The purpose of this paper is to inform the reader about the recent transformations in securities trading in America. This paper does not purport to be a summation of or prediction about what the future of securities trading holds. It serves as merely an introduction to the trends that have occurred in the past few years and how they have effected the market and its participants. It is necessary for any trader who wishes to take full advantage of the array of options that this activity holds to be fully informed about what the market holds.
 
 

America's first stock market began beneath a tree near New York's Wall Street in the 1700's, where gentlemen gathered to make business deals.1 They reached agreements, made deals, and a handshake sealed the offer and acceptance.

Today, hundreds of millions of shares of common stock change hands each day, as individuals and investors buy and sell bits and pieces of America's businesses.2 More likely than not, buyers and sellers are matched through computers, a far cry from the face-to-face arrangements that were the beginning of the American stock market.

Outside the exchanges, the home computer has had an even greater impact on the market.

Many investors are in for the long haul, but a large part of the daily volume on the major exchanges is due to traders who hope to make a quick profit.3 By taking advantage of small discrepancies in the pricing of securities "daytraders," armed with home computers, are able to buy a stock when favorable analyst reports are issued. They are termed "daytraders" because they hope to profit by selling before the inevitable run up, which usually happens within a 24 hour period.

The instantaneous access to on-line financial information that daytrading institutions have gives daytraders an enormous advantage over the individual investor when it comes to short-term trading.

By dialing-in to daytrading firms data banks, daytraders transact their own purchases as if they themselves were one of Wall Street's elite brokers. Daytraders have significant advantages over on-line traders who invest at home with their computers by buying through a middleman broker, albeit an "electronic" one. This is because of the enormous amounts of information that they are privy to due to their subscriptions with daytrading firms.
 
 

Most people do not have the time or inclination that is necessary to be a trader. Watching the market every second, being able to react instantly to changes. They usually peruse the previous day's occurrences in newspaper or watch it on MSNBC, CNNFN, or CNBC, etc. Ultimately they end up following the market leaders instead of being one.4

Technical analysts who invest long-term use Internet-capable computers to chart a stock's price and volume over time.5 The goal is to find patterns that indicate when to buy and when to sell a stock. Interpretation of these charts is more of an art than a science, and sometimes the patterns are more easily discernible in hindsight than in real time. Diligence is required to know when the signals are right to sell.
 
 

Today's three little words are point, click, trade. They sum up the allure for on-line stockbrokers.6 Using nothing more than an Internet connection and an account with an on-line broker, they buy and sell shares of stocks and mutual funds with mere keystrokes. No waiting to place orders with a brokerage house. No high commissions to gobble up significant shares of customer's financial portfolios.7

World Wide Web sites operated by brokers, mutual fund firms and other financial service businesses have much to offer investors -- speed, convenience and access to abundant information about investing, among other things.8 Chat rooms (Internet sites where people log-on to post and respond to real-time messages with distant strangers with similar interests), bulletin boards (Internet sites where people leave and respond to messages), and e-mail (an electronic form of correspondence) give investors good conduits to exchange ideas and opinions among themselves.9

By all accounts, on-line investing is the way of the future, although it may never completely replace the conventional approach of telephone or face-to-face conversation.
 
 

In spite of these advances, investing via the home computer has received more than its share of negative attention lately. That is due in part to its image as a world of trigger-happy traders who never stop to learn much about the stocks or funds they buy and sell. Someday, many observers suggest, this is all going to come to a bad end.10

It does indeed appear that the new breed of investors are trading, almost video-game style, through Internet brokers who charge very low commission rates -- less than $10 a trade, in many cases.11 If fast market savings are any guide many of these people will wind up suffering painful losses, especially if or is it when, the great bull market on Wall Street slows down or reverses.

But investors can use the 'Net without losing their long-term perspective. The trick is to realize that just because it is now easier and cheaper to buy and sell often does not ipso facto mean it is a good idea to do so.

