In the recent weeks and months more investors are becoming increasingly wary of the way Wall Street firms do business. Many individual investors feel as if they have no chance to make money in the stock market because the big institutional traders run the show. This might be true to a certain extent, but the small guy with a discount broker should be able to get in and out of the market getting the best prices available. The recent market drop in the beginning of May made headlines all over the news channels. Every day the various cable news channels replayed the NYSE drop, and then had many market experts comment on the possible fraud that was behind it. As it turned out there really was no real issue that was caused by outright fraud. It was just a coming together of bad news and circumstances that helped everyone hit the sell button. There were then no buyers to buy the sell orders and the market dropped. Those small traders who did not use limit orders that specify what the minimum price you will sell at, but instead used market orders with no specific price, had their orders filled far below what they had expected. This led to a small percentage of shares that traded well below the previous price the security was trading at. I don’t believe there was any fraud going on here, just computers filling market orders and a lack of buyers to buy them. Should there have been more buyers in the market to support prices? This is another question that has to be answered, and I am sure they are looking at that aspect of the problem now.
The Securities and Exchange Commission (SEC) charged Goldman Sach with fraud in April. The deal that they were charged with had nothing to do with the equities market, unlike the crash in May. In this instance Goldman was just acting as a market maker for two institutional investors that wanted to make a trade revolving around the real estate market. Many market pros feel as if this deal that Goldman helped create did not amount to any fraudulent activity. There are some that feel as if it might have been a bit unethical, but again was not illegal or fraudulent. The SEC had been asleep at the switch while there had been many other market fraud problems in the past decade, most notably the Bernie Madoff and Allen Stanford ponzi schemes. It was only a matter of time until they went after someone for something much smaller in nature, just to prove they were now paying attention. There will always be people in the world and especially out there in the financial sector looking to make money the fast easy way. The fast easy was most likely has fraud written all over it. The SEC if working properly serves a purpose in the financial world. We as investors need the SEC to be on top of all complaints that other investors and companies bring to their attention. In the past many have made formal complaints to the SEC which were simply dismissed or never looked at.
The SEC does not regulate the foreign exchange market, as it is an over the counter market. However the amount of liquidity in the market makes it unlikely there can be fraudulent trades happening. Anyone can open a forex account and start trading once it is funded. Trading forex provides a place where you are betting on the future price of currency and not the future of a company. There are no analysts that can influence the currency market like they can the equities markets, with an upgrade or downgrade before the market opens. Make sure you research possible forex brokers before committing funds to them. See what their spreads are and the minimum size lots you have to trade. The good news is that there are so many brokers available, that the spreads are becoming smaller and smaller to win your business. This will help you make profits and give them more business by you more making trades. Market fraud takes place in every market; in some markets it is easier to get away with. If it sounds too good to be true it just might be, always think twice before putting your money in someone else’s hands.
Old Services which we used to Provide
- Intraday Tips Performance
- Positional Calls Performance
- Premium Stocks
- Short Term Delivery Tips
- MCX Commodity Tips
Related Pages :
