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nasd sued over COCO
- Thread starter Banjo
- Start date
Good. Hope they have to pay up some big bucks!
-Fast
-Fast
naz could ultimately press for jurisdiction over all ecn's. is that progress or regression?
Naz waited til EMLX dropped 70ish points before they halted it -- that was a disaster. Seems like this time ARCA did what Naz couldn't...
Why should trades be broken? Weren't they entered into by willing parties?
Please, if I am missing something here, clue me in.
Naz waited til EMLX dropped 70ish points before they halted it -- that was a disaster. Seems like this time ARCA did what Naz couldn't...
Why should trades be broken? Weren't they entered into by willing parties?
Please, if I am missing something here, clue me in.
(REUTERS) UPDATE 1-Nasdaq sued for canceling Corinthian trades
UPDATE 1-Nasdaq sued for canceling Corinthian trades
(Adds byline, updates with Schumer statement, details)
By Nicole Maestri
NEW YORK, Dec 9 (Reuters) - Traders sued the Nasdaq Stock
Market Inc. <NDAQ.OB> Tuesday claiming they lost money when the
stock market canceled trades of Corinthian Colleges Inc.
<COCO.O> after its shares plunged 32 percent in only 12 minutes
on Friday.
DL Capital Group LLC is seeking to collect for damages it
said it sustained when Nasdaq halted Corinthian shares for
trading after the plunge, but then lifted the halt before
telling investors it would cancel trades that took place in the
12 minute time frame.
The lawsuit comes as calls widened on Tuesday for federal
regulators to conduct a review of the mishap.
New York Sen. Charles Schumer asked the U.S. Securities and
Exchange Commission to investigate trading of Corinthian
shares, saying the SEC "needs to open a probe to figure out
what went wrong in this case and how to prevent these issues in
the future."
Meanwhile, a source told Reuters that a regulatory
investigation of the entire affair is likely.
LAWSUIT FOLLOWS CANCELATION
On Friday, shares of Corinthian Colleges, a for-profit
college operator, sank from $57.45 at 10:46 a.m. EST to $38.97
in 12 minutes.
Nasdaq halted trading in the stock for roughly one hour,
saying an "erroneous trade," in which multiple orders were
routed to several trading venues by a single customer, prompted
"extraordinary market activity."
DL Capital said in its suit that it purchased Corinthian
shares during the 12 minute period, and then sold its shares
for a profit shortly after trading resumed.
But Nasdaq's decision to cancel the earlier trades, which
it announced after shares were released for trading, left DL
Capital facing a loss, the suit alleges.
"Nasdaq did not disclose a critical fact, which was that
they were going to cancel all the trades," said Sherrie Savett,
a lawyer with Berger & Montague, representing DL Capital.
Nasdaq said it had no comment on the lawsuit.
"If DL Capital had known that its purchase of COCO shares
would be canceled, it would not have sold those same shares
after trading resumed -- i.e. it would not have sold shares
which it did not own," stated the suit, filed Dec. 8 in the
U.S. District Court of the Southern District of New York.
Meanwhile, the trading mishap has touched off a regulatory
tug-of-war between Nasdaq, the No. 2 stock market, and its
competitors.
On Monday, Nasdaq filed a request with the SEC seeking
broader authority to suspend trading across all trading
platforms of Nasdaq-listed stocks.
The proposal followed a complaint by the Pacific Exchange
that Nasdaq had no right to halt trading in Corinthian shares
for what it called a "systems" problem and not a regulatory
issue. The Pacific Exchange, which acts as the regulator for
the Archipelago Exchange, has asked the SEC to probe last
week's stoppage.
The lawsuit filed against Nasdaq said it was bringing the
action on behalf of DL Capital as well as a class, consisting
of those who traded the common stock between 10:46 a.m. and the
time Nasdaq announced the cancellation of all trades.
