Let's talk about it.How you definite it, why the mutual fund scandals in USA are refering to stale price?

Dictionary: Having lost freshness, effervescence, or palatability: stale bread; stale air.Hence, stale pricing means that you set prices that no longer reflect the actual value.

Let's talk about sex, baby.After hours trading in mutual fund timing trades are obviously frowned upon, as they allow certain investors to trade into or out of the fund after the official close. Why is that profitable? Because new information might have arrived, allowing you to infer that the shares and hence: the mutual fund.You can exploit this "trade" (it's more like fraud) if you are in bed with the mutual fund management company and they allow you to redeem/buy your shares after hours.The management company doesn't suffer from this, on the contrary, they usually are getting a piece of the action.Hope this helps.

QuoteOriginally posted by: FDAXHunterLet's talk about sex, baby.if you want to talk about sex, pour your redish heart will split into pieces Quote After hours trading in mutual fund timing trades are obviously frowned upon, as they allow certain investors to trade into or out of the fund after the official close. Why is that profitable? Because new information might have arrived, allowing you to infer that the shares and hence: the mutual fund.You can exploit this "trade" (it's more like fraud) if you are in bed with the mutual fund management company and they allow you to redeem/buy your shares after hours.The management company doesn't suffer from this, on the contrary, they usually are getting a piece of the action.Hope this helps. All right understand it is not fair for the others, thnx.

THe most ridiculous thing I heard was a company that got to trade at 9pm using 3pm prices...lovely. And as for the hedge funds that got caught...Canary was in the news, the GP gets reimbursed, and so a few doxen rich LPs lose a few thousand dollars...The fun stuff comes if they would ever take down the mutual fund side of this "trade" (which FDAX aptly labeled fraud).~RQ

QuoteOriginally posted by: RookieQuant(which FDAX aptly labeled fraud).How is this fraud, what is the text of the fraudulent promise? So far as I can tell - and I don't know the story - the mutual fund investor put in a limit order, with a dealer, agreeing to sell at the 3 PM price good-til-canceled. Or was it more like a future?Is this any different from a Goldman Sachs energy customer putting in a limit order to sell some obscure product at 6, and the Goldman dealer not filling his order until he has a buyer at 6 1/4 in hand?When customers buy currency options from Goldman Sachs, they expect Goldman to replicate at a profit, no? In fact, the more profit there is, the more people will compete to get you as a customer up front, and the lower front-end loads will be, right?Some customers will benefit and some will lose - just like not every casino customer loses exactly his comps. But on average, in the long run, do the customers really lose from this sort of arrangement? Or did the customer specify that when he got out, his foregone profits should be divided evenly between remaining shareholders? If so, does he get to write it off on his taxes as a charitable contribution?Save me a trip through the inflated and Dickensian nonsense that is the average news story, and tell me what happened here. If a customer is not aware of how rounding, breakage, or whatever, will be divided up, can you honestly say that he has been lied to?MP

I think FDAX explained things very well - if you read it once again I'm sure you will as well.

MobPsycho,I'm not going to argue with you. Everyone doing this is getting their ass hauled into custody, so I leave it up to you to decide if it's fraud in that weird little "world" of yours. The fact that the management company (NOT the fund itself) receives a kickback should tell you something.MobPsycho: Is this any different from a Goldman Sachs energy customer putting in a limit order to sell some obscure product at 6, and the Goldman dealer not filling his order until he has a buyer at 6 1/4 in hand?In the sense that both are violating their acting in the best interest of their investors/shareholders? No, it isn't.MobPsycho: Some customers will benefit and some will lose - just like not every casino customer loses exactly his comps. But on average, in the long run, do the customers really lose from this sort of arrangement? The NAV of the fund is being diluted in favor of those who are trading after the offical close on a no longer representative price. Imagine if The index tracker manager would let you trade QQQs after hours to the same price as the close...But, I'm sure you'll find a way to justify that this is all just and cool and in the real interest of markets... right?