Among the benefits of the Internet for long-term investors:

• Access at any time to up-to-date information on the status of your account with a broker or fund family.12

• Handy references to research reports, historical data and other information useful in making investment decisions.13

• Hundreds of sites where you can browse, without cost, for information about retirement planning, saving for college, and other subjects.14

It is little wonder, that so many investors have already exchanged the security of traditional brick-and-mortar brokerage houses for the promise of cheap, fast on-line transactions and reams of late-breaking information about the hottest properties on the market.15

Traditional investing will continue to decline as on-line brokers gain popularity, according to a study released by NFO Interactive.16 While on-line investing is enjoying tremendous growth of late, much of its success has come at the expense of traditional investment firms.17 In one year (1998) the number of on-line investors in the United States increased from 5.3 million to 7.5 million. Forty-eight percent of those users were using full-service brokers less, and 38 percent of on-line users reported they were using discount brokers less as well.18 (Exact figures on the amount of on-line investors are currently a contested topic.)

According to Stephen C. Franco, senior research analyst of electronic commerce at Piper Jaffray,19 on-line brokers now collectively manage $420 billion in assets. That is due in large part to the fact that the industry's increasing number of competitors added 3.6 million new accounts20 during 1998 for a total of 7.5 million. Since many investors have multiple accounts however, Franco estimates the total number of on-line investors to be about 4.4 million.

Of the top 10 on-line brokers, all reported growth of more than 13 percent in 1998, with Waterhouse Securities leading the pack.21 Waterhouse grew its customer base 59 percent to end at 529,000 accounts.22 Other strong gainers were Datek, which grew 58 percent to 152,000 subscribers and Schwab, posting a 21 percent increase to end at 2.2 million accounts.23

The top 10 brokers and the number of their customers were: Schwab, 2.2 million;24 Fidelity, 2 million;25 E*Trade, 676,000;26 Waterhouse, 529,000;27 DLJdirect, 529,000;28 Ameritrade, 354,000;29 Datek, 152,000;30 Discover, 112,000;31 Suretrade, 109,000;32 and National Discount Brokers, 85,000.33

With nearly 55 percent of all on-line investors believing their dependence on a full service or discount brokerage will decrease, additional structural changes within the investing industry are imminent. Many more companies are being forced to consider on-line investing as an integral component of their business strategy.34

With a history of false starts and internal squabbles revolving around its Web plans, the heavy-weight investment firm Merrill Lynch made its most definitive step toward on-line trading in 1999. It acquired D.E. Shaw Financial Technology, a specialist in real-time, on-line trading technology.35

The move came amid mounting reports that the nation's largest brokerage firm was not committed to adapting its business to Internet investors. The acquisition of the D.E. Shaw unit, referred to as DESoFT, brings Merrill the technology and personnel it needs to expand its on-line trading.36 The deal, gives Merrill Lynch 30 DESoFT engineers and database specialists to help develop an in-house, on-line trading service.

The biggest benefit of the $30 million deal, is that DESoFT's technology can handle a large volume of trades and update customer accounts instantaneously. That ability will help Merrill Lynch offer customers a broad array of on-line trading options.

The moral: inescapable technology that people want will eventually change the way most companies conduct business if they wish to remain competitive.37

Even as it grows in size, eminence, prominence, and options, the validity of on-line investing has come into question. Recent problems have plagued several on-line brokers including AmeriTrade, E*Trade and Charles Schwab.38 Investors' frustrations with E*Trade have prompted two lawsuits and an investigation by the New York Attorney General Eliot Spitzer.39

In response, Charles Schwab & Co. president David Pottruck vowed to "spend what it takes" to make the largest on-line brokerage more reliable after technical glitches pulled the plug on on-line trading twice in February of 1999.40

Not only is the validity of on-line investing being questioned, but eager investors are becoming easy targets for fraud. This raises questions about the inherent usefulness of on-line investing to all but the most experienced customers. The number of Americans who buy and sell stocks over the Internet is expected to grow to 18 million by 2002.41

Most on-line investors use a reputable Internet brokerage service to buy and sell stocks.42 But, Internet stock scams typically involve stocks bought directly by an investor through initial public offerings (IPO's).43 With millions of people whose only goal is to make a profit and who are willing to hand over credit card numbers and other personal information, cyber-crooks may have an even better market to work with than the investment firms.

