piggyback

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Piggybacking

The practice in which a broker conducts a transaction on his/her own account after filling a similar order on behalf of a client. For example, if a client sells 10,000 shares and the broker owns some shares in the same company, he may piggyback by selling his own shares. A broker piggybacks when he/she believes that the client has insider information, or at least a better understanding than the broker on the market's future movements. Piggybacking should not be confused with piggy back registration, which is a different concept altogether.

piggyback

1. A broker trading in his or her personal account after trading in the same security for a customer. The broker may believe the customer has access to privileged information that will cause the transaction to be profitable.

Piggyback.

A broker who piggybacks acts illegally by buying or selling a security for his or her own account after -- and presumably because -- a client has authorized that same transaction.

One speculation is that a broker in this situation thinks the client is acting on information that the broker doesn't have.

References in periodicals archive ?
Shayegan, contacted on his cellphone by the AP, politely declined to speak of the piggyback rides until he could talk to an attorney.
Because of his piggyback antics, he has been banned from high school sporting events in Washington, Oregon, Montana, North Dakota and Minnesota.
Gill's assertion is supported by the latest analysis by Standard & Poor's, an influential Wall Street ratings agency, which analyzed nearly 640,000 piggyback first-lien mortgages in bond pools.
I expect every mortgage broker, loan officer, lender and real estate agent that knowingly put a client into a piggyback mortgage to contact them and tell them to read this Critical Report," said Gill.
Buyers choose from a dizzying array of new loan products, including 40-year, interest-only (IO), low-document or no-document and piggyback loans, as well as option adjustable-rate mortgages (option ARMs).
The problem for individual borrowers comes when risks are layered on top of each other--for example, a 100 percent LTV piggyback with an IO first mortgage and a HELOC second mortgage.
When buying a $200,000 home with a 5% down payment, SingleFile could result in a monthly mortgage payment that is about $50 less than a typical piggyback structure involving closed-end second mortgages.
By comparison, piggyback structures can include second mortgages that are balloons or HELOCs (home equity lines of credit) in which rates can adjust early and often.