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What a refreshing post: "Shorter's Paradise - Can't wait until all the smartphone manufactures sell their own protective coatings for pennies on the dollar!" VirtualDrew
Kudos to you for having the courage to admit you are short. Not sure why but most posters fail to admit it.
RocketMan: I would not be one bit surprised to learn that there are several entities including various brokerage firms, the DTCC, etc. pleading with regulators not to revoke FFGO. Since FFGO has clearly stated their intentions to have liquidating dividends a revocation would force those A's & B's to be distributed in certificate form. There is precedent for this happening and the DTCC emptied its vaults and ordered its member firms to remove all shares from the DTCC. Chaos erupted and certificates were delivered free of charge via Federal Express to all shareholders.
There is lots more to that story but somehow I don't think that anyone who is short wants to ever see that happen again. Go FFGO!!!
As an EIGH shareholder I was encouraged to read Monk's letter. This letter was written after meeting with the SEC and in it Monk states he has never ever sold a single share of EIGH, period. While he does not state the number of shares he owns he does state that he has $600,000.00 of his own money invested in shares.
No matter how you do the math that is one heck of a large number of shares. Sure adds to the evidence of the fact that the float of EIGH is in fact locked down. Sure helps to explain why Etrade and other brokerage firms are in fact short. Sure provides hope to those of us who own shares that this could end with a good outcome rather than a bad one. Now that regulators are well into this investigation they must know with certainty about the huge naked short position that exists. The company provided lots of evidence and I know many EIGH shareholders called and wrote to the SEC asking that they include the naked shorting of our stock as part of their investigation. With all the knowledgable people that post here I am hoping for some suggestions that will insure that regulators do in fact order a buyin of those non existant shares. A buyin of those shares would certainly help folks recoup the losses presently reflected in their brokerage accounts.
So should we try and get some press coverage? Should we start a calling campaign or mail campaign to the SEC? Should we contact the legal counsel that represented the TASR shareholders and recently won a settlement against the Wall Street giants for naked shorting? I think everyone wants the best possible outcome for the shareholders which would include a financial gain rather than a loss and if we all work together I believe we can acheive just that. Your honest help will be very much appreciated. Go EIGH!!!
My one allowed post for the day!
As an EIGH shareholder I was encouraged to read Monk's letter. This letter was written after meeting with the SEC and in it Monk states he has never ever sold a single share of EIGH, period. While he does not state the number of shares he owns he does state that he has $600,000.00 of his own money invested in shares.
No matter how you do the math that is one heck of a large number of shares. Sure adds to the evidence of the fact that the float of EIGH is in fact locked down. Sure helps to explain why Etrade and other brokerage firms are in fact short. Sure provides hope to those of us who own shares that this could end with a good outcome rather than a bad one. Now that regulators are well into this investigation they must know with certainty about the huge naked short position that exists. The company provided lots of evidence and I know many EIGH shareholders called and wrote to the SEC asking that they include the naked shorting of our stock as part of their investigation. With all the knowledgable people that post here I am hoping for some suggestions that will insure that regulators do in fact order a buyin of those non existant shares. A buyin of those shares would certainly help folks recoup the losses presently reflected in their brokerage accounts.
So should we try and get some press coverage? Should we start a calling campaign or mail campaign to the SEC? Should we contact the legal counsel that represented the TASR shareholders and recently won a settlement against the Wall Street giants for naked shorting? I think everyone wants the best possible outcome for the shareholders which would include a financial gain rather than a loss and if we all work together I believe we can acheive just that. Your honest help will be very much appreciated. Go EIGH!!!
My one allowed post for the day!
I still look at my .095 shares as being bargain priced and those are a couple of years old so we have lots and lots of room for upward price movement. Go SRSR!!!
JPGettY: That 100 Billion in ore is going to help many folks become wealthy! Go SRSR!!!
varmit: Welcome home! Hopefully your reappearence is an omen! The buck a share club continues to gain new members and it must be frightning to see those numbers by those that find themselves a tad short! Go FFGO!!!
SRSR has incredible assets, well respected management, a large stable growing shareholder base which continues to accumulate because the shareprice is ridiculously low. This steady continued accumulation is causing problems for those who have short positions. By holding the shareprice in a trading range they no doubt expected longs would become frustrated and move on to supposed greener pastures. That has not happened here due to the unique set of circumstances and the confidence in the company and its management that the shareholder base has. Thanks management and thanks too to the shorts. Go SRSR!!!
So are you now saying you don't know if Monk received free shares of CDIV or not? I too fully expect the SEC to get answers to all their questions and at the same time determine whether or not a huge naked short position exists and if so order those who sold non existant shares buy them back in the open market. A top to bottom examination with penalties imposed on anyone/everyone who has violated the law which would also include abusive naked shorting of the stock. Anything less would be an insult to those who purchased shares. Go CDIV!!!
My 3rd and final allowed post for the day!
Do you have a link to back up that allegation? I did read where he did receive 1.5 million PNTV restriced shares which he has returned to the company but I don't recall reading that he received free CDIV shares so your posting the link to that happening would be helpful! Go CDIV!!!
EarnestDD: You may want to read Janice Shells most recent post on the EIGH board which is a letter from Monk written on July 4th after meeting with his legal team and the SEC. Seems he has those millions of CDIV shares still. Perhaps we are nearing the day whenthe regulators will order the non existant CDIV shares sold into the markets to be repurchased by those who sold them.
Go CDIV!!!
So Monk did not sell a single share of EIGH and owns over $600,000.00 worth. Lots of folks who post here claimed otherwise, although I have communicated with several folks via email who, like myself, have not sold a single share as well. Nice to have this publicly stated. Now if the regulators can order those who are nakedly short to repurchase the non existant shares they sold into the market things may get really interesting around here. Go EIGH!!!
My one allowed post for the day!
"If you have fake shares, that is a valid statement. Indeed, those fake shares may be worse than worthless, they may even be a liability." camper Spot on, especially if those shares were deposited into the system! Go BCIT!!!
saplyak: That would be awesome! I'm sure everyone would like to see the company announce some good news. I look forward to getting the details on the shares held in certificate form. If Monk still has the remainder of his shares in certificate form after breaking off the million things look much much better for the CDIV longs. That information will become public in time and as things are now it makes no sense to sell anyway. Happy Independence Day CDIV longs! Go CDIV!!!
RocketMan: Per your post the price reaching .0009 and then having the company announce the record and payment dates of the divys would be a beautiful thing. I think all the longs would like to see that happen. Go FFGO!!!
Now that would make for an awesome PR! Go RENS!!!
