Monday, August 24, 2009
Is Goldman's Selective Trading Disclosure A Legal Way For Preferred Clients To Front Run The Market?
Zero Hedge has long been discussing the impact of selective informational disclosure, be it in the context of trading or research asymmetries, which promote a two-tiered market, where privileged accounts of major broker dealers receive "tips" ahead of "everyone else." The quid's pro quo is that these "privileged" few end up executing the bulk of their trades with the broker-dealer, thus ramping up riskless agency revenues. In essence the clients' capital risk is mitigated, while the return to the "perpetrator" is augmented by collecting a disproportionate share of the bid/offer spread in the given security. Whether this tiering mechanism occurs via Flash orders, SLP provisioning, actionable IOIs, advance selective notice of a large flow order, a phone call, a limited Bloomberg blast, or an Instant Message, the ethics of the practice are undoubtedly shady...
ZeroHedge: Is Goldman's Selective Trading Disclosure A Legal Way For Preferred Clients To Front Run The Market?
ZeroHedge: Is Goldman's Selective Trading Disclosure A Legal Way For Preferred Clients To Front Run The Market?
Permalink posted by markw @ 4:47 AM 
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