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Federal regulators have said that the trading practices could have sent false price signals and eroded the credibility of deregulated markets.
"There is no regulation that says, 'Wait a minute, is it mathematically positive, or reasonable, for 75 million who don't want ESPN to pay for the 25 percent who do, at a false price?' " said Barry Diller, the media executive who is backing the technology of a company called Aereo that streams broadcast channels online and is viewed as a challenge to cable.
An N would indicate that the transaction was not real and the supplier got a false price.
The sales staff would allegedly mark "R" next to a transaction in which the real price would be reported to the supplier; an "N" would indicate that the transaction was not real and that the supplier was to get a false price; "P" meant that only part of the reported transaction actually occurred.
I have been around here long enough to understand for those who oppose a particular proposal, their favorite tactic is to distort and misrepresent and put a false price tag on it.
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Traders acknowledge submitting false prices; they had financial incentives to do so.
The committee concluded that the practice, known as "spinning", had not only led to the false pricing of IPOs but had harmed ordinary investors.
The Commodity Futures Trading Commission said all six brokers had reported false prices and engaged in noncompetitive trading, while four were charged with fraud.
The question is whether false prices are causing big economic mistakes and, if so, what might be done about that.Many market prices do diverge from the corresponding "shadow prices" that would direct resources to their socially best uses.
The value of wilderness, either for its beauty or for its stocks of endangered species, is not priced into the market, so too much of it gets cemented over.Whether the pattern of consumption based on these false prices is sustainable is really beside the point.
And in Sacramento, Californian legislators were told that energy firms submitted false prices to firms such as Dow Jones and Platts that publish energy-price indices.Such news has started a vicious cycle of downgrades by credit-rating firms, loss of access to financing and demands for greater collateral.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com