RocketMan: Many FFGO longs read with interest this week about the TASR shareholders winning their case against the giants of naked shorting. The details of the settlement were sealed by the judge but it was clear that the giants lost and TASR and its shareholders won and would be compensated. How does that loss effect FFGO shareholders? Following close behind is the Overstock trial against the very same perps and Patrick Byrne has made it very clear he will not settle. He wants the case heard in an open courtroom in front of a jury. Should a small group of FFGO shareholders contact the firm that handled the TASR suit and see if they would like to take the case on a contingency basis?
Obviously we don't want to do anything that would mess up a previously agreed upon settlement of 3400%+ but wondering if it is possible to have our cake and eat it too? Here is the PR on the TASR case when it was first filed fyi: http://www.law.com/jsp/article.jsp?id=1202430726911&slreturn=1&hbxlogin=1
Go FFGO!!!
3400%+ is an awesome return!
Happy Independence Day all!
puppy: It is going to be awesome when those long longs finally are paid their long overdue dividends. Let me say thanks in advance to those who will be paying them, you know who you are!
Go FFGO!!!
3400%+ is an awesome return!!!
Short-Selling Sparks RICO Suit Against Financial Giants
Stun-gun maker Taser and shareholders claim that Morgan Stanley, Goldman Sachs, Merrill Lynch and others illegally manipulated stock price
Greg Land All Articles
Fulton County Daily Report
May 15, 2009
Trooping into the courtroom of Fulton County, Ga., State Court Judge Patsy Y. Porter, a phalanx of lawyers representing the cream of global finance -- to be sure, a thinner cream since last year's financial collapse -- sought to short-circuit a suit claiming a conspiracy to reap tens of millions of dollars in unearned fees and force down the value of stock in stun-gun manufacturer TASER International Inc.
Robert F. Wise Jr. of New York's Davis Polk & Wardwell, representing Morgan Stanley and one of three lawyers who would argue for the defendants, opened up the hearing succinctly.
"In short," he said, "what we'd like is a dismissal."
For nearly two and a half hours, they and opposing counsel sparred over a suit, originally filed by dozens of TASER shareholders and later joined by the company itself. It accuses Morgan Stanley, Goldman Sachs, Merrill Lynch, Deutsche Bank Securities, Credit Suisse, Banc of America Securities and three remnants of Bears Stearns of engaging "abusive naked short sales" of TASER stock that have devalued stock and created millions of shares of "counterfeit" or "phantom" shares.
The complaint (pdf), filed nearly a year ago by Bondurant, Mixson & Elmore partners John E. Floyd and Steven J. Rosenwasser and Houston's James W. Christian and John M. O'Quinn, accuses the companies of violating the Georgia Securities Act, the state's Racketeer Influenced and Corrupt Organizations Act and the Georgia Computer Systems Protection Act. A fourth count, added later, also alleges conversion.
The defense attacked the action on several fronts, asserting in filings and during the hearing that federal law pre-empted the action; that the plaintiffs could not prove any actual harm; that the majority of the plaintiffs lived outside of Georgia and could not sue in a Georgia court; and that -- regardless of their other points -- the financial giants were not liable of any wrongdoing.
SELLING SHORT
The practice of short-selling involves selling stock one does not own and, as detailed in court filings and during Tuesday's hearing, the practice is itself a long-standing and perfectly legal activity. A buyer who thinks a stock will lose value borrows some of that stock from a willing lender, sells it on the open market at the current price and then buys replacement shares and returns it to the lender.
If the stock price has fallen, then the short-seller makes money on the transaction because he sold the borrowed stock for more than he paid for the replacement. If the price remains stable or rises, the short-seller loses money by having to pay more for the replacement than he received for selling the borrowed stock.
In both cases, the short-seller is on the hook for any fees and commissions related to the sale and interest charged by the share lender.
In transactions like those cited in the TASER case, the short-sellers are generally hedge funds that borrow the shares either from their prime brokers -- the defendant companies -- or from a central clearinghouse established to hold and oversee such loans, the Depository Trust & Clearing Corp. (DTCC).
Under Securities and Exchange Commission rules, the seller of stock generally has three days to deliver the shares to a purchaser, or "settle," although in these days of computer transactions, no actual paper shares are transferred; rather, an electronic confirmation of the sale is sent to the purchaser.
Naked short sales, according to the SEC's Web site, are those in which "the seller does not borrow or arrange to borrow the securities in time to make delivery to the buyer within the standard three-day settlement period. As a result, the seller fails to deliver securities to the buyer when delivery is due (known as a 'failure to deliver' or 'fail')."
According to the suit, the defendant companies routinely failed to locate, borrow and deliver the TASER stocks to the DTCC for transmission to the buyer, but the DTCC nonetheless credited the buyer with the purchase.
"If the short seller fails to deliver the stock it owes to the DTCC," says the complaint, "the short seller has, in effect, created and conveyed a new, counterfeit share of stock to the buyer. That is, the DTCC credits the buyer with owning shares that did not previously exist. The newly created shares are counterfeit shares because they were not authorized or issued by the company or registered by the company ... . Rather, they were created electronically by the short seller through an illegal short sale of a stock that the short seller did not own, deliver and/or intend on possessing for the settlement of the short sale."
Contrary to the initial complaint, which bluntly says naked short-selling is illegal, the SEC does not say all such sales are improper.
"Indeed," says its Web site, "in certain circumstances, naked short selling contributes to market liquidity. For example, broker-dealers that make a market in a security generally stand ready to buy and sell the security on a regular and continuous basis at a publicly quoted price, even when there are no other buyers or sellers. Thus, market makers must sell a security to a buyer even when there are temporary shortages of that security available in the market."
But the agency adds that intentionally engaging in naked short sales to manipulate or drive down a stock's value is illegal.
COMMISSIONS AND 'PHANTOM SHARES'
In the case of TASER stock, says the suit, the companies deliberately engaged in a pattern of naked short-selling designed to generate commissions and fees for nonexistent stock transactions and interest on borrowed shares that were never loaned. They also manipulated the sales in order to drive down the value of TASER stock, it says, because the companies routinely short-sold the stock in their own proprietary accounts, "giving them a financial interest in lowering the stock's price."
"The SEC has repeatedly found that naked short sales can depress stock prices," said Rosenwasser, arguing in support of his case. "That's what happened with TASER."
In 2005, he said, TASER stock suffered a stunning 77 percent decline largely because of the defendant companies' manipulation.
"Why would they do that?" he asked. "Because they make a wealth of money. ... They make hundreds of millions of dollars in fees and commissions from short-selling," he said, asserting that the companies' second-largest source of revenue came from such transactions.
