Market Manipulators

[billiondollarman]

I was thinking we would not see anything different til Dec 5 th since the end of 35 days is tomorrow

[Zardiw]

It's way past due that's for sure....et z

[billiondollarman]

Good point

[billiondollarman]

I do too I just hope the SEC enforces it or I believe each STATE is going to enforce it.

[billiondollarman]

I hope soo but now they are trying get States enforce short selling laws too. I know one day all of this stuff will be stop.

[Wolfie123]

If SEC will enforce it!!!!!

[Starnes]

That is why I bought some today...A gut feeling..IMO.

[Zardiw]

Wow....Maybe tomorrow will go down in history for us little guys......z

[billiondollarman]

Ummm Yeaaaa!! haha That was the point of the post just show how Scared NITE was. We will see what happens this could finally be what investors have been looking for.

[puppydotcom]

thats dated September 20, 2006 ... long ago history ... I'm will to bet there is little to NO pps increase in 90% of the volume pennies trading .. take a snap shot of the top trading penny companies on IHUBs volume board today and look at them on dec 6th

we will see
lol

[billiondollarman]

ANOTHER NICE READ HERE FOLKS...


Maybe of Interest: Ballot initiative targets illegal short selling

http://www.siouxcityjournal.com/articles/2007/11/29/news/south_dakota/be7fd1bb9063631f862573a200175b7f.txt

SIOUX FALLS (AP) -- An initiative that would impose state penalties for the illegal short selling of stock shares appears to be the first headed to the 2008 ballot in South Dakota.

It's part of a nationwide effort to convince states to pass their own laws against "naked" short selling, which involves selling borrowed shares without having borrowed them first.

The practice is already illegal in the eyes of the federal Securities and Exchange Commission because it tends to lower a company's share price by artificially creating more sellers than buyers. But proponents of state laws against the practice say the SEC is not enforcing its laws so states need to act.

State Rep. Hal Wick, R-Sioux Falls, said South Dakotans for Securities Reform has gathered 27,500 signatures and plans to deliver the petitions to the South Dakota secretary of state on Thursday.

Wick said he knew nothing of "naked" short selling until last March, when Tim Mooney, spokesman for the Union, Mo.-based American Entrepreneurs for Securities Reform, brought it to his attention.

If passed by voters, the law would require stock shares to be delivered to the buyer within three days of their purchase.

"This is a consumer protection issue that needs to be addressed," Wick said Wednesday. "The people of South Dakota deserve to have the protection of both the state and the federal government when they invest their hard-earned dollars in the stock market."

Travis Larson, spokesman for the Securities Industry and Financial Markets Association, said the SEC has addressed the issue and any state law dealing with short selling would likely run counter to current federal regulations.

"The SEC has been given control of our financial market regulations so that we have one single set of rules and regulations for our financial markets," Larson said. "And if every state were to pass its own rules -- some of which may run counter to the SEC -- the patchwork quilt of resulting rules and regulations would tie up our financial markets and slow them, hurting our competitiveness."

Larson added that where short selling occurs illegally, it should be punished to the fullest extent of existing federal law.

In a July letter to the industry association, South Dakota Gov. Mike Rounds said promoters might have good intentions, but the proposed initiative would unduly burden and obstruct interstate commerce.

"The initiative will not receive support from this office and, unfortunately, there is no realistic way to prevent the short sale initiative from appearing on the November 4, 2008, ballot if the proper signatures are obtained," Rounds wrote.

Traditional short sellers borrow a stock, then sell it, betting its price will decline and they will be able to buy it back and return it to their lender at a cheaper price. In "naked" short selling, as defined by the SEC, the seller does not borrow or arrange to borrow the securities in time to "make the delivery" to the buyer within the standard three-day settlement period for trades. It's called a failure to deliver.

Mooney said the practice amounts to fraud, and the American Entrepreneurs for Securities Reform is trying to get similar legislation passed in Oklahoma and Missouri.

"Phantom shares of stock are created in excess of that which has been issued," Mooney said. "It's the same economic impact as putting a $100 bill in the Xerox machine and hitting 'copy."'

"Naked" short selling has received some attention in recent years from Patrick Byrne, chief executive officer of Overstock.com, who has become a vocal critic of the practice. The Salt Lake City-based Internet retailer is suing a stock research firm and hedge fund managers for allegedly driving down the company's shares.

Utah's legislature passed a law against the practice in 2006, but repealed it a year later.

The extent of "naked" short selling is not known.

Mooney estimates that as much as $6 billion a day worth of stock is not delivered, but he added that some of that is fixed over time.

Other business analysts contend the issue is overblown.

Failures to deliver can occur for a number of reasons, including human or mechanical errors or processing delays, and they can occur on both long and short sales.

Wick said he wasn't sure how prevalent the practice is in South Dakota, but he said he knows of one company in the state that has been impacted by it. He said he did not want to name the company.

But startup companies need protection against the practice so brokerage firms can't drive them into bankruptcy, Wick said. The conversion of the old Homestake gold mine in Lead into an underground laboratory will draw many startup companies to the state, he added.

