How Facebook helps brokers Make Mondo Moolah

The Reformed Broker has a post up how brokers will (are?) most likely use the FB IPO to rake in the money. I'd advise you to go read the whole thing - its a doozy, but the following should serve as a teaser

Step 1: I'd call all my best clients and tell them I have a limited amount of shares but my manager will only apportion Facebook IPO stock to the largest accounts.  I would then forward them incoming transfer paperwork and tell them they needed to send in their other brokerage accounts to be above level X.

Step 2: I'd call all my midsized accounts and say the same thing.  None of them would be getting any shares but I'd be able to raise a ton of assets with the longshot promise.

Step 3: I'd put my junior broker on the small accounts to do the same thing.  Then I'd have him call all qualified prospective leads morning, noon, and night - the pitch would be something like this:

"Now obviously, when a hot deal like Facebook comes along, the lion's share goes to our biggest and best accounts.  But we always keep a small amount aside for newer clients as a show of good faith that we intend to grow this relationship and look out for you when opportunities arise.  If we can get you any of Facebook - and remember, we're not promising for sure that we can - how would you like your new account to be titled?  Joint, individual or corporate?"

We'd open a slew of new accounts.  The day of the deal, we'd say "The bad news is I couldn't get you any shares of Facebook, we had to take care of exisiting clients first.  The good news is, my analysts just came out with a conviction buy rating on NVidia, ticker symbol NVDA.  Pick up a thousand shares with me today and the next time a hot offering comes along, I promise I'll be able to take care of you."  With that spiel, we'll convert probably 1 out of 5 of those new accounts to an actual trade, cowboy up!

And it goes on.  Ethics, shmethics, its about the moolah folks...