In 1998 the Securities ans Exchange Commission (SEC) received 200 to 300 electronic-mail complaints daily about potential Internet fraud. That number is up from 10 to 15 daily complaints in 1997.44 Since 1995 the agency has opened only 66 investigations into Internet stock fraud cases and has concluded 32 of them.45

While no legislation is pending to help state and federal investigators combat Internet securities fraud, the panel's hearings might be an effective means for educating investors about the risks of buying unknown stocks over the Internet. Senator Carl Levin, D-Mich., said the panel will continue to examine Internet fraud. He continued that it might develop legislation that can make it easier for authorities in one state to investigate interstate Internet fraud schemes.46

Senate Permanent Affairs Subcommittee Chairperson Susan Collins, R-Me.47, intends to introduce a bill to increase the Securities and Exchange Commission's (SEC) power to prosecute on-line trading criminals. "It will allow the SEC to piggyback on state enforcement actions," Collins said. "The SEC and [several] state groups [have already endorsed] it."48

She added that the bill will forbid people who are barred from trading in microcap stocks to migrate to penny stocks, and vice versa.49

The SEC and the North American Securities Administrators Association (NASAA) told Collins' subcommittee that people who want to invest on-line must remember [three] things.

• The same people who pull schemes they might find in the real world are Internet users too.

• Such fraudulent plans are even more pervasive in Cyberspace.

• [Caveat emptor].50

The agency also formed the "Cyberforce," a group of 125 employees currently assigned to other beats, who volunteer to monitor Internet fraud.51 Three full-time employees also staff this group, dedicated to trying to shut down dishonest investment operations.52

The Cyberforce group is designed to continue its surveillance of on-line investing, prosecute cyber-crooks, work with all levels of US government, educate investors, and "foster self-policing."53

Peter Hildreth, president of the North American Securities Administrators Association, told the subcommittee that "Given the size and growth of the Internet, regulators can't police it alone - [it is] like expecting one precinct house to patrol all of New York City. It simply [cannot] be done."54

He said that, "states must fight on-line fraud in tandem with the SEC to try to remedy this situation,"55 noting, "Missouri, New Jersey, Texas, New York, Ohio, Illinois and especially California have done a lot to try to shut down Internet criminal operations."56

According to Hildreth the types of investment fraud seen on-line mirror the frauds perpetrated over the phone or through the mail.57 Cyber-crooks can use a variety of Internet tools to spread false information, including bulletin boards, on-line newsletters, spam (junk e-mail), or chat (including Internet Relay Chat or Web page chat). They may also build glitzy, sophisticated Web pages. All of these tools cost very little money and can be found at the fingertips of cyber-crooks.58
 

Whether on-line or not, most investment frauds usually fit one of the following categories
 

1. "Pump And Dump"59

    2. Pyramid Schemes 61

Investors should be wary of messages that read: "How To Make Big Money From Your Home Computer!!!" One on-line promoter claimed that investors could "turn $5 into $60,000 in just three to six weeks." In reality, this program was nothing more than an electronic version of the classic "pyramid" scheme in which participants attempt to make money solely by recruiting new participants into the program.62

3. "Risk-Free" Investments 63

"Exciting, Low-Risk Investment Opportunities" to participate in exotic-sounding investments -- such as wireless cable projects, "prime" bank securities, and eel farms -- are offered through the Internet. No investment is risk-free. Sometimes the investment products touted do not even exist -- they are merely scams. If the deal sounds too good to be true, then it probably is.64

4. Off-shore Investments 65

At one time, off-shore schemes targeting U.S. investors cost a great deal of money and were difficult to execute. Conflicting time zones, differing currencies, the high costs of international telephone calls, and overnight mailings made it difficult for criminals to prey on U.S. residents. But, the Internet along with credit cards have removed those obstacles. When considering any investment opportunity that comes from another country investors should be wary. It is difficult for U.S. law enforcement agencies to investigate and prosecute foreign frauds.66
 

The Securities and Exchange Commission actively investigates allegations of Internet investment fraud and has, in many cases, taken quick action to stop scams.67 They have also coordinated with federal and state criminal authorities to put Internet crooks in jail.68

Here is a sample of recent cases in which the SEC took action to fight Internet fraud:69

• Francis A. Tribble and Sloane Fitzgerald, Inc. sent more than six million unsolicited e-mails, a process known as "spamming," built bogus Web sites, and distributed an on-line newsletter over a ten-month period to promote two small, thinly traded "microcap" companies. Spam -- junk e-mail -- is cheap and easy to create, so cyber-crooks increasingly use it to find investors for bogus investment schemes or to spread false information about a company. Spam allows the unscrupulous to target many more potential investors than cold calling or mass mailing. Using a bulk e-mail program, spammers can send personalized messages to thousands and even millions of Internet users at a time. Fitzgerald and Tribble failed to tell investors that the companies they were touting agreed to pay them in cash and securities. As a result the SEC enjoined them from violating the law again and imposed a $15,000 penalty on Tribble. Their massive spamming campaign triggered the largest number of complaints to the SEC's on-line Enforcement Complaint Center.70