Asked why he didn't introduce the bill in the Legislature rather than using the ballot initiative process, Wick said short selling is not the kind of issue that would otherwise get a lot of media attention.

"The things that go through the Legislature, most people never see," Wick said. "By doing this publicly and asking the people to vote on it, we let the people of South Dakota really say what they want."

Mooney said state efforts will also help get the attention of the SEC, which can then better enforce its laws.

Wick said he hasn't had any discussions with the South Dakota Attorney General's Office on how it would handle enforcement of the proposed law, but it would fall under the state's consumer protection division.

The ballot measure is titled the South Dakota Small Investors Protection Initiative

[billiondollarman]

No problem Lightbeam it is always good to see a crook on the run..

[lightbeam]

Great find Bill. I will be very busy the next few weeks. Mostly checking in once in a while. It is always good to see what is going on.

[billiondollarman]

DEC 4TH IS WHEN the FINALLY NSS Needs to be covered. This is the email from Knight asking the SEC for more time to cover because they were scared it would case to many short squeezes.. Dec 4th should be fun for alot of stocks. ..

Knight Capital Worried about Reg Sho Changes

September 20, 2006

Nancy M. Morris
Secretary
Securities and Exchange Commission
100 F. Street, NE
Washington, DC 20549-9303

Re: Release No. 34-54154; File Number S7-12-06

Proposed Amendments to Regulation SHO

Dear Ms. Morris:

Knight Capital Group, Inc. (“Knight”)[1] welcomes the opportunity to offer our comments to the Securities and Exchange Commission (“Commission”) on the proposed amendments to Regulation SHO.[2] The proposed amendments seek to: (i) eliminate the grandfather provision for fails; (ii) modify the options market maker exemption for closing out fails; and (iii) address the unwinding index arbitrage positions. The Commission also requests comment on a number of additional questions. Since our business will be impacted directly by the proposal relating to the elimination of the grandfather provision, we will focus most of our comments on that issue.

Proposed elimination of the grandfather provision

The Commission proposes to eliminate the grandfather clause of Rule 203(b)(3)(i). This rule generally exempts fails to deliver that existed prior to the security becoming a threshold security. The new amendment would require that all grandfathered fails be closed-out within 35 settlement days from the effective date of the amendment and if a security becomes a threshold security after the effective date, all fails would need to be closed out within 13 consecutive settlement days. We respectfully oppose such a change.

We believe that the empirical data now available shows that this proposal is not necessary – see, Memorandum from the Commission’s Office of Economic Analysis (August 21, 2006). For example, “99.2% of the fails that existed on January 3, 2005 are no longer outstanding as of March 31, 2006” (Memorandum at page 2).

Additionally, the elimination of the grandfather provision will lead to increased volatility in these securities, created by short squeezes as individuals attempt to cover positions. Importantly, the elimination of the grandfather provision will negatively impact bona fide market making and the ability of market makers to provide liquidity. As the Division of Market Regulation correctly noted,

There may be legitimate reasons for a failure to deliver….For example, market makers who sell short thinly traded, illiquid stock in response to customer demand may encounter difficulty in obtaining securities when the time for delivery arrives.

Naked short selling is not necessarily a violation of the federal securities laws or the Commission's rules. Indeed, 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. This may occur, for example, if there is a sudden surge in buying interest in that security, or if few investors are selling the security at that time. Because it may take a market maker considerable time to purchase or arrange to borrow the security, a market maker engaged in bona fide market making, particularly in a fast-moving market, may need to sell the security short without having arranged to borrow shares. This is especially true for market makers in thinly traded, illiquid stocks such as securities quoted on the OTC Bulletin Board, as there may be few shares available to purchase or borrow at a given time. (emphasis supplied and citations omitted)
See, Division of Market Regulation: Key Points About Regulation SHO (April 11, 2005).

Thus, to restrict – indeed eliminate, the ability of market makers to satisfy these investor needs will undoubtedly lead to less liquidity, greater volatility, and widening of spreads. Further, in certain instances, restricting bona fide market making in such a fashion could lead to upward price manipulation (i.e., the return of “pump & dump” schemes) causing investors to purchase shares at inflated prices.

If the Commission does determine, however, to move forward with the elimination of the grandfather clause, we urge the Commission to adopt a permanent phase-in period of 35 days for all fails to deliver incurred in securities prior to those securities becoming a threshold security. In addition to the reasons stated above, Knight is very concerned that the elimination of the grandfather provision will necessarily inject a new risk dynamic into the market making process that is nearly impossible to predict and even more difficult to measure. More specifically, when making a decision whether to sell short to an investor seeking to buy a “non-threshold” stock, a market maker today can adequately assess the risk associated with providing liquidity and capital to that order. Although there is always a risk of price movement, a market maker can manage that risk by deciding when to buy back that position. Under the current proposal, the market maker loses that risk management capability. Thus, if the stock is not a threshold security the day the market maker sells short to an investor, but becomes a threshold security shortly thereafter, the risk incurred by the market maker on the day it went short will exponentially increase – since, the market maker can no longer manage its exit point on the position and will now be forced to close that position within 13 consecutive settlement days. In effect, a new and substantial risk will be applied retroactively to a market making decision made in the past. So, through no fault of its own, the market maker is now forced into a potentially precarious – and costly, position.


