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Here's who's next joesixpack ...
July 28, 2004. (FinancialWire) The Depository Trust and Clearing Corp. has been sued again, this time along with Anthony Elgindy, Schwab Capital Markets (NYSE: SCH), Ameritrade Holding Corp. (NASDAQ: AMTD), ETrade Group, Inc. (NYSE: ET), and Bear Stearns (NYSE: BSC), for a total of $49 million.
In other StockGate activities, the NASD has expelled Ryan & Company, LP (RYCO) of West Conshohoken, PA, for failure to cooperate in an ongoing investigation into whether Ryan and the firm engaged in a widespread scheme of impermissible short selling activity on behalf of three hedge fund clients, and Track Data Securities of Brooklyn has been censured and fined $15,000 for accepting customer short sale orders in certain securities and, for each order, “failing to
make/annotate an affirmative determination that the firm would receive delivery of the security on behalf of the customer or that the firm could borrow the security on behalf of the customer for delivery by settlement date.”
The lawsuit, #04-CV-80403, Capece v. Elgindy, et al, was filed in the Southern District of Florida in West Palm Beach. The plaintiff is Louis R. Capece Jr., represented by Robert Charles Stone. It has been assigned to Judge Kenneth L. Ryskamp and is expected to be heard by a jury ....
http://www.investrend.com/articles/defaultFinancialWire.asp?level=160
Clancy's Judgment Against Basher Upheld
Business Wire - July 26, 2004 12:19
DENVER, Jul 26, 2004 (BUSINESS WIRE) -- Clancy Systems International, Inc. (OTCBB:CLSI), a leading developer of parking enforcement solutions, was notified on Friday that it's judgment against a basher who had harassed the company for almost three years at various chat room sites, including Raging Bull, was upheld by the Massachusetts Supreme Court. The Company intends to pursue the judgment award.
In a case originally filed with the Superior Court of the Trial Court of the Commonwealth of Massachusetts in September of 2000, the Company sought the identities of John Does 1-10 and filed a claim for damages. This was done as a result of an ongoing barrage of false, defamatory and slanderous remarks about the Company, its officers, its employees and shareholders that were made on Raging Bull and other chat room sites. The persons who perpetrated these falsehoods did so by posting their remarks under alias identities. Once the true identities were disclosed, the individuals were notified to cease and desist their actions. One individual continued his activities which included profanities and death threats. As the postings by this individual did not cease, the Company pursued the case.
The Company was awarded a judgment against the defendant on October 31, 2001. The defendant then began a process of filing appeals through the Massachusetts Court System. The final appeal to the Massachusetts Supreme Court was filed in June 2004.
Throughout this lengthy process, the defendant never provided proof that he at any time owned shares of the Company. He never contacted the Company directly to verify information. It appears that this was a recreational activity. There were over 5,000 posts during the period, and on some days the posts were continual for 10 to 12 hours.
While the Company feels the verdict is just, Company officials expressed sadness that they were forced to take this matter to the courts in the first place. "It has been a terrible ordeal for the Company and its shareholders. We have spent a great deal of time on this matter and wasted valuable Company financial resources. While we understand that a forum like Raging Bull offers an opportunity for favorable and unfavorable comments about publicly held companies, this individual violated all terms of service and went beyond the acceptable rules for posting," stated L. Wolfson, a Company spokesperson.
Xcentrix, an interesting thing to note on that claims map is the area of interest is in the southern half of the Province of Saskatchewan .. mostly farmland.
http://www.angelfire.com/mac2/mach1cobra/images/CMKXMap2.JPG
Pulling certs sure does work ...
But isn't that only if the system as a whole works? If you try to pull certs and the brokers don't follow the rules and buy-in to get those certs, will it still work?
Was your experience with the OTC or Pinks?
Me too thinkerman ... together they build weight.
This is alarming ... if it's true. Everyone should read this!
July 23, 2004. (FinancialWire) In a scathing commentary, the founder of InvestigatetheSEC.com, David Patch, a wronged investor who has become a leader in the fight against illegal naked short selling, has raised the issue of regulatory failures in the case of Riggs National Corp. (NASDAQ: RIGS) to those associated with StockGate.
StockGate has embroiled hundreds of companies, millions of investors, billions of dollars and dozens of brokerages such as FleetBoston (NYSE: FBF), Goldman, Sachs & Co. (NYSE: GS), and Charles Schwab (NYSE: SCH), which has just announced it will exit the market-making business. "It would not be Washington Politics if we are not a daily dose of 'Do as I say not as I do'," said Patch. "This time, the contradictions lie with Senator Carl Levin and his admonishment of Federal Banking Regulators as it pertains to the Riggs Bank scandal. Patch quotes a Dow Jones news report:
"When a bank such as Riggs operates with such reckless abandon and federal regulators are so ineffectual in their oversight, it does little to inspire confidence in our country's determination to stop money laundering, especially when that bank is located here in our nation's capital,' Levin said.
In the 113-page report, the minority staff of the Senate Governmental Affairs Committee's Permanent Subcommittee on Investigations urges bank regulators to bolster enforcement of anti-money laundering laws to prevent future oversight lapses.
"The failure to take quick and forceful enforcement action in the Riggs matter is not an isolated case," states the report, which details the findings of the panel's investigation. "It is symptomatic of uneven and, at times, ineffective enforcement by all federal bank regulators of bank compliance with their anti-money laundering obligations," the report said. Patch noted that, "suddenly it would appear that the Senator from Michigan is worried about the ill effects of money laundering and failed regulatory attentiveness. If only he would walk across the hall to the Senate Banking Committee and address those concerns with the committee.
It is the Senate Banking Committee that has authorized the Securities and Exchange Commission to continue to allow our nations wealthiest Wall
Street firms to continue to allow settlement failures in our securities to be used to launder money for many criminal elements including terrorists and organized crime.
"Recently the SEC passed a reform package, regulation SHO, in which they admitted that settlement failures can exceed the entire public float of companies. The SEC also admitted that 4% of all publicly traded companies have settlement failure abuses. The terms of the reform package for this abuse, however, has allowed the settlement failures of the past to remain unsettled indefinitely and the incorporation of changes to be pushed out another 6 months. All of this is in direct violation of Section 17A of the Congressional Securities Act of 1934.
"Unfortunately, when the Act was drafted it did not address the conflict of interest within Congress between Investor protection and campaign contributions by Wall Street.
"Settlement failures are tied to money laundering through a well documented paper trail. In Canada the British Columbia Securities Commission (BCSC) has taken on a case against Pacific International (PI) in which the BSCS claims that PI helped launder money into the US markets for US Organized Crime families. British Columbia Securities director Sasha Angus had these statements to make during the hearings ( http://www.rgm.com/articles/cornucopiaofcrooks.html) :
"Pacific International was little more than a massive stock and money laundering conduit which attracted and serviced scores of criminals, securities violators and other dubious American clients to circumvent American regulations and laws.
"According to a BCSC analysis, the commissions earned by Pacific International from accounts trading in U.S. stocks grew from $2.3-million in 1993 to about $19.2-million by Dec. 31, 1999, including trading done on a spread basis by brokers Dirk Rachfall and Michael Patterson, who were lured to Seattle by the Federal Bureau of Investigation, arrested, convicted and jailed for dealing with other Mafia-linked clients.
"The last major focus of alleged abuses was in the field of short selling. 'Many of P.I.'s U.S. clients were heavily involved in short sales. Staff reviewed ten particularized accounts for short sales. The total dollar amount of the month-end short positions in these accounts was approximately $72-million. In the month of June, 1999, alone there were 669 short sale trades totaling over $23-million,' Patch stated that Angus told the hearing.
"The evidence will show that the short sales done in U.S. markets from the P.I. accounts were naked shorts. That is, they were not covered in any way at the time the short sale was entered into. The evidence will also show that short selling of that nature is illegal in the U.S. and was a major reason why many of P.I.'s clients were trading at P.I. They were there, to the knowledge of P.I., to trade into the U.S. in defiance of American trading rules. They assisted knowingly in a breach of American trading rules. P.I. condoned that and grew fat on it."
The fact is these shares remain uncovered as they rest on our Wall Street books as unsettled trades. Like in the Riggs case, this crime is not isolated to simply one firm. Our US financial firms helped perpetrate these violations by failing to force settlement from the short seller and today, the Securities Regulators and the Senate Banking Commission are both willing to let it fly.
"Wall Street was given a free pass to their assumed liabilities. The cost of this abuse is immeasurable. The money laundering is not limited to organized crime but also terrorism. The SEC and Congress are fully aware of this fact. Therefore, losses are beyond monetary and into the loss of human lives. Is that to be considered acceptable collateral damage to protect these Wall Street firms who made a killing in years past in trade commissions on trades they never settled?
"Pacific International had its commissions grow to nearly $20 Million in 1999. An equal commission was taking place across the border in the US to those who were taking the trades executed by Pacific International.
"The Senate Banking Committee has the responsibility of oversight over the SEC. That oversight is supposed to be guided by the Securities Act of 1934 drafted by former Congressman. Today, with clear verbiage in the Act to address the need for "prompt and accurate clearance and settlement of trades" for the safety of the investor and the industry the present oversight committee is willing to forgo that law to protect those that aided in the crime in the first place.
"Only they can tell us why. "Senator Levin was clear in his message that regulatory failures exist and that changes were needed. He was talking about banking regulations and he appeared to be one willing to force change. For me personally, I would hope that the senator would walk across the hallways to his colleagues in the SEC Oversight Committees and explain to them the impacts these failures have on our economy, our markets, and our reputation as a nation.
"The Senate cannot deny the existence of this abuse based on the data already provided. To ignore it now, and to play politics with American lives, is inexcusable. There is no justifiable reason to allow the Wall Street firms to continue to manipulate our investments by failing to settle these abusive settlement failures. These firms took the commissions on these trades and have failed to close out the contract as they were paid a commission to do.
"The financial risk of their actions must now be addressed as opposed to placing that risk on the unsuspecting public," Patch concluded.
As noted, Charles Schwab & Co. said it is exiting the market-making business. It is one of several market makers that have been the subject of accusations and/or legal entanglements over naked shorting allegations and issues.
The company had said it is either the number one or number two market-maker in more than half of all of NASDAQ's (OTCBB: NDAQ) listed stocks.
Recently observers were surprised to find a comment letter submitted to the SEC by Mike Alexander, Senior VP of Charles Schwab, that admits outright that brokerages regularly ignore rules and regulations, saying it is not rules that need to be written; it is changes in behavior that is needed.
The comments were directed towards proposed changes in the U.S. settlement system, but could easily apply to other regulations as well. "Improvements in the U.S. settlement system will only be truly achieved if and when regulations are rationalized to ensure that all market participants are held accountable for compliance. For example, the industry has struggled with the issue of institutional trade affirmation for quite some time now. While the benefits to the clearance and settlement system are self-evident, Buy-Side firms and Custodian banks have been resistant to make those changes that provide for same-day trade confirmation / affirmation and assurance of trade settlement," said Alexander. "Schwab opposes the notion that securities intermediaries such as broker-dealers be required to police compliance," he stated. "The NYSE and other SROs have had trade affirmation rules on their books for some time. However, such rules have not been effective in changing the behavior of Buy-Side firms or their custodians; nor do the rules provide assurance that the affirmed trade will settle.
"Recognition of this fact is evidence that changes to the settlement cycle not only require overhauling systems, but also changing behavior.
We believe that only by holding all market participants directly accountable for making required affirmations will the necessary changes to behavior," he stated at http://www.sec.gov/rules/concept/s71304/charlesschwab061604.pdf .
In a June 23 release, the SEC stated it has put into place Rule 202(T), which establishes procedures to allow the Commission to temporarily suspend the operation of the current "tick" test in Rule 10a-1, and any short sale price test of any exchange or national securities association, for specified securities.
Through a separate order, the Commission will suspend, on a pilot basis for a period of one-year, the tick test provision of paragraph (a) of Rule 10a-1, and any short sale price test of any exchange or national securities association, for approximately one-third of stocks in the Russell 3000 index.
The order also will suspend, on a pilot basis for a period of one year, the tick test provision of paragraph (a) of Rule 10a-1 for short sales executed in any security included in the Russell 1000 index after 4:15 p.m. Eastern, and all other securities after the close of the consolidated tape, and until the open of the consolidated tape the next day.
The pilot will commence on January 3, 2005 to permit broker-dealers and self-regulatory organizations to make the necessary programming adjustments.
The Commission deferred consideration of the proposal to replace the current "tick" test of Rule 10a-1 with a new uniform bid test. The Commission could reconsider any further action on these proposals after the completion of the pilot.
Rule 203, which will incorporate current Rule 10a-2 and will create a uniform Commission rule requiring broker-dealers, prior to effecting short sales in all equity securities, to "locate" securities available for borrowing.
There will be limited exceptions from the locate requirement, including for short sales by registered market makers in connection with bona-fide market making.
Rule 203 also imposes additional requirements on designated "threshold securities." Rule 203 defines a threshold security to mean an equity security for which there is an aggregate fail to deliver position for five consecutive settlement days at a registered clearing agency of 10,000 shares or more and that is equal to at least 0.5% of the issue's total shares outstanding.
Where a clearing agency participant has a fail to deliver position in threshold securities that persists for ten consecutive days after settlement, the participant must take action to close out the position.
Until the position is closed out, the participant, and any broker-dealer for which it clears transactions, may not effect further short sales in the particular threshold security without borrowing or entering into a bona fide arrangement to borrow the security.
Rule 203 will become effective 30 days after publication with a compliance date of January 3, 2005, to permit firms to make programming and procedural adjustments.
Rule 200, which among other things, will redesignate current Rule 3b-3 with some modifications to define ownership and aggregation of securities positions, and include a requirement to mark all sell orders in all equity securities. Rule 200 will become effective 30 days after
publication.
The Commission also adopted amendments to Rule 105 of Regulation M to remove the current shelf offering exception, and issued interpretive guidance addressing sham transactions designed to evade the rule.
The amendment applies to short sales effected within five days prior to the pricing of a shelf offering. Such short sales may not be covered with offering securities purchased from an underwriter or other broker-dealer participating in the offering.
The Rule 105 amendments will be effective 30 days after publication in the Federal Register, and the interpretive guidance will be effective upon such publication.
Opponents of naked short selling were, however, quick to denounce the provision that allows market makers an exemption, and many market observers said that the SEC should provide a public list of companies that fall into the "threshold security" category.
"The SEC claims that the number of companies involved in this 'threshold security' category is 4% of all publicly traded companies. If in fact it is that small the process is certainly manageable," said the website InvestigatetheSEC.com at http://www.investigatethesec.com "It is also the right of every issuer, in protecting their business and their investors to know the status of their stock trading." Some were discussing whether the SEC can keep such information private under the Freedom of Information Act.
The marketplace is already upset over promises by the Berlin Stock Exchange, since broken, that it would delist any company upon request. "Please understand that cessation of trading in the shares of XRAYMEDIA Inc. (OTCBB: XRYM) is not possible," the exchange told one such requester.
It's not just U.S. companies such as Whistler Investments (OTCBB: WHIS), Sonoran Energy (OTCBB: SNRN), Celsion Corporation (AMEX: CLN), and eLinear Inc. (AMEX: ELU) or Israeli companies that have had serious concerns about their unannounced and unathrorized listings on the Berlin-Bremen Stock Exchange.
Apparently, some 150 British companies are protesting the same fate. A number of UK-listed companies have demanded a London Stock Exchange investigation after they found that their shares are being traded.
Meanwhile, Whistler, Sonoran and eLinear have announced they have successfully secured their delistings, and the U.S. Securities and Exchange Commission has rescheduled its open hearing to consider the adoption of amendments to Regulation Sho to July 23 at 9:30 a.m. The announcement is at http://www.sec.gov/news/digest/dig061504.txt
According to the London Money Telegraph, "several companies believe the market for their shares has been distorted and that they have fallen in value after trading started on the Berlin-Bremen exchange.
