Megas World

[weebie]

Totally agree. Clear sailing.

[mastaflash]

Nice to see Megas cut all ties to Sytner.

[mastaflash]

Remember a while back it felt to me like naked shorting had similarities to derivatives.

Here is a Byrne quote from 2008 article on systemic risk:

On the second floor, however, there is another casino. In that casino, people are watching television screens showing people gambling on the first floor. In the second floor casino, people bet each other on who they think is going to win and lose on the first floor. All the really big players are in that second floor casino, and they are betting hundreds of millions of dollars of action on various people in that first floor casino. Their outcomes are “derivative” of the outcomes on the first floor. A roll of the dice on the first floor that loses someone $100 may create tens of thousands of dollars of losses on the second floor (and if there is a third floor where people are placing even bigger bets on the outcomes on the second floor….)
I will argue that unsettled trades in the financial system bear the characteristics of such derivatives. However, they present a special kind of derivative. If you and I walk into the first floor casino and bet on whether the next roll of the dice is a 7 or not, no amount of betting on our part can affect the underlying event. Similarly, the underlying event will not be affect by any amount of betting by the people above us on the second floor (or by betting on them by people on the third floor).
Unsettled stock trades, however, can affect the underlying events upon which they are a bet. In fact, unsettled trades resulting from “the option market maker exception” are often the by-product ofdeliberate efforts to affect those underlying events. When an underlying event that someone deliberately affects is a stock price movement, it used to be called, “manipulation” (and was also called “illegal” until Wall Street captured the SEC, at which time it became known as, “a hedge fund business model”).
Because unsettled trades have this property of affecting the underlying events upon which they are a bet, they are derivative contracts with an especially nasty twist.

http://www.deepcapture.com/category/7-the-risk-of-systemic-collapse/

[mastaflash]

So it is UBS that naked shorted BCIT into oblivion. Well, should this really come as a surprise?

http://www.deepcapture.com/ubs-in-theory-a-conspiracy-to-naked-short-tens-of-millions-of-shares/

[mastaflash]

http://www.ritholtz.com/blog/2013/06/the-latest-fuckery-from-finra/

[mastaflash]

I've said it before, and now I'll say it again...it is all about possession and/or control. When a broker sells you shares, they must have one of those. If not, they must obtain it. This right of clients to receive delivery of certificates for stock they paid for is inviolate, and cannot be circumvented. There are numerous rules and regulations governing this, but Customer Protection Rule 15c3-3is the chief among them. I think it is pretty clear to most that when you pay for anything, you expect to get it. If you don't, you would probably go to the police in most cases. This white collar crime, though, has a diabolical methodology that confounds most attempts to label it a crime. TDA has tried every trick in the book to obfuscate, intimidate, and obliterate, their naked short position held in CGs account. They have completely failed, and in so doing, have exposed themselves to significant harm. Hopefully, what comes out of all this is a safer, fairer, market for all.

[mastaflash]

Looks to me like CG can now go back again and ask for his shares to be delivered, lol.

[mastaflash]

CG case Finra Award/Order:

http://finraawardsonline.finra.org/viewDocument.aspx?DocNb=60903

[mastaflash]

Interesting documentary. Just substitute BCIT whenever gold is mentioned:

http://www.cbc.ca/player/Shows/Shows/Doc+Zone/ID/2380466502/

[mastaflash]

Rule 15c3-3 requires that "a broker or dealer shall promptly obtain and shall thereafter maintain the physical possession or control of all fully-paid and excess margin securities carried by a broker or dealer for the account of customers."

Possession and control is what it is all about. My broker knows it, and the day they found out I knew it, they stopped all correspondence, whether by phoen, e-mail, or post.

http://15c3-3.com/rule_15c3-3_-_the_basics


My broker will not identify who the party was they bought the shares from on my behalf. Are they protecting a competitor? Or did they even try to buy them? Where is the money I gave them for which I got nothing in return?

Anyways, delivering my worthless stock to me is going to cost them a lot more than they ever could have imagined.