• Charles O. Huttoe and twelve other defendants secretly distributed to friends and family nearly 42 million shares of Systems of Excellence Inc., known by its ticker symbol "SEXI." In this classic "pump and dump" scheme, Huttoe drove up the price of SEXI shares through false press releases. He claimed non-existent multi-million dollar sales, an acquisition that had not occurred, and revenue projections that had no basis in reality. He also bribed co-defendant SGA Goldstar to tout SEXI to subscribers through SGA Goldstar's on-line newsletter "Whisper Stocks". The SEC fined Huttoe $12.5 million. Unfortunately he spent most of his ill-gotten gains, and investors did not get their money back. Huttoe and Theodore R. Melcher, Jr., the author of the on-line newsletter, were sentenced to federal prison. In addition, four of Huttoe's cohorts pled guilty to criminal charges.71

• Matthew Bowfin recruited investors for his company, Interactive Products and Services, in a direct public offering done entirely over the Internet. He raised $190,000 from 150 investors. Instead of using the money to build the company, Bowfin pocketed the proceeds and bought groceries and stereo equipment. The SEC sued Bowfin in a civil case, and the Santa Cruz, California District Attorney's Office brought a criminal prosecution. He was convicted of 54 felony counts and sentenced to 10 years in jail.72

• IVT Systems solicited investments to finance the construction of an ethanol plant in the Dominican Republic. The Internet solicitations promised a return of 50% or more with no reasonable basis for the prediction. Its literature contained lies about contracts with well-known companies and omitted other important information for investors. After the SEC filed a complaint, they agreed to stop breaking the law.73

• Gene Block and Renate Haag were caught offering "prime bank" securities, a type of security that does not even exist. They collected over $3.5 million by promising to double investors' money in four months. The SEC has frozen their assets and stopped them from continuing their fraud.74

• The SEC stopped Daniel Odulo from soliciting investors for a proposed eel farm. Odulo promised investors a "whopping 20% return," and claimed that the investment was "low risk." When caught by the SEC, he consented the court's order to stop breaking the securities laws.75

The Internet serves as an excellent tool for investors, allowing them to research investment opportunities easily and inexpensively.77 However, the Internet is also an excellent tool for criminals.78 That is why investors should always think twice before investing money and time in any opportunity learned about through the Internet.

Wary regulators, brokers and financial advisors are trying to slow the spread of daytrading, a practice that they see as rife with risk for all but the most discerning investor.79

Officials say their concerns about center on questions of "suitability" and "validity."80

At traditional brokerage houses, the argument goes, brokers are obliged to ensure that the investment advice they offer meets a client's financial goals.81 The absence of a human buffer between the customer and the market in daytrading exposes buyers and sellers to the market directly. Which can broadside them in an instant.

Earlier this year, the North American Securities Administrators Association, formed a Task Force to examine the growing phenomenon of daytrading which, unlike more traditional investing, encourages traders to wager large amounts of money on the narrowest spreads in stock prices to lock in rapid-fire profits before the margin evaporates. The industry is today estimated to embrace about 3,000 daytrading firms who facilitate millions of investors in darting in and out of stocks under the auspices of nine major licensing companies.82

In their purest form, these companies, led by a few powerhouses such as E*Trade, Datek On-line and Ameritrade, provide clients with no more than the tools they need to launch a do-it-yourself trading post.

These tools include a computer, perhaps a work station at a host company's office and, most importantly, access to an electronic trading system such as the NASDAQ market, run by the National Association of Securities Dealers.83

In recent months, a number of firms have come under scrutiny as regulators have widened their dragnet in search of companies that show signs of breaching this bare bones mandate. In October of 1998, Massachusetts regulators brought actions against two daytrading firms -- Block Trading84 and Bright Trading.85

Regulators charged the now-bankrupt Block Trading, based in Texas, with deceptive advertising and a deliberate effort to lure eager customers by playing down risks.86 Similar crackdowns are underway in Texas, Colorado and Florida, among other states.

