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Car Stock Exchange PMC's Suggestion how to prevent CSX fraud and abuse
2 messages, Last post on Oct 06, 2008 at 8:29 AM
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Since fraud comes by a single participant selling large chuncks of CSX stock under the sock-puppet account then buys the stock immediately thereafter under his main, fraudulent account, it would stand to reason that by making a delay between stock sales and stock price drop, mikedrud can end the fraud that's taking place. After all, how can someone buy the cheaper stock that his sock-puppet account just sold if he doesn't know when the stock will be cheaper in the first place? It now works like this: Sock-puppet account holds 20,000 CSX shares of GENS. Sock-puppet account sells all 20K shares, causing a radical drop in the price of GENS. The main account then scoops up all the cheap GENS stock, at a great profit. It can work like this: Sock-puppet account holds 20,000 CSX shares of GENS. Sock-puppet account sells all 20K shares, but since an algorithm in the software creates a delay, that radical drop in price won't be realised until an unknown length of time elapses. Unknown lenght of time elapses, then GENS price reflects the sale, reducing GENS at the later, unknown time. Thus, the main, fraudulent account misses out on scooping up those cheap, 20,000 shares of GENS.
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Replying to: pmc4 (Oct 04, 2008 8:19 pm) But you do bring up an interesting idea that we will continue to discuss internally to see if there is a way to address this in the short term. Thank you for your well thought-out post. Mike |
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