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A $13 Billion Wealth Transfer?

Traders Magazine, August 1998

Jeffrey L. Winograd

Two well-known finance professors, Robert Wood of the University of Memphis and Rutgers University's David Whitcomb, have locked horns over the Small Order Execution System. During a hearing of the House Commerce Subcommittee on Finance and Hazardous Materials last month, Wood spoke of a huge wealth transfer effected by SOES. Whitcomb countered, saying the best academic research suggests the effect of SOES usage is essentially neutral.

The most common practice of SOES day traders, testified Wood, is watching for the onset of large institutional buy or sell programs, and then stepping in front of them.

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