Do NASDAQ Market Makers Paint the Tape?

Posted: 26 Aug 1999

See all articles by David C. Porter

David C. Porter

University of Wisconsin

Daniel G. Weaver

Rutgers Business School

Date Written: December 1994


We examine NASD compliance with the Securities and Exchange Commission's (SEC) mandate that all trades be reported within 90 seconds of completion and in sequence. We find a substantial number of out-of-sequence trades both on an absolute level and when compared to out-of-sequence reporting on the combined centralized exchanges. We investigate possible explanations and find little or no support for the NASD sanctioned violations of lost trading ticket, computer malfunction, or abnormal volume, and only minimal support for firm size and trade size hypotheses. Evidence exists suggesting dealers could use late trades for management of margin accounts, delay of information, or for hiding inventory adjustments.

JEL Classification: G14

Suggested Citation

Porter, David C. and Weaver, Daniel G., Do NASDAQ Market Makers Paint the Tape? (December 1994 ). Available at SSRN:

David C. Porter

University of Wisconsin ( email )

800 W. Main
College of Business and Economics
Whitewater, WI 53190
United States
414-472-1880 (Phone)
414-472-4863 (Fax)

Daniel G. Weaver (Contact Author)

Rutgers Business School ( email )

94 Rockafeller Road
Piscataway, NJ 08854
United States
848.445.5644 (Phone)
732.445.2333 (Fax)


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