(Additional reporting by Javier David in New York and Kevin
Drawbaugh in Washington)
((Reporting by Nicole Maestri; editing by Phil Berlowitz;
Reuters Messaging: nicole.maestri.reuters.com@reuters.net;
(646) 223-6173))
REUTERS
*** end of story ***
UPDATE 1-Nasdaq sued for canceling Corinthian trades
(Adds byline, updates with Schumer statement, details)
By Nicole Maestri
NEW YORK, Dec 9 (Reuters) - Traders sued the Nasdaq Stock
Market Inc. <NDAQ.OB> Tuesday claiming they lost money when the
stock market canceled trades of Corinthian Colleges Inc.
<COCO.O> after its shares plunged 32 percent in only 12 minutes
on Friday.
DL Capital Group LLC is seeking to collect for damages it
said it sustained when Nasdaq halted Corinthian shares for
trading after the plunge, but then lifted the halt before
telling investors it would cancel trades that took place in the
12 minute time frame.
The lawsuit comes as calls widened on Tuesday for federal
regulators to conduct a review of the mishap.
New York Sen. Charles Schumer asked the U.S. Securities and
Exchange Commission to investigate trading of Corinthian
shares, saying the SEC "needs to open a probe to figure out
what went wrong in this case and how to prevent these issues in
the future."
Meanwhile, a source told Reuters that a regulatory
investigation of the entire affair is likely.
LAWSUIT FOLLOWS CANCELATION
On Friday, shares of Corinthian Colleges, a for-profit
college operator, sank from $57.45 at 10:46 a.m. EST to $38.97
in 12 minutes.
Nasdaq halted trading in the stock for roughly one hour,
saying an "erroneous trade," in which multiple orders were
routed to several trading venues by a single customer, prompted
"extraordinary market activity."
DL Capital said in its suit that it purchased Corinthian
shares during the 12 minute period, and then sold its shares
for a profit shortly after trading resumed.
But Nasdaq's decision to cancel the earlier trades, which
it announced after shares were released for trading, left DL
Capital facing a loss, the suit alleges.
"Nasdaq did not disclose a critical fact, which was that
they were going to cancel all the trades," said Sherrie Savett,
a lawyer with Berger & Montague, representing DL Capital.
Nasdaq said it had no comment on the lawsuit.
"If DL Capital had known that its purchase of COCO shares
would be canceled, it would not have sold those same shares
after trading resumed -- i.e. it would not have sold shares
which it did not own," stated the suit, filed Dec. 8 in the
U.S. District Court of the Southern District of New York.
Meanwhile, the trading mishap has touched off a regulatory
tug-of-war between Nasdaq, the No. 2 stock market, and its
competitors.
On Monday, Nasdaq filed a request with the SEC seeking
broader authority to suspend trading across all trading
platforms of Nasdaq-listed stocks.
The proposal followed a complaint by the Pacific Exchange
that Nasdaq had no right to halt trading in Corinthian shares
for what it called a "systems" problem and not a regulatory
issue. The Pacific Exchange, which acts as the regulator for
the Archipelago Exchange, has asked the SEC to probe last
week's stoppage.
The lawsuit filed against Nasdaq said it was bringing the
action on behalf of DL Capital as well as a class, consisting
of those who traded the common stock between 10:46 a.m. and the
time Nasdaq announced the cancellation of all trades.
(Additional reporting by Javier David in New York and Kevin
Drawbaugh in Washington)
((Reporting by Nicole Maestri; editing by Phil Berlowitz;
Reuters Messaging: nicole.maestri.reuters.com@reuters.net;
(646) 223-6173))
REUTERS
*** end of story ***
The last thing Nasdaq should get is jurisdiction over all trading venues for nasdaq stock. Nasdaq is not a real stock exchange like the NYSE but a group of marketmakers who set up systems and rules for trading among themselves. Why the f*ck should they have jurisdiction over ECN's? Talk about rewarding someone for their own incompetence.
Quote from Tea:
How is this any different than the CME or CBOT busting trades on a spike in the emini or dow mini contracts?
I wonder why no one sues them?
i dont think its the busting of trades that is the problem that is done all the time. its reopening and then deciding to bust the trades that hurt people and opens them up to being liable for losses.