The suit includes figures purporting to show that, on a given day, the number of TASER shares the DTCC recorded as being held by the defendant companies could be vastly lower than the number the company itself claimed to control. For instance, on May 22, Morgan Stanley claimed "beneficial ownership" of 11.7 million shares; the same day, DTCC records showed the company holding 2.6 million.
The so-called "phantom shares" also dramatically increased the number of TASER shares reportedly held by stockholders, the suit says.
"Objective shareholder voting data demonstrates that the defendants' unlawful selling of unregistered and unissued TASER shares flooded the market with counterfeit shares," it says. "For example, at the time of TASER's 2005 annual vote, TASER had approximately 61.1 million shares outstanding. Yet, approximately 82 million shares voted, an additional over-vote of approximately 20 million shares."
That figure is "particularly compelling," said the complaint, because the day of the vote there were roughly 17.2 million shorted shares of TASER stock. Thus, "[e]ven if all of the TASER shares that were sold short were able to vote ... there were at least 3.7 million shares that were undoubtedly counterfeit."
The suit, which now has 42 shareholder plaintiffs as well as TASER, does not enumerate the financial loss suffered by those bringing it, demanding only compensatory and punitive damages, along with attorney fees and court costs.
DEFENSE: CLAIMS ARE TOO VAGUE
The lack of any detail of actual harm suffered by the plaintiffs was one of many points attorneys for the financial companies pounced on Tuesday. That team included Wise; Rogers & Hardin partner Richard H. Sinkfield; and Gregory A. Markel of New York's Cadwalader, Wickersham & Taft, closely watched by a contingent of their legal brethren and support staff from behind the rail.
Wise argued that the case should be dismissed because the conduct at issue is permitted under SEC regulations and that any state claims were subordinate to those rules.
"If there is an actual conflict between state and federal law," he said, "federal law pre-empts" any challenge.
The plaintiffs "do not allege a single trade or transaction" to show fraud, manipulation or other abusive short-selling. "Instead," said Wise, "they rely on generalities ... it's all very unspecific, it's all very vague."
At "key periods" when shorted shares have been sold but not located or borrowed by the defendant companies, he said, there may indeed appear to be more shares than actually exist. But the discrepancy is resolved through the settlement process, even if it takes longer than the three days recommended by the SEC, and "the buyer receives what they're supposed to," he said.
"There is nothing 'counterfeit' about this," said Wise. "This is an attack on the system, not on a particular trade."
Rosenwasser responded, "This is not an attack of the system, or on short-selling or the SEC rules."
"It is about breaking those rules," and "engaging in an illegal transaction to manipulate the stock," he added.
"A lawful short sale involves actually finding stock to borrow," said Rosenwasser. But in the "abusive short sales" alleged in the suit, "the prime broker has no intention of locating the shares or borrowing them."
As to pre-emption, federal law explicitly allows states to enact their own securities regulations, he said; the FEC rules are in accord with Georgia's.
"There is no conflict," said Rosenwasser.
After haggling at length over the techniques and intricacies of naked short-selling, complete with flow charts, graphs and PowerPoint presentations, the attorneys wrangled over jurisdiction, with Sinkfield arguing that the Superior Court, not Porter's State Court, should be the venue for such a case, and Markel demanding to know why none of the plaintiffs had disclosed how much he or she had actually lost through the alleged scheme.
"It must be the case that they have to show damages," he said.
Floyd responded that his clients would be happy to provide that information at the proper time.
"The answer," he said, "is do discovery."
As the clock neared 5:30 p.m., the final salvos were exchanged, and Porter -- who had listened patiently, with few comments -- finally weighed in. Noting the "army of trees" already slaughtered for the copious filings she had reviewed, the judge urged the lawyers to keep in mind that she had but one staff attorney and to refrain from unduly complicating a case that, while complex, was not as intractable as their presentations seemed to indicate.
"All I'm saying is, be reasonable," said Porter. "It's not the easiest case to decide, but it's not nearly as complicated as it's been made out to be."
The suit had been filed almost a year earlier, she noted, and "it needs to be moved."
"This case is going to sit on the corner of Patsy Porter's desk," she said. "That means it's always on my mind."
The case is TASER International v. Morgan Stanley, No. 2008-EV-004739-B.
http://www.law.com/jsp/article.jsp?id=1202430726911&slreturn=1&hbxlogin=1
original post by ezaltheladispa
Short-Selling Sparks RICO Suit Against Financial Giants
Stun-gun maker Taser and shareholders claim that Morgan Stanley, Goldman Sachs, Merrill Lynch and others illegally manipulated stock price
Greg Land All Articles
Fulton County Daily Report
May 15, 2009
Trooping into the courtroom of Fulton County, Ga., State Court Judge Patsy Y. Porter, a phalanx of lawyers representing the cream of global finance -- to be sure, a thinner cream since last year's financial collapse -- sought to short-circuit a suit claiming a conspiracy to reap tens of millions of dollars in unearned fees and force down the value of stock in stun-gun manufacturer TASER International Inc.
Robert F. Wise Jr. of New York's Davis Polk & Wardwell, representing Morgan Stanley and one of three lawyers who would argue for the defendants, opened up the hearing succinctly.
"In short," he said, "what we'd like is a dismissal."
For nearly two and a half hours, they and opposing counsel sparred over a suit, originally filed by dozens of TASER shareholders and later joined by the company itself. It accuses Morgan Stanley, Goldman Sachs, Merrill Lynch, Deutsche Bank Securities, Credit Suisse, Banc of America Securities and three remnants of Bears Stearns of engaging "abusive naked short sales" of TASER stock that have devalued stock and created millions of shares of "counterfeit" or "phantom" shares.
The complaint (pdf), filed nearly a year ago by Bondurant, Mixson & Elmore partners John E. Floyd and Steven J. Rosenwasser and Houston's James W. Christian and John M. O'Quinn, accuses the companies of violating the Georgia Securities Act, the state's Racketeer Influenced and Corrupt Organizations Act and the Georgia Computer Systems Protection Act. A fourth count, added later, also alleges conversion.
The defense attacked the action on several fronts, asserting in filings and during the hearing that federal law pre-empted the action; that the plaintiffs could not prove any actual harm; that the majority of the plaintiffs lived outside of Georgia and could not sue in a Georgia court; and that -- regardless of their other points -- the financial giants were not liable of any wrongdoing.
SELLING SHORT
The practice of short-selling involves selling stock one does not own and, as detailed in court filings and during Tuesday's hearing, the practice is itself a long-standing and perfectly legal activity. A buyer who thinks a stock will lose value borrows some of that stock from a willing lender, sells it on the open market at the current price and then buys replacement shares and returns it to the lender.
