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During 1986, Mr. Gordon used Wagner Stott Clearing Corpora-
tion (Wagner Stott) as one of his clearing organizations. A
clearing organization like Wagner Stott provides financing to,
and sets margin requirements for, its clearing members. All
standardized security options are issued and guaranteed by
clearing organizations like Wagner Stott that are regulated by
the SEC. During 1986, Wagner Stott provided Mr. Gordon with
financing to trade during that year.
Wagner Stott issued statements (Wagner Stott statements) to
Mr. Gordon during 1986 that reflected, inter alia, his trading
activity as an options market maker. The Wagner Stott statements
for the periods March 27, 1986, through May 30, 1986 (April-May
1986 Wagner Stott statements) and October 31, 1986, through
November 28, 1986 (November 1986 Wagner Stott statement)7 showed
Mr. Gordon's trading activities as an options market maker in
various stock options and stock index options. The April-May
1986 Wagner Stott statements also showed Mr. Gordon's opening and
closing balances with respect to stocks of the following corpora-
tions: American Can, AMR, Cetus, Digital Equipment, Gould, Home
Shopping Network, J.C. Penney, Merrill Lynch, Motorola, National
Distillers & Chem, and Union Carbide. The November 1986 Wagner
Stott statement did not show opening or closing balances with
respect to any stocks.
7 The Wagner Stott statements identified above are the only
Wagner Stott statements that are part of the record.
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