- 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