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Locked Market Violations Corrected

Traders Magazine, July 2001

Gregory Bresiger

Several recently fined and suspended firms, whose IPO actions caused crossed and locked markets according to NASD Regulation, have filed corrective action plans. Ten firms were fined and five of them were also suspended from market-making activities because the after market of their IPOs caused locked and crossed markets, regulators said. "Locked crossed quotations," said NASD Regulation in a statement announcing the fines, "may occur in fast-moving markets and can have significant impact on the opening of newly traded securities. Many secondary trading markets were opening crossed by several points and in some cases, the locked or crossed condition existed for many minutes into the secondary trading period." These actions hurt orderly market and price discovery procedures, the regulators said.

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