Consequently, in light of the additional and substantial new risks the market maker is being asked to bear, and since this risk will be incurred in connection with activities designed to serve the investing public (i.e., bona fide market making), we suggest an extended, permanent buy-in period of 35 settlement days in these situations. No harm will come to any investor or the marketplace with this modest extension of time, however it will help market makers somewhat manage this newly created risk.

Additional questions posed by the Commission


The Commission raised additional questions in the proposed amendments which we would also like to address:

1. Should there be, “a mandatory pre-borrow requirement in lieu of a locate requirement for threshold securities with extended fails?”

If the Commission was to adopt a mandatory pre-borrow requirement in lieu of a locate requirement for threshold securities with extended fails to deliver, we submit that the Commission should clarify that such requirement would not be imposed on transactions that are exempted from Rule 203(b)(1) by Rule 203(b)(2). If such transactions are not exempted from the pre-borrow requirement, it could impact a market maker even if it did not have an extended fail. Such a requirement could also provide an un-level playing field to certain market participants. Specifically, broker/dealers that have extensive stock loan businesses will have the advantage of transacting in securities at costs much lower than other firms. Overall costs to other broker/dealers would increase as they would have to use capital and pay higher borrow costs to make a market in the stock even though they are not contributing to the fail. In addition, a market maker would be required to incur these borrow costs if it wanted to post quotations if such quotations may result in the market maker selling stock short. This will impact negatively a market maker’s ability to make markets in threshold securities – thereby reducing liquidity for threshold securities.

2. Should the, “current close-out requirement of 13 consecutive settlement days for Rule 144 restricted threshold securities or other types of threshold securities should be extended?”


Knight supports extending the close-out requirement from 13 consecutive settlement days to at least 35 settlement days for sales in threshold securities related to sales effected pursuant to SEC Rule 144, or other similar situations where delays may occur in settlement. Requiring a close-out of “owned” shares in the 13-day period has resulted in serious consequences to sellers that “own” a security who, through no fault of the seller, were not able to settle the transaction by the 13th day. For example, the mechanics of having the transfer agent remove a restrictive legend often results in delays of settling transaction beyond 13 settlement days. [3] These delays are not a result of the abusive short selling practices that Regulation SHO was intended to address. Instead, they are typically a result of ensuring that proper documentation is received to remove the legend (e.g., an opinion of counsel).


In addition, transactions in restricted securities are typically larger in size and occur over several days or weeks which increases the risk that such transactions will be subject to a buy-in because: (i) the fails associated with the sales of restricted shares may be sufficient enough to cause the security to become a threshold security or delay a security from being removed from the threshold list; [4] and (ii) sellers are typically not permitted to start the process of removing the restrictive legend until after the shares are sold. Moreover, using the last-in-first-out (“LIFO”) method of closing out fails-to-deliver, the seller of restricted securities is subject to a greater risk of buy-in because shares that are delivered to settle one trade may be applied to a subsequent trade that is also causing a fail-to-deliver.[5]

3. Should the Commission except “ETFs or other types of structured products from the definition of threshold securities?”

We support such a proposal and submit that such an exception should extend to other structured products and American Depository Receipts (ADRs). These types of securities are not subject to the potential short selling abuses as there value is derived from an underlying basket of securities or underlying foreign security. In addition, ETFs and ADRs are in continuous distributions making it difficult to determine the correct outstanding shares for such securities. Thus, the securities may become threshold securities when the fails-to-deliver do not amount to 0.5% of the true outstanding shares.

4. Should the Commission, “consider tightening the locate requirements?”

The Commission asks whether it should require that brokers/dealers obtain locates only from sources that will decrement shares. We respectfully oppose this proposal, as it will negatively impact the ability of a broker/dealer to borrow stock. Since the vast majority of locates do not result in an actual borrow by settlement, requiring a decrement base simply on a locate request would have the effect of reducing substantially the available stock for lending – thus, increasing the cost to borrow the shares and overall clearing costs (which, ultimately, may be passed on to the investor). Further, we also believe that a great deal of time and money will need to be spent by the clearing industry in developing systems and procedures designed to accurately count and decrement shares each time a locate is requested, cancelled, etc. In our view, the stock lending market is not based on the ability to deliver all shares for which there is a locate requested – rather, it is based on the ability to deliver stock in those instances where a broker/dealer is required to borrow the stock to settle a short sale. Since most locates do not result in a need to borrow shares to settle trades, there is no compelling reason to tie-up all stock available for lending.