As part on the on-going scrutiny, Massachusetts securities regulators recently accused All-Tech Investment Group Inc., of Montvale, New Jersey, of violations that included unauthorized trading and forging signatures to open fake accounts.87 The regulators accused the firm's Watertown, Massachusetts, branch of engaging in deceptive advertising and commingling customer funds.

Analysts say that because of its novelty, public awareness about the downsides of daytrading remains sketchy at best.88 Regulators assert that what the lay investor may know about the profession often stems from lopsided, or breathless, media coverage.89 Those in the electronic trading industry retort that such overdrawn attitudes are partly responsible for thrusting their business -- unfairly -- into the regulatory limelight.90

Industry representatives concede regulators' concerns about fraud, false advertising and licensing in day-trading are legitimate.91 They insist however that these abuses are no more prevalent -- and, in all likelihood, less widespread -- than among the broader "market makers" or big brokerages at the center of the stock-trading universe.92

A cynic might trace some of Wall Street's current qualms with daytrading to a price-fixing scandal that rocked NASDAQ in August 1996.93 In the wake of that controversy, the Securities and Exchange Commission adopted order-execution rules that evolved, after much haggling between the SEC and NASD, into the "actual size rule." The rule effectively reduced the minimum quotation size requirement for market makers in all securities listed on NASDAQ to one trade unit.94

The rule arguably went against the original purpose of Wall Street market makers, which was to provide liquidity in stocks in return for certain privileges. Those privileges included an exemption from the so-called "short-sale" rule, which bars brokers from selling a stock short when it is stagnant or declining.95

Daytrader advocates say the rule, which imposes a 100-share minimum on unit trades, effectively makes it harder for them to get into and out of positions, thereby decreasing liquidity.96 As a result of the rule, day-trading organizations that once used short-order execution systems (SOES) have had to redistribute their volume onto other systems that do not impose such "austere" rules.97 SOES volume, as part of NASDAQ volume, fell from about 12.5 percent in 1996 to under 5 percent in mid-1998.98 Today, 25 percent of NASDAQ listed stocks trade on private systems.99
 

In its first major attempt to control the growing practice of daytrading, the National Association of Securities Dealers proposed a few rules.100 The rules require members to better acquaint themselves with clients and to disclose the risks of jumping in and out of stocks.101

The move came amid criticism of daytrading firms that host ordinary people who recklessly attempt to turn a profit on small movements in stock prices. Millions more individuals trade in the fashion on-line from home without supervision.102

Regulators recently have been swamped with complaints from unsophisticated investors who have lost money in daytrading when they paid excessive commissions and lost a significant amount of money.103

The proposed rules will require firms to determine whether a daytrading strategy is appropriate for an investor opening an account by first examining the investor's financial situation and trading experience. The client will also be supplied with a disclosure statement that makes several points:104

1. Investors should be prepared to lose all their money and should not fund daytrading with retirement savings, student loans or second mortgages.

 
2. They should be wary of advertisements emphasizing large profits.105

 
3. Day trading requires in-depth knowledge of the securities markets and trading techniques.

 
4. Investors are competing with professional, licensed traders.106

 
5. Investors should be familiar with a securities firm's business practices, including the operation of order-execution systems and procedures, and should confirm that a firm has adequate systems capacity to permit customers to engage in daytrading.107

John Skiersch, a struggling Chicago actor, said such a document might have saved him from losing more than $100,000 in daytrading. "It was not long ago that this was entirely being done in the dark," said Skiersch. "In a very short time a big spotlight has come down. If I had read those disclosures and my suitability were examined, it would have been clear that I [could not] trade stocks."109

That sentiment is exactly what the SEC, NASD, and the NASAA have been trying to get amateur investors to understand. It is not exactly clear how many John Skiersch-type stories there are. However, what is abundantly clear is that daytrading is inherently risky, as is trading microcap stocks that have not been thoroughly investigated.

