NYSE Probe Brings Out Critics

Santini, Laura
April 2003
Investment Dealers' Digest;4/28/2003, Vol. 69 Issue 17, p13
Trade Publication
Now that the New York Stock Exchange has begun probing specialist-trading activity, upstairs trading and institutions are taking the opportunity to shout out their own complaints about the specialist system. For years, upstairs traders, those who route orders to the NYSE from Wall Street trading desks, and institutional investors have complained that specialists use their privileged position as the sole market maker for a given stock first to reap profits for their own firms-then to execute orders on behalf of customers. A few traders contend that NYSE specialists sometimes step in the middle of small orders not to boost profits-but rather, to inflate volume statistics. One trader recalled several instances where he witnessed a specialist buy 25,000 shares and later sell the same amount at the same price.


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