"Some smaller companies, whose shares are lightly traded in London, fear the Berlin market has been used by speculators to short-sell their shares."
The Telegraph said the number of companies are thought to be as high as 150, including even "larger companies" such as Matalan (OTC: MATNF) and Halfords. Mladen Ninkov, the chairman of Aim-listed Griffin Mining (OTC: GFNMF), was quoted as saying: "We were put on the Berlin market without our knowledge by a German broker and now we've got about 8m shares out in a short sale. It is horrifying - that is about 4 per cent of the company and it is forcing the price down."
A spokesman for the London Stock Exchange said: "If there is evidence of market abuse we would refer that on to the appropriate authorities."
Whistler said that according to its transfer agent records, "we have 5,504,680 shares held by DTC, but the ADP broker search indicates of 6,217,458 shares being reported by broker/dealers as being held on behalf of their customers, indicating a short position of more than 700,000 shares. A summary report can be viewed at http://www.whistlerinvestments.com/shorts.html .
"We have therefore commenced work with DTC for a formal review of the reported excessive broker/dealer holdings of our stock so that we can conduct our corporate affairs properly in view of our planned stockholders meeting and other upcoming corporate matters. We again advise our stockholders make sure that they receive delivery of any shares that they purchase, and also that their stock is not being borrowed without authorization.
Holly Roseberry, President of Whistler Investments, states "We intend to get to the bottom of the excessive short position and bring stability back into the trading of our stock. We're happy to say that we have 5,133 stockholders and we expect all our stockholders to benefit from the shorters having to cover their short positions."
FinancialWire has reported on the disclosure that "Dateline," the investigatory TV program aired by General Electric's (NYSE: GE) NBC unit, has purportedly been preparing a blockbuster expose of "Stockgate" (see separate story at http://www.financialwire.net).
It's very difficult if not impossible for them to do with an established substantial stock that is widely distributed and/or trades a lot .. unless they're the cause of it.
That's why they usually get into the OTC and the Pinks.
It certainly is worth revisiting Zen .. I saw it first posted with attributionon another forum. Great DD !!!
But mmayr ... doesn't this look like a manipulated stock to you over the past 36 months?
http://www.stockscores.com/index.asp
The manipulators accumulate huge quantities .. pump it up like in late 1999 ... unload it at the top and sell until they have none left ... then short it all the way down until there's no stock left to borrow ... then naked short it so as to drive the company into bankruptcy and never cover.
That's my opinion.
http://www.investigatethesec.com/
I find this quite alarming ... if it's true.
July 23, 2004. (FinancialWire) In a scathing commentary, the founder of InvestigatetheSEC.com, David Patch, a wronged investor who has become a leader in the fight against illegal naked short selling, has raised the issue of regulatory failures in the case of Riggs National Corp. (NASDAQ: RIGS) to those associated with StockGate.
StockGate has embroiled hundreds of companies, millions of investors, billions of dollars and dozens of brokerages such as FleetBoston (NYSE: FBF), Goldman, Sachs & Co. (NYSE: GS), and Charles Schwab (NYSE: SCH), which has just announced it will exit the market-making business. "It would not be Washington Politics if we are not a daily dose of 'Do as I say not as I do'," said Patch. "This time, the contradictions lie with Senator Carl Levin and his admonishment of Federal Banking Regulators as it pertains to the Riggs Bank scandal. Patch quotes a Dow Jones news report:
"When a bank such as Riggs operates with such reckless abandon and federal regulators are so ineffectual in their oversight, it does little to inspire confidence in our country's determination to stop money laundering, especially when that bank is located here in our nation's capital,' Levin said.
In the 113-page report, the minority staff of the Senate Governmental Affairs Committee's Permanent Subcommittee on Investigations urges bank regulators to bolster enforcement of anti-money laundering laws to prevent future oversight lapses.
"The failure to take quick and forceful enforcement action in the Riggs matter is not an isolated case," states the report, which details the findings of the panel's investigation. "It is symptomatic of uneven and, at times, ineffective enforcement by all federal bank regulators of bank compliance with their anti-money laundering obligations," the report said. Patch noted that, "suddenly it would appear that the Senator from Michigan is worried about the ill effects of money laundering and failed regulatory attentiveness. If only he would walk across the hall to the Senate Banking Committee and address those concerns with the committee.
It is the Senate Banking Committee that has authorized the Securities and Exchange Commission to continue to allow our nations wealthiest Wall
Street firms to continue to allow settlement failures in our securities to be used to launder money for many criminal elements including terrorists and organized crime.
"Recently the SEC passed a reform package, regulation SHO, in which they admitted that settlement failures can exceed the entire public float of companies. The SEC also admitted that 4% of all publicly traded companies have settlement failure abuses. The terms of the reform package for this abuse, however, has allowed the settlement failures of the past to remain unsettled indefinitely and the incorporation of changes to be pushed out another 6 months. All of this is in direct violation of Section 17A of the Congressional Securities Act of 1934.
"Unfortunately, when the Act was drafted it did not address the conflict of interest within Congress between Investor protection and campaign contributions by Wall Street.
"Settlement failures are tied to money laundering through a well documented paper trail. In Canada the British Columbia Securities Commission (BCSC) has taken on a case against Pacific International (PI) in which the BSCS claims that PI helped launder money into the US markets for US Organized Crime families. British Columbia Securities director Sasha Angus had these statements to make during the hearings ( http://www.rgm.com/articles/cornucopiaofcrooks.html) :
"Pacific International was little more than a massive stock and money laundering conduit which attracted and serviced scores of criminals, securities violators and other dubious American clients to circumvent American regulations and laws.
"According to a BCSC analysis, the commissions earned by Pacific International from accounts trading in U.S. stocks grew from $2.3-million in 1993 to about $19.2-million by Dec. 31, 1999, including trading done on a spread basis by brokers Dirk Rachfall and Michael Patterson, who were lured to Seattle by the Federal Bureau of Investigation, arrested, convicted and jailed for dealing with other Mafia-linked clients.
"The last major focus of alleged abuses was in the field of short selling. 'Many of P.I.'s U.S. clients were heavily involved in short sales. Staff reviewed ten particularized accounts for short sales. The total dollar amount of the month-end short positions in these accounts was approximately $72-million. In the month of June, 1999, alone there were 669 short sale trades totaling over $23-million,' Patch stated that Angus told the hearing.
"The evidence will show that the short sales done in U.S. markets from the P.I. accounts were naked shorts. That is, they were not covered in any way at the time the short sale was entered into. The evidence will also show that short selling of that nature is illegal in the U.S. and was a major reason why many of P.I.'s clients were trading at P.I. They were there, to the knowledge of P.I., to trade into the U.S. in defiance of American trading rules. They assisted knowingly in a breach of American trading rules. P.I. condoned that and grew fat on it."
The fact is these shares remain uncovered as they rest on our Wall Street books as unsettled trades. Like in the Riggs case, this crime is not isolated to simply one firm. Our US financial firms helped perpetrate these violations by failing to force settlement from the short seller and today, the Securities Regulators and the Senate Banking Commission are both willing to let it fly.
"Wall Street was given a free pass to their assumed liabilities. The cost of this abuse is immeasurable. The money laundering is not limited to organized crime but also terrorism. The SEC and Congress are fully aware of this fact. Therefore, losses are beyond monetary and into the loss of human lives. Is that to be considered acceptable collateral damage to protect these Wall Street firms who made a killing in years past in trade commissions on trades they never settled?
"Pacific International had its commissions grow to nearly $20 Million in 1999. An equal commission was taking place across the border in the US to those who were taking the trades executed by Pacific International.
"The Senate Banking Committee has the responsibility of oversight over the SEC. That oversight is supposed to be guided by the Securities Act of 1934 drafted by former Congressman. Today, with clear verbiage in the Act to address the need for "prompt and accurate clearance and settlement of trades" for the safety of the investor and the industry the present oversight committee is willing to forgo that law to protect those that aided in the crime in the first place.
"Only they can tell us why. "Senator Levin was clear in his message that regulatory failures exist and that changes were needed. He was talking about banking regulations and he appeared to be one willing to force change. For me personally, I would hope that the senator would walk across the hallways to his colleagues in the SEC Oversight Committees and explain to them the impacts these failures have on our economy, our markets, and our reputation as a nation.
"The Senate cannot deny the existence of this abuse based on the data already provided. To ignore it now, and to play politics with American lives, is inexcusable. There is no justifiable reason to allow the Wall Street firms to continue to manipulate our investments by failing to settle these abusive settlement failures. These firms took the commissions on these trades and have failed to close out the contract as they were paid a commission to do.
"The financial risk of their actions must now be addressed as opposed to placing that risk on the unsuspecting public," Patch concluded.
As noted, Charles Schwab & Co. said it is exiting the market-making business. It is one of several market makers that have been the subject of accusations and/or legal entanglements over naked shorting allegations and issues.
The company had said it is either the number one or number two market-maker in more than half of all of NASDAQ's (OTCBB: NDAQ) listed stocks.
Recently observers were surprised to find a comment letter submitted to the SEC by Mike Alexander, Senior VP of Charles Schwab, that admits outright that brokerages regularly ignore rules and regulations, saying it is not rules that need to be written; it is changes in behavior that is needed.
The comments were directed towards proposed changes in the U.S. settlement system, but could easily apply to other regulations as well. "Improvements in the U.S. settlement system will only be truly achieved if and when regulations are rationalized to ensure that all market participants are held accountable for compliance. For example, the industry has struggled with the issue of institutional trade affirmation for quite some time now. While the benefits to the clearance and settlement system are self-evident, Buy-Side firms and Custodian banks have been resistant to make those changes that provide for same-day trade confirmation / affirmation and assurance of trade settlement," said Alexander. "Schwab opposes the notion that securities intermediaries such as broker-dealers be required to police compliance," he stated. "The NYSE and other SROs have had trade affirmation rules on their books for some time. However, such rules have not been effective in changing the behavior of Buy-Side firms or their custodians; nor do the rules provide assurance that the affirmed trade will settle.
"Recognition of this fact is evidence that changes to the settlement cycle not only require overhauling systems, but also changing behavior.
We believe that only by holding all market participants directly accountable for making required affirmations will the necessary changes to behavior," he stated at http://www.sec.gov/rules/concept/s71304/charlesschwab061604.pdf .
In a June 23 release, the SEC stated it has put into place Rule 202(T), which establishes procedures to allow the Commission to temporarily suspend the operation of the current "tick" test in Rule 10a-1, and any short sale price test of any exchange or national securities association, for specified securities.
Through a separate order, the Commission will suspend, on a pilot basis for a period of one-year, the tick test provision of paragraph (a) of Rule 10a-1, and any short sale price test of any exchange or national securities association, for approximately one-third of stocks in the Russell 3000 index.
The order also will suspend, on a pilot basis for a period of one year, the tick test provision of paragraph (a) of Rule 10a-1 for short sales executed in any security included in the Russell 1000 index after 4:15 p.m. Eastern, and all other securities after the close of the consolidated tape, and until the open of the consolidated tape the next day.
The pilot will commence on January 3, 2005 to permit broker-dealers and self-regulatory organizations to make the necessary programming adjustments.
The Commission deferred consideration of the proposal to replace the current "tick" test of Rule 10a-1 with a new uniform bid test. The Commission could reconsider any further action on these proposals after the completion of the pilot.
Rule 203, which will incorporate current Rule 10a-2 and will create a uniform Commission rule requiring broker-dealers, prior to effecting short sales in all equity securities, to "locate" securities available for borrowing.
There will be limited exceptions from the locate requirement, including for short sales by registered market makers in connection with bona-fide market making.
Rule 203 also imposes additional requirements on designated "threshold securities." Rule 203 defines a threshold security to mean an equity security for which there is an aggregate fail to deliver position for five consecutive settlement days at a registered clearing agency of 10,000 shares or more and that is equal to at least 0.5% of the issue's total shares outstanding.
Where a clearing agency participant has a fail to deliver position in threshold securities that persists for ten consecutive days after settlement, the participant must take action to close out the position.
Until the position is closed out, the participant, and any broker-dealer for which it clears transactions, may not effect further short sales in the particular threshold security without borrowing or entering into a bona fide arrangement to borrow the security.
Rule 203 will become effective 30 days after publication with a compliance date of January 3, 2005, to permit firms to make programming and procedural adjustments.
Rule 200, which among other things, will redesignate current Rule 3b-3 with some modifications to define ownership and aggregation of securities positions, and include a requirement to mark all sell orders in all equity securities. Rule 200 will become effective 30 days after
publication.
The Commission also adopted amendments to Rule 105 of Regulation M to remove the current shelf offering exception, and issued interpretive guidance addressing sham transactions designed to evade the rule.
The amendment applies to short sales effected within five days prior to the pricing of a shelf offering. Such short sales may not be covered with offering securities purchased from an underwriter or other broker-dealer participating in the offering.
The Rule 105 amendments will be effective 30 days after publication in the Federal Register, and the interpretive guidance will be effective upon such publication.
Opponents of naked short selling were, however, quick to denounce the provision that allows market makers an exemption, and many market observers said that the SEC should provide a public list of companies that fall into the "threshold security" category.
"The SEC claims that the number of companies involved in this 'threshold security' category is 4% of all publicly traded companies. If in fact it is that small the process is certainly manageable," said the website InvestigatetheSEC.com at http://www.investigatethesec.com "It is also the right of every issuer, in protecting their business and their investors to know the status of their stock trading." Some were discussing whether the SEC can keep such information private under the Freedom of Information Act.
The marketplace is already upset over promises by the Berlin Stock Exchange, since broken, that it would delist any company upon request. "Please understand that cessation of trading in the shares of XRAYMEDIA Inc. (OTCBB: XRYM) is not possible," the exchange told one such requester.
It's not just U.S. companies such as Whistler Investments (OTCBB: WHIS), Sonoran Energy (OTCBB: SNRN), Celsion Corporation (AMEX: CLN), and eLinear Inc. (AMEX: ELU) or Israeli companies that have had serious concerns about their unannounced and unathrorized listings on the Berlin-Bremen Stock Exchange.
Apparently, some 150 British companies are protesting the same fate. A number of UK-listed companies have demanded a London Stock Exchange investigation after they found that their shares are being traded.
Meanwhile, Whistler, Sonoran and eLinear have announced they have successfully secured their delistings, and the U.S. Securities and Exchange Commission has rescheduled its open hearing to consider the adoption of amendments to Regulation Sho to July 23 at 9:30 a.m. The announcement is at http://www.sec.gov/news/digest/dig061504.txt
According to the London Money Telegraph, "several companies believe the market for their shares has been distorted and that they have fallen in value after trading started on the Berlin-Bremen exchange.
"Some smaller companies, whose shares are lightly traded in London, fear the Berlin market has been used by speculators to short-sell their shares."
The Telegraph said the number of companies are thought to be as high as 150, including even "larger companies" such as Matalan (OTC: MATNF) and Halfords. Mladen Ninkov, the chairman of Aim-listed Griffin Mining (OTC: GFNMF), was quoted as saying: "We were put on the Berlin market without our knowledge by a German broker and now we've got about 8m shares out in a short sale. It is horrifying - that is about 4 per cent of the company and it is forcing the price down."
A spokesman for the London Stock Exchange said: "If there is evidence of market abuse we would refer that on to the appropriate authorities."
Whistler said that according to its transfer agent records, "we have 5,504,680 shares held by DTC, but the ADP broker search indicates of 6,217,458 shares being reported by broker/dealers as being held on behalf of their customers, indicating a short position of more than 700,000 shares. A summary report can be viewed at http://www.whistlerinvestments.com/shorts.html .
"We have therefore commenced work with DTC for a formal review of the reported excessive broker/dealer holdings of our stock so that we can conduct our corporate affairs properly in view of our planned stockholders meeting and other upcoming corporate matters. We again advise our stockholders make sure that they receive delivery of any shares that they purchase, and also that their stock is not being borrowed without authorization.
