Quote from Maverick74:
There continues to be a lot of bad information spread around about this mess. The issue here folks is not the series 7. IT'S BEING A MEMBER OF AN EXCHANGE! Most exchanges require you to have a series 7, that is why many on this thread think incorrectly that this is a series7 issue. If you are not a member of an exchange, you cannot get around the PDT rule. This is what sub LLC's have been doing. Allowing non members to gain the benefits of being a member of an exchange. I cannot make this any more clear. I have stated several times there that is one exchange that CURRENTLY does not require a 7 and that is the CBOE. This could change in the future, but as of now, they don't.
What the SEC wants is for professional traders to be MEMBERS. If you want to get the benefits of membership, you have to be a MEMBER. This surely is not that hard to understand.
The reason the SEC wants this is so that they can have regulatory authority over ALL trading activity on the exchanges. This is not a bad thing. If they are going to regulate what Goldman does, shouldn't they also be able to regulate what Don Bright does as well?
did you even read the summary of the complaint?
the SEC is trying to use sect 10b5 and sect 15(a) and 15(b) to go after tuco.
these laws are strictly to prevent stock brokers from misleading clients through "inducing" them to buy specific issues through the mail or other devices interstate under fraudulent means. like lying about balance sheets of the corporation's stock they are pitching. or misleading a client as to risk or potential gains from the purchase of specific issues.
thats why if you read the actual complaint you will see the SEC use bizarre wording in regards to placement of terms such as "induced" traders and profited from "excessive" trading.
they are trying to make their case based on sales infractions which as traders we all know is ridiculous. this is about the law... not what the SEC wants. what the SEC wants is illegal. they do not have jurisdiction in this matter.
they also committed perjury with their initial reason to look into Tuco. they did this... because the statute requires that someone, i.e. the public was damaged by the actions of Tuco. so.. the SEC had to make up accounting fraud. if they didn't initiate this.. they couldn't bring up and pursue sect 10b5 and sect 15(a) and 15(b) issues.
this is sort of like drunk driving. a cop has to witness some type of infraction... i.e. probable cause. then he can pull someone over for this.. and then investigate to see if there is any alcohol consumption. he can not just randomly pull you over because he has a hunch.
it was known in the trading community that the SEC was going to try this. this was known before the alleged accounting fraud they claimed to uncover with Tuco in dec.
this case has nothing to do with protecting the public it is about protecting business interest for certain entities.
bottom line, the SEC is acting in a rogue manner. every right that they violate will be watched and reported to certain congressmen and senators and State Attorney Generals. this is the only protection we the people have from compromised govt entities that do not serve their public but now serve certain corporations.
