3 ms·

A fun read along these same lines, about the origins of the Zimmerman Rule (which says that profits from improperly funded trades accrue to the broker): https:/

A fun read along these same lines, about the origins of the Zimmerman Rule (which says that profits from improperly funded trades accrue to the broker): https://chicagoreader.com/news-politics/busted-6/ https://chicagoreader.com/news-politics/busted-6/

ksherlock 3y ago
via the August 30th Money Stuff, that sort of thing still happens: "The SEC's complaint alleges that, between July 1 and 6, 2022, Anthony opened a new brokerage account using a fraudulent application on which he overstated his personal income and then made $1 million in bogus deposits from his bank account, which held only nine cents at the time. The complaint also states that, before Anthony's deposits reversed for insufficient funds in his bank account, he used "immediate access" credit extended to him by his broker-dealer to purchase $199,956.65 in securities. According to the complaint, Anthony's broker-dealer discovered the scheme before Anthony could make any profits, froze his account, and liquidated his holdings." https://newsletterhunt.com/emails/37239 https://newsletterhunt.com/emails/37239 https://www.sec.gov/litigation/litreleases/lr-25816 https://www.sec.gov/litigation/litreleases/lr-25816 https://www.sec.gov/files/litigation/complaints/2023/comp25816.pdf https://www.sec.gov/files/litigation/complaints/2023/comp258...
- jakeinspace 3y ago
  Seems reasonable. Then again, what happens if someone robs my house, takes the cash he finds to the casino, and wins a million dollars before getting caught? Knowing how much political power casinos have, I wouldn't be surprised if the action itself violated their rules and meant they could repossess the winnings.
- underlipton 3y ago
  IIRC, the liquidation actually did yield $2k more than he'd paid for the securities. He just didn't profit.

3 ms·

A fun read along these same lines, about the origins of the Zimmerman Rule (which says that profits from improperly funded trades accrue to the broker): https:/

by cempaka 3y ago

ksherlock 3y ago
via the August 30th Money Stuff, that sort of thing still happens: "The SEC's complaint alleges that, between July 1 and 6, 2022, Anthony opened a new brokerage account using a fraudulent application on which he overstated his personal income and then made $1 million in bogus deposits from his bank account, which held only nine cents at the time. The complaint also states that, before Anthony's deposits reversed for insufficient funds in his bank account, he used "immediate access" credit extended to him by his broker-dealer to purchase $199,956.65 in securities. According to the complaint, Anthony's broker-dealer discovered the scheme before Anthony could make any profits, froze his account, and liquidated his holdings." https://newsletterhunt.com/emails/37239 https://newsletterhunt.com/emails/37239 https://www.sec.gov/litigation/litreleases/lr-25816 https://www.sec.gov/litigation/litreleases/lr-25816 https://www.sec.gov/files/litigation/complaints/2023/comp25816.pdf https://www.sec.gov/files/litigation/complaints/2023/comp258...
- jakeinspace 3y ago
  Seems reasonable. Then again, what happens if someone robs my house, takes the cash he finds to the casino, and wins a million dollars before getting caught? Knowing how much political power casinos have, I wouldn't be surprised if the action itself violated their rules and meant they could repossess the winnings.
- underlipton 3y ago
  IIRC, the liquidation actually did yield $2k more than he'd paid for the securities. He just didn't profit.