Replies to post #236294 on Sulja Bros. Building Supplies, Ltd (SLJB)

[jk21]

I liked this part. nice article. thanks.

"But Knight Securities, UBS, and other market making firms like Bernard L. Madoff Investment Securities look at this differently. "This [eliminating grandfather clause] is going to have a serious impact on our ability to make markets," Mark Madoff, co-director of trading at the family-owned Bernard L. Madoff Investment Securities, said of the SEC's planned elimination of the grandfather clause.

There is only one problem with Madoff's assertions.

Making markets is about matching legitimate buyers and sellers and about only creating temporary liquidity when they two can't be matched. Using a naked shorting exemption to sell off securities to unsuspecting buyers, and then failing to make good on delivery of these securities for long indefinite periods in time, is not considered temporary market making. Such a trading strategy is no longer making a bona-fide market but executing a trading strategy. When involved in this type of trading strategy market makers then fall under the same trading guidelines as every other market investor and carry the equivalent risk an investor would carry."