5. Should the Commission require the, “dissemination of aggregate fails data or fails data by individual security?”

We respectfully disagree with this proposal. Such disclosure would cause more confusion as the information is not indicative of abusive short selling, especially in light of fails caused by “owned” securities (restricted sales). Thus, for example, investors may mistakenly believe that a large percentage of fails to deliver is indicative of abusive short selling or problems with the issuer, when it could be a result of an operational delay with a transfer agent or a delay in removing the legend for a restricted securities transaction. This mistaken belief could result in increased volatility in the stock and increased short selling.

If the Commission were to require aggregate fail data to be published, Knight believes that such information should be limited to aggregate street-wide fails by cusip number, and that SROs should publish the data they receive from the National Securities Clearing Corporation (“NSCC”). In addition, the data should only be published for securities that are on the threshold list for 35 consecutive settlement days to avoid situations where the security became a threshold security as a result of restricted securities transactions or operational delays.

6. Should the Commission require, “additional specific documentation of long sales?”

We would oppose such a new requirement. We are not aware of any data which suggests there is a problem in this area. Most broker/dealers have fairly extensive compliance and supervisory requirements designed to confirm sales are properly marked “long” or “short” and to monitor settlement of transactions by its clients. This new proposal will add substantial costs to an already robust infrastructure, with minimal benefit. However, if the Commission does seek to amend Regulation SHO to require increased documentation for long sales, Knight submits that an executing broker should be exempt from such requirements when there is: (i) a prime brokerage relationship; (ii) the trade is a DVP trade; (iii) settlement instructions are on file with the executing broker; or, (iv) the order is sent electronically.

Conclusion

We commend the continued efforts of the Commission to make improvements to Regulation SHO and the marketplace. Knight would welcome the opportunity to discuss our comments with the Commission.

[Kindergartenkid]

whats going on over at SWVC, is there a manipulator over there bringing down the PPS so that they can scoop up millions and then run it back up.??????? hmmm.... kid

[rrufff]

On April 14, 2003, the Wall Street Journal published an article about this case, entitled “Hedge Fund Finds Dark Side to Message Boards”1 The article reveals that Cohodes himself was also posting messages on the TTWO and ESST bulletin boards during the time period of which he complains. Plaintiff’s general partner David Rocker told the Journal that the firm actually encourages its fund managers to engage in online debate. “It’s a source of research for us,” Rocker explained.

Opposition Exhibit F.

As it turns out, Cohodes – using the screen name “mccohodes” – was fully engaged in a heated
online debate with harry3866 in and around September, 2002. Wollack supplemental decl., ¶¶ 5-6. The
debate started out with “playful insults . . . about their favorite football teams and each other’s spelling
mistakes.” Opposition Exhibit F.

However, it soon escalated into a full-scale online cat-fight, with both parties engaged in name-calling and accusations. In one post, for instance, Cohodes called movant a “coward and a lowlife.” Exhibit O. In another, he responded to a group of posters at the ESST board, by stating, “MAY YOU EAT CAT FOOD UNDER A BRIDGE. You lowlifes....” Exhibit P. And in still another, he called harry3866 a “crackpot,” proclaimed that Rocker would spend big money to silence other
posters, and threatened any Yahoo! posters who, like himself, were involved in “the mutual fund business.”


http://www.cyberslapp.org/documents/RockerReplyBrief.pdf

[rrufff]

It is bad enough that Cohodes, who makes a living bad-mouthing publicly traded companies – often
in the most blunt and disparaging way possible – would then turn around and bring a defamation action
when someone does the same to him. But what makes this case even worse is that Cohodes brings this
suit after he voluntarily participated in the Yahoo! message boards, conducting “research” at that website
by posting antagonistic and even threatening messages directed at harry3866. Yet he now sues harry3866
for statements made during an argument in which Cohodes himself was a willing participant.

http://www.cyberslapp.org/documents/RockerReplyBrief.pdf

[fourkids_9pets]

great info

thanks for posting that

---
4kids
all jmo

[billiondollarman]

Thanks Lightbeam!!!!!!!!!

[lightbeam]

Thought this belongs here, also. Posted by: JNelson
In reply to: chunky-g who wrote msg# 88535 Date:11/7/2007 10:04:44 AM
Post #of 88735

you want to know why ,,,, GOOD Read

CELLAR BOXING

http://www.investorshub.com/boards/read_msg.asp?message_id=2543926

Posted by: Hack
In reply to: None Date:3/7/2004 8:22:47 PM

There’s a form of the securities fraud known as naked short selling that is becoming very popular and lucrative to the market makers that practice it. It is known as “Cellar boxing” and it has to do with the fact that the NASD and the SEC had to arbitrarily set a minimum level at which a stock can trade. This level was set at $.0001 or one-one hundredth of a penny. This level is appropriately referred to as “the cellar”. This $.0001 level can be used as a "backstop" for all kinds of market maker and naked short selling manipulations.