If the stock price has fallen, then the short-seller makes money on the transaction because he sold the borrowed stock for more than he paid for the replacement. If the price remains stable or rises, the short-seller loses money by having to pay more for the replacement than he received for selling the borrowed stock.
In both cases, the short-seller is on the hook for any fees and commissions related to the sale and interest charged by the share lender.
In transactions like those cited in the TASER case, the short-sellers are generally hedge funds that borrow the shares either from their prime brokers -- the defendant companies -- or from a central clearinghouse established to hold and oversee such loans, the Depository Trust & Clearing Corp. (DTCC).
Under Securities and Exchange Commission rules, the seller of stock generally has three days to deliver the shares to a purchaser, or "settle," although in these days of computer transactions, no actual paper shares are transferred; rather, an electronic confirmation of the sale is sent to the purchaser.
Naked short sales, according to the SEC's Web site, are those in which "the seller does not borrow or arrange to borrow the securities in time to make delivery to the buyer within the standard three-day settlement period. As a result, the seller fails to deliver securities to the buyer when delivery is due (known as a 'failure to deliver' or 'fail')."
According to the suit, the defendant companies routinely failed to locate, borrow and deliver the TASER stocks to the DTCC for transmission to the buyer, but the DTCC nonetheless credited the buyer with the purchase.
"If the short seller fails to deliver the stock it owes to the DTCC," says the complaint, "the short seller has, in effect, created and conveyed a new, counterfeit share of stock to the buyer. That is, the DTCC credits the buyer with owning shares that did not previously exist. The newly created shares are counterfeit shares because they were not authorized or issued by the company or registered by the company ... . Rather, they were created electronically by the short seller through an illegal short sale of a stock that the short seller did not own, deliver and/or intend on possessing for the settlement of the short sale."
Contrary to the initial complaint, which bluntly says naked short-selling is illegal, the SEC does not say all such sales are improper.
"Indeed," says its Web site, "in certain circumstances, naked short selling contributes to market liquidity. For example, broker-dealers that make a market in a security generally stand ready to buy and sell the security on a regular and continuous basis at a publicly quoted price, even when there are no other buyers or sellers. Thus, market makers must sell a security to a buyer even when there are temporary shortages of that security available in the market."
But the agency adds that intentionally engaging in naked short sales to manipulate or drive down a stock's value is illegal.
COMMISSIONS AND 'PHANTOM SHARES'
In the case of TASER stock, says the suit, the companies deliberately engaged in a pattern of naked short-selling designed to generate commissions and fees for nonexistent stock transactions and interest on borrowed shares that were never loaned. They also manipulated the sales in order to drive down the value of TASER stock, it says, because the companies routinely short-sold the stock in their own proprietary accounts, "giving them a financial interest in lowering the stock's price."
"The SEC has repeatedly found that naked short sales can depress stock prices," said Rosenwasser, arguing in support of his case. "That's what happened with TASER."
In 2005, he said, TASER stock suffered a stunning 77 percent decline largely because of the defendant companies' manipulation.
"Why would they do that?" he asked. "Because they make a wealth of money. ... They make hundreds of millions of dollars in fees and commissions from short-selling," he said, asserting that the companies' second-largest source of revenue came from such transactions.
The suit includes figures purporting to show that, on a given day, the number of TASER shares the DTCC recorded as being held by the defendant companies could be vastly lower than the number the company itself claimed to control. For instance, on May 22, Morgan Stanley claimed "beneficial ownership" of 11.7 million shares; the same day, DTCC records showed the company holding 2.6 million.
The so-called "phantom shares" also dramatically increased the number of TASER shares reportedly held by stockholders, the suit says.
"Objective shareholder voting data demonstrates that the defendants' unlawful selling of unregistered and unissued TASER shares flooded the market with counterfeit shares," it says. "For example, at the time of TASER's 2005 annual vote, TASER had approximately 61.1 million shares outstanding. Yet, approximately 82 million shares voted, an additional over-vote of approximately 20 million shares."
That figure is "particularly compelling," said the complaint, because the day of the vote there were roughly 17.2 million shorted shares of TASER stock. Thus, "[e]ven if all of the TASER shares that were sold short were able to vote ... there were at least 3.7 million shares that were undoubtedly counterfeit."
The suit, which now has 42 shareholder plaintiffs as well as TASER, does not enumerate the financial loss suffered by those bringing it, demanding only compensatory and punitive damages, along with attorney fees and court costs.
DEFENSE: CLAIMS ARE TOO VAGUE
The lack of any detail of actual harm suffered by the plaintiffs was one of many points attorneys for the financial companies pounced on Tuesday. That team included Wise; Rogers & Hardin partner Richard H. Sinkfield; and Gregory A. Markel of New York's Cadwalader, Wickersham & Taft, closely watched by a contingent of their legal brethren and support staff from behind the rail.
Wise argued that the case should be dismissed because the conduct at issue is permitted under SEC regulations and that any state claims were subordinate to those rules.
"If there is an actual conflict between state and federal law," he said, "federal law pre-empts" any challenge.
The plaintiffs "do not allege a single trade or transaction" to show fraud, manipulation or other abusive short-selling. "Instead," said Wise, "they rely on generalities ... it's all very unspecific, it's all very vague."
At "key periods" when shorted shares have been sold but not located or borrowed by the defendant companies, he said, there may indeed appear to be more shares than actually exist. But the discrepancy is resolved through the settlement process, even if it takes longer than the three days recommended by the SEC, and "the buyer receives what they're supposed to," he said.
"There is nothing 'counterfeit' about this," said Wise. "This is an attack on the system, not on a particular trade."
Rosenwasser responded, "This is not an attack of the system, or on short-selling or the SEC rules."
"It is about breaking those rules," and "engaging in an illegal transaction to manipulate the stock," he added.
"A lawful short sale involves actually finding stock to borrow," said Rosenwasser. But in the "abusive short sales" alleged in the suit, "the prime broker has no intention of locating the shares or borrowing them."
As to pre-emption, federal law explicitly allows states to enact their own securities regulations, he said; the FEC rules are in accord with Georgia's.
"There is no conflict," said Rosenwasser.
After haggling at length over the techniques and intricacies of naked short-selling, complete with flow charts, graphs and PowerPoint presentations, the attorneys wrangled over jurisdiction, with Sinkfield arguing that the Superior Court, not Porter's State Court, should be the venue for such a case, and Markel demanding to know why none of the plaintiffs had disclosed how much he or she had actually lost through the alleged scheme.
"It must be the case that they have to show damages," he said.
Floyd responded that his clients would be happy to provide that information at the proper time.
"The answer," he said, "is do discovery."
