"THE MARKET... consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Alexander Elder

Thursday, January 24, 2008

French Bank in Trouble

Rogue trader takes the blame.
see: Secret Trades
see: "everyone's worst nightmare"
see: Reuters video
see: 4 times greater losses than what brought down Barings
see: "Rogue trading is probably a daily occurrence..."
see: French police raid flat

An "INDEPENDENT" view, suggesting complicity, coverup and more? You decide!
"He did not siphon off a single cent, and did not profit in any way"
from the bank's assets, Mr Kerviel's lawyers told AFP.
see: Kerviel in temporary detention
see: video update: Kerviel free on bail
see: video update: They were warned

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What is a Bucket Shop?

"Bucket Shop is a specifically defined term under the criminal law of many states in the United States which make it a crime to operate a bucket shop. [2] Typically the criminal law definition refers to an operation in which the customer is sold what is supposed to be a derivative interest in a security or commodity future, but there is no transaction made on any exchange. The transaction goes 'in the bucket' and is never executed. Without an actual underlying transaction, the customer is betting against the bucket shop operator, not participating in the market."
see: Wikipedia

The SEC believes that "internalization" is somehow different, and this affects ALL of your online trading, no matter what you are trading. Trades that are executed outside of the exchange, never reaching the main market, effectively hide data from technical analysis, and skew pricing.
see: Not a bucket?

"... internalization hurts retail customers and market quality"

see: EconPapers

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