Subject: File No. SR-NYSE-2011-61
From: Suzanne Hamlet Shatto

January 18, 2012


see this disciplinary action by FINRA:

3.  2007007678201       Document Type: AWC (Letter of Acceptance, Waiver, and Consent)

it occurs to me that this strategy could easily be done by a puter algorithm.  makes you wonder if that's what the algorithms are doing.

i am a retail investor.  when i place an order, my broker puts that order on the floor and it is displayable, unless i am buying at the ask or selling at the bid.  i cannot place an order that won't execute unless is am below the bid or above the ask.  i do not have the ability to decide whether my order is displayed.  my order is automatically displayed.  my order must be for a specific quantity and a specific price.

i have noticed that many orders are not displayed.  frequently the quantity is incorrect.  sometimes it is very large in order to keep the price at a certain point.  sometimes this price wall "protects" a price from going up or down.  sometimes it is very small to prevent retail investors from buying into an ask of size 1 share for a certain price or selling into a bid of size 1 share.  in my opinion, all orders should be displayed correctly.  and no trader (or trading firm) should be simultaneously buying and selling, even if they are a marketmaker. they should decide which side they are taking and orders should not appear on different sides, bid and ask.

cancelling orders appears to be a consistent problem.  it costs nothing to cancel.  maybe it should cost something to cancel an order, like $1/cancellation.  perhaps a cancellation tax is in order.

the stock market is for capital formation, both for the companies and the investors.  the money that trillium made was far greater than the fine that was imposed.  i am sure that this strategy has been implemented for some time before the violation.  it is the investors $ that they were taking.  cheating is a capital outflow from the market.  trading is parasitic to the capitalistic market and when trading becomes the dominant force, we get economies like this, and the risk is shifted to the investor, away from the trader.  i understand that FINRA could not return the money to the anonymous investors in the stock, but these were the people that were harmed by this behavior.  trading is not investing, it is exactly the opposite.  

maybe the fines should be not only disgorgement, but 3 times disgorgement.  maybe people who cheat should be arrested for manipulating the market.  it is criminal behavior.  i want to see license revocations.  the unfortunate part about that is that all of these traders could successfully execute the very same strategy by opening accounts at more than one brokerage.  this is probably what they did, after they were suspended for a time.  and they probably made more $ doing that than they were making trading for a company.  this was probably a fine and punishment that was happily paid.  FINRA should NEVER agree not to prosecute, not to notify the SEC (DOJ or FBI) that this behavior was occurring.

suzanne hamlet shatto