Tagged: Biremis

Bending Like Beck

Do you hate day traders?

Reading the 30-page Waiver and Consent letter from Peter Beck, who once ran now-defunct day-trading firm Swift Trade, it seems FINRA must.

Maybe you do too. But there’s a lesson in the story here, IR folks.

If you missed it, Beck’s woes got page-one billing from the keyboard of Scott Patterson at the Wall Street Journal yesterday. Beck ran a loose global day-trading federation last decade that at peak hosted some 4,000 traders outside the United States funneling orders through Beck’s execution broker Biremis Securities in Toronto.

The allegations are a compendium on failed oversight. We counted 35 instances of the words “appropriate,” “proper,” “improper” and “improperly” in the document signed by Beck and his legal counsel. It effectively bans Beck from US securities markets (although Beck operated outside the US so the ban seems hollow).

Behind bolded subheadings, the letter says primarily that Beck failed to supervise staff, didn’t keep good records and didn’t comply with standards. What gets attention in the Wall Street Journal is a practice called “layering,” in which traders place a bunch of orders at various price points, say, to buy shares in one place, and then simultaneously enter opposing orders elsewhere, and then cancel most orders as soon as other participants react. The aim is a quick profit at minimal risk. (more…)