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represents remuneration for their labors as a middle
man bringing together buyer and seller, and performing
the usual services of retailer or wholesaler of goods.
Such sellers are known as "dealers."
Contrasted to "dealers" are those sellers of
securities who perform no such merchandising functions
and whose status as to the source of supply is not
significantly different from that of those to whom they
sell. That is, the securities are as easily accessible
to one as the other and the seller performs no services
that need be compensated for by a mark-up of the price
of the securities he sells. The sellers depend upon
such circumstances as a rise in value or an
advantageous purchase to enable them to sell at a price
in excess of cost. Such sellers are known as
"traders." [Citations omitted.]
Petitioner apparently relies on the merchant analogy in
Kemon in arguing that he should be treated as a dealer because,
like a dealer, he attempted to derive his profit from the
"spread" between the bid and asked prices of the securities in
which he transacted, and in his view also performed a
merchandising function. Petitioner claims that his "on the book"
method of bid and asked for transacting in securities was highly
unusual, indeed unique, for an individual. When placing an order
to buy and/or sell securities with his broker-dealer, petitioner
would propose prices that were "inside" the prevailing market
spread between bid and asked prices. If petitioner's bid or
asked price were the best available, the exchange would be
required to display it. In petitioner's view, if he consummated
a transaction at a price that was "inside" the spread being
offered by conventional dealers, he was thereby "getting in their
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