Holly Roseberry, President of Whistler Investments, states "We intend to get to the bottom of the excessive short position and bring stability back into the trading of our stock. We're happy to say that we have 5,133 stockholders and we expect all our stockholders to benefit from the shorters having to cover their short positions."
FinancialWire has reported on the disclosure that "Dateline," the investigatory TV program aired by General Electric's (NYSE: GE) NBC unit, has purportedly been preparing a blockbuster expose of "Stockgate" (see separate story at http://www.financialwire.net).
Ericson … This might help … 4th para down.
" ... The typical sequence of events we witness time and time again goes something like this. A stock is trading at let's say $5 and a certain group of Wall Street DTCC participants and their co-conspirators judge that the $5 level is a bit too generous for this particular stock. Perhaps they, in their infinite wisdom, think that the $2 level would be more appropriate. They then sell, let's say, one million nonexistent shares at $5 into one million shares of real buy orders over the course of a month or two. There wasn't really an imbalance between too many buy orders and not enough sell orders to address, it was more that the market makers have a superior visibility of these buy orders coming in and they can easily beat a real seller of shares to that buy order. This is no way, shape, or form bona fide market making.
They now have access to a pile of $5 million, the same $5 million that investors just paid for what they thought were legitimate "shares or packages of rights attached to a public company". As the price per share tanks, a bona fide market maker would take that $5 million and buy back shares at perhaps between $4.80 and $4.60 and pocket a quick $300,000 profit without lifting a finger. Abusive market makers don't see it this way, the $300,000 "free" dollars courtesy of naïve investors just doesn't quite make it. This fraud is way too easy to pull off to settle for a measly $300,000. They saw how easy it was to sell a million nonexistent shares and raise $5 million and so they get greedy and instead of taking money from that pile of $5 million to buy back shares, they decide to add to it by selling yet more nonexistent shares on the way down to maybe $1 or so. Why not, nobody's keeping score back at the DTCC, all of those "failed deliveries" are now safely in the "counterfeit electronic book entries" column hidden amongst the real shares. Now perhaps they have $10 million in front of them from the selling of nonexistent shares.
With more of this behavior the $10 million becomes $15 million as the price per share now approaches a penny. At a penny per share there really are many more buy orders than sell orders. Their continued selling at a penny really does start to resemble "bona fide market making", at least for new buyers anyways. At a penny per share they might decide to go ahead and cover but they notice that they're the only seller around. Who's going to sell shares to them at a penny so that they can cover? They've been the only seller from perhaps $1 on down. All of the real investors are so far "underwater" on their investment that they can't afford to take that big of a loss. Besides, most of them don't even follow the stock anymore unless it's at a year's end and need a capital loss. No new naked short sellers are dumb enough to start attacking a stock that just went from $5 to a penny. They'll go find a different $5 stock to attack.
These market manipulators soon learn that they can't cover because the second they take their finger off of the selling trigger, the stock gaps upward and they haven't even started to buy back shares yet. Since they can't cover without driving the PPS up violently they soon learn that all they can do is to continue leaning on the stock in an attempt to suffocate the company to death by constantly knocking out any bids that are posted. This phase of the overall fraud is where the necessity of Rule 201, the Uniform Bid Rule, comes into play. Without protection from this constant "bid banging" these victim companies will have a tough time fighting off bankruptcy.
What really is frustrating to the corporation mentioned above is that perhaps recent corporate developments perhaps have made the $5 share price level an appropriate valuation but it's too late. With all of the dilution caused by the "bear raid", any future earnings are now divided by an inordinate number of shares to calculate earnings per share and stocks usually trade at multiples of earnings per share. Thus the damage incurred is permanent. ..."
http://www.sec.gov/rules/proposed/s72303/decosta122203.htm
Gump ... have you any comments on this?
Dave Patch, Financialwire
July 23, 2004. (FinancialWire) In a scathing commentary, the founder of InvestigatetheSEC.com, David Patch, a wronged investor who has become a leader in the fight against illegal naked short selling, has raised the issue of regulatory failures in the case of Riggs National Corp. (NASDAQ: RIGS) to those associated with StockGate.
StockGate has embroiled hundreds of companies, millions of investors, billions of dollars and dozens of brokerages such as FleetBoston (NYSE: FBF), Goldman, Sachs & Co. (NYSE: GS), and Charles Schwab (NYSE: SCH), which has just announced it will exit the market-making business. "It would not be Washington Politics if we are not a daily dose of 'Do as I say not as I do'," said Patch. "This time, the contradictions lie with Senator Carl Levin and his admonishment of Federal Banking Regulators as it pertains to the Riggs Bank scandal. Patch quotes a Dow Jones news report:
"When a bank such as Riggs operates with such reckless abandon and federal regulators are so ineffectual in their oversight, it does little to inspire confidence in our country's determination to stop money laundering, especially when that bank is located here in our nation's capital,' Levin said.
In the 113-page report, the minority staff of the Senate Governmental Affairs Committee's Permanent Subcommittee on Investigations urges bank regulators to bolster enforcement of anti-money laundering laws to prevent future oversight lapses.
"The failure to take quick and forceful enforcement action in the Riggs matter is not an isolated case," states the report, which details the findings of the panel's investigation. "It is symptomatic of uneven and, at times, ineffective enforcement by all federal bank regulators of bank compliance with their anti-money laundering obligations," the report said. Patch noted that, "suddenly it would appear that the Senator from Michigan is worried about the ill effects of money laundering and failed regulatory attentiveness. If only he would walk across the hall to the Senate Banking Committee and address those concerns with the committee.
It is the Senate Banking Committee that has authorized the Securities and Exchange Commission to continue to allow our nations wealthiest Wall
Street firms to continue to allow settlement failures in our securities to be used to launder money for many criminal elements including terrorists and organized crime.
"Recently the SEC passed a reform package, regulation SHO, in which they admitted that settlement failures can exceed the entire public float of companies. The SEC also admitted that 4% of all publicly traded companies have settlement failure abuses. The terms of the reform package for this abuse, however, has allowed the settlement failures of the past to remain unsettled indefinitely and the incorporation of changes to be pushed out another 6 months. All of this is in direct violation of Section 17A of the Congressional Securities Act of 1934.
"Unfortunately, when the Act was drafted it did not address the conflict of interest within Congress between Investor protection and campaign contributions by Wall Street.
"Settlement failures are tied to money laundering through a well documented paper trail. In Canada the British Columbia Securities Commission (BCSC) has taken on a case against Pacific International (PI) in which the BSCS claims that PI helped launder money into the US markets for US Organized Crime families. British Columbia Securities director Sasha Angus had these statements to make during the hearings ( http://www.rgm.com/articles/cornucopiaofcrooks.html) :
"Pacific International was little more than a massive stock and money laundering conduit which attracted and serviced scores of criminals, securities violators and other dubious American clients to circumvent American regulations and laws.
"According to a BCSC analysis, the commissions earned by Pacific International from accounts trading in U.S. stocks grew from $2.3-million in 1993 to about $19.2-million by Dec. 31, 1999, including trading done on a spread basis by brokers Dirk Rachfall and Michael Patterson, who were lured to Seattle by the Federal Bureau of Investigation, arrested, convicted and jailed for dealing with other Mafia-linked clients.
"The last major focus of alleged abuses was in the field of short selling. 'Many of P.I.'s U.S. clients were heavily involved in short sales. Staff reviewed ten particularized accounts for short sales. The total dollar amount of the month-end short positions in these accounts was approximately $72-million. In the month of June, 1999, alone there were 669 short sale trades totaling over $23-million,' Patch stated that Angus told the hearing.
"The evidence will show that the short sales done in U.S. markets from the P.I. accounts were naked shorts. That is, they were not covered in any way at the time the short sale was entered into. The evidence will also show that short selling of that nature is illegal in the U.S. and was a major reason why many of P.I.'s clients were trading at P.I. They were there, to the knowledge of P.I., to trade into the U.S. in defiance of American trading rules. They assisted knowingly in a breach of American trading rules. P.I. condoned that and grew fat on it."
The fact is these shares remain uncovered as they rest on our Wall Street books as unsettled trades. Like in the Riggs case, this crime is not isolated to simply one firm. Our US financial firms helped perpetrate these violations by failing to force settlement from the short seller and today, the Securities Regulators and the Senate Banking Commission are both willing to let it fly.
"Wall Street was given a free pass to their assumed liabilities. The cost of this abuse is immeasurable. The money laundering is not limited to organized crime but also terrorism. The SEC and Congress are fully aware of this fact. Therefore, losses are beyond monetary and into the loss of human lives. Is that to be considered acceptable collateral damage to protect these Wall Street firms who made a killing in years past in trade commissions on trades they never settled?
"Pacific International had its commissions grow to nearly $20 Million in 1999. An equal commission was taking place across the border in the US to those who were taking the trades executed by Pacific International.
"The Senate Banking Committee has the responsibility of oversight over the SEC. That oversight is supposed to be guided by the Securities Act of 1934 drafted by former Congressman. Today, with clear verbiage in the Act to address the need for "prompt and accurate clearance and settlement of trades" for the safety of the investor and the industry the present oversight committee is willing to forgo that law to protect those that aided in the crime in the first place.
"Only they can tell us why. "Senator Levin was clear in his message that regulatory failures exist and that changes were needed. He was talking about banking regulations and he appeared to be one willing to force change. For me personally, I would hope that the senator would walk across the hallways to his colleagues in the SEC Oversight Committees and explain to them the impacts these failures have on our economy, our markets, and our reputation as a nation.
"The Senate cannot deny the existence of this abuse based on the data already provided. To ignore it now, and to play politics with American lives, is inexcusable. There is no justifiable reason to allow the Wall Street firms to continue to manipulate our investments by failing to settle these abusive settlement failures. These firms took the commissions on these trades and have failed to close out the contract as they were paid a commission to do.
"The financial risk of their actions must now be addressed as opposed to placing that risk on the unsuspecting public," Patch concluded.
As noted, Charles Schwab & Co. said it is exiting the market-making business. It is one of several market makers that have been the subject of accusations and/or legal entanglements over naked shorting allegations and issues.
The company had said it is either the number one or number two market-maker in more than half of all of NASDAQ's (OTCBB: NDAQ) listed stocks.
Recently observers were surprised to find a comment letter submitted to the SEC by Mike Alexander, Senior VP of Charles Schwab, that admits outright that brokerages regularly ignore rules and regulations, saying it is not rules that need to be written; it is changes in behavior that is needed.
The comments were directed towards proposed changes in the U.S. settlement system, but could easily apply to other regulations as well. "Improvements in the U.S. settlement system will only be truly achieved if and when regulations are rationalized to ensure that all market participants are held accountable for compliance. For example, the industry has struggled with the issue of institutional trade affirmation for quite some time now. While the benefits to the clearance and settlement system are self-evident, Buy-Side firms and Custodian banks have been resistant to make those changes that provide for same-day trade confirmation / affirmation and assurance of trade settlement," said Alexander. "Schwab opposes the notion that securities intermediaries such as broker-dealers be required to police compliance," he stated. "The NYSE and other SROs have had trade affirmation rules on their books for some time. However, such rules have not been effective in changing the behavior of Buy-Side firms or their custodians; nor do the rules provide assurance that the affirmed trade will settle.
"Recognition of this fact is evidence that changes to the settlement cycle not only require overhauling systems, but also changing behavior.
We believe that only by holding all market participants directly accountable for making required affirmations will the necessary changes to behavior," he stated at http://www.sec.gov/rules/concept/s71304/charlesschwab061604.pdf .
In a June 23 release, the SEC stated it has put into place Rule 202(T), which establishes procedures to allow the Commission to temporarily suspend the operation of the current "tick" test in Rule 10a-1, and any short sale price test of any exchange or national securities association, for specified securities.
Through a separate order, the Commission will suspend, on a pilot basis for a period of one-year, the tick test provision of paragraph (a) of Rule 10a-1, and any short sale price test of any exchange or national securities association, for approximately one-third of stocks in the Russell 3000 index.
The order also will suspend, on a pilot basis for a period of one year, the tick test provision of paragraph (a) of Rule 10a-1 for short sales executed in any security included in the Russell 1000 index after 4:15 p.m. Eastern, and all other securities after the close of the consolidated tape, and until the open of the consolidated tape the next day.
The pilot will commence on January 3, 2005 to permit broker-dealers and self-regulatory organizations to make the necessary programming adjustments.
The Commission deferred consideration of the proposal to replace the current "tick" test of Rule 10a-1 with a new uniform bid test. The Commission could reconsider any further action on these proposals after the completion of the pilot.
Rule 203, which will incorporate current Rule 10a-2 and will create a uniform Commission rule requiring broker-dealers, prior to effecting short sales in all equity securities, to "locate" securities available for borrowing.
There will be limited exceptions from the locate requirement, including for short sales by registered market makers in connection with bona-fide market making.
Rule 203 also imposes additional requirements on designated "threshold securities." Rule 203 defines a threshold security to mean an equity security for which there is an aggregate fail to deliver position for five consecutive settlement days at a registered clearing agency of 10,000 shares or more and that is equal to at least 0.5% of the issue's total shares outstanding.
Where a clearing agency participant has a fail to deliver position in threshold securities that persists for ten consecutive days after settlement, the participant must take action to close out the position.
Until the position is closed out, the participant, and any broker-dealer for which it clears transactions, may not effect further short sales in the particular threshold security without borrowing or entering into a bona fide arrangement to borrow the security.
Rule 203 will become effective 30 days after publication with a compliance date of January 3, 2005, to permit firms to make programming and procedural adjustments.
Rule 200, which among other things, will redesignate current Rule 3b-3 with some modifications to define ownership and aggregation of securities positions, and include a requirement to mark all sell orders in all equity securities. Rule 200 will become effective 30 days after
publication.
The Commission also adopted amendments to Rule 105 of Regulation M to remove the current shelf offering exception, and issued interpretive guidance addressing sham transactions designed to evade the rule.
The amendment applies to short sales effected within five days prior to the pricing of a shelf offering. Such short sales may not be covered with offering securities purchased from an underwriter or other broker-dealer participating in the offering.
The Rule 105 amendments will be effective 30 days after publication in the Federal Register, and the interpretive guidance will be effective upon such publication.
Opponents of naked short selling were, however, quick to denounce the provision that allows market makers an exemption, and many market observers said that the SEC should provide a public list of companies that fall into the "threshold security" category.
"The SEC claims that the number of companies involved in this 'threshold security' category is 4% of all publicly traded companies. If in fact it is that small the process is certainly manageable," said the website InvestigatetheSEC.com at http://www.investigatethesec.com "It is also the right of every issuer, in protecting their business and their investors to know the status of their stock trading." Some were discussing whether the SEC can keep such information private under the Freedom of Information Act.
The marketplace is already upset over promises by the Berlin Stock Exchange, since broken, that it would delist any company upon request. "Please understand that cessation of trading in the shares of XRAYMEDIA Inc. (OTCBB: XRYM) is not possible," the exchange told one such requester.
It's not just U.S. companies such as Whistler Investments (OTCBB: WHIS), Sonoran Energy (OTCBB: SNRN), Celsion Corporation (AMEX: CLN), and eLinear Inc. (AMEX: ELU) or Israeli companies that have had serious concerns about their unannounced and unathrorized listings on the Berlin-Bremen Stock Exchange.
Apparently, some 150 British companies are protesting the same fate. A number of UK-listed companies have demanded a London Stock Exchange investigation after they found that their shares are being traded.
Meanwhile, Whistler, Sonoran and eLinear have announced they have successfully secured their delistings, and the U.S. Securities and Exchange Commission has rescheduled its open hearing to consider the adoption of amendments to Regulation Sho to July 23 at 9:30 a.m. The announcement is at http://www.sec.gov/news/digest/dig061504.txt
According to the London Money Telegraph, "several companies believe the market for their shares has been distorted and that they have fallen in value after trading started on the Berlin-Bremen exchange.