As the clock neared 5:30 p.m., the final salvos were exchanged, and Porter -- who had listened patiently, with few comments -- finally weighed in. Noting the "army of trees" already slaughtered for the copious filings she had reviewed, the judge urged the lawyers to keep in mind that she had but one staff attorney and to refrain from unduly complicating a case that, while complex, was not as intractable as their presentations seemed to indicate.
"All I'm saying is, be reasonable," said Porter. "It's not the easiest case to decide, but it's not nearly as complicated as it's been made out to be."
The suit had been filed almost a year earlier, she noted, and "it needs to be moved."
"This case is going to sit on the corner of Patsy Porter's desk," she said. "That means it's always on my mind."
The case is TASER International v. Morgan Stanley, No. 2008-EV-004739-B.
http://www.law.com/jsp/article.jsp?id=1202430726911&slreturn=1&hbxlogin=1
original post by ezaltheladispa
Hey check this on the DTCC site ...
DTCC Financial Reform In-Focus Podcast Series
http://www.dtcc.com/products/video/2011/interview_michael_grimm.php
original post by burberrybenz
New York Attorney General Steps Up Probe Into BofA-Merrill Disclosures
JULY 2, 2011
By DAN FITZPATRICK
http://online.wsj.com/article/SB10001424052702303763404576420210182971714.html?mod=WSJ_business_whatsNews
Another headache from the financial crisis is flaring back up for Bank of America Corp.
New York state Attorney General Eric Schneiderman has issued subpoenas seeking new depositions from the Charlotte, N.C., bank's chief executive and other current and former executives, according to people familiar with the situation.
The subpoenas are a sign that Mr. Schneiderman, who became New York's top law-enforcement official this year, doesn't intend to drop the civil-fraud investigation of Bank of America begun more than a year ago under predecessor Andrew Cuomo.
Mr. Cuomo, now the governor of New York, accused Bank of America, former Chief Executive Kenneth D. Lewis and former Chief Financial Officer Joseph Price of deliberately misleading shareholders about ballooning losses at Merrill Lynch & Co. before the securities firm was acquired by Bank of America in 2008.
The Securities and Exchange Commission accused Bank of America of similar disclosure failings, which the company settled by paying $150 million without admitting or denying the allegations.
It isn't clear what Mr. Schneiderman wants to know from Brian Moynihan, who took over as CEO when Mr. Lewis retired at the end of 2009. A spokeswoman for the New York attorney general said the office "remains committed to this case and is in the process of routine discovery."
Bank of America declined to comment.
Bank of America and Messrs. Lewis and Price have denied the Merrill-related allegations in previous court filings. In one response, Mr. Lewis denounced the case as "an ill-founded attempt to lay blame where it does not belong."
"He is fighting it as he should," said a person close to Mr. Lewis. "He said: 'I didn't do anything wrong. I tried to do what the politicians wanted me to do and now they want to put me on a roasting skewer.'"
Mr. Lewis, who retired partly because of rancor over the Merrill deal, declined comment through his lawyer. Mr. Price's lawyer couldn't be reached to comment.
In addition to the civil-fraud probe, Mr. Schneiderman recently opened an investigation into the packaging of mortgage loans into securities, requesting documents from Bank of America and several other major financial firms.
The attorney general's office and Bank of America have clashed recently about how to proceed in the Merrill case. In court filings, Mr. Schneiderman's office said it intended to begin its depositions, but Bank of America asked a judge to delay any depositions until the attorney general produced certain documents disclosing communications between employees who worked with Mr. Cuomo and outside parties.
Last week, New York state Supreme Court Judge Bernard Fried ruled that Mr. Schneiderman must hand over the documents requested by Bank of America, describe the parameters of the search for the documents, and list any documents not produced on grounds of privilege. The judge also ruled that depositions wouldn't begin for 90 days.
Pressure from U.S. regulators contributed to Bank of America's decision to buy Merrill as the firm teetered in 2008. The deal was struck the same weekend that Lehman Brothers Holdings Inc. tumbled into bankruptcy.
The legal friction with Mr. Schneiderman is the latest reminder that Bank of America is a long way from shedding legal and financial wreckage of the crisis. The bank's 2008 takeover of mortgage lender Countrywide Financial Corp. culminated in this week's $8.5 billion settlement with holders of mortgage-backed securities issued by Countrywide.
Bank of America plans to incur $20.6 billion in mortgage-related charges in the second quarter. The company faces the possibility of billions of dollars in additional penalties as part of a separate settlement with U.S. and state regulators who are investigating mortgage-servicing problems.
Write to Dan Fitzpatrick at dan.fitzpatrick@wsj.com
http://online.wsj.com/article/SB10001424052702303763404576420210182971714.html?mod=WSJ_business_whatsNews
original post by scion
Finra Executives Get Big Payday
BEN PROTESS, The New York Times On Friday July 1, 2011, 11:54 am EDT
Wall Street's self-policing organization is getting richer - and so are its top executives.
Richard G. Ketchum, chairman and chief executive of the Financial Industry Regulatory Authority, earned $2.6 million in 2010, according to a new filing. His pay, which included a $1.2 million bonus, was roughly the same in 2009.
Finra, a private nonprofit organization that regulates more than 600,000 stockbrokers, upped its total compensation 9 percent last year to $540 million, as it added some 200 new employees to its ranks. The organization's top 10 executives received nearly $13 million, up from roughly $11 million the year before, the organization's annual report shows.
Finra says it offers big paydays to compete with compensation on Wall Street.
"Finra strives to have a compensation structure that is competitive with the comparable segment of the market," Mr. Ketchum said in an interview earlier this year. "We have engaged an outside consultant, Mercer, that benchmarks salaries at Finra to make sure they are competitive with that market, but not excessive."
But some brokerage firms, which pay for the watchdog's operations through fees, have complained that Finra executives are overpaid. Regulators, they argue, should not earn millions of dollars.
Finra drew particular scrutiny after awarding a previous chief executive, Mary L. Schapiro, $7.3 million in 2009, when she left the organization to become chairwoman of the Securities and Exchange Commission. That same year, a small brokerage firm in Moreno Valley, Calif., sued Finra to rein in its pay packages at a time when the regulator was losing money on bad investments.
But Finra, born out of the 2007 merger between the National Association of Securities Dealers and the New York Stock Exchange's regulatory arm, is now back in the black. The organization turned a $54.6 million profit in 2010, up 12 percent from a year earlier, according to the annual report that was filed this week. Finra lost nearly $700 million at the height of the financial crisis, as its investment portfolio soured.
Now, Finra's investments and trading revenue are driving the recent earnings growth, according to the annual report. In the aftermath of the crisis, Finra shifted its investment portfolio to a lower-risk strategy, which includes mutual funds and hedge funds.
