Wednesday, December 17, 2003

Can someone explain to me why no one noticed this for 113 years?
Working out of booths scattered around the exchange floor, specialists match buyers and sellers of specific stocks....

Specialists are allowed to trade in stocks themselves to keep the market moving smoothly....

The lawsuit alleges that specialists used their insider knowledge of supply and demand to make trades that let them skim off profits at the expense of legitimate trades by market investors. At opportune times, the specialists essentially cut in line ahead of investors whose orders they were supposed to execute, the suit says. For example, a specialist who knew an investor wanted to buy 100,000 shares of Stock X at up to $50 a share might swoop in and buy the stock himself at $49.95, then resell it to the investor at $50, for a profit of a nickel a share, or $5,000.

Is that the invisible hand in your pocket, or are you just glad to see me?


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