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Urgent DNAG sees this SHO list. They are on it continuously and nothing is being done about it.
The shorts are breaking the rules, the SEC is turning the other way...nasdaq could care less..
they are getting rid of us anyway...and the company apparently is not fighting back as others are beginning to do. This should be a first priority now...to stop this naked shorting of this stock. I have tried over and over again to get this point across to Tony...but no one responds...no one seems to even care about this travesty. This is the reason we've all lost so much in this stock..and since the RS hit us in the face...we now have to contend with outside forces naked shorting our company's stock. Tthis is an outrage!!! And if it's not addressed and demanded to be ceased immediately, we will stay in this penny ditch forever.
Someone please get this SHO list to R.G and
T.F...asap... Tony changed his e-mail address back awhile, again, and I cannot reach him.
How can a company allow this to continue illegally? I have just about had it. No matter how much good news, some entity, probably toxic lenders (which I also warned them about over and over again)...are out to destroy this company. Go see the list every day and you'll see us right there...
Pathetic and something had better be done to
stop this abuse and soon.
Babe
SHO info and list below:
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Regulation SHO Threshold Security List
NASDAQ Issues Mutual Funds
NASDAQ Symbols Market Category Financial Status Fund Type Fund Category MP Type ------------------ Downloads: Other Exchanges NASDAQ Issues Mutual Funds MPs Regulation SHO Background
As defined in Rule 203(c)(6) of Regulation SHO, a “threshold security” is any equity security of any issuer that is registered under Section 12 of the Exchange Act, or that is required to file reports under Section 15(d) of the Exchange Act (commonly referred to as reporting securities), where, for five consecutive settlement days:
There are aggregate fails to deliver at a registered clearing agency of 10,000 shares or more per security;
The level of fails is equal to at least one-half of one percent of the issuer’s total shares outstanding; and
The security is included on a list published by a self-regulatory organization (SRO).
A security ceases to be a threshold security if it does not exceed the specified level of fails for five consecutive settlement days.
NASDAQ publishes Regulation SHO Threshold Security List for NASDAQ issues (NNM and SmallCap), OTCBB issues, and Other OTC issues.
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NASDAQ will publish a new Threshold Security List on each settlement day prior to midnight, Eastern Time.
Formats: HTML (see below) and Pipe-Delimited ASCII Text File (.txt)
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Additional OTC Securities subject to Regulation SHO for January 20, 2005 to April 13, 2005. Note: As of April 14, 2005, all OTC Securities have been included on the Threshold Security List.
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--------------------------------------------------------------------------------
Trade Date:
Wednesday, January 04, 2006 File Creation Timestamp:
01/04/2006 11:10:05 PM
--------------------------------------------------------------------------------
Threshold Security List - Wednesday, January 04, 2006
Symbol Security Name Market
Category Reg SHO Threshold Flag
AAIIQ AAIPHARMA INC u Y
ABDE ATLANTIS BUSNINESS DEVELOPMENT U Y
ABLE ABLE ENERGY INC S Y
ABRXQ ABLE LABORATORIES INC u Y
ABWG A.B. WATLEY GROUP INC u Y
ADBK ADVANTAGE BANK BRANCHBURG NJ U Y
ADDI ADDISON-DAVIS DIAGNOSTICS, INC U Y
AGCI ANGELCITI ENTERTAINMENT INC NE U Y
AGEN ANTIGENICS INC. (DEL) Q Y
AGIX ATHEROGENICS INC Q Y
ALLI ALLION HEALTHCARE, INC Q Y
APHT APHTON CORP S Y
ARDMD ARADIGM CORP Q Y
ATDVF AUSTIN DEVELOPMENTS LTD u Y
AUGC AuGRID Corporation New Common u Y
AVII AVI BIOPHARMA INC Q Y
AVNA ADVANCE NANTECH INC U Y
BCON BEACON POWER CORP S Y
BIDU BAIDU.COM, INC. SPON ADR RPTNG Q Y
BPUR BIOPURE CORPORATION CL-A NEW Q Y
BUERF BLUE EARTH REFINERIES INC ORD u Y
BWDI BLUE WIRELESS & DATA INC U Y
CAMH CAMBRIDGE HEART INC U Y
CBHI CENTENNIAL BANK HOLDINGS, INC. Q Y
CDNR CADENCE RESOURCES CORP U Y
CEPO CEPTOR CORPORATION U Y
CGLD CAPITAL GOLD CORP U Y
CHNW CASH NOW CP u Y
CHRT CHARTERED SEMICONDUCTOR MFG LT Q Y
CKCM CLICK COMM INC Q Y
CMDZQ COMDIAL CORPORATION NEW u Y
CNLG CONOLOG CORPORATION NEW S Y
CPNLQ CALPINE CORPORATION u Y
CSJB MERRILL LYNCH & CO INC JETBLUE Q Y
CTCH COMMTOUCH SOFTWARE LTD S Y
CTHR CHARLES & COLVARD LTD Q Y
CTIC CELL THERAPEUTICS INC Q Y
CTTY CATUITY INC NEW S Y
CUAQ CHINA UNISTONE AQUISITION CORP U Y
CURE CURATIVE HEALTH SERVICES INC Q Y
CYTR CYTRX CORP S Y
DALRQ DELTA AIR LINES INC DEL u Y
DBMI DOBI MEDICAL INTERNATIONAL INC U Y
DCTH DELCATH SYSTEMS INC S Y
DECK DECKERS OUTDOOR CORP Q Y
DEIX DIRECTED ELECTRONICS INC Q Y
DIAAF DIAMANT ART CORP U Y
DJJI Dijji Corp. Common Stock U Y
DMED DIAMETRICS MEDICAL INC U Y
DNAG DNAPRINT GENOMICS INC. NEW U Y
DTMG DATAMEG CORPORATION U Y
DVNTF DIVERSINET CORP U Y
ECGI ENVOY COMMUNICATIONS GR INC S Y
EEEI ELECTRO ENERGY INC S Y
EENC ENTERRA ENERGY TRUST TR UTS Q Y
EGLE EAGLE BULK SHIPPING INC. Q Y
FAAC FORTRESS AMERICA ACQUISITION C U Y
FFFC FASTFUNDS FINANCIAL CORP U Y
FGIFF BIOMETRIC SIGNALING INC (ANTIG u Y
FGWI 5G WIRELESS COMMUNICATIONS INC U Y
FLIP FTS GROUP INC U Y
FLYIQ FLYI INC u Y
FMKIQ FIBERMARK INC u Y
FORD FORWARD INDUSTRIES INC S Y
FOXH FOX HOLLOW TECHNOLOGIES INC Q Y
FSRT FREESTAR TECHNOLOGY CORP NEW U Y
FVCCQ FIRST VIRTUAL COMMUNI INC u Y
GENI GENESISINTERMEDIA INC u Y
GEPT GLOBAL E-POINT INC S Y
GIGM GIGAMEDIA LIMITED Q Y
GLAD GLADSTONE CAPITAL CORPORATION Q Y
GLBC GLOBAL CROSSING LTD NEW (BERMU Q Y
GLGT GLOBAL GENERAL TECHNOLOGIES IN U Y
GLKC GLOBAL LINKS CORP NEW u Y
GNPI GENIUS PRODUCTS INC-NEW U Y
GOMD GOHEALTH.MD INC U Y
GSHF GREENSHIFT CORP U Y
GVIS GVI SECURITIES SOLUTIONS INC U Y
HCGI HELM CAPITAL GROUP INC u Y
HHDG HEAVENTLY HOT DOGS INC-NEW u Y
HTVL HARTVILLE GROUP INC U Y
IAWK IASIAWORKS, INC u Y
ICRP IMCOR PHARMACEUTICAL CO NEW u Y
IESR Integrated Electrical Services Inc u Y
ILCO INNOTELCO INC (WY) u Y
IMAX IMAX CORPORATION Q Y
INSG INSIGNIA SOLUTIONS PLC ADR S Y
IPHN IPHONE2, INC. u Y
IRBT IROBOT CORPORATION Q Y
ITER IT&E INTERNATIONAL GROUP U Y
ITUI I2 TELECOM INTERNATIONAL INC U Y
IVOW IVOW INC NEW S Y
KHLM KUHLMAN COMPANY, INC U Y