"Financially, 2010 was a sound year overall," Mr. Ketchum said in the report.
http://finance.yahoo.com/news/Finra-Executives-Get-Big-nytimes-1320907869.html?x=0&sec=topStories&pos=4&asset=&ccode=
Thu Jun 30, 2011 8:15pm EDT
* Ketchum received $1 mln salary, $1.25 mln bonus in 2010
* Eight of top 10 officers each received more than $1 mln (Adds detail on salary, bonuses; notes Ketchum joined FINRA in March 2009)
By Joseph A. Giannone
NEW YORK, June 30 (Reuters) - Leading brokerage industry watchdog FINRA may not have the same global cachet as running the Securities and Exchange Commission, but it generates a much, much bigger paycheck.
The Financial Industry Regulatory Authority more than doubled the salary, bonus and other compensation paid to Chief Executive Richard Ketchum last year to $2.6 million, according to its annual report posted to its website on Wednesday.
Ketchum, who joined FINRA in March 2009, received $1.01 million in total compensation but no bonus that year.
Ketchum received $1 million in salary, a $1.25 million bonus and nearly $350,000 in deferred pay and other benefits last year for policing the country's securities firms and brokers.
The report also shows the former NYSE and Citigroup (C.N) executive received a $1.2 million bonus in February and is on pace to earn $1 million of salary in 2011.
FINRA bonuses are paid after the end of the year, based on performance for the previous year.
Ketchum's predecessor, Mary Schapiro, by comparison earned $165,000 last year as chairman of the SEC, which has nearly 4,000 staff and spent $755 million on salaries and expenses.
FINRA is organized as a private company, but supports the SEC by regulating securities firms and market activity. Though not a household name, FINRA is a big-time company with $1.15 billion in total revenue and 3,000 employees watching some 4,600 broker-dealer firms.
Unlike the SEC, which depends on Congress for funding, FINRA funds itself with fees, fines, investments and other revenue. As a result, it can be more generous: eight of FINRA's 10 top-paid executives received more than $1 million in salary, bonus and other compensation.
Overall compensation and benefits rose more than 9 percent last year to $540.3 million, reflecting a net increase of 200 employees. Pay for the 10 officers last year was on par with compensation for 2009.
FINRA's annual report also revealed a decline in fines assessed to $42.2 million from $47.6 million in 2009. Last year FINRA issued 1,310 new disciplinary actions, expelled 14 firms and ordered $6.2 million in restitution.
Compensation for FINRA's top officers is a sore topic among some small brokerage firms, many of which are still convinced Schapiro in 2007 short changed members when the NASD merged with NYSE Regulation to form FINRA. Schapiro, who left to lead the SEC in 2009, received $9 million for her work in 2008.
The annual report also revealed that FINRA's $1.6 billion investment portfolio generated a 6.9 percent return and contributed $50.1 million of income last year. FINRA's investments had lost nearly $500 million in 2008, prompting the company to reel in risk-taking. (Reporting by Joseph A. Giannone; editing by Matthew Lewis, Bernard Orr)
http://www.reuters.com/article/2011/07/01/finra-compensation-idUSN1E75T29120110701
original post by jbsliverer
Looking forward to it. Will continue to be patient here and hope this turns into a hugely sucessful company generating large revenues and profits. Go UNQT!!!
Thirty months in prison for lawyer in Galleon case
By Grant McCool
NEW YORK | Fri Jul 1, 2011 1:49pm IST
http://in.reuters.com/article/2011/07/01/idINIndia-58026720110701
(Reuters) - Arthur Cutillo, a former lawyer with the well-known Ropes & Gray law firm who admitted leaking corporate secrets in exchange for $32,500 in cash, was sentenced on Thursday to 2-1/2 years in prison for his part in a sweeping insider trading case.
Cutillo's name featured prominently at a trial that ended on June 13 with the conviction of three traders on securities fraud and conspiracy charges brought by federal prosecutors in New York in a crackdown on insider trading at hedge funds.
Cutillo said at his plea proceeding in January that he received $32,500 in cash for providing inside information to trader Zvi Goffer about merger activity involving computer network equipment maker 3Com Corp and Canadian drug company Axcan Pharma Inc in 2007.
Zvi Goffer once worked for the Galleon Group hedge fund, whose founder, Raj Rajaratnam, was also found guilty on insider trading charges after a separate high-profile two-month-long trial that ended on May 11.
During Thursday's sentencing by U.S. District Judge Richard Sullivan, the court heard how Cutillo, who is married with four young children, once earned $200,000 a year as a lawyer but since his November 2009 arrest and disbarment, had worked as a waiter for as little as $2.13 an hour.
The judge remarked on the notoriety of the insider trading cases, what he called their "negative impact on the nation's economy" and the need for deterrence because Cutillo had breached a lawyer's "sacred trust" of clients.
"Every lawyer in New York, every lawyer in the country is going to pay attention to this sentence," Sullivan said before imposing the prison term of 30 months.
Cutillo, 34, will report to prison on Sept. 16. The judge ordered a forfeiture amount of $378,000 jointly with Zvi Goffer and Cutillo's former Ropes & Gray colleague Brien Santarlas.
Goffer, his brother Emanuel Goffer and their former partner at Incremental Capital LLC trading firm, Michael Kimelman, plan to appeal their convictions. Cutillo did not testify at the trial but Santarlas told the jury that he and Cutillo conspired to find confidential information about the firm's clients.
Cutillo told Sullivan when he pleaded guilty in January that he and Santarlas provided another lawyer, Jason Goldfarb, with information about the two companies. He said Goldfarb, an old college roommate of Cutillo, passed it on to Goffer.
"I just want to apologize for everyone that I hurt by what I did," Cutillo said on Thursday as his wife sat in the courtroom. "I am and always am going to be ashamed."
Santarlas, Goldfarb, the Goffer brothers, Kimelman and others will be sentenced separately later this year.
Rajaratnam will be sentenced on Sept. 27, according to an order issued on Thursday by U.S. District Judge Richard Holwell postponing the proceeding from July 29.
The case is USA v Goffer et al, U.S. District Court for the Southern District of New York, No. 10-00056.
(Editing by Steve Orlofsky, Gary Hill)
http://in.reuters.com/article/2011/07/01/idINIndia-58026720110701
original post by scion
Tough Justice Persists in White-Collar Crime Cases
By PETER J. HENNING
6:24 p.m. | Updated
Lee B. Farkas received a 30-year prison sentence on Thursday for his role in a long-running mortgage fraud that federal prosecutors said caused about $2.9 billion in losses and brought down a bank with $12 billion in assets in 2009. For those who think the courts routinely go easy on white-collar defendants, this is the latest in a string of prominent cases in which judges have imposed substantial punishments, some of which may work out to virtually a life sentence.
