Quote from hughb:
This is somewhat correct. I was daytrading stocks back before the PDT rule was being "enforced". There have always been restrictions against daytrading stocks, but brokerages never enforced them. My broker, Scottrade, was fined $800K for not enforcing the PDT rule.
Both the SEC and NASD were receiving mountains of complaints via email about being ripped off in one fashion or another from newbs who were daytrading. This was a big factor in writing the new rule and actually enforcing it on the brokers. If you were a government beauracrat you would get sick of recieving the same whiny emails hour after hour each day from pikers complaining that market makers were manipulating stocks and ripping them off. A friend of mine at the time who was a newb actually sent charts of Micron Technology to the SEC several times pointing out some imagined intraday pattern that "proved" "market makers" were manipulating the stock. MU was an NYSE stock and traded under the specialist system back in that day. It was that kind of moronic behavior that pushed regulators to clamp down.
And yeah, the shootings didn't help either.....
