This one is important. Intuitive if you work in an investment bank, but in any case: When a firm is in possession of material non-public information, they should not refuse trades to which they are a counterparty because doing so would send a signal to the market that the firm is in possession of material non-public information.
you should take sides of unsolicit trades if you are MM
Right - that’s a more accurate way of saying it.
so I know that GM will acquire some little auto company. and u are my client and ask me to sell some GM shares, I sell them, act as if I know nothing. correct? what if I suspect that you know the insider info?
Typically - these securities will show up on a firm’s restricted list, but as a market maker, the can be a counterparty to a trade. The trader will know they’re on the restricted list but won’t have any more information than that.