"Some smaller companies, whose shares are lightly traded in London, fear the Berlin market has been used by speculators to short-sell their shares."
The Telegraph said the number of companies are thought to be as high as 150, including even "larger companies" such as Matalan (OTC: MATNF) and Halfords. Mladen Ninkov, the chairman of Aim-listed Griffin Mining (OTC: GFNMF), was quoted as saying: "We were put on the Berlin market without our knowledge by a German broker and now we've got about 8m shares out in a short sale. It is horrifying - that is about 4 per cent of the company and it is forcing the price down."
A spokesman for the London Stock Exchange said: "If there is evidence of market abuse we would refer that on to the appropriate authorities."
Whistler said that according to its transfer agent records, "we have 5,504,680 shares held by DTC, but the ADP broker search indicates of 6,217,458 shares being reported by broker/dealers as being held on behalf of their customers, indicating a short position of more than 700,000 shares. A summary report can be viewed at http://www.whistlerinvestments.com/shorts.html .
"We have therefore commenced work with DTC for a formal review of the reported excessive broker/dealer holdings of our stock so that we can conduct our corporate affairs properly in view of our planned stockholders meeting and other upcoming corporate matters. We again advise our stockholders make sure that they receive delivery of any shares that they purchase, and also that their stock is not being borrowed without authorization.
Holly Roseberry, President of Whistler Investments, states "We intend to get to the bottom of the excessive short position and bring stability back into the trading of our stock. We're happy to say that we have 5,133 stockholders and we expect all our stockholders to benefit from the shorters having to cover their short positions."
FinancialWire has reported on the disclosure that "Dateline," the investigatory TV program aired by General Electric's (NYSE: GE) NBC unit, has purportedly been preparing a blockbuster expose of "Stockgate" (see separate story at http://www.financialwire.net).
Thank you for the info Janice, greatly appreciated.
Could you expand a little on each?
TIA
Janice, tell me, how can you PROVE the existence of a naked short if by definition it's a phantom share that doesn't exist?
What was PROOF to you?
"... As for GMXX: I'm on record as having said many many times that there really was a naked short. Several years ago. But that's the ONLY proved naked short I'm aware of in any US penny stock. ..."
Thanks for agreeing with me ... Regardless of the issue, 99% of the people in America want transparency so they can check what's going on behind the scenes.
They want their paper receipts ... whether they be a vote confirmation receipts or a paper share certificate receipt with the seal and serial number of the Issuer.
People don't want US election to be deceided by Phantom votes.
While watchin Lou Dobbs on CNN this evening I read the results of poll taken in the US related to electronic voting.
99% of the people polled wanted a paper receipt backing up their electronic vote … 1% didn’t care.
In all probability the people polled have been following the STOCKGATE scandal where a large number of electronic share credits have been fraudulently substituted for the “dematerialized” registered paper share certificates.
SEC offers no effective deterrent to stock fraud.
NASD wrist slaps firm accused of Naked Shorting
We are barely 3 months past the NASD's new Rule 3370 Affirmative
Determination laws and what has changed? Apparently little as the July enforcement actions by the NASD include a SLAP ON THE WRIST fine for failing to make affirmative determination on short sales to insure proper settlement of that trade. The $15,000 fine may or may not be equal to commissions made in the execution of these orders but, more importantly, the fine certainly appears to be worth the risk. Failure to make Affirmative Determination and to properly settle these trades is acting as a co-conspirator to naked shorting for the client.
The SEC, on June 23, 2004 stated unequivocally that 4% of all publicly traded companies have harmful settlement failures attached to that stocks true public float. Those settlement failures can and do exceed the entire public float of some companies. What affect does that have on shareholders and their investments? It dilutes their holdings and depresses stock values. Investments made based on stock structures becomes meaningless as the true stock structure of these companies, as recorded, is mere fractions of the true shares in circulation.
So, with the NASD putting in place Rule 3370, with the SEC staking claims to their new proposal as the means to the end to this abuse, you have to wonder about the Industry. Clearly they do not get the message and clearly the fines we impose are worth the risks of violations. The SEC and NASD have refused to force settlement of trades executed which fail, including these trades that Track Data Securities initiated, but instead allow these failures to add up and accumulate against long investor interests.
The time is now to start the enforcement of the Securities Act of 1934. The Act is very specific (Section 17A) in the requirement for prompt and accurate clearance and settlement of trades. Those that are in violation should be suspended from operations until such point in time as to when they can show policies and compliance to this requirement. The NASD can initiate this suspension under NASD rule IM-3130 section (6).
The NASD and SEC identify naked shorting as abusive and manipulative.
Failure to properly address the issue with stiff fines and sanctions,
including forced settlements, will only allow the industry to continue with this abuse and manipulation on the investing public. The NASD would say that I should be happy this action was taken but, as I read their monthly reports, this is typical action and fines imposed yet the root behavioral issue remains unchanged. You don't stop a habitual speeder with continued warnings. The Industry has had it's warnings, it is time to flex the muscles.
Dave Patch
www.investigatethesec.com
GeneMax Corp. reports advanced human TAP cancer vaccine successful in animal trials
GENEMAX CORP. (OTCBB Symbol - GMXX, FWB Symbol - GX1, WKN: 645096, ISN: US36870Q1031)
VANCOUVER, July 20 /PRNewswire-FirstCall/ - GeneMax Corp. (OTC Bulletin Board: GMXX; Frankfurt: GX1) GeneMax's advanced human adenovirus TAP-1 cancer vaccine is successful in treating animal models of lung cancer. These findings will be reported at the 12th International Congress of Immunology and 4th Annual Conference of FOCIS (Federation of Clinical Immunology Society) in Montreal, Quebec, being held at Viger Hall of the Palais des Congres de Montreal (July 18-23, 2004).
GeneMax's cancer vaccine, designed with the human version of TAP-1 together with a non-replicating adenovirus that is applicable for use in humans, was able to increase the survival rate, retard tumor growth, and promote a centralized immune response to the cancer in the animal model. The studies showed that the immune system of the animal had been sufficiently armed to locate cancerous cells throughout the animal and to prevent metastasis.
Many forms of cancer cells have a disruption in TAP (transporter associated with antigen processing). These include melanoma, lung, prostate and breast cancers, and many others. Without a properly activated TAP, cancerous cells do not identify themselves to the immune system as an alien cell type and they remain camouflaged, allowing cancer to proliferate and eventually metastasize in the body. When TAP is properly activated in a cell it produces signals that indicate the identity of the cell to the immune system. GeneMax's human version of a non-replicating TAP-1 cancer vaccine acts to stimulate the mechanisms required for the identity of the cancer cell to be recognized as foreign, which is expected to cause the cancer cells to be naturally eliminated by the immune system. Furthermore, GeneMax's TAP-1 cancer vaccine appears to efficiently elicit an immune response towards cancer despite an individual's genetic background.
The study entitled "Restoration of TAP1 Expression in a TAP Deficient Lung Carcinoma In Vivo Increases Tumor Specific Immune Responses and Survival" was conducted under the supervision of Dr. Wilfred A. Jefferies, Chairman and CSO of GeneMax, the lead researcher, Dr. Yuanmei Lou, with Bing Cai , Dr. Timothy Z. Vitalis, Susan S. Chen, Andrew P. Jeffries, Dr. Genc Basha, Ray S. Gopaul and Dr. Qian-Jin Zhang at the Biotechnology Laboratory and Biomedical Research Center, University of British Columbia, Canada. The research that led to the scientific report was supported by grants from the Canadian Institutes of Health Research (CIHR) and the Canadian Network for Vaccines and Immunotherapeutics (CANVAC), as well as funding from GeneMax through its Collaborative Research Agreement with The University of British Columbia.
For further information:
-------------------------------------------------------------------------
Contact: Kendra Payne
Phone: Toll Free (866) 872-0077 or (604) 714-1225 Fax: (604) 331-0877
GeneMax Corp. - Suite 400 - 1681 Chestnut Street, Vancouver B.C. Canada V6J 4M6
Stock Exchange Information: (Symbol: OTCBB - GMXX, Symbol FWB - GX1, WKN: 645096, ISN: US36870Q1031)
-------------------------------------------------------------------------
SAFE HARBOR STATEMENT
THIS NEWS RELEASE INCLUDES FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE UNITED STATES SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED. THESE STATEMENTS ARE MADE UNDER THE "SAFE HARBOR" PROVISIONS OF THE UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. EXCEPT FOR THE HISTORICAL INFORMATION PRESENTED HEREIN, MATTERS DISCUSSED IN THIS PRESS RELEASE CONTAIN FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH STATEMENTS. STATEMENTS THAT ARE NOT HISTORICAL FACTS, INCLUDING STATEMENTS THAT ARE PRECEDED BY, FOLLOWED BY, OR THAT INCLUDE SUCH WORDS AS "ESTIMATE," "ANTICIPATE," "BELIEVE," "PLAN" OR "EXPECT" OR SIMILAR STATEMENTS ARE FORWARD-LOOKING STATEMENTS. RISKS AND UNCERTAINTIES FOR GENEMAX CORP. INCLUDE BUT ARE NOT LIMITED THE RISKS ASSOCIATED WITH PRODUCT DISCOVERY AND DEVELOPMENT AS WELL AS THE RISKS SHOWN IN GENEMAX'S MOST RECENT ANNUAL REPORT ON FORM 10-KSB AND ON FORM 10-QSB AND FROM TIME-TO-TIME IN OTHER PUBLICLY AVAILABLE INFORMATION REGARDING GENEMAX. OTHER RISKS INCLUDE RISKS ASSOCIATED WITH OBTAINING GOVERNMENT GRANTS, THE SUCCESS OF PRECLINICAL AND CLINICAL TRIALS, THE PROGRESS OF RESEARCH AND PRODUCT DEVELOPMENT PROGRAMS, THE REGULATORY APPROVAL PROCESS, COMPETITIVE PRODUCTS, FUTURE CAPITAL REQUIREMENTS, AND GENEMAX'S ABILITY AND LEVEL OF SUPPORT FOR ITS RESEARCH ACTIVITIES. THERE CAN BE NO ASSURANCE THAT GENEMAX'S DEVELOPMENT EFFORTS WILL SUCCEED, THAT SUCH PRODUCTS WILL RECEIVE REQUIRED REGULATORY CLEARANCE, OR THAT EVEN IF SUCH REGULATORY CLEARANCE WERE RECEIVED, THAT SUCH PRODUCTS WOULD ULTIMATELY ACHIEVE COMMERCIAL SUCCESS. GENEMAX DISCLAIMS ANY INTENT OR OBLIGATIONS TO UPDATE THESE FORWARD-LOOKING STATEMENTS."
Why has the SEC neither the courage nor leadership to do what has to be done to restore integrity to the marketplace and pride to its employees?
I feel it must in some way be tied to the upcoming election.
Registered v's Beneficial ....
REGISTERED OWNER-
A Registered Owner literally possesses, owns, and holds, his stock or bond with his name appearing on the face of the certificate. The company that issued the certificate has registered the owner's (holder's) name on their official books. This is the safest way to own a paper asset. You literally possess the fully registered certificate and only you can transfer or sell it. By all Rights and definition of law, you are the owner. You have it, you hold it, you possess it, and you keep it. You have the complete control over it.
BENEFICIAL OWNER-
A Beneficial Owner is nothing more than a beneficiary, "One who is entitled to the benefit of a contract"- A Dictionary of Law, 1893. All book-entry stocks and bonds you purchase make you the beneficial owner, not the registered holder. The owner of a book-entry stock or bond is the entity or name that it is registered under … CEDE.
The Depository Trust Company (DTC) owns that bond or stock, not you. Rather than in your name, it's registered (as the legal Registered Owner or agent) in their "street name", Cede & Company. (In the past, it may have been registered in your broker's street name, but this is no longer allowed). The DTC is the Registered Owner - holder - of your stock or bond. The DTC is the legal property-holder, shareholder, stock-holder, owner and purchaser. Your name appears nowhere on the book entry or certificate as the actual owner. Instead, you have been designated by the legal registered owner, the DTC, as the Beneficial Owner. This means that your lawful Rights in that stock or bond are confined to that of a successor or heir.
According to the DTC, under the US Security and Exchange Commission (SEC) rules, you only have the right to "receive proceeds or other advantages as the beneficiary". You are not the owner... you are the consignee, "One who has deposited with a third person an article of property for the benefit of a creditor"-
Why can you sell virtual stock but not virtual houses?
According to the security regulators “naked” shorting of company stock is to create stock out of thin air. And this is known to have been going on for years and nothing has been done to effectively stop it !!
To simplify the concept of naked shorting of shares, consider this:
A person puts his home up for sale in a hot sellers housing market, and his real estate broker lines up 5 buyers. The broker sells the home to all five, has it re-registered and delivered to one of the buyers but keeps the 5 commissions and the money from the other four sales in his bank account for his own use.
How would you feel if you were one of the four so called “beneficial” owners who paid the asking price, didn’t get the deed to the home, weren’t entitled to live in it, but told if you’re willing to pay a further commission you’re entitled to sell it to some other sap. What your broker is reselling for you doesn’t really exist and may not resell for the price you paid for it, because now it’s a buyers market with 4 extra phantom homes for sale helping drive the price down … and just when you need your money back to buy a proper house!
The difference between the above and “naked” short selling of stock is that the four home buyers would soon realize they’re not the registered owners - they’ve been defrauded and they would alert the regulators who in turn would remove the bogus listing and severely penalize the crooked real estate broker. On the other hand, the market investor never realizes he’s been defrauded because he has been raised to have faith in a system supposedly being regulated by the Securities and Exchange Commission. When he gets a monthly statement he doesn’t demand his stock broker show him the actual registered share certificates to confirm what the statement shows.
Don’t be content with a monthly statement showing you “beneficially” own shares when in reality they might not even exist, or at best be jointly owned with someone else. Pay for and ask to be shown the registered paper certificates, and if you’re a long term investor, ask for delivery of them to be sure they’re not borrowed by others to manipulate the share price. If you don’t receive them within 10 business days you can conclude phantom shares credits or fake shares are plentiful in that issue and the stock broker is having trouble locating real share certificates that can be re-registered in your name.
If you'd like to know more, visit Website www.investigatethesec.com
Matt … I’ve learned that being a “Freebee” I can’t post in The Jailhouse so I tracked you down here at Fatty’s to lobby for the release of gump – we are unrelated.
If you’re an “Untouchable” and not to be approached by a “Freebee”, so be it … forget the rest. If you’ll listen to me, please consider this:
DueDillinger is very skilled in the written language when it suits his needs. He also can be quite crass when the spotlight is not on him.
He and his gang, which includes Janice Shell and others, have spread innuendo and untruths towards me and towards gump on several boards for standing up to him.
The following is an example, originally posted on the iHUB CMKX board, it has since been removed. Following its removal from iHUB it was posted again on the RB Genemax board as recent as 3 days ago. This innuendo is what gump is having to deal with ... to DD it’s all mirth and merriment.
By: DueDillinger
12 Jul 2004, 02:45 AM EDT
Msg. 37243 of 37254
Jump to msg. #
Shocking NEWS from the CMKX board on IHUB...
Posted by: janice shell
In reply to: BadBassPlayer who wrote msg# 49744
Date:7/12/2004 1:26:04 AM
Post #49839 of 49843
Hey Janice. Gump says you and your buddies have been harrassing him for a while now. Had to make his own web site to tell his story. Says you guys bomb his puter with bugs and gabage. Any truth to this?
Here's the scoop. Gumpy and I were once lovers. A passionate but difficult and sometimes acrimonious affair.
He didn't deal well with the breakup.
http://ragingbull.lycos.com/mboard/boards.cgi?board=GMXX&read=37243
hasher5 ... sorry to offend.
