Compaq Computer Corporation and Subsidiaries - Page 7




                                        - 7 -                                         

          years.  During 1991, Gallagher participated in several ADR                  
          transaction trades as the purchaser of the ADR's.  Tempesta had             
          no knowledge of the identity of the seller of ADR's.  He only               
          knew that the seller was a client of Twenty-First.                          
               On September 16, 1992, Leo instructed ABD-N.Y., Inc. (ABD),            
          to purchase 10 million Royal Dutch ADR's on petitioner's behalf             
          from Gallagher on the floor of the NYSE.  He also instructed ABD            
          to resell the 10 million Royal Dutch ADR's to Gallagher                     
          immediately following the purchase trades.  The purchase trades             
          were made in 23 separate cross-trades of approximately 450,000              
          ADR's each with special "next day" settlement terms pursuant to             
          NYSE rule 64.  The aggregate purchase price was $887,577,129, cum           
          dividend.                                                                   
               ABD executed the 23 sale trades, selling the Royal Dutch               
          ADR's back to Gallagher, immediately following the related                  
          purchase trade.  Accordingly, each purchase trade and its related           
          sale trade were completed before commencing the next purchase               
          trade.  The sales transactions, however, had regular settlement             
          terms of 5 days, and the aggregate sales price was $868,412,129,            
          ex dividend.  The 23 corresponding purchase and resale trades               
          were completed in about an hour between approximately 2:58 p.m.             
          and 4:00 p.m.                                                               
               Leo had instructed the ABD floor brokers to execute the                
          trades only if the prices selected were within the range of the             





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011