QuoteOriginally posted by: PatrikI think FDAX explained things very well - if you read it once again I'm sure you will as well.I still don't understand it. What is the fraud, specifically? That sounds more like theft. And when someone misleads to cover up a theft, is "fraud" the correct word?Even if the mutual fund managers were the beneficial owners of a riskless trade, but said otherwise on account documents, I still wouldn't call that "fraud." In this case, such details as "3 PM" would be irrelevant. Perhaps it is the description of the trades as "after hours" which has confused me?I suspect that the real fraud, is in the way this is being explained to investors. If it is a simple theft, then you don't need any SEC or any regulators to handle it, just an ordinary district attorney.And make no mistake, the central issue here is governance. And the central ambition of everyone involved is not to empower the investor to manage his own money, but just the opposite, to secure political power for himself.Are "investors" allowed to trade at today's close after 4 PM or aren't they? If not, then referring to people who do as "certain investors" is misleading. Basically, you're selling something which is not yours, and the people buying it know this.Sounds more like "embezzlement."MP

QuoteOriginally posted by: FDAXHunterThe fact that the management company (NOT the fund itself) receives a kickback should tell you something.Look, what would tell me something is if they are selling my stake when I make a profit, and sticking me with it when I don't, or something. You people are too stupid even to explain what has happened in English. And then you are surprised that most investors don't withdraw their money?QuoteOriginally posted by: FDAXHunterThe NAV of the fund is being diluted in favor of those who are trading after the offical close on a no longer representative price.This is nonsense. People are being robbed. It wouldn't be any different if they just sold some stock and wrote a check at 11 AM. They are selling something which they don't own, and which the shareholders have not agreed to sell. The shareholders have not authorized this transaction. It's not "after hours." It's not "NAV." It's just selling your shares below market, to a friend.QuoteOriginally posted by: FDAXHunterBut, I'm sure you'll find a way to justify that this is all just and cool and in the real interest of markets... right?No, the real hustlers are the regulators. They've got to concoct this thing like it's some huge, technical mumbo jumbo, in order that the investor will simply throw up his hands and beg to be saved. In reality, the very reason this happened is specifically because the regulators defined this out of the domain of ordinary business, into a domain where everything is politicized, and run by insiders in a cartel.The mutual funds want to call it "after-hours trading" as a euphemism. And then the regulators go along with this camouflage, in order that investors believe there are stacks of subtle technicalities beyond their ken, and SEC attorneys should be given a raise. And all of it is designed to keep the investor in helplessness, so that attorneys get 2% no matter what happens.This is not "arbitrage." The people doing this are not "investors." The people doing this are not "trading." Regulators want you to believe they are, in order to talk you out of more of your money and autonomy. Next thing, short sellers or program traders are going to be blamed for something, or "traders" in general. They're all "traders" and they're evil, and need to be stamped out! Both the regulators and the thieves want to convince the public that these people are hardly any different from you, FDAX. And you are going along with it!MP

QuoteOriginally posted by: abumazenQuoteOriginally posted by: RookieQuant(which FDAX aptly labeled fraud).How is this fraud, what is the text of the fraudulent promise? . . . Stale pricing refers to two seperate things . . .1) stale prices= timezone arbeurope closes at noon NY time, but AMERICAN funds that hold euro stocks allow one to put in orders till 4pm. [that 4pm is in the prospectus] . the price you trade a fund at is the 4pm fixing, wheather you submit an oder at 1pm or 4pm.so one watches the S+P from noon till 358pm, and if its up enough, one puts in a web buy with charlie schwab to buy one of the many euro-mutual-funds from the fuind store, acomplishing this at 359pm, just under the 4pm deadline. the theory is that europe will rally the next day in sympathy to NY's late afternoon rally [the theory is that an afternoon rally in NY is "unpriced" news in the euro-fund] there is NOTHING illegal about what i've just described. But eventually, schwab says that they wont execute your trade anymore., cause the fund objects to timersHowever, some fund companies, WHILST STATING IN THIER PROSPECTUS THAT THEY DIDNT WANT FUND TIMERS, would aloow "big players" [i.e. larger than the $100k schwab customer], to time thir funds, in exchange for big fees being paid to the funds in terms of parking assets in the fund family, or in the case of BofA, borrwing money at above market rates to finance the fund trades. Spitzer held that these special considerations violated a fiduciary responsability, NOT BECAUSE BIG GUYS GOT DIFFERENT TREATMENT THAN LITTLE GUYS, but becuase these side deals ran contrary to the prospectus and werent offered toeveryone2) stale prices = late tradingrecall that the 4pm deadline is fixed by prospectus. Some order agregators would accept orders as late as 9pm, AND REPORT TO THE FUND THAT THE ORDER BEAT THE 4PM DEADLINE. ie. they "back timestamped" trades. that is clearly illegal, wheather it is for a stockbroker executing an order for a dentist in Duluth on a single stock, or a local on the NYMEX executing an oil futures order, or an institutional broker executing an OTC order for a hedge fund.Canary also had side deals other than the late executions [like a daily list of stocks in the funds that was unavailable to other fund holders]

