[GJM] TRICKS OF THE TRADERS from [www dot ecotort.gn.apc.org]

[E. Crockett]

--- Mary Fee <mary at letslink.org> wrote:

> Anonymously printed in the colour supplement.
> Just the sort of thing I suspected - and then some
> - truly shocking. Thanks for posting it Nick
> ..M
> 
> 
> 
> >TRICKS OF THE TRADERS
> >
> >What's the rarest commodity on the stockmarket? 
> >Honesty. A former broker exposes the corruption, 
> >greed and insider dealing endemic in the City 
> >The Guardian, Saturday May 3 2008
> >
> >
> >
> >It was a typical day of coke hangovers and 
> >questionable ethics. Half past 10 in the morning 
> >and I was slumped at my desk, grey Hermès tie 
> >hanging despondently from my neck like a 
> >hangman's noose. I was struggling to breathe. 
> >Steve on the other side of the room overruled my 
> >pleas for the air conditioning to be switched on 
> >- another reason to hate him and his crew on the 
> >old-boy side of the desk.
> >
> >         We sat in long, straight rows in the 
> >trading room, like slaves chained in the hold of 
> >a Roman galley. Our chains were gilded ones, 
> >granted, but they shackled us all the same: from 
> >7 till 4.30, five days a week, we barely left 
> >our desks. There were eight screens shared 
> >between each pair of traders, the monitors 
> >stacked on top of one another in a tight 
> >semicircle. Hundreds of stocks flashed their 
> >rise and fall across the screens, with the 
> >Reuters newsbar spewing out company 
> >announcements like a Gatling gun all day. Our 
> >eyes were trained to follow every flicker. Banks 
> >of phone lines were available at the push of a 
> >button, two handsets per man - one for the right 
> >hand, one for the left - thoughtfully built of 
> >toughened plastic to withstand the phone-to-wall 
> >smashing that took place whenever a deal fell 
> >through. This was our world - and the flashing 
> >numbers scrolling past on the liquid crystal 
> >screens could make or break us, turning us from 
> >heroes to villains and back again in the blink 
> >of an eye. My boss Tony's rasping voice bored 
> >its way relentlessly into my ear from the minute 
> >I sat down to the minute I bolted at the closing 
> >bell. Today was no exception, try as I might to 
> >ignore him.
> >
> >         "Everyone's saying there's a bid for 
> >Company A," he babbled. Yeah, Tone, but you're 
> >like the boy who cried wolf - every five minutes 
> >he'd get a text, or a call, or even just a 
> >vision, about this or that company being the 
> >subject of a takeover bid. Nine times out of 10 
> >it was complete nonsense - but in this game 
> >nonsense wins prizes. Because if you buy early, 
> >and the story reaches enough people, the stock's 
> >going to fly - truth or no truth - and you've 
> >sold yours well before the company issues a 
> >denial announcement.
> >
> >         Hard facts meant little in a world ruled 
> >by paranoia and fear - paranoia that everyone's 
> >trying to do you out of your profit, fear that 
> >you're going to miss out on even bigger winnings 
> >if you don't follow the herd. People like Tony 
> >acted as both instigator and reactor in this 
> >game - some days he set the ball rolling when he 
> >felt like ramping a stock; on others he'd be 
> >just one more adding to the circle of Chinese 
> >whispers that blew round the City like wind 
> >through rushes.
> >
> >         So, for all I doubted this latest 
> >rumour, I agreed to keep my eye on the screens, 
> >in case anything did happen. We worked well like 
> >that - he had all the sources, I did the grunt 
> >work. He'd large it up at Fabric, Hakkasan or 
> >wherever the denizens of the trading scene hung 
> >out, while I, faithful lapdog, got to be his 
> >Sets boy by day. (Sets is the computerised 
> >trading floor used by the London Stock 
> >Exchange.) If you're quicker than the other 
> >10,000 traders out there, you can read an 
> >announcement, make up your mind in a flash, and 
> >buy or sell before the others have even clocked 
> >something's going on.
> >
> >         That's the way it would go. I'd seen it 
> >happen. Bang - Company B announces, it's 
> >received an approach. Your fingers know what 
> >they're doing before your eyes have caught up. 
> >Buy ... 100,000 ... limit, say, £7.65. Got them 
> >- now you're off and running.
> >
> >         Ten seconds later and the little 
> >beauties are changing hands at 835, no ... 840, 
> >850 ... 860 now ... you're yelping like a puppy 
