Insiders Describe Shooting Scene at Daytrading Firms

The alleged gunman, who has been found dead, is said to have been concerned about his finances.
Author:
Publish date:

His voice unusually stunned and subdued, Harvey Houtkin, president of Montvale, N.J.-based

All-Tech Investment Group

, was on the other end of the phone running through the scene that had unfolded just minutes earlier in Atlanta.

Television cameras were just arriving at the scene to report the carnage. "Some madman shot up our Atlanta office. There are at least five dead. Apparently he was a customer, but he hadn't been around for a couple of months," he said.

Thursday night, Atlanta police found the former customer, Mark O. Barton, dead. He had allegedly killed nine people after opening fire at the offices of All-Tech and

Momentum Securities

, both daytrading firms. Authorities later found the bodies of his wife and two children.

At one time, Barton was a customer of All-Tech, a daytrader, Houtkin said. Houtkin had just gotten off the phone with one of the traders who had been there during the shooting. "He was there several months. That's what the guy who called me told me. I understand he had lost a little money. We have people who win and people who lose. It's crazy."

A couple of days ago, Houtkin said, the customer had come in to speak to the office manager. Then he came back Thursday. Went into the office manager's office. There were gunshots, and then he emerged and started shooting.

"There was no rationale, someone who was getting a demonstration got shot and might have been killed," Houtkin said. "He had two guns. One in each hand. That's what I was told."

In Houston, Texas, Momentum principal James Lee was shocked and his voice just a whisper. The news was still coming in. "We may have known some people there. We're getting sketchy information. I can't talk about this now."

In Atlanta's

Piedmont Center

, where the shootings occurred, it was chaos. An attorney with offices there said workers were locked in, waiting for the killer to be found. "We were told to lock our doors and stay put. We're not too far away but other than lots of police cars, it's pretty quiet," he said.

John Cabrer of the

Georgia State Tollway Authority

was in the building where the shootings occurred. "When I first heard the noise I went out and saw people shot, lots of blood. I tried to help and resuscitate one but I knew he wouldn't make it. He was moving but was taking his last breath," Cabrer said.

"Only at one point did it dawn on me that I was in the middle of a room full of shot people and that the gunman could come back and shoot me. I was scared but knew what I had to do. It seemed like it only lasted an instant and then I was back in the office," he said.

Shortly after 7 p.m., the police told him he could leave.

All-Tech and Momentum are two of many daytrading firms that have sprung up around the country as the bull market has continued to roar on. There are an estimated 3,000 to 5,000 daytraders nationwide, ranging from amateurs to the professionals. They spend from 8 a.m. or 8:30 a.m. to 5 p.m. or so at computer terminals, making anywhere from 30 to 100 trades a day, reaping profits from movements as small as 1/8 in stock prices.

In recent months, regulators have cracked down on daytrading firms, concerned about whether daytraders are aware of the risks they are taking and about the motives of the firms charging heavy commissions to the traders who are their customers.

At some firms, terminals may be manned by professional traders with

Series 7

licenses trading for their own accounts or those of their firms. Or they can be unlicensed amateurs who have paid $3,000 to $5,000 for a daytrading course and who act as customers of the firm, trading only their own money or that of friends or family. All-Tech's customers often fall into the latter group, people in the daytrading community say.

With amateurs in the game, some daytraders and daytrading shop chiefs say the shootings were surprising but not shocking.

"It's definitely not a total surprise. Yes, the answer would be it figures because people have such unrealistic expectations and don't understand what they are doing," says one professional daytrader.

But Gary Mednick, who heads Great Neck, Long Island's

On-Site Trading

, says he thinks it was an isolated event. "Someone was mad about something, and he took matters into his own hands," he says.

Mednick doesn't even have plans to beef up security, a sentiment echoed by David Laurent, chief operating officer of

Andover Brokerage

, also in Great Neck.

At least one firm, though, began looking into security months ago.

Broadway Trading

in New York installed a security card entry system for its clients four months ago. Once an account is canceled, says Andrew Actman, an executive with the firm, the card is disabled.

Daytraders are hitting a rough patch because the tech-stock market they've fed on for the past 18 months has weakened. And, the professional trader says, a few firms allow their customers to skirt the maximum borrowing requirements, meaning that the losses can be far deeper.

With so many new people out there trading, in some cases from their retirement and savings accounts, understanding the risks is vital, the trader says.

On Thursday, that became even clearer.

Senior writer

Jesse Eisinger and contributing editor

Christopher S. Edmonds contributed to this story.