Two months ago the investment house PSAGOT, the largest of TASE, closed its nostro operations. The two traders in charge suddenly decided to leave and go independent. The reason: to focus on managing the client's money and to avoid conflicts of interest. They were giving up a nice source of profits. Very laudable.
Now we know why they really did it. They knew they have been cought. This night the Stock Exchange requested the jailing of two PSAGOT managers for manipulating corporate and state bonds. Globes:
A longstanding capital market trader said today, "What was apparently going on at Psagot was front running."Front running is when a trader knows in advance of a buy order for securities, giving him the chance to place his own order at a lower price, and selling the securities after the price rises.Fortunately, yesterday NASDAQ was strong green and this morning TASE is rising very nicely. We shall weather this incident too.
Lesson to be learned: When money managers insist that they are disinterested and work for only for the benefit of their clients, they mean to steal your money.
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