I assure you I'm not gump nor related to him in any way. I am one of many from RB who follow him and read his posts. My big mistake there was to side with his point of view on occasion and as a consequence DD found a way to have me TOS'D ... never to return. I used to post on RB as Graynut when I was accused by DD of being gump's son ... which I am NOT.
I now see Matt posts in Fatty's Donut Shop ... I'll try to reach him there.
I'm sorry to have annoyed you ... this isn't the easiest medium to communicate in.
hasher5 .. it isn't unreasonable to take out one's frustrations on the inmates by poking them with little pointy sticks now and again, but DueDillinger appears to be doing more than that. He has a way with words that conceal his intent, which is to silence gump on all chat forums.
DueDillinger and his gang, which includes Janice Shell and others, have spread innuendo and malice concerning gump on several boards. As a team they posted the following on the iHUB CMKX board. It has since been removed - I assume because it was intended to discredit and malign gump90. Following its removal from iHUB it was found posted again on the RB Genemax board.
Since I cannot access The Jailhouse to speak with Matt, would you please draw this to his attention. I feel Matt has been misled by DueDillinger and as a result gump is being unfairly judged.
By: DueDillinger
12 Jul 2004, 02:45 AM EDT
Msg. 37243 of 37254
Jump to msg. #
Shocking NEWS from the CMKX board on IHUB...
Posted by: janice shell
In reply to: BadBassPlayer who wrote msg# 49744
Date:7/12/2004 1:26:04 AM
Post #49839 of 49843
Hey Janice. Gump says you and your buddies have been harrassing him for a while now. Had to make his own web site to tell his story. Says you guys bomb his puter with bugs and gabage. Any truth to this?
Here's the scoop. Gumpy and I were once lovers. A passionate but difficult and sometimes acrimonious affair.
He didn't deal well with the breakup.
http://ragingbull.lycos.com/mboard/boards.cgi?board=GMXX&read=37243
was surfing and came across The Jailhouse. You appeared benign enough so I spoke to you. My question was to be "why can't I post in here?" - Now I know.
hasher ... tried to question you in The Jailhouse but not being a Premium member like you they won't listen to me. I had to come here to be heard.
Hasher ... how come you spend so much time hanging around The Jailhouse?
Just curious.
Charles Schwab & Co. (SCH) is exiting the market-making business. It is one of several market makers that have been the subject of accusations and/or legal entanglements over naked shorting allegations and issues
http://www.investors.com/breakingnews.asp?journalid=22147218&brk=1
StockGate: The Beat Goes On
Jul 12, 2004 (financialwire.net via COMTEX) -- (FinancialWire) With Bank of America's (BAC) Banc of America Securities LLC and Societe Generale's (SCGLF) SG Cowen Securities Corp. under investigation by the U.S. Securities and Exchange Commission for possible insider trading in connection with PIPE transactions related to hedge funds, and despite Knight Trading Group's (NITE) settling investigations by the SEC and NASD for $79 million in disgorgements, interest and penalties, the industry remains in limbo over whether regulators will make a serious effort to end manipulative trading practices and offshore money laundering said to be related to "illegal" naked short selling.
While both regulatory agencies appear reluctant to make sweeping changes, they continue to take small swipes at the problem with isolated individual actions, such as the expulsion of Ryan & Company for its "failure to cooperate in a short sale probe."
The NASD said Scott W. Ryan and Ryan & Company were under investigation for a "widespread scheme of impermissible short selling activity on behalf of three hedge fund clients."
Meanwhile, the Federal Bureau of Investigation is investigating reports that an imposter has been posing as an SEC examiner has been calling hedge funds in an attempt to solicit information.
And finally, the SEC has named Charles Fishkin, formerly with Fidelity, to head its new Office of Risk Assessment, designed to find "potential problem areas across the securities industry."
The office, Chair William Donaldson's idea to get ahead of the bad guys, if not NY Attorney General Eliot Spitzer, will have a staff of 15, and a budget of $2.5 million.
Many observers have suggested that no greater "problem area" has existed in U.S. financial history than the apparently counterfeit and virtually unlimited oversupply of electronic securities and overseas interests that threaten to collapse the entire American financial underpinnings, leaving the "Crash" and the aftermath of "9-11" as comparative Monopoly money events.
In a June 23 release, the SEC stated it has put into place Rule 202(T), which establishes procedures to allow the Commission to temporarily suspend the operation of the current "tick" test in Rule 10a-1, and any short sale price test of any exchange or national securities association, for specified securities.
Through a separate order, the Commission will suspend, on a pilot basis for a period of one-year, the tick test provision of paragraph (a) of Rule 10a-1, and any short sale price test of any exchange or national securities association, for approximately one-third of stocks in the Russell 3000 index.
The order also will suspend, on a pilot basis for a period of one year, the tick test provision of paragraph (a) of Rule 10a-1 for short sales executed in any security included in the Russell 1000 index after 4:15 p.m. Eastern, and all other securities after the close of the consolidated tape, and until the open of the consolidated tape the next day.
The pilot will commence on January 3, 2005 to permit broker-dealers and self-regulatory organizations to make the necessary programming adjustments.
The Commission deferred consideration of the proposal to replace the current "tick" test of Rule 10a-1 with a new uniform bid test. The Commission could reconsider any further action on these proposals after the completion of the pilot.
Rule 203, which will incorporate current Rule 10a-2 and will create a uniform Commission rule requiring broker-dealers, prior to effecting short sales in all equity securities, to "locate" securities available for borrowing.
There will be limited exceptions from the locate requirement, including for short sales by registered market makers in connection with bona-fide market making.
Rule 203 also imposes additional requirements on designated "threshold securities." Rule 203 defines a threshold security to mean an equity security for which there is an aggregate fail to deliver position for five consecutive settlement days at a registered clearing agency of 10,000 shares or more and that is equal to at least 0.5% of the issue's total shares outstanding.
Where a clearing agency participant has a fail to deliver position in threshold securities that persists for ten consecutive days after settlement, the participant must take action to close out the position. Until the position is closed out, the participant, and any broker-dealer for which it clears transactions, may not effect further short sales in the particular threshold security without borrowing or entering into a bona fide arrangement to borrow the security.
Rule 203 will become effective 30 days after publication with a compliance date of January 3, 2005, to permit firms to make programming and procedural adjustments.
Rule 200, which among other things, will redesignate current Rule 3b-3 with some modifications to define ownership and aggregation of securities positions, and include a requirement to mark all sell orders in all equity securities. Rule 200 will become effective 30 days after publication.
The Commission also adopted amendments to Rule 105 of Regulation M to remove the current shelf offering exception, and issued interpretive guidance addressing sham transactions designed to evade the rule.
The amendment applies to short sales effected within five days prior to the pricing of a shelf offering. Such short sales may not be covered with offering securities purchased from an underwriter or other broker-dealer participating in the offering.
The Rule 105 amendments will be effective 30 days after publication in the Federal Register, and the interpretive guidance will be effective upon such publication.
Opponents of naked short selling were, however, quick to denounce the provision that allows market makers an exemption, and many market observers said that the SEC should provide a public list of companies that fall into the "threshold security" category.
"The SEC claims that the number of companies involved in this 'threshold security' category is 4% of all publicly traded companies. If in fact it is that small the process is certainly manageable," said the website InvestigatetheSEC.com at http://www.investigatethesec.com . "It is also the right of every issuer, in protecting their business and their investors to know the status of their stock trading."
Some were discussing whether the SEC can keep such information private under the Freedom of Information Act.
Recently observers were surprised to find a comment letter submitted to the SEC by Mike Alexander, Senior VP of Charles Schwab, that admits outright that brokerages regularly ignore rules and regulations, saying it is not rules that need to be written; it is changes in behavior that is needed.
The comments were directed towards proposed changes in the U.S. settlement system, but could easily apply to other regulations as well.
"Improvements in the U.S. settlement system will only be truly achieved if and when regulations are rationalized to ensure that all market participants are held accountable for compliance. For example, the industry has struggled with the issue of institutional trade affirmation for quite some time now. While the benefits to the clearance and settlement system are self-evident, Buy-Side firms and Custodian banks have been resistant to make those changes that provide for same-day trade confirmation / affirmation and assurance of trade settlement," said Alexander.
"Schwab opposes the notion that securities intermediaries such as broker-dealers be required to police compliance," he stated. "The NYSE and other SROs have had trade affirmation rules on their books for some time. However, such rules have not been effective in changing the behavior
of Buy-Side firms or their custodians; nor do the rules provide assurance that the affirmed trade will settle.
"Recognition of this fact is evidence that changes to the settlement cycle not only require overhauling systems, but also changing behavior. We believe that only by holding all market
participants directly accountable for making required affirmations will the necessary changes to behavior," he stated at http://www.sec.gov/rules/concept/s71304/charlesschwab061604.pdf .
The marketplace is already upset over promises by the Berlin Stock Exchange, since broken, that it would delist any company upon request.
"Please understand that cessation of trading in the shares of XRAYMEDIA Inc. (XRYM) is not possible," the exchange told one such requester.
It's not just U.S. companies such as Whistler Investments (WHIS), Sonoran Energy (SNRN), Celsion Corporation (CLN), and eLinear Inc. (ELU) or Israeli companies that have had serious concerns about their unannounced and unathrorized listings on the Berlin-Bremen Stock Exchange.
Apparently, some 150 British companies are protesting the same fate.
A number of UK-listed companies have demanded a London Stock Exchange investigation after they found that their shares are being traded.
Meanwhile, Whistler, Sonoran and eLinear have announced they have successfully secured their delistings, and the U.S. Securities and Exchange Commission has rescheduled its open hearing to consider the adoption of amendments to Regulation Sho to July 12 at 9:30 a.m. The announcement is at http://www.sec.gov/news/digest/dig061504.txt .
According to the London Money Telegraph, "several companies believe the market for their shares has been distorted and that they have fallen in value after trading started on the Berlin-Bremen exchange.
"Some smaller companies, whose shares are lightly traded in London, fear the Berlin market has been used by speculators to short-sell their shares."
The Telegraph said the number of companies are thought to be as high as 150, including even "larger companies" such as Matalan (OTC: MATNF) and Halfords.
Mladen Ninkov, the chairman of Aim-listed Griffin Mining (OTC: GFNMF), was quoted as saying: "We were put on the Berlin market without our knowledge by a German broker and now we've got about 8m shares out in a short sale. It is horrifying - that is about 4 per cent of the company and it is forcing the price down."
A spokesman for the London Stock Exchange said: "If there is evidence of market abuse we would refer that on to the appropriate authorities."
Whistler said that according to its transfer agent records, "we have 5,504,680 shares held by DTC, but the ADP broker search indicates of 6,217,458 shares being reported by broker/dealers as being held on behalf of their customers, indicating a short position of more than 700,000 shares. A summary report can be viewed at http://www.whistlerinvestments.com/shorts.html .
"We have therefore commenced work with DTC for a formal review of the reported excessive broker/dealer holdings of our stock so that we can conduct our corporate affairs properly in view of our planned stockholders meeting and other upcoming corporate matters. We again advise our stockholders make sure that they receive delivery of any shares that they purchase, and also that their stock is not being borrowed without authorization.
Holly Roseberry, President of Whistler Investments, states "We intend to get to the bottom of the excessive short position and bring stability back into the trading of our stock. We're happy to say that we have 5,133 stockholders and we expect all our stockholders to benefit from the shorters having to cover their short positions."
FinancialWire has reported on the disclosure that "Dateline," the investigatory TV program aired by General Electric's (GE) NBC unit, has purportedly been preparing a blockbuster expose of "Stockgate" (see separate story at http://www.financialwire.net).
It is not known if "Dateline" has uncovered continuing underworld connections to the scandal, but FinancialWire reported that Dateline may be pointing a large finger of conflict at the U.S. Securities and Exchange Commission itself, which reportedly receives a slice of every transaction fee as part of its budget. According to court filings supported by the O'Quinn/Christian legal network, almost $1 billion annually is received by the Depository Trust and Clearing Corp. for its "Stock Borrow Program," which the lawsuits claim is just a fancy name for counterfeiting, as the DTCC purportedly lends out many multiples of the actual certificates in the float. Apparently the SEC receives a transaction fee for each transaction facilitated by these loans of non-existent certificates, which could knock a hole in its budget should the revenues from the practice be halted.
The North American Securities Administrators Association, comprised of state and Canadian regulators, has pointedly told the SEC that either it must rethink its cozy DTCC relationship, or it hints, some of its more aggressive state practitioners (think Eliot Spitzer) may do the rethinking for the SEC.
Naked short selling is worrisome for hundreds of small U.S. companies, including those recently asking to be delisted from the Berlin Stock Exchange, such as Golden Phoenix Minerals, Inc. (GPXM), Nannaco, Inc. (NNCO), 5G Wireless Communications, Inc. (FGWC), CyberAds, Inc. (CYAD), Provectus Pharmaceuticals, Inc. (PVCT), House of Brussels Chocolates (HBSL), InforMedix, Inc. (IFMX), Tissera, Inc. (TSSR), Americana Publishing, Inc. (APBH), Celsion Corporation (CLN), ChampionLyte Holdings, Inc. (CPLY), Pickups Plus, Inc. (PUPS), China Wireless Communications Inc. (CWLC), CareDecision Corp. (CDED), Titan General Holdings, Inc. (TTGH), IPVoice Communications, Inc. (IPVO), Whistler Investments (WHIS), WARP Technology Holdings, Inc. (WRPT), BGR Corp. (OTCBB: BGRR), ICOA, Inc., (ICOA), DICUT, INC. (OTCBB: DCUTE), NHC Communications Inc. (NHC), Stratus Services Group, Inc. (SERV), Golden Phoenix Minerals, Inc. (GPXM).
Berliner Freiverkehr (Aktien) AG has been singled out as the broker and market maker that has been "listing" the companies. It is suspected that one broker, RA Angsar Limprecht, is involved in all if not most of the listings.
Small public companies are squeezed not only by hedge funds, naked short sellers, overseas listers such as the Berlin Stock Exchange, and the out-of-control "Stock Borrow Program" run by the governance-conflict-laden Depository Trust and Clearing Corporation, but to the amazement of the industry, as often and not by their own regulators.
A new staff recommendation by Annette Nazareth, director of the division of market regulation at the U.S. Securities and Exchange Commission to "outlaw" ownership of paper certificates at the same time the Depository Trust and Clearing Corporation is under intense scrutiny for alleged electronic counterfeiting has begun hitting the small public company markets, company executives, shareholders and manipulative short-selling opponents like the proverbial ton of bricks.
A Dow Jones (DJ) article by Judith Burns sparked the uproar, as the inextricably intertwined web of connections between the SEC and the DTC, which is sagging from the weight of conflicted governance by representatives from a rollcall of industry heavyweights, including NASD, which owns NASDAQ (NDAQ), the New York Stock Exchange, Goldman Sachs (GS) and Lehman Brothers (LEH), to name only a few.
The rule proposal would bar stock transfer agents from handling shares that carry any limitations on transfer. Control over stock certificates is one of the ways that small companies have combated illegal naked short sellers. Burns quoted Nazareth as saying that these companies' "self-help" efforts "aren't helping U.S. markets overall." Nazareth was quoted as saying restrictions on stocks are "a significant step backwards" in the "move from paper stock certificates to automated computerized trading."
Nazareth said that abusive "naked" short selling has been a problem "in some cases," but that is "best dealt with by a pending SEC proposal," presumably Regulation SHO.
SEC Commissioner William Donaldson purportedly publicly refused to answer any questions from the NASD about the timing of the Commission's consideration of the Regulation at a conference where he was simultaneously proposing early reforms of the mutual fund scandals. The Dow Jones said, however, that Robert Colby, SEC deputy market regulation division director, predicted the SEC will take that to a vote in early June.
The Dow Jones report noted that "naked short-selling occurs when sellers don't buy shares to replace those they borrowed, a manipulative practice that can drive a company's stock price sharply lower.
