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Petitioner was awarded Treasury securities in 23 auctions in
1985, 19 in 1986, 14 in 1987, 9 in 1988, and 9 in 1989.
Petitioner's auction purchases as a percentage of his total
purchases of Treasury securities ranged from 25 to 50 percent
during 1985 through 1989. Overall, petitioner acquired more than
one-third of his Treasury securities through auctions during that
period. Petitioner participated actively in the auctions because
they allowed him to acquire a large position in a short time at
one price. Petitioner then traded from the core positions
acquired at auction, adding to his holdings through purchases and
selling the securities to primary dealers in smaller blocks.
Petitioner frequently submitted multiple bids in the same auction
through different primary dealers. Petitioner never acquired a
Treasury security on the auction in response to a prospective
buyer's request to repurchase that security from him.
Petitioner had ongoing contacts with CF and numerous primary
dealers. There was no difference in the way CF treated
petitioner and the way it treated any other CF customer. When a
customer of CF would call to place a bid or offer on the CF
system, it was solely the customer's choice to decide the
security on which he would make a bid or offer. When petitioner
called CF to post a bid or offer on the CF system, it was solely
his choice whether to do so, and solely his choice as to the
specific security he wanted to bid or offer. When petitioner
called CF to post a bid or offer on the CF system, it was not
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