NASDAQ Coverup

Fri May 13,11:32 AM ET
Associated Press

Computer Problem Causes False Stock Quotes

NEW YORK - A computer problem at an unidentified stock trader caused erroneous, exaggerated prices to be posted to the Nasdaq Stock Market Friday morning, a spokeswoman for the Nasdaq said.

Only a handful of thinly traded stocks were affected, and the problem has been corrected, Nasdaq spokeswoman Bethany Sherman said. If any transactions were completed at those higher prices, those transactions will be broken and the sellers will get their stock back.

The problem arose when a broker linked to the all-electronic Nasdaq system inadvertently put out bids for stocks that were substantially higher than the prices in which those stocks normally trade. Shares of J.W. Mays Inc., which normally trades between $15 and $16 per share, was quoted as high as $136 on Friday.

The story above is from the Associated Press, but it seems they are simply taking the spoon fed version from the NASD. This little problem has been affecting the stock of the company that I work for, plus several others that I own or follow so, I have been getting some feedback from the brokerage community.

First, the trader involved is a very large New York brokerage with a name we would all recoginize. Secondly, these were real trades which the NASD is now breaking as if they really didn't happen. In the case of our company, I can tell you that there are some disappointed sellers out there that are having money taken out of their accounts for trades they made in good faith.

The other part of the story which isn't covered in this AP story yet is that there appears to be a fair amount of trading that was based on the original trades. Based on the stocks that I follow, there were also a number of companies whose price was impacted negatively.

I can also report that as of 4:00 PM EDT we have not had any communication from NASDAQ on this matter.