ADJUSTED TRADING

adjusted trading: translation

A practice used to sell securities without recognizing any or all of the true loss from that sale. To hide the loss, the investor agrees to overpay for a newly purchased security in exchange for the broker/dealer's agreement to overpay for the security that the investor wants to sell. The broker/dealer incurs a loss by purchasing the investor's underwater bond at an above-market price. At the same time, the broker/dealer offsets that loss by selling the investor a new bond at an above-market price. Thus the transactions are completely neutral from the broker/dealer's perspective. However, from the investor's perspective, the transactions effectively defer the recognition of losses on the security sold by establishing an excessively high book value for the security purchased. These transactions are specifically prohibited for federally insured financial institutions. They may also be illegal.

Sometimes called fee trading. American Banker Glossary

бирж. скорректированная торговля* (метод сокрытия убытков от торговли ценными бумагами, при котором инвестор соглашается переплатить при новой покупке бумаг в обмен на согласие брокера или дилера переплатить за бумаги, которые инвестор продает; в результате, брокер ничего не теряет, а признание убытка инвестором откладывается; применение метода запрещается финансовыми институтами)