Does anybody know what the textbook says about receiving advanced notice from clients for IPOs? Nagle has a standing order with Presley Brothers to purchase as much of each IPO that Presley Brothers can give him. Once Nagle gets the IPO issue, he divides it into three allocations and begins calling his clients one at a time, beginning with the top commission-generating client, and offers to sell an allocation to each client until all three allocations are sold. Nagle’s standing order to purchase as much as much as possible of each Presley Brothers’ IPOs is a violation of the standard because: A) Nagle is, in effect, distributing soft dollars. B) Nagle should get advanced notice of his clients’ interest in the IPO. C) of no reason, it is actually an acceptable practice because all the IPOs have been profitable.
a
I’m sorry I forgot to post the answer. The answer is B, but I want to know more about what the book says about advance notice from clients re: IPOs
always get advanced notice
I said B, there’s no way that distribution was fair and impartial.
CFA.Rhythm Wrote: ------------------------------------------------------- > Does anybody know what the textbook says about > receiving advanced notice from clients for IPOs? > > > Nagle has a standing order with Presley Brothers > to purchase as much of each IPO that Presley > Brothers can give him. Once Nagle gets the IPO > issue, he divides it into three allocations and > begins calling his clients one at a time, > beginning with the top commission-generating > client, and offers to sell an allocation to each > client until all three allocations are sold. > > > Nagle’s standing order to purchase as much as much > as possible of each Presley Brothers’ IPOs is a > violation of the standard because: > > A) Nagle is, in effect, distributing soft > dollars. > > B) Nagle should get advanced notice of his > clients’ interest in the IPO. > > C) of no reason, it is actually an acceptable > practice because all the IPOs have been > profitable. Gotta be B. Hes basically giving preferential treatment to the top clients and anyone else he calls first. Completely unfair.