QuoteOriginally posted by: FDAXHunterAfter hours trading in mutual fund timing trades are obviously frowned upon, as they allow certain investors to trade into or out of the fund after the official close. Why is that profitable? Because new information might have arrived, allowing you to infer that the shares and hence: the mutual fund.You can exploit this "trade" (it's more like fraud) if you are in bed with the mutual fund management company and they allow you to redeem/buy your shares after hours.The management company doesn't suffer from this, on the contrary, they usually are getting a piece of the action.Hope this helps.That seems to be interesting, because I was thinking of the problem of timezone.Suppose that equities of the same company are quoted and traded in HK, London and NY.You know that as those are shares of the same fake, so despite their locations, they must have the same value if expressed in the some currency.Three seconds after the Exchange of HK is closed, news came that the CEO is shot dead by a mad man or the company manipulated balance sheets or whatsever, traders in London would be able to dump the shares of the company, but the poor Chinese shareholders is welly "fucked".Same thing for the NewYorkers who were to find the terrorist act had ruined all wealth of the company after midnight. In HK the shares were traded at 0.0001c while it was recorded 10 USD per share in the books of the poor NYs.

QuoteOriginally posted by: FDAXHunterAfter hours trading in mutual fund timing trades are obviously frowned upon, as they allow certain investors to trade into or out of the fund after the official close. Why is that profitable? Because new information might have arrived, allowing you to infer that the shares and hence: the mutual fund.You can exploit this "trade" (it's more like fraud) if you are in bed with the mutual fund management company and they allow you to redeem/buy your shares after hours.The management company doesn't suffer from this, on the contrary, they usually are getting a piece of the action.Hope this helps.That seems to be interesting, because this lead me to think of the problem of timezone.Suppose that equities of the same company are quoted and traded in HK, London and NY.You know that as those are shares of the same fake, so despite their locations, they must have the same value if expressed in the some currency.Three seconds after the Exchange of HK is closed, news came that the CEO is shot dead by a mad man or the company manipulated balance sheets or whatsever, traders in London would be able to dump the shares of the company, but the poor Chinese shareholders is welly "fucked".Same thing for the NewYorkers who were to find the terrorist act had ruined all wealth of the company after midnight. In HK the shares were traded at 0.0001c while it was recorded 10 USD per share in the books of the poor NYs.

QuoteOriginally posted by: abumazenQuote You people are too stupid even to explain what has happened in English. And then you are surprised that most investors don't withdraw their money?So I spoke with someone who knows exactly what happened, and I'm still confused as to why you dont think its wrong. Essentailly, in some cases at least, people were buying assets at prices not indicative (or available to everyone else) of their value. Im not pounding the table for regulation, and in the end, you probably just have a few million IRA's that are owed $1.56. But in the case of international funds, with certian markets closing around the world at various times, its quite possible to know how a portion of an underlying fund will perform (and in some special cases, perhaps all the markets on which the fund's holdings trade have closed). If you are then able, through no means other than a negotiation with an American fund, buy that fund at what amounts to yesterday's prices, knowing how the funds NAV will catch up, is there not a problem?Is your issue more with your desire to have less regulation, or that you dont think "mutual fund timing" is wrong?~RQ