“Cellar boxing” has been one of the security frauds du jour since 1999 when the market went to a “decimalization” basis. In the pre-decimalization days the minimum market spread for most stocks was set at 1/8th of a dollar and the market makers were guaranteed a healthy “spread”. Since decimalization came into effect, those one-eighth of a dollar spreads now are often only a penny as you can see in Microsoft’s quote throughout the day. Where did the unscrupulous MMs go to make up for all of this lost income? They headed "south" to the OTCBB and Pink Sheets where the protective effects from naked short selling like Rule 10-a, and NASD Rules 3350, 3360, and 3370 are nonexistent.

The unique aspect of needing an arbitrary “cellar” level is that the lowest possible incremental gain above this cellar level represents a 100% spread available to MMs making a market in these securities. When compared to the typical spread in Microsoft of perhaps four-tenths of 1%, this is pretty tempting territory. In fact, when the market is no bid to $.0001 offer there is theoretically an infinite spread.

In order to participate in “cellar boxing”, the MMs first need to pummel the price per share down to these levels. The lower they can force the share price, the larger are the percentage spreads to feed off of. This is easily done via garden variety naked short selling. In fact if the MM is large enough and has enough visibility of buy and sell orders as well as order flow, he can simultaneously be acting as the conduit for the sale of nonexistent shares through Canadian co-conspiring broker/dealers and their associates with his right hand at the same time that his left hand is naked short selling into every buy order that appears through its own proprietary accounts. The key here is to be a dominant enough of a MM to have visibility of these buy orders. This is referred to as "broker/dealer internalization" or naked short selling via "desking" which refers to the market makers trading desk. While the right hand is busy flooding the victim company's market with "counterfeit" shares that can be sold at any instant in time the left hand is nullifying any upward pressure in share price by neutralizing the demand for the securities. The net effect becomes no demonstrable demand for shares and a huge oversupply of shares which induces a downward spiral in share price.

In fact, until the "beefed up" version of Rule 3370 (Affirmative determination in writing of "borrowability" by settlement date) becomes effective, U.S. MMs have been "legally" processing naked short sale orders out of Canada and other offshore locations even though they and the clearing firms involved knew by history that these shares were in no way going to be delivered. The question that then begs to be asked is how "the system" can allow these obviously bogus sell orders to clear and settle. To find the answer to this one need look no further than to Addendum "C" to the Rules and Regulations of the NSCC subdivision of the DTCC. This gaping loophole allows the DTCC, which is basically the 11,000 b/ds and banks that we refer to as "Wall Street”, to borrow shares from those investors naive enough to hold these shares in "street name" at their brokerage firm. This amounts to about 95% of us. Theoretically, this “borrow” was designed to allow trades to clear and settle that involved LEGITIMATE 1 OR 2 DAY delays in delivery. This "borrow" is done unbeknownst to the investor that purchased the shares in question and amounts to probably the largest "conflict of interest" known to mankind. The question becomes would these investors knowingly loan, without compensation, their shares to those whose intent is to bankrupt their investment if they knew that the loan process was the key mechanism needed for the naked short sellers to effect their goal? Another question that arises is should the investor's b/d who just earned a commission and therefore owes its client a fiduciary duty of care, be acting as the intermediary in this loan process keeping in mind that this b/d is being paid the cash value of the shares being loaned as a means of collateralizing the loan, all unbeknownst to his client the purchaser.

An interesting phenomenon occurs at these "cellar" levels. Since NASD Rule 3370 allows MMs to legally naked short sell into markets characterized by a plethora of buy orders at a time when few sell orders are in existence, a MM can theoretically "legally" sit at the $.0001 level and sell nonexistent shares all day long because at no bid and $.0001 ask there is obviously a huge disparity between buy orders and sell orders. What tends to happen is that every time the share price tries to get off of the cellar floor and onto the first step of the stairway at $.0001 there is somebody there to step on the hands of the victim corporation's market.

Once a given micro cap corporation is “boxed in the cellar” it doesn’t have a whole lot of options to climb its way out of the cellar. One obvious option would be for it to reverse split its way out of the cellar but history has shown that these are counter-productive as the market capitalization typically gets hammered and the post split share price level starts heading back to its original pre-split level.

Another option would be to organize a sustained buying effort and muscle your way out of the cellar but typically there will, as if by magic, be a naked short sell order there to meet each and every buy order. Sometimes the shareholder base can muster up enough buying pressure to put the market at $.0001 bid and $.0002 offer for a limited amount of time. Later the market makers will typically pound the $.0001 bids with a blitzkrieg of selling to wipe out all of the bids and the market goes back to no bid and $.0001 offer. When the weak-kneed shareholders see this a few times they usually make up their mind to sell their shares the next time that a $.0001 bid appears and to get the heck out of Dodge. This phenomenon is referred to as “shaking the tree” for weak-kneed investors and it is very effective.

At times the market will go to $.0001 bid and $.0003 offer. This sets up a juicy 200% spread for the MMs and tends to dissuade any buyers from reaching up to the "lofty" level of $.0003. If a $.0002 bid should appear from a MM not "playing ball" with the unscrupulous MMs, it will be hit so quickly that Level 2 will never reveal the existence of the bid. The $.0001 bid at $.0003 offer market sets up a "stalemate" wherein market makers can leisurely enjoy the huge spreads while the victim company slowly dilutes itself to death by paying the monthly bills with "real" shares sold at incredibly low levels. Since all of these development-stage corporations have to pay their monthly bills, time becomes on the side of the naked short sellers.

