Is this Illegal?
- Thread starter newguy1
- Start date
slightly off topic, but related question ....
is there anything illegal about being long and short the exact same futs contract and month simultaneously via individual accts at two different brokers?
is there anything illegal about being long and short the exact same futs contract and month simultaneously via individual accts at two different brokers?
ic, so if i was long ES in broker A individual acct, and short ES in a broker B managed acct of some type (or vice versa), that would be illegal, is that right?
but for instance if i wanted to hold net positions in a situation where it's all my cap, where say i was long 10 in one acct, and short 5 in another acct on a regular basis that would be ok
but for instance if i wanted to hold net positions in a situation where it's all my cap, where say i was long 10 in one acct, and short 5 in another acct on a regular basis that would be ok
This thread is a testament to why people occasionally need a lawyer.
Under the Federal Securities and Exchange Act of 1934, Section 9(a)(2), It shall be unlawful for any person, directly or indirectly, by the use of the mails or any means or instrumentality of interstate commerce, or of any facility of any national securities exchange, or for any member of a national securities exchange -- To effect, alone or with one or more other persons, a series of transactions in any security registered on a national securities exchange or in connection with any security-based swap agreement (as defined in section 206B of the Gramm-Leach-Bliley Act) with respect to such security creating actual or apparent active trading in such security, or raising or depressing the price of such security, for the purpose of inducing the purchase or sale of such security by others.
newguy1's facts state that he requests that other traders assist him with their buying power to help him to "increase the price" of a particular security instrument. The obvious intent of such an act is to create a price that permits newguy1 to quickly profit from the likely immediate price change. Because newguy1's actions will take place using a national securities exchange to effect this transaction, newguy1 will directly violate the language of the above-quoted federal statute, which prohibits a knowing and concerted action to raise or depress the price of a security.
Therefore, newguy1 would be subject to civil and criminal liability under federal law for securities fraud.
And, so ends the lesson for today.
You have to understand the regulatory approach. They cannot tell anyone for sure what is legal or illegal. They don't know.
They only know when they prosecute, win and bang your arse in the slammer. Thats when you know for sure you got it wrong.
That is why big bright shining corporate leaders who all along had the most expensive top of the range attorneys working to protect them end up in the greatest shows on earth, a USA court of law in the manner of a Roman carnival where you are tried, found guilty both before and at the trial, and to the delight of the masses you get up to 25 years in the slammer.
They only know when they prosecute, win and bang your arse in the slammer. Thats when you know for sure you got it wrong.
That is why big bright shining corporate leaders who all along had the most expensive top of the range attorneys working to protect them end up in the greatest shows on earth, a USA court of law in the manner of a Roman carnival where you are tried, found guilty both before and at the trial, and to the delight of the masses you get up to 25 years in the slammer.