[mastaflash]

Things are truly becoming unraveled for TDA now. Maybe you don't like the words 'naked short'. Perhaps you believe there is no such thing. If that is so, then answer me this: what is it exactly that is going on with TDA and others buying shares for their clients 8 years after they said they had already bought them?

This is truly a MOASS in the making, and I believe the only thing that can stop it now, is Congress or the President.

~700M shares needing to be covered. So far only ~250K have been covered, and the last price was 0.50. No public market required here. Brokers will have to go to the handful of 205 cert holders, or the company.

[mastaflash]

Court Compells TDAmeritrade to Deliver Share Certificates for Bancorp International Group Inc
A Bancorp International Group Inc (BCIT) shareholder wins case against TDAmeritrade for the delivery of his share certificates purchased in 2005

Carson City, NV (PRWEB) April 17, 2013

Records from the Magistrates Court of Mercer County West Virginia state that on April 15, 2013 in the case of Blankenship v TD Ameritrade, Case number 13-c-333, Judge Fowler ordered TDAmeritrade to deliver a certificate for the 170,000 BCIT shares which he had purchased through the defendant on August 17, 24 & 25 2005. This is confirmed by the judgement order attached to this release.
BCIT confirms previous statements that shares are available for delivery
Thomas Megas
CEO & President
Bancorp International Group Inc
http://www.prweb.com/releases/2013/4/prweb10642576.htm

[mastaflash]

Curious deletion from BCIT board. Seems harmless.

Removed By: IH Admin Reason: Off-Topic | Send PM To SevenTenEleven Replies(1) | Previous | Next
Posted by: SevenTenEleven
In reply to: Major_Bankz who wrote msg# 154887 Date:4/10/2013 10:43:13 AM
Post #154888 of 154890

BCIT - Waiting for final guidance regarding TDA case. I don;t want to comment without having the final and official ruling, but it appears that TDA is still slithering in the sand. remember, TDA and the other retail brokerage firms have become depositories for trillions of dollars worth of counterfeit electronic equity markers. Since these collaborating criminal entities have ALL of our money, they have much of the power and influence to keep it.

The parties truly fighting for shareholder rights will be victorious over those only pretending to be investor advocates.

[mastaflash]

I have come to believe that most trades in BCIT were ex-clearing.

[mastaflash]

In Aug 2005, I bought into a potential MOASS. We are closer to that now than ever we were.

Still think I'm a nut-job Janice?

[mastaflash]

This victory creates a huge precedent, and I expect flood of claims by BCIT holders now, who must surely see the light. THis could get VERY expensive for the brokers, unless they act fast. If they wait for an open market to cover, it could be disastrous. They need to act now to make BCIT beneficial holders whole.

Personally, I hope they wait for trading, and forced cover....;)

[mastaflash]

FINRA Arbitration Victory:

By its Order of January 2nd 2013 issued yesterday 1/9/13 (Arbitration Number 12-01838) Seth Barsky Chairperson Arbitration Panel FINRA ordered on behalf of Christopher Grabowski that TDAmeritrade, Inc at their expense must deliver to the Claimant within 90 days his due Stock Certificate for all his required shares in BCIT.

[mastaflash]

A good investment tip here:

https://www.homestreet.com/index.aspx?detect=yes

http://www.kplu.org/post/seattle-based-homestreet-ipo-success-story

[mastaflash]

http://www.rollingstone.com/politics/news/secret-and-lies-of-the-bailout-20130104

[mastaflash]

