The work of the Stock Exchange

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Multivolume work

Identifikator:: 1895264332

Document type:: Multivolume work

Author:: Myers, Gustavus

Title:: Geschichte der großen amerikanischen Vermögen

Place of publication:: Berlin

Publisher:: Fischer

Year of publication:: 1916 -

Collection:: Economics Books

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Volume

Identifikator:: 1895266750

URN:: urn:nbn:de:zbw-retromon-242184

Document type:: Volume

Author:: Myers, Gustavus http://d-nb.info/gnd/10190651X

Title:: Geschichte der großen amerikanischen Vermögen

Volume count:: Bd. 1

Place of publication:: Berlin

Publisher:: Fischer

Year of publication:: 1916

Scope:: XL, 412 Seiten

Digitisation:: 2022

Collection:: Economics Books

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Chapter

Document type:: Multivolume work

Structure type:: Chapter

Title:: Dritter Teil: Die grossen Vermögen aus Eisenbahnen

Collection:: Economics Books

ADMINISTRATION OF THE STOCK EXCHANGE 455 of every order executed for them, which states the name of the firm from whom the customer’s stocks were purchased, or to whom they were sold. This important safeguard obviously prevents the broker from only pretending to execute the cus- tomer’s orders, since it enables the customer to verify their execution readily and quickly. Matching Orders.—A similar but subtler evil consists of “matching orders.” An outside party might conceivably hire two brokers, and by giving orders to one to buy and to the other to sell, at identical prices, manipulate the price of a security listed on the Exchange. Both brokers could be quite innocent of any intention of misdoing, and still be the uncon- scious agents of collusion. For such a practice is contrary to the rule of the Stock Exchange quoted above, which forbids the execution of “an order for the purchase or sale of securities the execution of which would involve no change of ownership.” In practice, however, two Exchange brokers, even if so in- clined, could scarcely match sales often enough to cause any considerable manipulation of price in the open market, without attracting the attention of other members. The Business Con- duct Committee is constantly watching any peculiar price move- ments occurring on the Exchange, with full authority to inves- tigate and report them to the Governing Committee. A few other instances where there is danger of matched orders also deserve brief explanation. It may happen that a broker may receive two separate orders from two distinct sources over the telephone from his firm, one to buy and the other to sell the same security at the same price. To avoid any doubtful practices arising from such cases, the Constitution (Rules, Chapter I, Sec. 1 3) provides that: When a member has an order to buy and an order to sell the same security, he must offer such security, if bonds at 14 of 1%, and if stocks at 14 of one dollar, higher than his bid before making a trans- action with himself, if not so already bid or offered.

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