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At times, petitioner also bought and sold securities for his own
account.
Petitioner left EMR in 1987, largely for reasons of health.
In October 1988 petitioner commenced employment as a registered
securities principal with Cadre Consulting Services, Inc.
(Cadre), a registered broker-dealer. Petitioner was a full-time
employee of Cadre. In 1988, in addition to the securities
transactions undertaken on behalf of his employer, petitioner
bought and sold securities, as well as futures contracts, for his
own account. During 1988, petitioner began to employ the "on the
book" method of bid and asked when buying and selling securities
for his own account.
Under the "on the book" bid and asked method, petitioner
would place orders to buy securities (bids) and to sell
securities (asks) with his broker at specified bid and asked
prices. A maximum quantity to buy or sell would be specified, as
well as an agreement to accept quantities that only partially
filled an order. Petitioner would endeavor to set his bid and
asked prices at levels slightly better than prevailing prices.
Most significantly, the orders were required to be handled "on
the book", which deprived those handling the order of any
discretion to delay filling it in anticipation of improvements in
the market. Moreover, if petitioner's bid or ask constituted the
best price for a security, "on the book" treatment would result
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