More DeCosta: The development stage yet to be cash flow positive biomedical companies are the perfect targets for NSS attacks. They have high monthly burn rates and there is no way they can become cash flow positive for many years due to how the FDA process works. Abusive naked short sellers can easily flood their share structures with failures to deliver (FTDs) that procreate the “accounting measures” known as “securities entitlements” that UCC Article 8 unfortunately made readily sellable due to the assumed short term nature of any delivery delay at the DTCC. All securities fraudsters have to do is to refuse to deliver that which they sell and a self-fulfilling prophecy can easily be accessed. As the readily sellable “securities entitlements” stack up the share price of the company under attack has to implode since the sum of the “supply” of readily sellable “shares” plus the “supply” of readily sellable “securities entitlements” gets artificially manipulated upwards. “Supply” and “demand” forces still interact to determine share prices through a process known as “price discovery” but these two variables are easily manipulated. The share price can easily be manipulated into a self-propagating death spiral. Non-cash flow positive biomeds like Dendreon can thus be forced to raise money to pay their expensive monthly burn rates at often steep discounts (due to the implied risk of financing a company whose share price is in a death spiral) to ever-decreasing share price levels. If they ever do survive their attack and become successful then their future earnings per share will be small because of the gazillions of shares they will have outstanding by the time they become cash flow positive. More mature cash flow positive corporations can always buy back and cancel their shares when their share price becomes ridiculously low. The Dendreons of the world don’t have this luxury. The crooks know that it would make no sense for Dendreon to sell shares at steep discounts to market and use that cash to buy back shares at market levels. It’s tough for the Dendreons of the world to sell a piece of their company for cash UNTIL their cancer cure is well proven which takes time and money and therefore dilution. The combination of a high monthly burn rate and the predictable inability to become cash flow positive for extended periods of time is what these criminals crave. The choice of going after companies with prospective cancer cures gives us all a little bit of insight into the hearts and souls (or lack thereof) of these crooks. Their recent targeting of a company that retrofits Humvees to better sustain the effects of IEDs used in Iraq to maim and kill our soldiers is equally appalling. The collateral damage involving the taking down of our entire financial system in order for these crooks to cash in on attacking certain banks perceived to be defenseless at the time was also very inspiring. Kudos to Patrick for the charts clearly showing the astronomic increase in the levels of FTDs right as the share prices of these targeted corporations fell off the cliff.

Continue reading at NowPublic.com: Mad Dog Madoff Steals 50 Billion, Gets Bail - Tip of the Iceberg | NowPublic News Coverage http://www.nowpublic.com/tech-biz/mad-dog-madoff-steals-50-billion-gets-bail-tip-iceberg#ixzz2E1XTscEO

[mastaflash]

Dr. Jim DeCosta: In the case of BCIT, it seems to be that there are two sets of books.

One set of books is kept by the corporation BCIT and the other by DTCC.

BCIT’s books show how many shares have been officially and legally issued, and DTCC’s books can show us how many shares of BCIT have been sold.

When it comes to brokerage statements that us common people receive monthly, there seems to be something similar once again to the existence of two sets of books.

Our brokerage statements say we hold stocks xyz long, yet it is very possible that the DTCC has a second set of books that show xyz shares are merely an electronic marker, a “securities entitlements” that has NOT been delivered, and does NOT exist in the corporation’s books of legally issued shares.

Because the DTCC hides its second set of books showing how many shares of stock for each corporation have been SOLD, corporations are being lied to and we the common people are being lied to.

The whole system is corrupted, and the SEC has become the protector of the this corrupt system.

[mastaflash]

Some DeCosta comments on BCIT situation I had not seen before. Notice the quantity of NS shares he mentions:

STUDYING THE COMMONALITIES BETWEEN THE VICTIMS OF MADOFF AND THOSE OF ABUSIVE NAKED SHORT SELLING (ANSS) FRAUDS

I am not doing any of the forensic work on the Madoff case so I am speaking as an outsider looking in. At the end of the day I believe this case will reveal a lot of the puzzle pieces that unconflicted SROs and unconflicted staff members and commissioners of the SEC can utilize to further their efforts towards providing “investor protection and market integrity” IF THEY ARE SO INCLINED.

The question I raise is what is held in common between the victims of the Madoff (alleged) fraud and the victims of naked short selling abuses. The answer I come up with is that both sets of victims got duped by month end brokerage statements that were then and are now very misleading. One could easily make the case that they have been made INTENTIONALLY misleading in both cases.

Both Bernie and Peter Madoff have attained a working knowledge of how our DTCC-administered clearance and settlement system works beyond compare. During the “comment period” for the proposed Reg SHO they filed a brilliant paper making their case for why market maker (MMs) should be gifted with special exemptions from the tenets of the proposed Reg SHO. They won their case and the exemption package became known as the “Madoff exception”.

