader sat staring at his Watcher in Maschler’s basement, all decked out in their standard work uniform– baggy shorts, T-shirts, tennis shoes or flip-flops. Suddenly, they all noticed an odd presence in the room: two men in crisp suits looming over the stairwell door.
Maschler exploded like a grenade.
“Who…the FUCK…are YOU!” he screamed, jumping from his seat and jabbing his Macanudo in the air.
“We’re from the SEC,” one of the suits said. “We’re looking for Sheldon Maschler.”
“Who the FUCK let you in!”
“The door was open.”
“If my fly was open, would you suck my dick?”
The Datek traders buckled in their seats, struggling to contain their laughter.
“Now get upstairs and RING THE FUCKING BELL!” Maschler roared.
The two SEC officials sheepishly crept back upstairs– and rang the bell. Maschler pressed the intercom buttom.
“Hello, who is it?” he said calmly.
There was a pause. Then, “It’s the SEC.”
“Come on down!”
Maschler greeted them warmly, all smiles, backslapping. “Now, wasn’t that easier?” he said, waving around his Macanudo and blowing smoke into their faces.
Goldman Sachs, Morgan Stanley and UBS said this morning that they have agreed to share their “dark pools,” the trading arenas used by institutional investors seeking to trade large blocks of stocks without alerting the broader market about such moves. All of the major investment banks operate dark pools, with Goldman Sachs widely thought to […]