KLUCQ KAISER ALUMINUM CORP U Y
LHFF LIGHTHOUSE FAST FERRY INC u Y
LVEL LEVEL 8 SYSTEMS INC U Y
MAGY MAGNITUDE INFORMATION SYS INC U Y
MAMT MEDICAL ASSET MGMT INC u Y
MATK MARTEK BIOSCIENCES CORP Q Y
MCHX MARCHEX INC Q Y
MCLD MCLEODUSA INC CL-A u Y
MCLDO MCLEODUSA INC PFD SER A u Y
MDLH MEDICAL INTL TECHNOLOGY INC NE U Y
MDTL MEDIS TECHNOLOGIES LTD Q Y
MDWYQ MIDWAY AIRLINES CORP u Y
MEMY MEMORY PHARMACEUTICALS CORP Q Y
MFNC MACKINAC FINANCIAL CORPORATION S Y
MGEN MED GEN, INC. NEW U Y
MMUS MAKEMUSIC! INC NEW S Y
MTTT MERRILL LYNCH & CO., INC S&P 5 Q Y
NAVR NAVARRE CORP Q Y
NCST NUCRYST PHARMACEUTICALS CORP Q Y
NFLX NETFLIX COM INC Q Y
NMGC NEOMAGIC CORP NEW Q Y
NNOS NANOSIGNAL CORPORATION INC u Y
NTMD NITROMED INC Q Y
NVEC NVE CORPORATION NEW S Y
NVLT NOVELOS THERAPEUTICS, INC. U Y
NXPS NEXPRISE INC u Y
OCAI OCA INC u Y
OGHC ON THE GO HEALTH CARE INC NEW U Y
OISI OPHTHALMIC IMAGING SYS INC U Y
ONEI ONEIDA LIMITED U Y
ONEV ONE VOICE TECHNOLOGIES INC U Y
ONMC OMNINET MEDIA.COM INC u Y
OSCI OSCIENT PHARMACEUTICALS CORP Q Y
OSTK OVERSTOCK COM INC DEL Q Y
OTIX ORTHODONTIX INC U Y
OVEN TURBOCHEF TECHNOLOGIES, INC (N Q Y
PCFG PACIFIC GOLD CORP U Y
PDGE PDG-ENVIRONMENTAL INC U Y
PEIX PACIFIC ETHANOL, INC. Q Y
PFEH PACIFICAP ENT HLDGS INC U Y
PFMS PAPERFREE MEDICAL SOLUTIONS IN U Y
PRKR PARKERVISION INC Q Y
PTSEF POINTS INTL LTD (CANADA) U Y
PVCT PROVECTUS PHARMACEUTICAL INC U Y
PXPL PIXELPLUS CO LTD AMER DEP SHS Q Y
QOIL QUEST OIL CORP U Y
RPRV RAPID RECOVERY HEALTH SERVICES u Y
RSMI RIM SEMICONDUCTOR COMPANY U Y
RTGVE RTG VENTURES INC U Y
RVMN RAVEN MOON ENTERTAINMENT, INC. U Y
SCOP SCOPUS VIDEO NETWORKS LTD ORD Q Y
SEED ORIGIN AGRITECH LIMITED Q Y
SFCC SFBC INTERNATIONAL INC. Q Y
SKPI SKY PETROLEUM, INC. U Y
SKYE SKYEPHARMA PLC ADS Q Y
SLLR STELLAR TECHNOLOGIES INC U Y
SMVD SMARTVIDEO TECHNOLOGIES INC U Y
SOMX SOMAXON PHARMACEUTICALS INC Q Y
SPEX SPHERIX INCORPORATED Q Y
SRLSE SERACARE LIFE SCIENCES INC Q Y
SSTY SURE TRACE SECURITY CORP u Y
SURBF SUR AMERICAN GOLD CORP (F) u Y
SUWN SUNWIN INTERNATIONAL NEUTRACEU U Y
SVMI SAVI MEDIA GROUP, INC U Y
SYCI SYNDICATION NET.COM INC U Y
TASR TASER INTERNATIONAL INC Q Y
TBIO TRANGSGENOMIC INC Q Y
TCHC 21ST CENTURY HLDGS CO. Q Y
TGLO THEGLOBE.COM INC U Y
TMRT 2THEMART.COM INC u Y
TORCQ TORCH OFFSHORE INC u Y
TPFS TEMPORARY FINL SVCS INC. U Y
TPLM TRIANGLE PETROLEUM CORP U Y
TRLG TRUE RELIGION APPAREL INC Q Y
TWRAQ TOWER AUTOMOTIVE INC u Y
TYRIA TREY RES INC CL A U Y
UALAQ UAL CORP(NEW) U Y
UALNQ UAL CORP CAP TR 13 1/4% (TOPRS U Y
UARM UNDER ARMOUR INC CL A Q Y
UCPJ UNITED CO CORP U Y
UNSP UNITED SPECIALTIES INC u Y
UPCFF URANIUM POWER CORP (CANADA) u Y
USXP UNIVERSAL EXPRESS INC U Y
VASC VASCULAR SOLLUTIONS INC Q Y
VCSY VERTICAL COMPUTER SYS INC-NEW- U Y
VLTS VALENTIS INC S Y
VOCL VOCALTEC COMMUNICATIONS LTD OR S Y
VRDI VERIDICOM INTERNATIONAL INC U Y
VSUS VSUS TECHNOLOGIES INC U Y
VVDL VIVID LEARNING SYSTEMS, INC. U Y
WAVR WAVERIDER COMMUNICATIONS INC N U Y
WBMD WEBMD HEALTH CORP CL A Q Y
WNDXQ WINN-DIXIE STORES INC u Y
WPCS WPCS INTERNATIONAL INC NEW S Y
WSTM WORKSTREAM INC S Y
WTVN WI-FI TV, INC. NEW u Y
XTLB XTL BIOPHARMACEUTICALS AMERICA Q Y