Mr. Farkas, the former chief executive at the Taylor, Bean & Whitaker Mortgage Corporation, was convicted on 14 counts for falsifying mortgages financed through Colonial Bank, which was closed partly because of losses from its dealings with the mortgage company. Prosecutors accused him of using company money to finance a lavish lifestyle, diverting $40 million in addition to his generous salary and bonuses.
The Justice Department had asked Judge Leonie Brinkema in Federal District Court in Alexandria, Va., to sentence Mr. Farkas to the maximum term for all his convictions, totaling 385 years, to send a message to corporate executives. As I discussed in an earlier post on sentencing, it is questionable whether those executives will pay much attention to what happened in the case because the prison term is not outside what seems to have become almost ordinary in white-collar cases.
Although Judge Brinkema did not accept the government’s recommendation, there is a good chance the sentence means Mr. Farkas spends the rest of his life behind bars. Under federal Bureau of Prisons guidelines, he will have to serve about 24 years in a federal prison. Mr. Farkas, who is 58, will not be released until he is in his 80s, even accounting for the time he has been in custody since being charged in June 2010.
Mr. Farkas’s sentence is part of a continuing trend in white-collar cases in which federal judges have imposed substantial prison terms on defendants who abused their positions to engage in fraudulent schemes. Marc Dreier, a former New York lawyer, received a 20-year sentence for bilking hedge funds and other investors out of $700 million, while a $1.4 billion scam by Scott Rothstein, a Miami lawyer, brought a 50-year prison term.
Lengthy sentences have been around for fraud cases for more than a decade, since the United States Sentencing Commission’s sentencing guidelines ratcheted up the penalties for this type of case in 2001. The impact on white-collar defendants has been substantial, with chief executives like Jeffrey K. Skilling of Enron and Bernard Ebbers of WorldCom each receiving prison terms of more than 20 years for the accounting frauds at their companies.
Taking a case to trial like the one against Mr. Farkas did may also increase the sentence because federal prosecutors usually argue for the maximum punishment under the federal guidelines, with little incentive to cut a defendant any slack. And if a defendant testifies and is convicted, then there is the additional risk that, like Mr. Farkas, the judge will conclude that the person committed perjury, which is an additional enhancement to the sentence.
An interesting question is whether this trend toward longer sentences aimed at “sending a message” will have a greater impact on the sentence of Raj Rajaratnam, the Galleon Group hedge fund manager, for insider trading. That sentencing had been scheduled for the end of July, but late Thursday a federal judge postponed it until Sept. 27. As I discussed in a post about the Galleon case, the sentencing guidelines in his case call for a prison term of about 15 to 20 years.
Mr. Rajaratnam’s crime was hardly the type of Ponzi scheme perpetrated by Mr. Dreier or Mr. Rothstein, nor did it have the claims of falsified documents and fake mortgages for which Mr. Farkas was convicted. Unlike those defendants, Mr. Rajaratnam was accused of crossing the line by illegally using confidential information for the benefit of the Galleon Group, but otherwise there was no claim that his business was illegitimate or that he stole from individual investors.
Yet Mr. Rajaratnam was convicted of taking information from highly placed sources who breached their fiduciary duty to publicly traded corporations like Goldman Sachs, I.B.M. and Advanced Micro Devices, at least indirectly harming thousands of shareholders. The wiretaps played at trial demonstrate a rather brazen approach to gathering this information, with instructions on how to cover up the trading to make it appear to be innocent. Although Mr. Rajaratnam did not testify, the type of conduct portrayed on the wiretaps could lead the court to find that he deserves a significant sentence for abusing his position.
I would not be surprised if federal prosecutors sought a sentence above the guidelines recommendation for Mr. Rajaratnam to send yet another message to Wall Street, one that certainly would be noticed in the hedge fund universe. A substantial prison term, in the 25-year range, would also be consistent with the trend in white-collar cases toward harsher punishments.
--------------------------------------------------------------------------------
Peter J. Henning, who writes White Collar Watch for DealBook, is a professor at Wayne State University Law School.
http://dealbook.nytimes.com/2011/06/30/tough-justice-persists-in-white-collar-crime-cases/?pagemode=print
original post by scion
Taser settled Lawsuit on NSS
http://www.bloomberg.com/news/2011-06-29....rt-selling.html
Taser International Inc. (TASR) and a group of shareholders settled a lawsuit against financial firms in which the stun-gun maker alleged stock-price manipulation through illegal short selling.
Both sides told a federal court in Atlanta they had reached a binding agreement. The judge yesterday put the case on hold pending the filing of a dismissal notice. The case was filed in 2008 against companies including Goldman Sachs Group Inc. (GS)
Terms of the settlement are confidential and won’t have to be approved by the judge, Steven Rosenwasser, a lawyer for Taser and about 40 of the company’s investors, said today in a telephone interview.
“After lengthy litigation, the plaintiffs are happy to have the case resolved,” Rosenwasser said.
In routine short selling, stocks are borrowed and then sold in anticipation of falling prices in hopes of repaying the loan with cheaper shares bought at a later date. The Taser investors accuse the brokerages of so-called naked short selling by placing electronic orders to sell shares without borrowing the corresponding shares or actually delivering them to the buyer.
The plaintiffs accused the firms of creating phantom or counterfeit Taser shares and diluting the value of authentic shares.
Goldman Sachs spokeswoman Andrea Raphael and Morgan Stanley (MS) & Co. spokesman Pen Pendleton declined to comment.
The case is Taser International v. Morgan Stanley, 10- 03108, U.S. District Court, Northern District of Georgia (Atlanta.)
To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net
the snowball is rolling down the hill and gathering momentum
They should get more than 5 years imho!
Lock em up and throw away the key!
SevenTenEleven: Why am I not surprised? If they kept accurate data they would have no excuses available to them for not enforcing the law.
OldBen: The worm has turned. TASR settlement just announced while details hidden. Overstock trial later this year against the very same perps and in this instance the Judge has allowed RICO charges to be brought against the defendants. Can you say RICO? FFGO has already announced what our dividend will be and we are merely waiting for the record and payment date. Naked shorting a year from now will be history. Many who practiced it will be spending time in jail. Good always prevails over evil although at times good is frustratingly slow. Go FFGO!!!
3400%+ is an awesome return!
Anyone heard how much the TASR naked shorting settlement cost GS?
Taser settled Lawsuit on NSS
http://www.bloomberg.com/news/2011-06-29....rt-selling.html
Taser International Inc. (TASR) and a group of shareholders settled a lawsuit against financial firms in which the stun-gun maker alleged stock-price manipulation through illegal short selling.