The stock certiticate plan has been put to a 30-day comment periodl Then the SEC would have to vote to adopt it. If adopted, Colby was quoted as saying that regulators might "sue firms that seek to impose restrictions on stock transfers."
The recent lawsuit filed by Nanopierce Technologies (NPCT) alleges that the Depository Trust and Clearing Corp. has a lot of reasons, almost one billion of them a year, to keep illegal naked short selling in operation. It was the shot across the bow by the legendary Houston law firms of Christian, Smith, Wukoson and Jewell, and OQuinn, Laminack and Pirtle, whose notches already include environmental targets, the breast implant industry and the tobacco industry, all brought to their knees.
In comments to the U.S. Securities and Exchange Commission, C. Austin Burrell, who is providing litigation support and research for the law firms, said that StockGate is more massive than anyone may have imagined. "Illegal Naked Short Selling has stripped hundreds of billions, if not TRILLIONS, of dollars from American investors," and have resulted in over 7,000 public companies having been "shorted out of existence over the past six years." Burrell said some experts believe as much as $1 trillion to $3 trillion has been lost to this practice.
He stated that the restrictions on short selling were deliberately put into the Securities Acts of 1933 and 1934 because of the first-hand evidence then available that the "sheer scale of the crashes was a direct result of intentional manipulation of US markets through abusive short selling by a massive conspiracy."
Burrell noted that the 65-lawyer team presided over by lead lawyers Wes Christian and John O'Quinn has uncovered more than 1,200 hedge fund and offshore accounts working through more than 150 broker-dealers and market makers in a joint cooperative effort to strip small and medium size public companies of their value.
Recently the NASD and U.S. Securities and Exchange Commission approved an interim naked short-selling band-aid, requiring U.S. brokers to make an "affirmative determination" that short-sellers, even foreign short-sellers, mostly Canadian, can find certificates to cover before processing the order.
Last year, many besieged public companies sought refuge from the manipulation by seeking to exit the DTC, but on July 12, 2003, the SEC stated "the issues surrounding naked short selling are not germane to the manner in which DTC operates as a depository registered as a clearing agency. Decisions to engage in such transactions are made by parties other than DTC. DTC does not allow its participants to establish short positions resulting from their failure to deliver securities at settlement. While the Commission appreciates commenters' concerns about manipulative activity, those concerns must be addressed by other means."
The Nanopierce lawsuit, said to be the first of many out of the box, emphatically suggests otherwise. According to lawyer Christian, et.al., the DTC is at the very heart of the problem, and has almost a billion dollars a year at stake in keeping the problem.
The Depository Trust Company (DTC) is a member of the U.S. Federal Reserve System, a limited-purpose trust company under New York State banking law and a registered clearing agency with the SEC. The depository supposedly brings efficiency to the securities industry by retaining custody of some 2 million securities issues, effectively "dematerializing" most of them so that they exist only as electronic files rather than as countless pieces of paper. The depository also provides the services necessary for the maintenance of the securities it has in "custody."
According to the suit, the DTCC has an enormous pecuniary and conflicted interest in the entire short selling scandal through the huge income stream they were realizing from it every day. They have made literally billions of dollars lending individual real shares, in most cases over and over, getting a fee each time they made a journal entry in the "Stock Borrow Program."
The Stock Borrow Program was purportedly set up to facilitate expedited clearance of stock trades. Somewhere along the line, the DTCC became aware that if it could lend a single share an unlimited number of times, it could collect a fee each time, according to Burrell. "There are numerous cases of a single share being lent ten or many more times," giving rise to the complaint that the DTCC has been electronically counterfeiting just as was done via printed certificates before the Crash.
"Such re-hypothecation has in effect made the potential 'float' in a single company's shares virtually unlimited and the term 'float' meaningless. Shares could be electronically created/counterfeited/kited without a registration statement being filed, and without the underlying company having any knowledge such shares are being sold or even in existence." Burrell said the Christian/O'Quinn lawsuits will seek to show that the "counterfeiting/creation of unregistered shares is a specific violation of the Securities Act of 1933, barring the 'Sale of Unregistered Securities'."
While the Nanopierce lawsuit has been filed at the state level, another companion lawsuit just heading to the courts on behalf of Exotics.com (EXII) will be argued at the Federal level.
Nanopierce's suit in the 2nd Judicial District Court in Nevada, is Case No. CV04-01079, alleges that the DTC's "stock borrow program" was "purportedly created to address SHORT TERM delivery failures," but that the "end result of the program has been to create tens of millions of unissued and unregistered shares to be traded in the public market," and in some instances resulting in "two or more shareholders who purchase shares in separate transactions to own the same shares."
The complaint alleges that the DTC has a colossal disincentive to stop the "stock borrow" program, booking revenues from services of $425,416,000 and similarly, the NSCC deriving revenues of $293,133,000.
Further, the suit alleges that "open positions" resulting from this activity at the close of business on December 31, 2003, "approximated $3,025,467,000" due to NSCC, and $2,303,717,000 due by NSCC, and unsettled positions of $721,750,000 for securities borrowed through the NSCC's "Stock Borrow Program."
Nanopierce claims that DTCC and NSCC have joined in a "scheme" to "manipulate downward the price of the affected securities, thereby reducing the market value of the open fail to deliver positions." The suit also claims that the defendants have permitted sellers to maintain open fail to deliver positions of tens of millions of shares for periods of a year and even longer.
It quotes the National Association of Security Dealers as admitting that "concerns have been raised by members, issuers, investors and other interested parties about potentially abusive short selling activities occurring in the marketplace. In particular, naked short selling, or selling short without borrowing securities to make delivery, can result in long term failures to deliver, including aggregate failures to deliver that exceed the total float of a security. NASD believes such extended failures to deliver can have a negative effect on the market. Among other things, by not having to deliver securities, naked short sellers can take on larger short positions than would otherwise be permissible, which can facilitate manipulative activity."
Nanopierce claims that it had "relied on material misrepresentations and omissions by DTC and NSCC in trading its shares in the stock market "without knowledge of Defendants' fraud-on-the market through statements they made about the clearing and settlement services they provided." Further, it claims that the Defendants acted with "scienter" since they had a major financial financial motivation to falsely represent their services, which Nanopierce claims are also anticompetitive.
The largely unregulated DTC has become something of a defacto Czar presiding over the entire U.S. markets system, wielding more day-to-day influence and control than the SEC, the NASD and NASDAQ combined. And, as the SEC's July 12 ruling indicates, its monopoly over the electronic trading system appears even to be protected.
The Depository Trust and Clearing Corp.'s two preferred shareholders are the New York Stock Exchange and the NASD, a regulatory agency that also owns the NASDAQ (NDAQ) and the embattled American Stock Exchange! Regulators, regulate thyself?
In an era when corporate governance is the primary interest for the SEC and state regulators, the DTCC is hardly a role model. Its 21 directors represent a virtual litany of conflict:
They include Bradley Abelow, Managing Director, Goldman Sachs (GS); Jonathan E. Beyman, Chief Information Officer, Lehman Brothers (LEH); Frank J. Bisignano, Chief Administrative Officer and Senior Executive Vice President, Citigroup / Solomon Smith Barney's Corporate Investment Bank (C); Michael C. Bodson, Managing Director, Morgan Stanley (MWD); Gary Bullock, Global Head of Logistics, Infrastructure, UBS Investment Bank (UBS); Stephen P. Casper, Managing Director and Chief Operating Officer, Fischer Francis Trees & Watts, Inc.; Jill M. Considine,Chairman, President & Chief Executive Officer, The Depository Trust & Clearing Corporation (DTCC);
Also, Paul F. Costello, President, Business Services Group, Wachovia Securities (WB); John W. Cummings, Senior Vice President & Head of Global Technology & Services, Merrill Lynch & Co. (MER); Donald F. Donahue, Chief Operating Officer, The Depository Trust & Clearing Corporation (DTCC); Norman Eaker, General Partner, Edward Jones; George Hrabovsky, President, Alliance Global Investors Service; Catherine R. Kinney, President and Co-Chief Operating Officer, New York Stock Exchange; Thomas J. McCrossan, Executive Vice President, State Street Corporation (STT); Eileen K. Murray, Managing Director, Credit Suisse First Boston (CSR); James P. Palermo, Vice Chairman, Mellon Financial Corporation (MEL); Thomas J. Perna, Senior Executive Vice President, Financial Companies Services Sector of The Bank of New York (BNY); Ronald Purpora, Chief Executive Officer, Garban LLC; Douglas Shulman, President, Regulatory Services and Operations, NASD; and Thompson M. Swayne, Executive Vice President, JPMorgan Chase (JPM).
In their comments to the SEC regarding Regulation SHO in January, the 50 state regulators, through their association, the North American Association of Securities Administrators (NASAA) issued what many consider to be a strong warning that if the DTC is not dealt with in the final regulations, state regulators such as New York State Attorney General Eliot Spitzer may step to the plate.
In what many considered to have been explosive comments, Ralph Lambiase, NASAA president and Director of the Connecticut Division of Securities, warned "NASAA urges the Commission to reconsider its stance regarding the role of the Depository Trust and Clearing Corporation (the DTC). As a threshold matter, NASAA believes that the Commission should explicitly prohibit the DTC from lending more shares of a security than it actually holds. The ability of the overall proposed rule would be severely impared unless the Commission undertakes to implement such a prohibition."
As the Nanopierce lawsuit reveals, those were indeed strong words, meddling as it did, in a substantial revenues base for the DTCC.
Recently, leading market makers and brokers named in various lawsuits and other actions, including FleetBoston (NYSE: FBF), Goldman, Sachs & Co. (GS), H. Myerson & Co., Inc. (NASDAQ: MHMY), Olde / H&R Block (HRB), Charles Schwab (SCH), Toronto-Dominion's (TD), TD Waterhouse Group, Bank of America's (BAC) Banc of America Securities LLC, Societe Generale's (SCGLF) SG Cowen Securities Corp. vFinance, Inc. (VFIN), Knight Trading Group, Inc. (NITE), A.G. Edwards, Inc. (AGE), Ameritrade Holding Corp. (AMTD), Deutsche Bank AG (DB), and ETrade Group, Inc. (ET), were forced to comply with new short-selling market regulations imposed by the NASD after the SEC had "sat on" the NASD request to plug material loopholes for almost 2-1/2 years.
"The new rules expand the scope of the affirmative determination requirements to include orders received from broker/dealers that are not members of NASD ("non-member broker/dealers").
The new rule is on the web at http://www.nasdr.com/2610_2004.asp#04-03
The rule itself, while welcomed by small companies and their shareholders in the U.S., nevertheless raised an outcry because the NASD's request to put it into effect had set on a shelf at the SEC since 2001.
The scandal has embroiled hundreds of companies and dozens of brokers and marketmakers, in a web of internaitional intrigue, manipulative short-selling and cross-border acctions and denials.
Comments on Regulation SHO ended January 5, and may be viewed at http://www.sec.gov/rules/proposed/s72303.shtml .
Some 122 companies, including 13 brokers, such as FleetBoston (NYSE: FBF), Goldman, Sachs & Co. (GS), H. Myerson & Co., Inc. (NASDAQ: MHMY), Olde / H&R Block (HRB), Charles Schwab (SCH), Toronto-Dominion's (TD), TD Waterhouse Group and vFinance, Inc. (VFIN). A.G. Edwards, Inc. (AGE), Ameritrade Holding Corp. (AMTD), Deutsche Bank AG (DB), Knight (NITE) and ETrade Group, Inc. (ET), have been embroiled for over a year in a raging controversy
The remaining 109 companies among the 122 named to date have issued press releases or been named in the media as having been victimized, or as taking various actions, either alone or in concert with other companies, to oppose manipulative trading in the form of illegal naked short selling. The actions have ranged from lawsuits to withdrawals and threatened withdrawals from the electronic trading system managed by the Depository Trust & Clearing Corp., to withdrawals from toxic financings, to the issuance of dividends or name changes designed to squeeze manipulators, to joining associations or networks or to contacting regulatory authorities to provide documentation of abuses or otherwise complain.
The complete list of those 108 companies include Advanced Viral Research Corp. (ADVR), AdZone Research, Inc. (ADZR), Amazon Natural Treasures (OTC: ANTD), America's Senior Financial Services (OTCBB: AMSE), American Ammunition, Inc. (AAMI), AngelCiti Entertainment (OTCBB: AGLC), ATSI Communications, Inc. (ATSC), Federal Agricultural Mortgage / Farmer Mac (AGM) Allied Capital (ALD), American Motorcycle (OTC: AMCYV), American International Industries (AMIN), Ameri-Dream (OTC: AMDR), Adirondack Pure Springs Mt. Water Co. (OTCBB: APSW), ATSI Communications,Inc. (ATSC) Bluebook International (BBIC), Blue Industries (OTCBB: BLIIV), Bentley Communications (OTCBB: BTLY), BIFS Technologies Corporation (BIFT), Biocurex (BOCX). Broadleaf Capital Partners, Inc. (BDLF), Chattem, Inc. (CHTT), Critical Home Care (CCLH), Composite Holdings (COHIA), CyberDigital, Inc. (CYBD). Diamond International Group (OTCBB: DMND), Dobson Communications Corp. (DCEL), Eagle Tech Communications (EATC), Edgetech Services (EDGH);
Also, Endovasc Ltd. (EVSC), Enviro-Energy Corporation (ENGY), Environmental Products & Technologies (OTC: EPTC), Environmental Solutions Worldwide, Inc. (ESWW), EPIXTAR Corp. (EPXR), eResearchTechnologies, Inc. (ERES), Flight Safety Technologies (OTCBB: FLST), Freddie Mac (FRE), FreeStar Technologies (OTCBB: FSRCE), Front Porch Digital,
Inc. (FPDI), Geotec Thermal Generators, Inc. (GETC), Genesis Intermedia (GENI), GeneMax Corp. (GMXX), Global Explorations Inc (GXXL), Global Path (OTCBB: GBPI), GloTech Industries, Inc. (OTCBB: GTHI), Green Dolphin Systems (OTCBB: GLDS), Group Management (OTCBB: GPMT), Hop-On (HPON), H-Quotient, Inc., (HQNT), Hyperdynamics Corp. (HYPD), International Biochem (IBCL), Intergold Corp. (OTCBB: IGCO), International Broadcasting Corporation (IBCS), InternetStudios, Inc. (ISTO), ITIS Holdings (ITHH), Investco Corp. (IVCO), Lair Holdings (LAIR), Lifeline BioTechnologies Inc. (LBTT), Life Energy & Technology (LETH), MBIA (MBI);
Also, MegaMania Interactive (MNIA), MetaSource Group, Inc. (MTSR),Midastrade.com (MIDS), Make Your Move (OTCBB: MKMV), Medinah Minerals (MDMN), MSM Jewelry Corp. (OTC: MSMC), Nanopierce Technologies, Inc. (NPCT), Nutra Pharmaceutical (NPHC), Nutek (OTCBB: NUTK), Navigator Ventures (NVGV), Orbit E-Commerce, Inc. (OECI), Pitts & Spitts (OTC: PSPP), Sales OnLine Direct (OTCBB: PAID), Pacel Corp. (OTCBB: PACC), PayStar Corporation (PYST),Petrogen Corp. (PTGC), Pinnacle Business Management (OTC: PCBM), Premier Development & Investment, Inc. (PDVN), PrimeHoldings.com, Inc. (PRIM), Phlo Corporation (PHLC), Resourcing Solutions (RESG), Reed Holdings (OTC: RDHC), Rocky Mountain Energy Corp. (OTCBB: RMECE), RTIN Holdings (OTCBB: RTNHE), Saflink Corp. (SFLK), Safe Travel Care (OTCBB: SFTVV), Sedona Corp. (SDNA);
Also, Sionix Corp. (SINX), Sonoran Energy (SNRN), Starmax Technologies (SMXIF), Storage Suites America (SSUA), Suncomm Technologies (OTC: STEH), Sports Resorts International (SPRI), Technology Logistics (TLOS), Swiss Medica, Inc. (SWME), Ten Stix, Inc. (TNTI), Tidelands Oil (TIDE), Titan Construction (TTCS), Trezac Corp. (OTCBB: TRZAV), Universal Express, Inc. (USXP), Valesc Holdings, Inc. (OTCBB: VLSHV), Vega Atlantic (OTCBB: VGAC), Viragen (VRA), Viragen International (VGNI), Vista Continental Corporation, (VICC), Viva International (VIVI), Vtex Energy (OTCBB: VXENE) and Wizzard Software (WIZD), WorldTradeShow.com (WTSW) and Y3K Secure Enterprise Software, Inc. (OTCBB: YTHK).
