Commentary

Elaine Wah

Modern Markets, Modern Metrics - A Blog By IEX

In this blog by IEX's Elaine Wah, the newest public exchange looks to refute public claims that the metrics it uses are designed to inflate its own volume numbers and mislead people.

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Should have had a pilot program a long time ago.

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August 31, 2000

At Deadline

By John A. Byrne

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  • At Deadline

Hackers

Bloomberg is plugging all the holes now that its computer security was reportedly breached by hackers. "We are not at liberty to discuss it," said Chris Taylor, a Bloomberg spokeswoman, "because if we did then it would no longer be secure." Oleg Zevov, 27, one of the two perpetrators operating out of the former Soviet republic in Central Asia, allegedly sent an e-mail to Michael Bloomberg stating he had passwords of several top employees, including Michael Bloomberg.

Zevov demanded $200,000 in return for disclosing how he masterminded the scam. Bloomberg deposited the money in London and later met there with the two scam artists. Shortly thereafter, Zezov and his accomplice Igor Yarimaka, 37, were arrested by two London police officers. Extradition proceedings are underway to bring both men to the U.S. to stand trial. Corporate superslueths Kroll Associates recommends rigorous audits for corporate networks in the wake of the Bloomberg episode. Closely monitor servers and the Internet, says Jason Paroff, managing director in the high-technology investigations group at Kroll in New York.

STA Conference

The annual conference of the Security Traders Association in Boca Raton, Fla., on Oct. 11 through 15, is scheduled to host Securities and Exchange Commission Chairman Arthur Levitt. The SEC chairman, who never shies away from controversy, should draw a standing-room only crowd. Other notables include Big Board Chairman Richard Grasso, NASD Regulation President Mary Shapiro and famed Prudential analyst Ralph Acamparo. On Saturday night the celebrities include political satirists Al Franken and P.J. O'Rourke.

STA affiliate delegates will elect four members to the 19-member STA Board of Governors for two-year terms, commencing on Jan. 1. Among the early crop of contenders are Stephen Bookbinder, Bloomberg Tradebook; Catherine (Cebby) Koepke, Cantor Fitzgerald; Thomas Gravina, Spear, Leeds & Kellogg and Richard Sorrentino, RBC Dominion Securities. "People could even be nominated from the floor," STA general counsel Andrew Grass noted.

Order Flow

Bowing to practical considerations, the Securities and Exchange Commission decided not to ban payment for order flow in the options market. The decision comes after the agency reviewed a plan by the Chicago Board Options Exchange that taxes its member specialists and dealers on options contracts. The plan helps the CBOE raise finance to purchase order flow. The CBOE is alarmed that specialist firms are paying for orders in the exchange's most active issues, but executing them away from the exchange. Other exchanges, including the American Stock Exchange, have followed the CBOE's example. SEC Chairman Arthur Levitt has reservations about payment for order flow but said it was hard to outlaw the practice. The SEC, however, will require brokers to disclose how much money they receive from order flow sales.

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