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Devil's dictionary
(FORTUNE Magazine) – Anyone who thinks a Quotron machine is what Larry Speakes used to make up quotes will have trouble surviving the blizzard of buzzwords blowing around the congressional probe of Drexel Burnham Lambert's junk bond activities. Herewith, a glossary: -- Parking: The Securities and Exchange Commission requires that once you accumulate 5% or more of a company's shares, you must disclose that fact publicly. Since you don't want to tip off your prey, you stop buying just before you hit 5%, but you get your friends and associates to buy for you in their names. Later you act in concert. You devil, you. -- Withholding and free-riding: You put chunks of a hot new stock or bond issue aside at the offering price to offer to favored clients or employees, who later unload them for a handsome profit when the market bids it up. Your withholding of shares from the market, in fact, helps guarantee the rise in price, making the eventual profit so certain that the holder is said to have enjoyed a free ride. Apparently, you have no shame. -- Front-running: Your client gives you a buy or sell order to execute, of such size that you know it will influence the market price. You promptly buy options, locking in a profit on the stock's rise or descent before you handle your client's transaction. They don't call you the Wolf of Wall Street for nothing.- A.F. |
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