At times it almost seems that the unscrupulous market makers are not actively trying to kill the victim corporation but instead want to milk the situation for as long of a period of time as possible and let the corporation die a slow death by dilution. The reality is that it is extremely easy to strip away 99% of a victim company’s share price or market cap and to keep the victim corporation “boxed“ in the cellar, but it really is difficult to kill a corporation especially after management and the shareholder base have figured out the game that is being played at their expense.

As the weeks and months go by the market makers make a fortune with these huge percentage spreads but the net aggregate naked short positions become astronomical from all of this activity. This leads to some apprehension amongst the co-conspiring MMs. The predicament they find themselves in is that they can’t even stop naked short selling into every buy order that appears because if they do the share price will gap and this will put tremendous pressures on net capital reserves for the MMs and margin maintenance requirements for the co-conspiring hedge funds and others operating out of the more than 13,000 naked short selling margin accounts set up in Canada. And of course covering the naked short position is out of the question since they can’t even stop the day-to-day naked short selling in the first place and you can't be covering at the same time you continue to naked short sell.

What typically happens in these situations is that the victim company has to massively dilute its share structure from the constant paying of the monthly burn rate with money received from the selling of “real” shares at artificially low levels. Then the goal of the naked short sellers is to point out to the investors, usually via paid “Internet bashers”, that with the, let’s say, 50 billion shares currently issued and outstanding, that this lousy company is not worth the $5 million market cap it is trading at, especially if it is just a shell company whose primary business plan was wiped out by the naked short sellers’ tortuous interference earlier on.

The truth of the matter is that the single biggest asset of these victim companies often becomes the astronomically large aggregate naked short position that has accumulated throughout the initial “bear raid” and also during the “cellar boxing” phase. The goal of the victim company now becomes to avoid the 3 main goals of the naked short sellers, namely: bankruptcy, a reverse split, or the forced signing of a death spiral convertible debenture out of desperation. As long as the victim company can continue to pay the monthly burn rate, then the game plan becomes to make some of the strategic moves that hundreds of victim companies have been forced into doing which includes name changes, CUSIP # changes, cancel/reissue procedures, dividend distributions, amending of by-laws and Articles of Corporation, etc. Nevada domiciled companies usually cancel all of their shares in the system, both real and fake, and force shareholders and their b/ds to PROVE the ownership of the old “real” shares before they get a new “real” share. Many also file their civil suits at this time also. This indirect forcing of hundreds of U.S. micro cap corporations to go through all of these extraneous hoops and hurdles as a means to survive, whether it be due to regulatory apathy or lack of resources, is probably one of the biggest black eyes the U.S. financial systems have ever sustained. In a perfect world it would be the regulators that periodically audit the “C” and “D” sub-accounts at the DTCC, the proprietary accounts of the MMs, clearing firms, and Canadian b/ds, and force the buy-in of counterfeit shares, many of which are hiding behind altered CUSIP #s, that are detected above the Rule 11830 guidelines for allowable “failed deliveries” of one half of 1% of the shares issued. U.S. micro cap corporations should not have to periodically “purge” their share structure of counterfeit electronic book entries but if the regulators will not do it then management has a fiduciary duty to do it.
A lot of management teams become overwhelmed with grief and guilt in regards to the huge increase in the number of shares issued and outstanding that have accumulated during their “watch”. The truth however is that as long as management made the proper corporate governance moves throughout this ordeal then a huge number of resultant shares issued and outstanding is unavoidable and often indicative of an astronomically high naked short position and is nothing to be ashamed of. These massive naked short positions need to be looked upon as huge assets that need to be developed. Hopefully the regulators will come to grips with the reality of naked short selling and tactics like "Cellar boxing" and quickly address this fraud that has decimated thousands of U.S. micro cap corporations and the tens of millions of U.S. investors therein.



http://investorshub.advfn.com/boards/read_msg.asp?message_id=24345181

[lightbeam]

Thank you. Sometimes it's good not to be seen. What Kevin and Tom are trying to do is cutting edge. They have gained the patent rights for alot of things that people would be amazed at. Greenshift is such a good company that has been naked shorted for so long. Watch out when they arise from the dead. All their stocks are so undervalued. IMO you would be a fool not to invest in any of them. Check their filings. Go to their June PR and you will find the answers to all your questions there. These people are super smart. I love Tom, Kevin, their team, in all they're trying to do. Keep up the good work folks. American Psycho thank you for all your hard work. And, Red you too.

[Kindergartenkid]

your a good guy Lightbeam and honesty and integrity are a rare thing down here and there should be more of us that ban together to stop this garbage that is running wild on the boards..... kid

[lightbeam]

Great site Bill been reading all!

[lightbeam]

You are 100% right! I stand up for what I believe!

