Word: brokering
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...that the SEC complaint accused Merrill Lynch of accepting a payoff for its stock tip to big investors. This consisted in part of "give-ups" on shares subsequently traded by the 15 institutions, the SEC charged. A give-up is a practice by which a large investor orders the broker executing a transaction to split his commission with other brokers, in this case with Merrill Lynch. Give-ups have long been under SEC fire. The agency contends that such fee splitting means that brokers' commissions are unduly large on big-volume deals. In their battle to fend off more...
Stretching the Rule. The SEC's current effort to force the exchanges to pare their commissions began only this year, but the drive to erase insiders' advantages in the stock market started long ago. The agency established in 1961, in the Cady, Roberts case, that a broker who buys or sells stock on the basis of inside information commits fraud. Such police work intensified after Lawyer Manuel F. Cohen, an austere career civil servant, took over as SEC chairman in 1964. In the Merrill Lynch case, the SEC contends that not only the inside-tip giver is acting...
...hearings, probably in Manhattan. If he and the commission uphold the accusations, Merrill Lynch could face penalties ranging from a wrist-tap censure to permanent revocation of its license to do business. The institutions would be subject to milder punishment. They could, for example, be barred from operating as broker-dealers, or lose their registration as investment advisers. But, except for Dreyfus Corp., which operates the well-known Dreyfus & Co. brokerage firm, almost none of them engage in such activities. In any case, the SEC's verdict can be appealed all the way to the U.S. Supreme Court. Considering...
...that they are legitimately and fairly made, the new law provides that anyone who wants to buy 10% or more of a company's stock must immediately identify himself and give a complete accounting of his negotiations and intentions. "Everybody is so scared of the SEC," observes one broker, "that they don't need to be afraid of the New York Stock Exchange...
...only are the large sheets difficult to file, but every time a broker places a buy or sell order, the actual certificates must be sorted out manually and delivered to the buyer by messenger. Because stocks have no uniformly accepted identification numbers, a single issue may be assigned one number by the issuing corporation, a second by the broker who is selling, and a third by the broker who is buying. Such hoary habits, coupled with an unprecedented volume in trading, have created so much paper work that the nation's stock exchanges have been forced to close down...