Earlier in 2003, the SEC fined Rhino Advisors, Inc., $1 million for its representation of Amro International in the financing and manipulation of Sedona Corp. Amro, also known as AMRO, was registered in Panama, a secretive offshore haven, but was not named in the SEC settlement. Another 60 public companies may have been manipulated by the fined Rhino Advisors and its indicted principals, or its funding apparatus, Amro.
These include:
All American Food Group Inc (AAFGQ), Amanda Co Inc (AMNA), Antra Holdings (RECD), Aquis Communications Group Inc (OTCBB: AQUIS), Avanir Pharmaceuticals (AVN), Bionutrics Inc (BNRX), Brilliant Digital Entertainment Inc (AMEX: BDE), Bravo! Foods International Corp. (OTCBB: BRVOE), Butler National Corp (BUTL),Calypte Biomedical Corp (CYPT), Chemtrak Inc/DE (CMTR), Clicknsettle Com Inc (CLIK), Corporate Vision Inc (OTC: CVIA), Crown Laboratories Inc/DE (CLWB), Dental Medical Diagnostic Systems Inc (DMDS), Detour Media Group Inc (DTRM),
Also, Digital Privacy Inc/DE (OTC: DGPV), Senior Services Inc (DISS), International Inc (DYNX), Endovasc Ltd Inc (EVSC), Esynch Corp/CA (OTCBB: ESYN), Focus Enhancements Inc (NASDAQ: FSCE), Frederick Brewing Co (FRBW), Greystone Digital Technology Inc (GSTN), Havana Republic Inc/FL (HVNR), Henley Healthcare Inc (HENL), Hollywood Media Corp (HOLL), Ibiz Technology Corp (IBZT), Diagnostic Systems Inc/FL (IMDS), Imaging Technologies (OTCBB: IMTO), Integrated Surgical Systems Inc (RDOC),
Also, Interferon Sciences Inc (IFSC), Interiors Inc (OTC: ITRNA), Laminaire Corp (THMZ), Medisys Technologies Inc (SCEP), Milestone Scientific Inc/NJ (MS), Nevada Manhattan Group Inc (NVMH), Innovations Inc (OTCBB: NTGE),Systems Group (OSYM), Pacific Systems Control Technology Inc (PFSY), Professional Transportation Group Ltd Inc (TRUC), Rnethealth Inc (RNTT),
Also, Sand Technology Inc (SNDT), Sedona Corp (SDNA), Silverado Foods Inc (SVFO), Stockgroup Information Systems (SWEB) Surgilight Inc (SRGL), Tasty Fries Inc (TFRY), Tech Laboratories Inc (TCHL), Teltran International Group Ltd (TLTG), Titan Motorcycle Co of America Inc (TMOTQ), Trans Energy Inc (TSRG), Motorcycle Co (UMCC), Universal Communication Systems Inc (UCSY), Medical Systems Inc (UMSI), Vianet Technologies Inc (VNTK),Viragen Inc (VRA), Webcatalyst Inc (WBCL), Worldwide Wireless Networks Inc (WWWNQ), and ZAP (ZAPZ).
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Has this been posted here?
http://ragingbull.lycos.com/mboard/boards.cgi?board=CLB01219&read=39637
There’s a racket known as “naked shorting” taking place in some of the North American Stock Markets.
To simplify the concept of “naked shorting” of shares, consider this:
Imagine you’ve got your home for sale in a hot housing market, and your real estate broker lines up 5 buyers. He sells the home to all five but keeps the money from the other four. How would you feel if you were one of the four people who paid the price but didn’t get the deed to the home, weren’t entitled to live in it, but for a commission you’re offered a chance to sell it to someone else, even though it really doesn’t exist … and now in a marketplace with 4 extra “homes” for sale?
The only difference between the above and “naked shorting” is that the four home buyers soon realize they’ve been defrauded and alert the regulators. The market investor never realizes he’s been defrauded because he has faith in the system and therefore doesn’t demand his broker show him the registered share certificates made out in his name.
Don’t be content with a monthly statement showing you own shares when in reality they don’t exist. Pay for and ask to be shown the registered paper certificates, and if you’re a long term investor, ask for delivery of some of them to be sure they’re not borrowed by others to manipulate the share price.
More and more people believe the proceeds of these fraudulent sales are being used to fund terrorism.
For more on this, visit Website www.investigatethesec.com
You've probably not yet heard of this
... but there’s a racket known as “naked shorting” taking place in some of the North American Stock Markets.
To simplify the concept of “naked shorting” of shares, consider this:
Imagine you’ve got your home for sale in a hot housing market, and your real estate broker lines up 5 buyers. He sells the home to all five but keeps the money from the other four. How would you feel if you were one of the four people who paid the price but didn’t get the deed to the home, weren’t entitled to live in it, but for a commission you’re offered a chance to sell it to someone else, even though it really doesn’t exist … and now in a marketplace with 4 extra “homes” for sale?
The only difference between the above and “naked shorting” is that the four home buyers soon realize they’ve been defrauded and alert the regulators. The market investor never realizes he’s been defrauded because he has faith in the system and therefore doesn’t demand his broker show him the registered share certificates made out in his name.
Don’t be content with a monthly statement showing you own shares when in reality they don’t exist. Pay for and ask to be shown the registered paper certificates, and if you’re a long term investor, ask for delivery of some of them to be sure they’re not borrowed by others to manipulate the share price.
More and more people believe the proceeds of these fraudulent sales are being used to fund terrorism.
For more on this, visit Website www.investigatethesec.com
phatboy - this will answer some of your questions:
The Unknown $19 Trillion Company
This report is a compilation of interviews and background research from October 1995 through April 1999.
The Depository Trust Company (DTC) is the best-kept secret in America. Headquartered at 55 Water Street in New York City, the average American has no clue that this financial institution is the most powerful banking corporation in the world. The general public has no knowledge of what the DTC is or what they do. How can a private banking trust company hold assets of over $19 trillion and be unknown? In a recent press release dated April 19, 1999, the Depository Trust Company stated:
……"The Depository Trust Company (DTC) is the world’s largest securities depository, holding nearly $19 trillion in assets for its Participants and their customers. Last year, DTC processed over 164 million book-entry deliveries valued at more than $77 trillion".
In dealing with the trust department of Midlantic Bank, N.A. in New Jersey [now PNC Bank, N.A.], this writer was authorized, as trustee and power of attorney, to transfer original trust assets comprising of common stocks and bonds to a new trust set up in another jurisdiction. An Assistant Vice President from the Trust & Financial Management Office of Midlantic Bank said to me "it will take at least 6 weeks to do this as the majority of the stocks and bonds are not held in the name of the trust". This same Midlantic Bank Assistant V.P. also stated in a letter dated November 17, 1995, "Of the 11 municipal bonds, 8 are held in book entry only. This means they cannot be physically re-registered with a certificate sent to the new trustees." (* These are not the actual figures quoted in the letter in order to protect the privacy of the account holder, at their request. Also, we were asked not to name the Midlantic Assistant V.P. in order to protect her privacy rights. We respect these requests with full moral compliance). In disbelief, I brought this matter to the attention of our research assistants at the Christian Common Law Institute [formerly the North Bridge News] and we began our lengthy investigation into the matter. After 3½ years, the can of worms we've opened up should frighten every American. With the advent of reported Y2K computer glitches and the possible collapse of our 'paper asset' economy, every person who has a stock or bond in their portfolio had better read this report and act on the information we are disclosing here.
In November 1995, after encountering numerous "no comments" and a myriad of "that's not my department" excuses via telephone, I eventually spoke with Mr. Jim McNeff who told me his position was Director of Training for the DTC. He said he'd been employed there for 19 years and was "very proud" of his employer. During my initial telephone interview, either Jim's employer or some other unknown person or persons were illegally listening or taping our telephone conversation according to the electronic eavesdropping equipment we have installed on our end. Why did anyone feel it was necessary to illegally record our conversation without advising us?
Jim informed me back then (1995) that "the DTC is the largest limited trust company in the world with assets of $ 9.1 trillion". In July 1998, I spoke with Ms. Rose Barnabic of the DTC Finance Department who said, "DTC assets are currently estimated at around $11 trillion". As of April 19, 1999, the DTC itself has stated that their assets total "nearly $19 trillion". Mr. McNeff had also stated "the DTC is a brokerage clearing firm and transfer center. We're a private bank for securities. We handle the book entry transactions for all banks and brokers. Every bank and brokerage firm must secure their membership with us in case they become insolvent, so your assets are secure with DTC". Yes, you read that correctly. The DTC is a private bank that processes every stock and bond (paper securities) for all U.S. banks and brokerage houses. The big question is this - Just who gave this private bank and trust company such a broad range of financial power and clout?
The reason the public doesn't know about DTC is that they're a privately owned depository bank for institutional and brokerage firms only. They process all of their book entry settlement transactions. Jim McNeff said "There's no need for the public to know about us... it's required by the Federal Reserve that DTC handle all transactions". The Federal Reserve Corporation, a/k/a The Federal Reserve System, is also a private company and is not an agency or department of our federal government, according to the 1998 Federal Registry. The Federal Reserve Board of Governors is listed, but they are not the owners. The Federal Reserve Board, headed by Mr. Alan Greenspan, is nothing more than a liaison advisory panel between the owners and the Federal Government. The FED, as they are more commonly called, mandates that the DTC process every securities transaction in the US. It's no wonder that the DTC (including the Participants Trust Company, now the Mortgage-Backed Securities Division of the DTC) is owned by the same stockholders as the Federal Reserve System. In other words, the Depository Trust Company is really just a 'front' or a division of the Federal Reserve System.
"DTC is 35.1% owned by the New York Stock Exchange on behalf of the Exchange's members. It is operated by a separate management and has an independent board of directors. It is a limited purpose trust company and is a unit of the Federal Reserve." -New York Stock Exchange, Inc.
Now, let's see how this effects the average working American family. If you're not aware how the system works, you should visit or call a stockbroker or bank and instruct them you want to purchase some shares of common stock or a small municipal bond, for example. They will set up a brokerage account for you and act as your agent with full durable power of attorney (which you must legally sign over to them) to conduct business on your behalf, upon your buy or sell instructions. The broker will place your stock or bond purchase into their safekeeping under a "street name". According to Mr. McNeff of the DTC, no bank or broker can place any stock or bond into their firm's own name due to Federal Trade Commission (FTC) and Security and Exchange Commission (SEC) regulations.
The broker or bank must then send the transaction to the DTC for ledger posting or book entry settlement under mandate by the Federal Reserve System. Remember, since your bank or broker can't use their name on the certificate, they use a fictitious street name. "Since the DTC is a banking trust company, we can't hold the certificates in our name, so the DTC transfers the certificates to our own private holding company or nominee name." states Mr. McNeff. The DTC's private holding company or street name, as shown on certificates we have personally examined from numerous certificate holders, is shown as either "CEDE and Company", "Cede Company" or "Cede & Co". We have searched every source known to learn who CEDE really is, but have been unable to get any background information on them. We must presume that the information Mr. McNeff gave us was correct when he confirmed that Cede Company was a controlled private holding company of the DTC. We have now found the following proof that CEDE is real from the Bear Stearns internet site:
NEW YORK, New York — March 16, 1999 — Bear Stearns Finance LLC today announced that it will redeem all of the 6,000,000 outstanding 8.00% Exchangeable Preferred Income Cumulative Shares, Series A ("EPICS") of Bear Stearns Finance LLC, liquidation preference of $25.00 per Series A Share, CUSIP number G09198105. All of the Series A Shares are held by Cede & Co., as nominee of The Depository Trust Company, and the payment of the redemption price will be made to Cede & Co. by ChaseMellon Shareholder Services, LLC, as paying agent, whose address is: 85 Challenger Road, Ridgefield Park, New Jersey 07660.
The banks and brokers are merely custodians for their clients. By federal law (SEC), they cannot hold any assets in the customer's name. The assets must be held in the name of DTC's holding company, CEDE & Co. That's how DTC has more than $19 trillion dollars of assets in trust... or is it really in "trust" if the private Federal Reserve System is technically holding it in their "unknown" entity's name? Obviously, if stock and bond certificates you've purchased aren't in your name, then the "holder" (the Federal Reserve System) could theoretically refuse to surrender them back to you under a "national emergency" according to the Trading with the Enemy Act (as amended).
According to Mr. McNeff, the DTC was a former member of the New York Stock Exchange (NYSE), and "Our sister company is the National Securities Clearing Corporation... the NSCC" (they have since merged). He was correct since we now know that the NYSE holds 35.1% of the "ownership" of the DTC on behalf of their NYSE members. Simply put, the Depository Trust Company absolutely controls every paper asset transaction in the United States as well as the majority of overseas transactions, and they now physically hold (as of April 1999) 99% of all stock and bond book-entries in their street name, not the actual owner's names. If you have stock or bond certificates in your name buried in your back yard or under your mattress, we suggest you keep them there. If not, it might be very wise to cancel your brokerage account and power of attorney status, re-register the stocks and bonds in your name (if you still can), and keep them hidden where only you know their location. Otherwise, you have absolutely no control over them. However, getting a stock or bond certificate these days is not so easy if possible at all:
"For the most part, issuers know little about the role of the Depository Trust Company (DTC). The DTC was created in 1973 as a user-owned cooperative for post-trade settlement. Our members are banks and broker/dealers, whom we refer to as participants. We handle listed and unlisted equities, including 51,000 equity issues and 170,000 corporate debt issues, equating to more than 78% of shares outstanding on the New York Stock Exchange (NYSE). We also have more than 95% of all municipals on deposit.
In the 1980s, the "Group of 30" [business leaders] recommended that stock certificates be eliminated, because physical certificates create risk. The Securities Exchange Commission (SEC) issued a concept release in 1994 to gradually decrease certificates, providing optional direct registration on the books of the issuer instead of a certificate this enhances the portability of shares between transfer agents and brokerage accounts. With the direct registration system, brokers transmit instructions to purchase through DTC, which the issuer or transfer agent then registers, so shares can be delivered electronically." -John D. Faith, Manager, Corporate Trust Services, The Depository Trust Company (1996)
Most of us remember a few years back the purported computerized selling of stocks that resulted in Wall Street's "Black Monday":
Dow Dives 508.32 Points in Panic on Wall Street
"The largest stock-market drop in Wall Street history occurred on "Black Monday" -- October 19, 1987 -- when the Dow Jones Industrial Average plunged 508.32 points, losing 22.6% of its total value. That fall far surpassed the one-day loss of 12.9% that began the great stock market crash of 1929 and foreshadowed the Great Depression. The Dow's 1987 fall also triggered panic selling and similar drops in stock markets worldwide" -Source: Facts on File World News CD ROM
The stock exchanges had dramatic record losses, and a record volume of shares were traded on that infamous Monday in October 1987. We all asked ourselves how computers could have done this by themselves without someone knowing about it. After all, someone has to program a computer to tell it what to do, what not to do, or even when to do or not do it.