> >and, ignoring everyone around you, selling back 
> >the 100,000 you've just bought for maybe 862. 
> >The brokers erupt like Vesuvius. Right there 
> >they're sitting on nearly a hundred grand profit.
> >
> >         Their hearts are racing. They get the 
> >lift down, then run out on to the street for a 
> >smoke.
> >
> >         "Keep it down, keep it down, someone'll 
> >hear..." And this is the beauty of the 
> >operation. With the team leader on board level 
> >at the firm, yet still a dodgy little bastard at 
> >heart, a three-man team has the means to pull 
> >this type of heist all day, every day. The rules 
> >say you must specify which client you're dealing 
> >for before you trade - so, in theory, the 
> >Company B winnings would already have a home. 
> >But for many a broker, the rules are slightly 
> >different. You trade first, ask questions later. 
> >If it all goes pear-shaped, if the stock falls 
> >instead of rises, there's always a pension fund 
> >or discretionary account that can take the hit 
> >for 50 grand or so. But if, with Company B, say, 
> >you hit the jackpot, then screw the clients, 
> >this one's for the boys.
> >
> >         Everyone had dummy punters, friends or 
> >relatives who let you wash any winners through 
> >their account. So in the case of Company B and a 
> >three-man team, this would mean just shy of 100 
> >grand split three ways: more than £30,000 - less 
> >40% capital gains tax - and that would be nearly 
> >20 grand per man.
> >
> >         I had a setup with my mate M that we'd 
> >go 40-60 on each deal - but I had to see it in 
> >cash the same day. And, of course, I took the 
> >60. His account was entirely governed by me. I 
> >had tacit approval to move as much stock through 
> >it as I liked, so long as he was always up at 
> >the end of the week. And that's what I did. The 
> >compliance department (company employees who 
> >were answerable to the Financial Services 
> >Authority [FSA] which was supposed to check that 
> >all the deals were above board) barely batted an 
> >eyelid at his account's stellar performance, 
> >assuming he was a proper punter who knew the 
> >ropes - plus I tossed in a few losing trades 
> >every now and then to throw them off the scent. 
> >We needed to maintain only around 20 grand in 
> >the account to keep it operational. I traded off 
> >margin (that is, we had only a small percentage 
> >of what we were spending in the account); so 
> >long as the trade was bought and sold during the 
> >same three-day period, no cash would ever need 
> >to be laid out on the deal. In this way, I could 
> >take six-figure positions in his name with ease. 
> >Whatever smash and grab I'd pulled off would 
> >soon be marked down on a dealing ticket with M's 
> >name and number at the top; I passed it to the 
> >boys in the back office who put the trade into 
> >the system, thus ensuring the cash made its way 
> >to its (not so) rightful home. That meant, in a 
> >few hours' time, I could be picking up several 
> >grand in folding bills somewhere near Bond 
> >Street.
> >
> >         Behind the headline-grabbing stories of 
> >rogue traders losing billions, the more mundane, 
> >day-to-day world of high finance is as wild and 
> >unregulated today as it ever has been. Brown 
> >envelopes stuffed with £50 notes change hands 
> >every lunchtime in bars across the City; drugs 
> >wreak havoc with traders' judgments as they 
> >stake fortunes of their firms' money on the 
> >markets; and greed trumps all else in the 
> >stampede to get rich or die trying.
> >
> >         "When in Rome, build a fucking 
> >aqueduct." Those words, bellowed at me by my 
> >biggest client as he lay sprawled in the bar, 
> >proved to be the most telling advice I ever got 
> >in the City. Everybody's doing it, why shouldn't 
> >we? There's no point pretending - no one is in 
> >this game to make the world a better place. It's 
> >all about the money. >From the bottom up, the 
> >only thing that matters is feathering your own 
> >nest, regardless of who gets shafted along the 
> >way or how compromised your morals become in the 
> >process.
> >
> >         I played the game for the best part of a 
> >decade and saw first-hand what lies beneath the 
> >veneer of London's financial district. For all 
> >the stock exchange is presented as a 
> >transparent, trustworthy great British 
> 
=== message truncated ===


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