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:Massachusetts regulators further allege that the company allowed Mr.
:Baruchowitz to allocate trades to either his account or the other
customer's
:at the end of each day. His personal account was the only profitable one,
:according to the complaint.
:Mr. Baruchowitz declined to comment. Christopher M. Block, Block Trading's
:chief executive, said the firm didn't violate any laws. He said the firm's
:computer system doesn't allow post-hoc allocations to separate accounts...
Wanna bet? Hell, I've done this myself. ;-) You have 15 mintues to do this
(from 4:00pm until 4:15 pm EST) before the "books" are closed. Note: I've
never worked at Block but at 2 SOES places where this is a common practice.
Let's say we have 2 guys trading one stock. One guy is short the stock at 87
and the other guy is long at 86 with the stock closing at 85. So the short
will take the trade off the guy at 86, covering his short, keeping his
profit in the expectation that the long will return the favor sometime in
the future. Usually this shit happens at least once a week. And the prices
are usually closer with the profit of around a 1/8 to 1/2 a point. At NYSE
member firms, this is not allowed at all but at smaller NASD firms this can
happen.
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