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| December 1997 | Market makers agree to settle the class-action case for approximately $1 billion. |
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I never liked the term SOES bandits. This was the pejorative name given to us by market makers and NASD officials in order to give us a "bad-guy" connotation. The use of the term bandit was a NASD and market-maker attempt to secure SEC approval for regulatory changes curtailing SOES and to prejudice our position in the media by slandering anyone who actively used the SOES electronic execution system. We detested the pejorative "bandit" connotation and the name but did not shy away from it. The term bandit had romanticized SOES trading and given us a Robin Hood-like image. Sometimes I felt like a modern-day Zorro, who had assumed the mask of Zorro as a symbol for the DAET community. The industry wanted to give us the same negative image associated with penny stockbrokers, boiler room operators, and other abusers of the public. While firms as notable as Prudential Securities were under investigation relating to the sales of limited partnership interests, Pru continues to do business with an aura of legitimacy as if nothing had happened, but of course, it is one of the boys. |
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Despite the fact that the activities of SOES traders were 100 percent legal, moral, and correct, we were subjected to negative publicity. Fortunately, America roots for the underdog, and the nickname bandit had opened up the door to very helpful public relations with the print and television media. Today, the tide has turned, and many sophisticated thinkers in the financial and regulatory world now recognize that DAET is a true democratization of access to the trading markets. The bad press and negative portrayal of SOES trading has for the most part disappeared and been replaced with more appropriate press coverage of the positive effects of DAET on the spreads, in particular, and the future structure of the markets, in general. |
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