In this paper they cited the now famous “Manning interpretation” as well as many of the aspects of the SEC’s and NASD’s “OHRs” or “Order Handling Rules”. They illustrated how when a buy order enters their brokerage side of the business they are willing to naked short sell into it within 1/100th of a second. They bragged of how they could “guarantee” that a client of theirs would get a “fill” on their order under various circumstances.

On the abusive naked short selling side of matters there is a small corporation with the symbol “BCIT” that has what appears at first glance to be credible evidence that at least 350 million naked short sold shares exist in their share structure with only 4.7 million shares legally “outstanding”. Their dealings with the DTCC are now famous to most pro-market reform advocates.

The investors in the $50 billion apparent “Ponzi” scheme run by Madoff led to believe that they were earning a healthy return of about 12% per annum and the purchasers of the naked short sold 350 million “shares/securities entitlements” led to believe that their brokerage firms were “holding long” these “securities were obviously hoodwinked by the monthly brokerage statements they were receiving. In the Madoff case it appears to have been grossly blatant but in the naked short selling case it was very cleverly concocted.

On a monthly brokerage statement the purchases made by an unknowing investor are referred to as “securities held long”. The first question that arises is are the mere “securities entitlements” resulting from the “failures to deliver” (FTDs) of those buying naked short sold shares actually “securities” because in reality in the “BCIT” case they could be more properly referred to as “evidences of fraud”. Unfortunately for investors much less financially sophisticated than the Madoffs of the world one definition of a “security” is an “evidence of indebtedness” which might indeed fit the bill for these “IOUs” we refer to as “securities entitlements”. Let’s put this into the “technically true but possibly misrepresentative” category.

The next question is are these incredibly damaging “securities entitlements” being “held long” by somebody and if so where are they being “held long”. One way to rephrase this question is can it be possible to “hold long” a “security” that doesn’t have a paper-certificated security in existence to justify its existence. Apparently in DTCC lingo “holding long” can be accomplished by issuing electronic book entry representations of failed delivery obligations with no paper-certificated representation whatsoever.

Thus “holding” might be representative of electrons flying through cyberspace as opposed to anything to do with being “held” in a vault somewhere as might be implied. Perhaps a less misrepresentative phraseology might be considered but then investors might start asking questions like what exactly did I get for my money. If they learned it was just a readily sellable and nonvoting “securities entitlement” that actually did damage to the prognosis for the investment made then the next question would obviously be then why did I pay the full retail price of a legitimate “share” with voting and other rights. A “securities entitlement” initially is basically an “accounting measure” denoting a failed delivery obligation. The original “contract” stated that I’ll deliver that which I’m selling by T+3 or “settlement date”.

Due to the existence of valid reasons for slight delays in making delivery an allowance had to be made for slightly delayed deliveries. After a certain period of time, however, these readily sellable “securities entitlements” become evidentiary of a fraud. This timeframe would correlate with when it becomes perfectly obvious that the seller had no intention whatsoever to deliver that which he sold under any supposed timeframe. Perhaps after 4 or 5 days past the previously agreed upon “settlement date” or “T+3” the entry on the brokerage statement should be converted to “incredibly damaging evidences of fraud flying through cyberspace that I got hoodwinked into paying too much for”.

Maybe the Madoff as well as the abusive naked short sellers’ “leg up” on their victims is the knowledge that investors never question the veracity of monthly brokerage statements with all of those official looking government logos and guarantees embossed.

http://www.deepcapture.com/bernard-madoff-the-mafia-and-naked-short-selling/

[mastaflash]

“What happens if a long investor unknowingly sells his/her long shares which are only “security entitlements” BEFORE the FTD is cured?”


DeCosta:

Assume that an NSCC participating clearing firm has 10 million Acme shares in its NSCC participant “shares account”. Let’s also assume that it sends out monthly statements “implying” that it is “holding long” 30 million shares of Acme for its clients. It is thus “naked short” 20 million shares.