[Kindergartenkid]

most definately and there should be more boards showing this type of manipulation is not needed and not warrented... KID

[billiondollarman]

I do not think like that but i think boards like mines and others are letting them know that we see what they are doing..

[Kindergartenkid]

well Billion we need to stop this way of thinking and send POSTER to the perpetraters... KID

[billiondollarman]

HAHA Yes KID that is how it goes.....

[Kindergartenkid]

the good ones always get shot and run out of town... Kid

[billiondollarman]

No problem Light.... I see they banned you for sharing the truth hahaha

[bigbear96]

;)

[fourkids_9pets]

lol

yep

---
4kids
all jmo

[bigbear96]

4k- meow???

[fourkids_9pets]

ace

i just finished reading the last
few hundred posts on the swvc board

i rarely bother reading that board anymore
since i became aware of the *tactics*
of one of the larger shareholders -- who likes
to put a massive sell order at the ask

essentially suppressing the pps ...
eventually walking it down as he sells
so he can rebuy at a lower pps
and for those of you think he's out
-- imo he's not ... just watch sbsh

as for the noise that has been created
by a few recently ... i just laugh

they all need a new script ...

---
4kids
all jmo

[Ace Magoo]

Can anyone explain to me what is going on over at the SWVC board? From the posts that are being deleted and the tone of the new group of posters something is up. Looks like some people want it down and from what is being deleted it looks like there is support for it. I am not saying SWVC is going down, I am saying someone wants it to look like it is. What’s up?

[lightbeam]

Gave you away out!

[lightbeam]

I post that I save and save to muti hard driives what is what!

[lightbeam]

I read and saw that over 10 times and still learn!

[lightbeam]

Great site BillION! I am reading all of your imfo, some of names I am finding go back more than 15 years. Now I know why Jim Cramer
had a break down slamming his fist ! Thanks for sharing all your hard work.

[lightbeam]

I am 40 boardmark!

[billiondollarman]

"The federal securities laws prohibit the manipulation of securities. Specifically, manipulation is intentional conduct designed to deceive investors by controlling or artificially affecting the market for a security. Manipulation can involve a number of techniques to affect the supply of, or demand for, a stock. They include: spreading false or misleading information about a company; improperly limiting the number of publicly-available shares; or rigging quotes, prices or trades to create a
false or deceptive picture of the demand for a security.

While the First Amendment protects freedom of speech, a charge of slander may be brought against someone who knowingly makes a false statement. Please note that this is a civil matter, not a matter under the federal securities laws.

If you want to provide us specific details of persons being paid to bash a company, we would appreciate your letting us know. You can do this by filing a complaint at http://www.sec.gov/complaint.shtml.

Sincerely,

ROBERT T GREENE
U.S. Securities and Exchange Commission
[phone] "

[rjbluesky]

Interesting. Hopefully, the truth will prevail here in the end and any wrongdoing will not be taken lightly. I'm betting there are many other cases like this that don't hit the newswires.

[rrufff]

http://communities.canada.com/financialpost/blogs/francis/archive/2007/10/23/fairfax-financial-cop-a...

http://www.canada.com/nationalpost/financialpost/story.html?id=4b28e374-6dee-444d-b9d0-0cc46274ff18

Fairfax Financial Wins over S.A.C. Capital Management et al
National Post
Diane Francis
October 23, 2007

S.A.C. Capital got the equivalent of a "yellow" card, or official wrist slap, in court recently when an American judge refused to dismiss a US$6-billion lawsuit by Toronto’s Fairfax Financial Holdings Ltd. against S.A.C. and 22 other defendants.

Fairfax is suing S.A.C. and others for financial damages which resulted from the creation of a short-selling, disinformation conspiracy designed to drive down Fairfax stock.

S.A.C. and other lawyers claimed that there was no conspiracy, no wrongdoing and that their trading was legal.

But Judge Deanna Wilson did not agree.

“I hope that this didn’t happen because it’s a scheme of tremendous proportions,” said Judge Wilson in the hearings two weeks ago. She rejected motions for dismissal and ordered the matter should proceed to trial under RICO, or organized crime, and other statutes.

Fairfax claims that S.A.C. and various affiliates, with US$40 billion in assets under management, attacked the company after it was listed in 2002 on the New York Stock Exchange. In the first few weeks, Fairfax stock was driven down by 15% or US$14 per share.

By spring 2003 it had rebounded from US$50 to US$96, then was attacked again in summer 2006. It currently trades in the $230-range and has a market capitalization value of US$4 billion. The insurance conglomerate is Canada’s 49th largest corporation by revenues.

The attacks were invalid and caused financial damage to shareholders over the years and to the company’s reputation, said the company.

“It was a massive and fraudulent disinformation campaign”, reads Fairfax’s statement of claim which used “dirty tricks”, fronts, aliases and bear attacks to ruin the company’s reputation and price.

One defendant is an “analyst” called Spyro Contogouris who Fairfax claims had no credentials and a career of lawsuits and legal hassles.

He and others were hired to spread disinformaton to journalists, online chat rooms, regulators, auditors, rating agencies and even harassed Prem Watsa, Fairfax CEO and Chair and other officers.

