I am reading about the Proprietary trading procedure, there is a paragraph that I don not understand.
“This concern is particularly important in the relationships between small, regional broker/dealers and small issuers. In many situations, a firm will take a small issuer public with the understanding that the firm will continue to be a market maker in the stock. In such instances, a withdrawal by the firm from market-making acts would be a clear tip to outsiders.”
Can anyone please explain what is the “clear tip” to outsiders? and what kind of firm does it refer to? thank you in advance.