During my telephone conversation, Mr. McNeff was trying to assure me that they [the DTC] have "never lost a certificate or made a mistake in a book ledger transaction". In attempting to give me an example of how trustworthy the DTC is when I asked him how he could back up such a statement, he replied "DTC's first controlled test was 4 or 5 years ago. Do you remember Black Monday? There were 535 million transactions on Monday, and 400 million transactions on Tuesday". He was very proud to inform me that "DTC cleared every transaction without a single glitch!".
On June 7, 1995, the federal government issued a new regulation requiring stock and bond certificate transfers to be cleared in three days instead of the previous five day time period. It coincided with the infamous Regulation CC that purportedly gave us faster three day availability of funds from deposited checks. This means that brokers and banks must get your stock or bond transaction into the street name (Cede & Co.) of the DTC within 3 working days. That's hard to do considering banks claim it takes 3 or more days to clear a check that you've submitted to pay for a stock purchase.
On February 22, 1996, "the DTC will flip the switch" according to Mr. McNeff. "What switch?", I asked. "This is the day that clearing house funds will no longer be accepted for stock or bond transactions" was the reply from Jim. "Instead, only Fed Funds will be accepted". Fed Funds, or a Fedwire, are electronic computer ledger debit transfers between Federal Reserve System member banks. No checks or drafts have been allowed from that day, just as Mr. McNeff accurately stated. This is more commonly called a "cashless transaction". I call it the reality of the mark of the beast.
The Depository Trust Company has grown since October 1995. On July 1998, this amount was estimated by a DTC employee at more than $11 Trillion. As of April 19, 1999, the DTC itself has stated in a press release that their asset value is nearly $19 trillion. In 3 1/2 years, their assets increased nearly $ 10Trillion. That's a lot of stocks and bonds supposedly held in trust. The latest trend over the past ten years is for stock and bond brokers to offer "book-entry ownership" only. Every book-entry stock or bond is literally owned by the DTC. Since 1985, most bond and many stock issuers have converted from the issuance of certificates to book-entry systems administered and controlled by the DTC. As of March 1999, the National Securities Clearing Corporation (NSCC) and the Participants Trust Company (PTC) are now merged into the DTC. Practically, there isn't one stock or bond issued that is not controlled by the DTC.
If you purchase any stock or bond through a broker, it is being held for you under a "street name" by the DTC unless you have specifically requested to hold the certificate yourself. If you have a book entry stock or bond, you won't be issued a certificate. It's important to note that you have purchased that particular stock or bond without becoming a registered holder of the actual stock or bond certificate. Instead, you have become a beneficial owner. The difference between the two is like night and day. Take the time to absorb and understand the following definitions:
REGISTERED HOLDER- A Registered Holder literally possesses, owns, and holds, his stock or bond with his name appearing on the face of the certificate. The company that issued the certificate has registered the owner's (holder's) name on their official books. This is the safest way to own a paper asset. You literally possess the fully registered certificate and only you can transfer or sell it. By all Rights and definition of law, you are the owner. You have it, you hold it, you possess it, and you keep it. You have the complete control over it.
BENEFICIAL OWNER- A Beneficial Owner is nothing more than a beneficiary, "One who is entitled to the benefit of a contract"- A Dictionary of Law, 1893. All book-entry stocks and bonds you purchase make you the beneficial owner, not the registered holder. The owner of a book-entry stock or bond is the entity or name that it is registered under.
The DTC owns that bond or stock, not you. Rather than in your name, it's registered (as the legal Registered Owner or agent) in their "street name", Cede & Company. (In the past, it may have been registered in your broker's street name, but this is no longer allowed). The DTC is the Registered Owner - holder - of your stock or bond. The DTC is the legal property-holder, shareholder, stock-holder, owner and purchaser. Your name appears nowhere on the book entry or certificate as the actual owner. Instead, you have been designated by the legal registered owner, the DTC, as the Beneficial Owner. This means that your lawful Rights in that stock or bond are confined to that of a successor or heir.
At the University of Utah College of Law, we found the following examination question about Cede & Co.:
......The common stock of LargeCo, Inc. is publicly traded on the New York Stock Exchange. Over 2/3rds of the shares are registered on LargeCo's books in the name of Cede & Co. Cede is a depository company which holds the shares as nominee on behalf of brokerage firms, mutual funds and other active traders. The brokerage firms in turn are also nominees with respect to some of the shares, which they hold on behalf of their customers. Nominees, such as Cede and brokerage firms holding for customers, view the customer as the beneficial owner of the shares and consider the customer to be the one with the right to vote the shares; mutual funds, however, view the fund as the owner of the shares it holds and vote the shares themselves.
......Most of the remainder of LargeCo's stock (26% of the total) is held by the Large family, which is still actively involved in management. LargeCo is aware that the beneficial owner of about half the stock registered in Cede's name is the Small family, who live next door to the Larges in downtown Rome, and that the remainder of the Cede stock is beneficially owned by several well known mutual funds.
According to the DTC, under the US Security and Exchange Commission (SEC) rules, you only have the right to "receive proceeds or other advantages as the beneficiary". You are not the owner... you are the consignee, "One who has deposited with a third person an article of property for the benefit of a creditor"- A Dictionary of Law, 1893. In legal terms, you are considered the heir presumptive or heir at law to the stock or bond you paid for. The DTC controls, possesses as creditor, holds and owns your book-entry stock or bond. This is a difficult pill to swallow for those who have placed their assets in stocks and bonds over the past decade. Your broker sends you a fancy accounting every month of your purported holdings, along with dividend and interest payments paid. The fact is, you only receive the benefit of ownership (interest and dividends) without holding title to your property. You are at the mercy of the registered owner, the DTC. If you don't believe this is true, then call your broker right now and ask them who's name is listed as the Registered Holder of your book-entry stocks and bonds. If you're lucky, the broker will tell you "why of course you're the Beneficial Owner", then you'll know the truth. He may emphasize to you that the stocks and bonds are being held in "safe keeping" for your own protection. This is broker language for "your stocks and bonds are held by the DTC in their street name as the creditor".
From J.P. Morgan's internet site:
Registered and beneficial shareholders
There are two types of shareholders: registered, who hold an ADR in physical form, and beneficial, whose ADRs are held by third-parties and are listed under a "nominee" or "street" name.
Registered shareholders are listed directly with the issuer or its U.S. transfer agent. The transfer agent handles the record-keeping associated with changes in share ownership, distribution of dividend payments, and investor inquiries; it also facilitates annual meetings. An issuer's depositary bank can provide the identities of registered shareholders on a regular basis. However, this may not provide the level of shareholder identification required for a successful investor relations effort. Registered shareholders are typically individual investors who have physical possession of their share certificates, generally in lots of 100 shares or fewer. The registered list also includes nominee names such as Cede & Co., which represent the aggregate position of the Depository Trust Company (DTC), the primary safekeeping, clearing, and settlement organization for securities traded in the United States. DTC uses electronic book-entry to facilitate settlement and custody rather than the physical delivery of certificates.
Beneficial shareholders, which can include individual as well as institutional investors, do not have physical possession of their certificates; third-party broker-dealers or custodian banks hold their securities on their behalf. These shares are said to be held in street name because they are kept with the DTC in the name of the broker-dealer or the custodian bank - not the underlying shareholder. Lists of beneficial shareholders who do not object to disclosing their holdings are available from banks and broker-dealers. These lists, called NOBO for Non-Objecting Beneficial Owner, typically provide the names of individual investors.
To help identify institutional investors, who do not usually disclose their holdings, issuers use publicly available filings. Large holders, including investment managers, are required to make periodic filings - such as 13-F, 13-G, and 13-D - with the Securities and Exchange Commission (SEC) disclosing the name and value of the positions in their portfolios.
Which brings us to the street name used, registered, and designated by the DTC as the registered owner of over $19 Trillion (USD) of our stocks and bonds... CEDE & Co. Everyone in the brokerage business keeps pronouncing this name as "See Dee" and Company, but it's spelled C-E-D-E and pronounced "Seed". This is where the real irony comes.
Black's Law Dictionary, Sixth Edition, 1990, the word Cede is defined as "To yield up; to assign; to grant; to surrender; to withdraw. Generally used to designate the transfer of territory from one government to another". In the Black's 1951 Fourth Edition, it lists the following as supportive case law; Goetze v. United States, C.C.N.Y., 103 Fed. 72.
Our suggestion to you is this: If you don't literally have every stock and bond registered certificate in your possession, then promptly call your broker and tell him you want all your securities transferred and re-registered into your name as the Registered Holder and Owner. If he says he can't do that because your stock or bond is a book-entry transaction only, we strongly suggest, for your own security, that you sell your book-entry assets immediately. Don't let the broker tell you that it's "safer" for you if they keep your certificates. Remember, you know the truth. Even if all your stock and bond certificates were burned in a fire, the process to have them replaced is simple. If someone were to steal your certificates, you simply report them stolen to the company that issued them and they're automatically cancelled, just like a stolen credit card. Replacement certificates are then issued to replace the lost or stolen originals.
Most people don't realize that when they open a brokerage account, they have entered into a contractural agreement allowing the broker to assign the stocks and bonds to an undisclosed creditor, the DTC. (We suggest you read the small print on your brokerage agreement). This gives the broker your express written permission to place all your securities into the ownership of the DTC. Your broker is an agent for the DTC through mandatory Securities and Exchange Commission regulations and mandates by the Federal Reserve System private bank. Your broker represents them, not you. Your brokerage account is nothing more than a ledger of accounting. It reflects no assets held in your name. The assets are registered in a "street name" that is not you or your name. Sure, you receive the interest and dividends, but you do so as a beneficiary to the real owner. Your brokerage account in no way, shape, or manner reflects who literally owns your securities. What you own is a brokerage account and nothing more.
There’s a racket known as “naked shorting” taking place in some of the North American Stock Markets.
To simplify the concept of “naked shorting” of shares, consider this:
Imagine you’ve got your home for sale in a hot housing market, and your real estate broker lines up 5 buyers. He sells the home to all five but keeps the money from the other four. How would you feel if you were one of the four people who paid the price but didn’t get the deed to the home, weren’t entitled to live in it, but for a commission you’re offered a chance to sell it to someone else, even though it really doesn’t exist … and now in a marketplace with 4 extra “homes” for sale?
The only difference between the above and “naked shorting” is that the four home buyers soon realize they’ve been defrauded and alert the regulators. The market investor never realizes he’s been defrauded because he has faith in the system and therefore doesn’t demand his broker show him the registered share certificates made out in his name.
Don’t be content with a monthly statement showing you own shares when in reality they don’t exist. Pay for and ask to be shown the registered paper certificates, and if you’re a long term investor, ask for delivery of some of them to be sure they’re not borrowed by others to manipulate the share price.
More and more people believe the proceeds of these fraudulent sales are being used to fund terrorism.
For more on this, visit Website www.investigatethesec.com
What a sickening poor excuse for "regulators and enforcers" we have!
http://www.nj.com/news/ledger/index.ssf?/base/news-16/108901265249070.xml
"The SEC is not disputing that someone is manipulating the stocks," said John Nestor, a spokesman for the agency. "We just passed new rules to make that tougher …."
Yeah,we know it's there....
Yeah,we know jobs are being lost...
Yeah, we know investors are being robbed blind....
Yeah, we know they drive businesses into bankruptcy so crooks get to keep all the money...
Yeah, we know it's all illegal....
Yeah, we know we have been asleep at the wheel...
Yeah, we know profits are funding terrorist cells...
Yeah, we know the tax loss in the US tax base has been phenomenal and that losses measure into the trillions for investors and businesses....
Yeah, we know ..we know...we know.... but ya know what???
Whatcha gonna do....we get our paychecks and that's all we care about!
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Section 20 of the securities Act of 1934 addresses the involvement of those that aid and abet in the facilitation of securities fraud.
e. Prosecution of persons who aid and abet violations
For purposes of any action brought by the Commission under paragraph (1) or (3) of section 21(d), any person that knowingly provides substantial assistance to another person in violation of a provision of this title, or of any rule or regulation issued under this title, shall be deemed to be in violation of such provision to the same extent as the person to whom such assistance is provided.
I. section 17A of the securities act is very specific about the mandate to facilitate:
a. The prompt and accurate clearance and settlement of securities transactions, including the transfer of record ownership and the safeguarding of securities and funds related thereto, are necessary for the protection of investors and persons facilitating transactions by and acting on behalf of investors.
To facilitate a naked short there cannot simply be an illegal short sale, there needs to be an orchestrated conspiracy that supports that illegal trade. The Buying Broker-Dealer must ignore their fiduciary duty to enforce delivery for settlement in seeking out the protection of the investors’ best interests. The Buying Broker-Dealer in fact perpetuates the facilitation of that crime when they themselves initiate the false trade statement/confirm identifying settlement had occurred.
http://investigatethesec.com/DavePatch7.html
Why do we allow our hard earned tax dollars to pay these unscrupulous regulator's salaries??? Why are they allowed to keep their jobs in the light of knowing about ongoing fraud???
How do those so called "regulators" sleep at night?
To whom this may concern
There is a racket known as “naked shorting” taking place in some of the North American Stock Markets.
To simplify the concept of “naked shorting” of shares, consider this:
Imagine if you were selling your home, and your real estate broker were to sell it for you to 10 different people and keep the money from the other nine. How would you feel if you were one of the nine people who didn’t get the deed to the home you paid for, weren’t entitled to live in it, but could sell it to someone else, even though it really didn’t exist … and in a marketplace now with 10 times as many homes for sale?
The only difference is that the nine home buyers soon realize they’ve been defrauded and alert the media. The market investor never realizes he’s been defrauded because he doesn’t demand his broker show him the registered share certificates made out in his name.
Some believe the proceeds of this racket are being used to fund terrorism.
For more on this, visit Website www.investigatethesec.com
I've got a huntch what's going on ...
... There's a racket known as “naked shorting” taking place in some of the North American Stock Markets.
To simplify the concept of “naked shorting” of shares, consider this:
Imagine if you were selling your home, and your real estate broker were to sell it for you to 10 different people and keep the money from the other nine. How would you feel if you were one of the nine people who didn’t get the deed to the home you paid for, weren’t entitled to live in it, but could sell it to someone else, even though it really didn’t exist … and in a marketplace now with 10 times as many homes for sale?
The only difference is that the nine home buyers soon realize they’ve been defrauded and alert the media. The market investor never realizes he’s been defrauded because he doesn’t demand his broker show him the registered share certificates made out in his name.
Some believe the proceeds of this racket are being used to fund terrorism.
For more on this, visit Website www.investigatethesec.com
To whom this may concern.
There is a racket known as “naked shorting” taking place in some of the North American Stock Markets.
To simplify the concept of “naked shorting” of shares, consider this:
Imagine if you were selling your home, and your real estate broker were to sell it for you to 10 different people and keep the money from the other nine. How would you feel if you were one of the nine people who didn’t get the deed to the home you paid for, weren’t entitled to live in it, but could sell it to someone else, even though it really didn’t exist … and in a marketplace now with 10 times as many homes for sale?
The only difference is that the nine home buyers soon realize they’ve been defrauded and alert the media. The market investor never realizes he’s been defrauded because he doesn’t demand his broker show him the registered share certificates made out in his name.
Some believe the proceeds of this racket are being used to fund terrorism.
For more on this, visit Website www.investigatethesec.com
To whom this may concern.
There is a racket known as “naked shorting” taking place in some of the North American Stock Markets.
To simplify the concept of “naked shorting” of shares, consider this:
Imagine if you were selling your home, and your real estate broker were to sell it for you to 10 different people and keep the money from the other nine. How would you feel if you were one of the nine people who didn’t get the deed to the home you paid for, weren’t entitled to live in it, but could sell it to someone else, even though it really didn’t exist … and in a marketplace now with 10 times as many homes for sale?
The only difference is that the nine home buyers soon realize they’ve been defrauded and alert the media. The market investor never realizes he’s been defrauded because he doesn’t demand his broker show him the registered share certificates made out in his name.
Some believe the proceeds of this racket are being used to fund terrorism.
For more on this, visit Website www.investigatethesec.com