EF Hutton was an American stock brokerage firm founded in 1904 by Edward Francis Hutton and his brother, Franklyn Laws Hutton. Later, it was led by well known Wall Street trader Gerald M. Loeb. Under their leadership, EF Hutton became one of the most respected financial firms in the United States and for several decades was the second largest brokerage firm in the country.
Pump and dump (P&D) is a form of securities fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements (pump), in order to sell the cheaply purchased stock at a higher price (dump). Once the operators of the scheme "dump" (sell) their overvalued shares, the price falls and investors lose their money. This is most common with small-cap cryptocurrencies and very small corporations/companies, i.e. "microcaps".
A binary option is a financial exotic option in which the payoff is either some fixed monetary amount or nothing at all. The two main types of binary options are the cash-or-nothing binary option and the asset-or-nothing binary option. The former pays some fixed amount of cash if the option expires in-the-money while the latter pays the value of the underlying security. They are also called all-or-nothing options, digital options, and fixed return options (FROs).
Boiler Room is a 2000 American crime drama film written and directed by Ben Younger, and starring Giovanni Ribisi, Vin Diesel, Nia Long, Ben Affleck, Nicky Katt, Scott Caan, Tom Everett Scott, Ron Rifkin and Jamie Kennedy. The film was conceived when Younger interviewed for a job at brokerage firm Sterling Foster. "I walked in and immediately realized, 'This is my movie.' I mean, you see these kids and know something is going on."
Penny stocks are common shares of small public companies that trade for less than one dollar per share. The U.S. Securities and Exchange Commission (SEC) uses the term "Penny stock" to refer to a security, a financial instrument which represents a given financial value, issued by small public companies that trade at less than $5 per share. Penny stocks are priced over-the-counter, rather than on the trading floor. The term "penny stock" refers to shares that, prior to the SEC's classification, traded for "pennies on the dollar". In 1934, when the United States government passed the Securities Exchange Act to regulate any and all transactions of securities between parties which are "not the original issuer", the SEC at the time disclosed that equity securities which trade for less than $5 per share could not be listed on any national stock exchange or index.
In business, a boiler room is an outbound call center selling questionable investments by telephone. It usually refers to a room where salespeople work using unfair, dishonest sales tactics, sometimes selling penny stocks or private placements or committing outright stock fraud. A common boiler room tactic is the use of falsified and bolstered information in combination with verified company-released information. The term is pejorative: it is often used to imply high-pressure sales tactics and, sometimes, poor working conditions.
Front running, also known as tailgating, is the practice of entering into an equity (stock) trade, option, futures contract, derivative, or security-based swap to capitalize on advance, nonpublic knowledge of a large ("block") pending transaction that will influence the price of the underlying security. In essence, it means the practice of engaging in a personal or proprietary securities transaction in advance of a transaction in the same security for a client's account. Front running is considered a form of market manipulation in many markets. Cases typically involve individual brokers or brokerage firms trading stock in and out of undisclosed, unmonitored accounts of relatives or confederates. Institutional and individual investors may also commit a front running violation when they are privy to inside information. A front running firm either buys for its own account before filling customer buy orders that drive up the price, or sells for its own account before filling customer sell orders that drive down the price. Front running is prohibited since the front-runner profits come from nonpublic information, at the expense of its own customers, the block trade, or the public market.
The Cyprus Stock Exchange or CSE, is a European stock exchange located in Cyprus.
Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information. The setups are generally made to result in monetary gain for the deceivers, and generally result in unfair monetary losses for the investors. They are generally violating securities laws.
Stratton Oakmont, Inc. was a Long Island, New York, over-the-counter brokerage house founded in 1989 by Jordan Belfort and Danny Porush. It defrauded many shareholders, leading to the arrest and incarceration of several executives and the closing of the firm in 1996.
Anthony Elgindy, was an American stock broker, and financial commentator who founded Pacific Equity Investigations. Elgindy gained a reputation for his "investigations" of companies. Towards the end of his life, Elgindy was convicted of insider trading and served seven years in federal prison.
Microcap stock fraud is a form of securities fraud involving stocks of "microcap" companies, generally defined in the United States as those with a market capitalization of under $250 million. Its prevalence has been estimated to run into the billions of dollars a year. Many microcap stocks are penny stocks, which the SEC defines as a security that trades at less than $5 per share, is not listed on a national exchange, and fails to meet other specific criteria.
In finance, a dark pool is a private forum for trading securities, derivatives, and other financial instruments. Liquidity on these markets is called dark pool liquidity. The bulk of dark pool trades represent large trades by financial institutions that are offered away from public exchanges like the New York Stock Exchange and the NASDAQ, so that such trades remain confidential and outside the purview of the general investing public. The fragmentation of electronic trading platforms has allowed dark pools to be created, and they are normally accessed through crossing networks or directly among market participants via private contractual arrangements. Generally, dark pools are not available to the public, but in some cases, they may be accessed indirectly by retail investors and traders via retail brokers.
Sentinel Management Group was a cash-management firm based in Northbrook, Illinois.
Payment for order flow (PFOF) is the compensation that a stockbroker receives from a market maker in exchange for the broker routing its clients' trades to that market maker. It is a controversial practice that has been called a "kickback" by its critics. Policymakers supportive of PFOF and several people in finance who have a favorable view of the practice have defended it for helping develop new investment apps, low-cost trading, and more efficient execution.
The Cyprus Securities and Exchange Commission, better known as CySEC, is the financial regulatory agency of Cyprus. As an EU member state, CySEC's financial regulations and operations comply with the European MiFID financial harmonization law.
Daniel Mark Porush is an American businessman, former stock broker and convicted criminal who helped run a pump and dump stock fraud scheme in the 1990s at the Stratton Oakmont brokerage in collaboration with Jordan Belfort. In 1999, he was convicted of securities fraud and money laundering, for which he served 39 months in prison. After prison, Porush became involved with a Florida-based medical supply company, Med-Care, which was the subject of federal investigations. In the biographical 2013 film The Wolf of Wall Street, which focuses on the story of Belfort and Stratton Oakmont, Jonah Hill portrays Donnie Azoff, a character loosely based on Porush. Porush has called the portrayal inaccurate and threatened to sue the filmmakers to prevent him from being depicted.
Benjamin Wey is a Chinese-born US Wall Street financier and CEO of New York Global Group (NYGG). He began his financial career as an investment advisor and broker in Oklahoma in the late 1990s. Wey and NYGG were among the most active "facilitators and promoters" of reverse takeovers, which created Special-Purpose Acquisition Companies (SPAC) and allowed small Chinese companies to raise capital on U.S. markets, until reverse takeovers became the subject of a U.S. Securities and Exchange Commission investigation in 2011.
The Wolf of Wall Street is a memoir by former stockbroker and trader Jordan Belfort, first published in September 2007 by Bantam Books, then adapted into a 2013 film of the same name. Belfort's autobiographical account was continued by Catching the Wolf of Wall Street, published in 2009.
Citadel Securities LLC is an American market making firm providing liquidity and trade execution to retail and institutional clients, headquartered in Miami. The firm also trades futures, equities, credit, options, currencies, and Treasury bonds. It is the largest designated market maker on the New York Stock Exchange.
