- 6 -
securities as demanded to provide increased liquidity, especially
where there is a temporary imbalance between buy and sell orders
from investors.
Convertible bonds are hybrid instruments; typically they are
subordinated debentures with a fixed interest rate, a fixed
maturity, and an ability to be converted into the issuer’s stock
at the holder’s option. Bonds generally have been and remain
thinly traded.
A hedge in convertible bonds typically consists of a long
position in the bonds and a short position in the underlying
common stock into which the bonds can be converted, which is
intended to be market neutral (i.e., to have the combined bond
and stock positions not generate major additional profits or
losses even with large moves in the overall markets).
Before moving to Mt. Kisco in December 1992, petitioner had
as many as 53 employees in its New York City office. Until
December 1992, petitioner had its own “back office” operation in
which petitioner’s staff “cleared” securities (i.e., moved the
actual certificates in sales transactions), kept records and
accounts of trades, sent and received confirmations, and
maintained records otherwise required by the SEC, securities
exchanges, and the National Association of Securities Dealers
(NASD).
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