Tim Quast
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We're All HFTs Now

In this guest commentary, author Tim Quast looks back at the history of HFT and how the market has evolved to where many firms now fit the definition of high-frequency trader.

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August 31, 2000

Charges Hurt All-Tech's IPO Revival Plans

By William Hoffman

Harvey Houtkin, the embattled chief executive of All-Tech Direct, is accused of misleading investors in public statements and advertising.

All-Tech and two of the senior executives at the Montvale, N.J.-based firm are charged with not properly supervising employees who arranged loans between clients to cover margin calls.

Other All-Tech employees were alleged to have misrepresented the risks associated with such loans.

But Houtkin, the so-called original SOES bandit, is literally laughing off the charges.

"Most of the charges are laughable," said Houtkin, referring to the NASD Regulation charges

"We will definitely be exonerated in an impartial forum," Houtkin said, "which means not in an NASD kangaroo court."

Houtkin may have reason to be bitter. The action dealt a blow to his firm's hopes to revive plans to bring itself public. Banc of America Securities, LLC. has been advising his firm on alternatives to the IPO route, although an IPO is still a possibility, Houtkin said.

Nonetheless, the advising firm just wants the whole mess to go away, he said. All-Tech considered the traditional IPO route, "but it's common knowledge that most brokers are not our biggest fans," he said. "It would be nice to exploit the business for all it could be," he added, but "going public isn't all it's cracked up to be."

Responding to the regulatory charges, Houtkin said that everything he told investors was "100 percent accurate, and I stand by what I said." An angry Houtkin contended that regulators issue slaps on the wrist to favored industry firms charged with more egregious offenses, while aggressively pursuing day trading firms such as All-Tech.

"This is the most corrupt industry in the entire world," he said.