If the phone rings and a client wants to sell his Acme purchases by default he will be determined to be one of the lucky ones that did get delivery of that which he purchased. That’s the beauty of “anonymous pooling” to cover up frauds. If there were a “run on the bank” scenario in which the purchasers of all 30 million Acme shares at that broker wanted to sell their shares simultaneously it still wouldn’t matter.

Since 90% of people hold their shares in “street name” because it’s so “handy” that broker could always borrow some from across the street and repay the borrowing later. The “fraternity brothers” at the DTCC take very good care of each other. I’ll post a blurb from book #9 in a second re: the tricky nature of “security entitlements”.

[mastaflash]

KEY CONCEPTS IN REGARDS TO ABUSIVE NAKED SHORT SELLING (ANSS) FRAUDS

By Dr. Jim DeCosta

1) The fraud known as abusive naked short selling (ANSS) went into high gear back when the DTC (Depository Trust Corporation) “volunteered” to act as the surrogate “legal owner” of all shares held in “street name” ostensibly to enhance the efficiency of the clearance and settlement process. Their nominee “Cede and Co.” became the “legal owner” or “owner of record” of all shares held in “street name” as referenced on the corporate transfer agent’s books.

2) This effectively blindfolded a corporation’s transfer agent from performing his “anti-counterfeiting policeman” role as “Cede and Co.” owned pretty much everything in sight and the TA was left with no visibility of the shenanigans going on behind the scenes at the secrecy-obsessed DTCC and their DTC and NSCC subdivisions.

3) Since the purchasers of shares were no longer the “legal owner” of that which they purchased they became relegated to being the mere “beneficial owners” of the securities purchased. “Cede and Co.” would “legally own” the shares for the benefit of (FBO) its “participating” clearing firm that in turn “owned” them FBO their client the investor. A “fiduciary” relationship was thus created between this surrogate “legal owner” and the “beneficial owner” that purchased the shares. Unfortunately for investors mere “beneficial owners” do not have the visibility of the behind the scenes actions at the NSCC like the “legal owners” enjoy. These “blindfolded” investors are forced to place their TRUST in the DTC to “act in good faith” and represent the interests of the purchasers of these shares while acting as a fiduciary in this surrogate “legal owner” capacity. History has now clearly shown us that neither the DTCC nor the DTC nor the NSCC nor many of their abusive “participating” market makers and clearing firms were up to this “acting in good faith” concept. The ability to re-route literally trillions of dollars of previously blindfolded investors’ money with very little risk of detection or meaningful penalties was just too tempting to pass up on.
4) The “beneficial owner” of securities was deemed by law to be what is referred to as a “security entitlement holder” as opposed to the “legal owner” of that which he purchased. What the investing public that hold their shares in “street name” often fail to comprehend is the tricky nature of legal “entitlements”.

5) The authors of UCC Article-8 wanted to send a “reminder” to the DTC “participants” and their nominee “Cede and Co.” that just because they were acting as the surrogate “legal owner” of all shares held in “street name” for efficiency purposes only they were never to LEVERAGE this form of public trust over the investors that they have the congressional mandate to protect. After all, it was the “security entitlement holders” that bought and paid for the shares (that may or may not have ever been delivered). As it turns out mere “security entitlement holders” have absolutely no clue as to whether or not that which they purchased ever did get delivered. The test begins; will abusive DTC participants try to LEVER the “legal owner” role and their superior view of the clearance and settlement system that the regulators and investing public entrusted them with?

6) UCC Article 8 made it clear that it was the investor clients of the various clearing firms making up the NSCC subdivision of the DTCC that were entitled “to exercise all of the rights and property interest that comprise the securities that they purchased” and not the NSCC participating clearing firms. The DTC promised that they would never think of LEVERAGING the fact that they were technically the “legal owner” of that which others purchased. Well, history seems to indicate otherwise as the “legal owner” of these securities ended up doing pretty much anything they wanted to with their “possession”.