“The amended complaint alleges a shocking scheme against a prominent Canadian company and its American subsidiary,” said Fairfax lawyer Marc Kasowitz in a telephone interview yesterday. “The decision, denying the motions to dismiss, is very important because it confirms that the legal challenges to the amended complaint are without merit and that this case can now proceed aggressively to discovery and trial.”

It’s interesting to note that S.A.C. was accused of another “bear raid”, short-selling conspiracy by Canada’s Biovail Corp. which has also sued the hedge fund and others for US$6 billion. That matter is on hold in a New Jersey court, said Mr. Kasowitz.

And Mr. Rocker’s firm is implicated in a similar case in California.

Short-selling is a legitimate strategy, but the whispering campaign against Fairfax spread false information which, if proven, would be illegal. Judge Wilson remarked on Fairfax’s resilience.

“First of all… this company obviously could withstand a whole lot of junk being thrown at it, because at what the stock price is now…and it kept going back up.”

S.A.C. and the others claimed that Fairfax’s lawsuit was frivolous and not rooted in any law.

“Am I swallowing them [the pleadings] in whole or in part?” said the Judge, “no. I’m not supposed to do that.”

Her decision meant that the next step is for examinations for discovery to be conducted under commercial libel, interference in contracts and under organized criminal activity, or RICO, statutes.

[rrufff]

Lots of heated arguments, surveys and discussion about similar topics. Feel free to come over and take the surveys and contribute. Perhaps both boards should be combined.

http://investorshub.advfn.com/boards/board.asp?board_id=771

[Kindergartenkid]

hey people it has been 2 days since the last manipulator arguement.. remember this board was designed for market manipulator discussion... so try to manipulate me.. lmao... KID

[billiondollarman]

I never believe that I am trying to save people BS. The only bad thing about it is they are smarter now then they ever been. They use to just post more than research now they research like a normal investor and when something small goes wrong or right before a big PR they turn and found this hugggeee document that may be 10 years old that is suppose to make investors sell..Which they go back a few years ago and repost information that has nothing to do with today. Sometimes it is CEO history or Companies history. I know the only way to stop it is if the Companies stand up because the freedom of speech is not going to work if enough companies lose money. In this Country Freedom of speech is ok until it is hurting somebody pocket in a big way. I believe in in the months to come you see more companies jump in all they need to see is one company win acase then everybody will jump in. I kind of hope that happens sad to say because we have too much craziness on these internet chat boards now and some are falling for it..

[rjbluesky]

I think we've all learned these past few years that those that talk badly about stocks do have a motive. And, my bet is it's $$. No matter who they hurt to get it.

[billiondollarman]

I hope they go after them hard.. Like I always say if you do not like it sell it no need to complain . Nobody ever said that investing in stocks would not be risky. Everytime you put your money in any stock it is a risk.mio

[rjbluesky]

billion. That is a great read. I've previously read where certain parties that slander companies sometimes get into some serious legal trouble because of that type of activity. Times appear to be changing for the better. House cleaning for company and shareholder protection! Much needed IMO.

[billiondollarman]

Nice little read
St. Elias huffs and puffs about Stockhouse posters


2005-10-13 09:48 ET - News Release

Ms. Lori McClenahan reports

ST. ELIAS RETAINS LEGAL

St. Elias Mines Ltd. confirms that, due to repeated defamatory comments concerning the company and its president, Lori McClenahan, posted on the Stockhouse forum chat lines prompting serious concern from the company's long-time investors, the company has retained counsel to begin taking appropriate action against certain parties who post malicious and inaccurate information deemed to be damaging to the company's reputation.

The company believes that the Internet is one of the most powerful tools for communication ever invented. Posting defamatory comments on a widely read Internet bulletin board must be considered in the same light as publishing them in any other way because the accusations are available to a potentially broad and worldwide audience. For example, statements transmitted and published over Stockhouse about particular companies are accessible by millions of individuals including investors and potential investors.

While management believes in focusing its efforts on advancing the company and its projects, it is management's responsibility to address defamatory comments when they cause interference and/or damage to the company.

In the past, anonymous posters were hard to identify, however, recent Internet libel cases have set precedents and this lack of information is no longer an obstacle to obtaining the identity of anonymous Internet posters and launching an Internet libel suit. In a case decided in Alberta last year, Madame Justice C.A. Kent awarded oil and gas producer Vaquero Energy Ltd. $75,000 in damages over defamatory Stockhouse posts. During the trial, it was revealed that the anonymous poster was easily tracked down by his IP address, a unique number assigned to every computer accessing the Internet. Other cases include libel lawsuits filed by (1) Adanac Gold Corp. and Molycor Gold Corp., (2) Epic Data Inc. and (3) Farallon Resources Ltd. In addition, Barrick Gold Corp. recently won a $125,000 libel award over defamatory Internet postings. Based on these cases, it is evident that the Canadian courts take an unfavourable view of defamatory comments posted by cyberchatters.