1 http://www.nyse.com/public/thenyse/1c/1cix.htm

2 Id.

3 http://www.cnnfn.com/smbusiness/9904/07/survey/

4 http://clubs.yahoo.com/clubs/seriousdaytraders

5 http://www.cnet.com/Content?Reports/Special/OnlineInvest/Broker/?st.cn.InvestTC.cnt2.gp

6 http://www.schwab.com

7 http://www.etrade.com

8 http://www.ameritrade.com

9 http://www.ragingbull.com/mboard/boards.pl?board=ON-LINE

10 Morarriz, Rick Using the Trouble (8/28/98) <http://www.fool.com.Features/1998/sp980828UsingTheTrouble.htm>

11 http://www.stokcs4less

12 http://www.swiftrade.com

13 http://www.wisiontrade.com/

14 http://www.farsight.com

15 http://www.nasdaq-amex.com/asp.majorindices_java.stm

16 http://www.nfow.com/nfointeractive/nfoi_brokerage.asp

17 Berger, Kathy Old-Guard Brokerages Fight Back as Internet Rivals Grow Stronger (3/30/1999)

<http://chicagetribune.com/business/businessnews/article/0,1051,ART-26227,00.html>

18 http://www.thestandard.net/metrics/display/0,1283,840,00.html?home.metf

19 http://www.msnbc.com/news/241986.asp

20 Id.

21 http://www.thestandard.net/metrics/display/0,1283,840,00.html?home.metf

22 Id.

23 Id.

24 http://www.schwab.com

25 http://www.441.fidelity.com

26 http://www.etrade.com

27 http://www.waterhouse.com

28 http://www.dljdirect.com

29 http://www.ameritrade.com

30 http://www.datek.com

31 http://www.dbdirect.com

32 http://www.suretrade.com

33 http://www.ndb.com

34 http://www.ml.com/woml/press_release/19990219-1.htm

35 Id.

36 Id.

37 Id.

38 http://cnnfn.com/digitaljam/9903/11/on-linebrokers/index.htm

39 http://www.oag.state.ny.us/investors/invest_5.html

40 http://dailynews.yahoo.com/headlines/story/.html?s=v/nm./19990331/wr/brokers _schwab_2.html

41 http://www.sec.gov/consumer/onlitips.htm

42 Id.

43 Id.

44 Id.

45 Id.

46 Id.

47 http://www.senate.gov/~collins/

48 HTTP://www.senate.gov/~gov_affairs/psiongoi.htm

49 Id.

50 http://www.nasaa.org/investoredu/investoralerts/cyberspa.html

51 http://www.sec.gov/news/speeches/spch265.txt

52 Id.

53 Id.

54 http://www.nasaa.org/whoweare/speeches/PSI.html

55 Id.

56 Id.

57 Id.

58 Id.

59 Id.

60 Id.

61 Id.

62 Id.

63 Id.

64 Id.

65 Id.

66 Id.

67 http://www.sec.gov/enforce/aben.htm

68 Id.

69 Id.

70 http://www.sec.gov.enforce/litigrel/lr15959.txt

71 http://www.sec.gov.enforce/litigrel/lr15906.txt

72 http://www.sec.gov.enforce/litigrel/lr15700.txt

73 http://www.sec.gov.enforce/litigrel/lr15042.txt

74 http://www.sec.gov.enforce/litigrel/lr14711.txt

75 http://www.sec.gov.news/testmony/tsty0699.txt

76 http://www.nasaa.org/investoredu/investoralerst/cybrespa.html

77 http://www.datek.com

78 http://www.nasdr.com/2575.htm

79 http://www.nasdr.com/pdf-text/9903dis.txt

80 http://www.active-investor.com/daily_comment.shtml

81 http://www.josephcharles.com/

82 http://www.daytraders.org

83 Id.

84 http://www.nasdr.com/pdf-text/9810dis.txt

85 http://www.nasdr.com/pdf-text/9811dis.txt

86 Id. see note 84.

87 http://www.nasdr.com/pdf-text/9902dis.txt

88 http://www.turtletrader.com/firststep.html

89 http://www.nasd.com/pgla.html#1

90 http://www.hasd.com.ppl_18.html

91 Id.

92 Id.

93 http://www.sec.gov/news/extra/app21a.txt

94 http://www.sec.gov/news/digests/01-27.txt

95 Id.

96 http://www.sec.gov/rules/final/17a23.txt

97 Id.

98 http://www.nasd.com/notices/9866ntm.txt

99 Id.

100 http://www.nasd.com/notices/98102ntm.txt

101 Id.

102 Id. see note 16.

103 Id. see note 41.

104 Dugan, Ianthe Jeanne NASD Acts to Control Daytrading (3/26/99) <http://www.washingtonpost.com>

105 Id.

106 Id.

107 Id.

108 Id.

109 Id.