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2. A brokerage that agrees to buy or sell securities on behalf of clients at a given price, but instead buys at a lower price or sells at a higher price in order to keep the difference as profit.
A bucket shop is an illegal brokerage firm whose salespeople pose as legitimate brokers and attempt to sell you securities.
Typically, a bucket shop broker doesn't actually purchase the securities you agree to buy and that you pay for. Rather, the con artists pocket your money and move on, disappearing before you realize you have been scammed.