Back in 2003, proprietary traders on Merrill Lynch’s Equity Strategy Desk made tidy profits for the firm by selling shares of several little-known companies. How did they get the notion that offloading millions of dollars of, say, Teva Pharmaceuticals and Comverse Technology might be a good idea? “Traders who bought and sold securities with the firm’s own money for two years were close enough to see the computer screens of traders taking orders from clients and overhear their phone calls,” the Journal reports. Also, in case their eyes and ears failed them or they were just too lazy to strain, they sometimes got the info from their colleagues over IM, even though doing so was against the company’s ethics policy and, according to the SEC, the law. Because they were smart.
An ESD trader on one occasion told a market maker in an instant message: “[I] always like to do what the smart guys are doing.”
Too bad nobody told him the smart guys don’t allow their illegal trades to be recorded on Instant Message.
SEC CHARGES MERRILL LYNCH FOR MISUSING CUSTOMER ORDER INFORMATION AND CHARGING UNDISCLOSED TRADING FEES [SEC via WSJ]
Too bad nobody told him the smart guys don’t allow their illegal trades to be recorded on Instant Message.
SEC CHARGES MERRILL LYNCH FOR MISUSING CUSTOMER ORDER INFORMATION AND CHARGING UNDISCLOSED TRADING FEES [SEC via WSJ]
