Wednesday, 9:30pm
More on Maduff. It turns out I had most of it correct. But I missed the front running part. When we handed off an order to Maduff he would own it. In other words it was off our books and on his. So, to use my earlier example, if we were a seller of 500,000 shares…we would show a piece to the NYSE specialist and sell a little to him. Then we would pull the order and sell the remainder to Maduff. We would do this to get it done, and off our books. If the stock was a thin trader, volume not too great, then Maduff would essentially own the market. Evidently, Maduff the Money Manager knew our trade and would front run it. This is verbotin in any language. So, he would probably short, maybe, 20,000 shares, probably electronically via the Cincinnati Exchange (which he essentially owned) and wait for his desk to sell the remainder of our order. Our order, as it was fed out, would push the stock down and Maduff would cover, perhaps a half point, lower. My example seems like small potatoes but multiply it a hundred times and there is real coin to be made. The SOB violated every written law and every implied best business practice. He has tarnished money mangement and brokerage for a long, long time.