7) UCC-8 clearly spelled out the various roles of the “legal owners” of securities versus those of the “security entitlement holders”. If the “entitlement holders” wanted to attain the “legal ownership” of that which they purchased all they had to do was to file an “entitlement order” demanding the delivery of the paper-certificated version of ownership (a share certificate) with their name inscribed on it. As the investors in corporations undergoing abusive naked short selling attacks will readily attest the DTCC often refuses to honor these “entitlement orders” in a timely fashion because to do so would often involve the NSCC management buying-in the delivery failures of their abusive bosses/participants. This process would drive share prices up and counter the share price depressant effect of “security entitlements” which those with massive preexisting naked short positions rely upon. The absolute refusal to execute buy-ins in order to service an “entitlement order” by the surrogate “legal owner” of shares obviously would be bordering on a criminal act. An unconflicted surrogate “legal owner” acting in a fiduciary capacity would obviously not facilitate the counterfeiting (via the NSCC’s SBP) of that which it has the mandate to “safeguard” and act as the “legal owner” of.
UCC Article-8-501 mandated that the clearing firms of investors that didn’t get delivery of the securities they purchased by “settlement date” (T+3) must nevertheless credit the investor’s account with “security entitlements”/IOUs/”long positions”/”phantom shares” representing the yet (if ever) to be delivered shares. Make a mental note as to the naïveté of this default assumption that ALL delivery failures on Wall Street involve securities that are about to arrive any second due to an unforeseeable but “legitimate” delay.

9) UCC Article -8 also mandated that the clearing firms holding these “security entitlements” treat their clients/”entitlement holders” as being entitled to exercise ALL of the rights and property interest that comprise the security even though they never got delivered and even though that which was sold may have never existed in the first place. OOPS!

10) Note the insanity here IF those shares sold whose delivery was theoretically “delayed” weren’t “delayed” at all but never existed in the first place and are not about to “arrive any second”. If that were to happen it’s too late because the purchaser of these “nonexistent” shares i.e. their “entitlement holder” already got permission to sell them as if they did arrive due to the wording used in 8-501.

11) Faulty presumptions about the imminence of delivery now allowed “counterfeit” shares to enter the system. The door was now wide open for securities fraudsters to take advantage of this “default assumption” regarding an imminent delivery and establish massive naked short positions by simply refusing to deliver the (nonexistent) securities they previously sold and thereby literally drown U.S. corporations with share price depressing “security entitlements” while claiming to be “injecting” much needed “liquidity”.

[mastaflash]

Ponder this:

- 300M+ NS shares via DTC clearing...but another 300M+ NS post freeze. These ex-clearing transactions are transparent, so we can't see them, and the SROs and SEC can't see them. They are securities arrangements between brokers that allow naked short positions to exist forever. These are things your broker will never talk to you about, and my broker did all they could to obfuscate these facts. You see, the pure beauty of ex-clearing is that one of the counter parties must have physical certs. Ex-clearing means exactly what it says...outside electronic clearing services. Now the securities contracts are legally binding, and it is assumed that all pertinent SEA and FINRA rules are observed within that contract, but the reality is, none of them are actually backed by certificates, and that can now be proven. These contracts also represent a contingent liability for one of the parties. As BCIT value increases, the contract will break, and one counter party will force a buy in on the other. It will be very interesting to watch, no matter what.

[mastaflash]

Summary: Shareholders of record are to include beneficial holders, where issuer is aware that beneficial shareholders remain so for the purpose of evading 12g requirements for registration, and thus in violation of 12g5-1(b)(3).

[mastaflash]

From the discussion:
Conclusion:
The current enforcement tools available to the Commission are adequate to enforce the anti-evasion provision of Rule 12g5-1. While difficult to detect at the outset, once the staff is alerted to a potential circumvention of Section 12(g), the current authority to investigate potential violations of the securities laws provides the staff with a wide variety of tools to gather facts. The increase in the Section 12(g) threshold from 500 holders of record to 2000 included in the JOBS 34 Act may reduce the motivation of issuers and others to engage in circumvention efforts, although it is possible that the requirement to register if the number of non-accredited holders of record exceeds 500 may mitigate that effect. Since those changes were just recently enacted, time will need to pass before the impact, including the impact on possible circumvention efforts, can be assessed. We therefore have no particular legislative recommendations regarding enforcement tools relating to Rule 12g5-1(b)(3) at this time.