Despite the dangers of being accused of insider trading, personal accounts or PAs – operated by individual traders and analysts on their own behalf – are alive and well in the Square Mile, but when greed runs ahead of itself, the results can be embarrassing. About a month ago, the Stock Exchange temporarily added a digital clock to one of the main SEAQ share price pages. Trouble was the time was expressed exactly as if it was a new share with bid and offer prices and the previous night’s closing price. It also had the name Nodecheck and the letters TTS by its side. One trader at a UK merchant bank was shown the new ‘share’ by a colleague who told her it was a Spanish time-share outfit rumoured to be in take-over talks. Some share: every time she looked at the screen the price had gone up. The following morning she was somewhat surprised to see it had collapsed from 1700 all the way back to 800. The talks were called off late last night, said her colleague, but they’re back on now. Ten minutes later, she turned to the colleague with the immortal words its incredible, it’s going up more than a point a minute!. She was finally let into the secret when she tried to buy some Nodecheck shares. One of her other colleagues didn’t fare so well: he actually got permission from the firm’s compliance officer, the internal official responsible for making sure employees don’t trade on inside information. He got as far as asking a market-maker to buy him some shares in Nodecheck, and looked extremely silly when the market-maker let him in on the secret in front of the rest of the dealer room. Silly? Well, not compared with another individual at a foreign-owned bank. This poor unfortunate was told that Nodecheck was a French Bank about to be taken over. After watching the share go up for a while, he went and got permission to trade from the appropriate person. This particular Compliance Officer was in on the joke as was the market-maker entrusted with the purchase. After 40 minutes and a 40-point rise, the poor unfortunate told the market-maker to sell. Thinking he had made a real killing – remember, you don’t get the money until at least 10 days later – he took his whole desk out for champagne at his expense. Some bottles later he was let in the secret, and colleagues had a whip round to reimburse some of his by now heavy losses.
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