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Thursday, March 28, 2024

Dark Pools Traded 791% More Boeing Stock During Week of 737 Max Crash

Courtesy of Pam Martens

Dark PoolsLily Tomlin once famously said “No matter how cynical you get, it is impossible to keep up.” When it comes to Wall Street, that particularly rings true. Just take the case of what happened to the trading of Boeing’s stock by Dark Pools the week after the second crash of its new 737 Max 8 jet in a nose-down dive on March 10.

The biggest Wall Street banks are (insanely) allowed by Federal regulators to own and operate unregulated quasi stock exchanges called Dark Pools where they trade New York Stock Exchange and Nasdaq listed stocks between themselves, in the dark. The only speck of sunshine comes three weeks after the trading when the banks’ self-regulator, FINRA, posts totals for the week for each Dark Pool. There is no information on who’s on the buy and sell side or what time of day or day of the week the trades occurred. Adding to the darkness, a number of banks have more than one Dark Pool. For all the public knows, one bank could be on both the buy and sell side of the same trade – artificially boosting the price of the stock if it has a buy rating on it or artificially tanking the stock price if it has an underperform, or the very rare, sell rating on it.

On Sunday, March 10, 2019 a Boeing 737 Max 8 operated by Ethiopian Airlines Group crashed minutes after takeoff, killing all 157 people on board. That followed a similar crash of a 737 Max 8 on October 29, 2018 by a Lions Air flight in Jakarta, Indonesia that killed all 189 passengers and crew on board when it plunged into the sea shortly after takeoff.

On the Friday before the Ethiopian crash, March 8, 2019, Boeing had closed at $422.54. It opened trading on Monday morning after the crash at $371.27, a decline of 12 percent. But, miraculously, by the end of the trading day, the stock had mounted a nice rally and closed at $400.01.

Going into the week of March 11, 2019, UBS had a buy rating on Boeing; Credit Suisse had an outperform rating on Boeing; and JPMorgan Chase had an overweight rating on the stock with a $450 price target from its analyst Seth Seifman.

All three of those mega Wall Street banks own Dark Pools. For the week of March 11, according to the FINRA data, UBS’ Dark Pool traded 3,051,722 shares of Boeing stock while it had traded only 394,044 shares the week prior. Credit Suisse’s Dark Pool known as Crossfinder traded 1,300,300 shares of Boeing versus 159,634 shares the week before. JPMorgan Chase’s Dark Pool called JPM-X traded 964,628 shares of Boeing in the week of March 11 and its other Dark Pool, JPB-X, traded 107,996 shares for a total of 1,072,624 shares. JPMorgan’s two Dark Pool totals for the prior week were 218,764 shares of Boeing.


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