Both sides told a federal court in Atlanta they had reached a binding agreement. The judge yesterday put the case on hold pending the filing of a dismissal notice. The case was filed in 2008 against companies including Goldman Sachs Group Inc. (GS)
Terms of the settlement are confidential and won’t have to be approved by the judge, Steven Rosenwasser, a lawyer for Taser and about 40 of the company’s investors, said today in a telephone interview.
“After lengthy litigation, the plaintiffs are happy to have the case resolved,” Rosenwasser said.
In routine short selling, stocks are borrowed and then sold in anticipation of falling prices in hopes of repaying the loan with cheaper shares bought at a later date. The Taser investors accuse the brokerages of so-called naked short selling by placing electronic orders to sell shares without borrowing the corresponding shares or actually delivering them to the buyer.
The plaintiffs accused the firms of creating phantom or counterfeit Taser shares and diluting the value of authentic shares.
Goldman Sachs spokeswoman Andrea Raphael and Morgan Stanley (MS) & Co. spokesman Pen Pendleton declined to comment.
The case is Taser International v. Morgan Stanley, 10- 03108, U.S. District Court, Northern District of Georgia (Atlanta.)
To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net
the snowball is rolling down the hill and gathering momentum
Where are the Fraud Busters at and why isn't this something they are interested in exposing? SevenTenEleven
All the fraud busters are at the Goldman Sachs, Morgan Stanley, etc.. boards chastising them for having naked shorted TASR! lol
dahbmw: Both TASR and BCIT are proven victims of criminal naked shorting. Both companies and the shareholders of both companies are entitled to be compensated. End of story. Go BCIT!!!
mastaflash: I have never communicated with TM but feel free to forward it to him. Go BCIT!!!
Expect the SRSR shorts to try and close the price today as low as possible as this is not only the end of the month but also the end of the quarter. Good day to buy if you are so inclined.
Go SRSR!!!
indebt2: Unfortunatly we are working at the speed of governement and as we all know that speed can at times be frustratingly slow.
Perhaps this settlement, just announced will provide encouragement for you to hang in. Go FFGO!!!
Taser settled Lawsuit on NSS
http://www.bloomberg.com/news/2011-06-29....rt-selling.html
Taser International Inc. (TASR) and a group of shareholders settled a lawsuit against financial firms in which the stun-gun maker alleged stock-price manipulation through illegal short selling.
Both sides told a federal court in Atlanta they had reached a binding agreement. The judge yesterday put the case on hold pending the filing of a dismissal notice. The case was filed in 2008 against companies including Goldman Sachs Group Inc. (GS)
Terms of the settlement are confidential and won’t have to be approved by the judge, Steven Rosenwasser, a lawyer for Taser and about 40 of the company’s investors, said today in a telephone interview.
“After lengthy litigation, the plaintiffs are happy to have the case resolved,” Rosenwasser said.
In routine short selling, stocks are borrowed and then sold in anticipation of falling prices in hopes of repaying the loan with cheaper shares bought at a later date. The Taser investors accuse the brokerages of so-called naked short selling by placing electronic orders to sell shares without borrowing the corresponding shares or actually delivering them to the buyer.
The plaintiffs accused the firms of creating phantom or counterfeit Taser shares and diluting the value of authentic shares.
Goldman Sachs spokeswoman Andrea Raphael and Morgan Stanley (MS) & Co. spokesman Pen Pendleton declined to comment.
The case is Taser International v. Morgan Stanley, 10- 03108, U.S. District Court, Northern District of Georgia (Atlanta.)
To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net
the snowball is rolling down the hill and gathering momentum
allez: Just a matter of time until we are compensated one way or another and we start seeing bad guys taking perp walks. We know it and they know it. Go BCIT!!!
Taser settled Lawsuit on NSS
http://www.bloomberg.com/news/2011-06-29....rt-selling.html
Taser International Inc. (TASR) and a group of shareholders settled a lawsuit against financial firms in which the stun-gun maker alleged stock-price manipulation through illegal short selling.
Both sides told a federal court in Atlanta they had reached a binding agreement. The judge yesterday put the case on hold pending the filing of a dismissal notice. The case was filed in 2008 against companies including Goldman Sachs Group Inc. (GS)
Terms of the settlement are confidential and won’t have to be approved by the judge, Steven Rosenwasser, a lawyer for Taser and about 40 of the company’s investors, said today in a telephone interview.
“After lengthy litigation, the plaintiffs are happy to have the case resolved,” Rosenwasser said.
In routine short selling, stocks are borrowed and then sold in anticipation of falling prices in hopes of repaying the loan with cheaper shares bought at a later date. The Taser investors accuse the brokerages of so-called naked short selling by placing electronic orders to sell shares without borrowing the corresponding shares or actually delivering them to the buyer.
The plaintiffs accused the firms of creating phantom or counterfeit Taser shares and diluting the value of authentic shares.
Goldman Sachs spokeswoman Andrea Raphael and Morgan Stanley (MS) & Co. spokesman Pen Pendleton declined to comment.
The case is Taser International v. Morgan Stanley, 10- 03108, U.S. District Court, Northern District of Georgia (Atlanta.)
To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net
the snowball is rolling down the hill and gathering momentum
Taser settled Lawsuit on NSS
http://www.bloomberg.com/news/2011-06-29....rt-selling.html
Taser International Inc. (TASR) and a group of shareholders settled a lawsuit against financial firms in which the stun-gun maker alleged stock-price manipulation through illegal short selling.
Both sides told a federal court in Atlanta they had reached a binding agreement. The judge yesterday put the case on hold pending the filing of a dismissal notice. The case was filed in 2008 against companies including Goldman Sachs Group Inc. (GS)
Terms of the settlement are confidential and won’t have to be approved by the judge, Steven Rosenwasser, a lawyer for Taser and about 40 of the company’s investors, said today in a telephone interview.
“After lengthy litigation, the plaintiffs are happy to have the case resolved,” Rosenwasser said.
In routine short selling, stocks are borrowed and then sold in anticipation of falling prices in hopes of repaying the loan with cheaper shares bought at a later date. The Taser investors accuse the brokerages of so-called naked short selling by placing electronic orders to sell shares without borrowing the corresponding shares or actually delivering them to the buyer.
The plaintiffs accused the firms of creating phantom or counterfeit Taser shares and diluting the value of authentic shares.
Goldman Sachs spokeswoman Andrea Raphael and Morgan Stanley (MS) & Co. spokesman Pen Pendleton declined to comment.
The case is Taser International v. Morgan Stanley, 10- 03108, U.S. District Court, Northern District of Georgia (Atlanta.)
To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net
the snowball is rolling down the hill and gathering momentum