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current market prices. Thus, when, between the sixth and seventh
trades, the market price changed, Leo modified the price for
subsequent trades to compensate for the change. In addition,
NYSE rule 76 required an open outcry for each cross-trade, and
NYSE rule 72 allowed other traders on the floor or the
"specialist" responsible for making the cross-trades to break up
the transaction by taking all or part of the trade. However, for
cross-trades priced at the market price, there was no incentive
to break up the transaction.
Pursuant to the "next day" settlement rules, the purchase
cross-trades were settled between petitioner and Gallagher on
September 17, 1992. On that date, Gallagher's account with Bear
Stearns was credited $887,547,543 for the purchase trades,
including a reduction for Securities and Exchange Commission fees
(SEC fees) of $29,586. Gallagher was subsequently reimbursed for
the SEC fees. Also on September 17, 1992, petitioner transferred
$20,651,996 to Bear Stearns, opening a margin account.
On September 18, 1992, at 10:47 a.m., petitioner complied
with the applicable margin requirements, transferring $16,866,571
to its margin account with Bear Stearns. The margin requirement
for purchase and sale transactions completed on the same day was
50 percent of the purchase price of the largest trade executed on
that day. It was not necessary to make payments for each
completed trade. Accordingly, this wire transfer was made by
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