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Toxic lenders, Dr. F, for one. And those who shorted DNAG out of the box and who continue to try and keep it down for their own financial gain.
I have never seen a stock more abused than DNAG
in this regard. It is terrible to think that a company that can save lives through IDing DNA of killers, improve medical outcomes through genetic considerations and letting people become aware of their genetic heritage would be attacked in this manner. It is an outrage really and something that has to be addressed completely in 2006. Time is running out and people such as yourself, carpers to the end,
will have had a hand in harming one of the most promising otcbb stocks of all time.
Shame on you! Whoever you might be. Wonder how you sleep at night? And please, don't bother posting to me. This is my only and last reply.
Babe
Arch...thank you for your thoughtfulcomments! but there are many who came to this fight this past year who deserve more credit than I do...because they used web sites...( I am not on a computer, so couldn't at the time)...and really waged an open war on naked shorting. But when I began my efforts, most were very skeptical about even the existance of naked shorting. I think those doubts, repeated over and over by the bashers, can now be layed to rest. The fight is not over...it's just beginning a second phase ~ to see NASD really move against this practice and clean up trading in the otcbb. Until, then, little will change.
Being an optimist...still, even after years of investing and watching much of it evaporate, I hope that change is coming and very, very soon, as I wrote in my poem earlier today.
And you, Arch, deserve a lot of credit for being so loyal, so tuned in to what's out there in the press, etc., and for never giving up!
And for fighting back at the bashers on RB and those creeping into IHUB, bit by bit...
Happy New Year to you and all longs here.
Babe
Poem for 06 ~ Phil, thank you for your kind comments...I'll write one right now...just for you! LOL..
Anything Is Possible
Anything is possible
if people recognize
the devastation wrought
that brought
so many stocks' demise
and hampered growth,
prosperity
for those who still remained
imprisoned in the OTC,
while no one took the blame
for all those past injustices,
and no one took a stand
to defend the least, the most
vulnerable at hand,
the micro-caps, the newly born,
struggling to survive,
the trap of toxic lenders,
and trying to stay alive.
Is it really possible,
after all these years
of sanctioned, gross abuses,
with NASD here,
that the tide will change and soon,
they'll, finally, be free
of the naked shorting chains
and then, allowed to be
traded for their value,
potential ~ like the rest,
not as traders' fodder,
and at the behest
of the many hedgefunds,
shorting viciously,
even Market Makers,
supposed to oversee
trading in the OTC
BB stocks and keep
trading fair ~ yet in their lair,
more abuse, they heap,
upon the young, the tender ones,
who cried out for a place
to be nurtured, never tortured,
knowing what they faced.
Is it really possible
that change is in the wind?
Could next year be their year,
at last,
when, finally, a friend
NASD ~ rescues them
from their enemies,
and let each one become the stock,
that they were meant to be?
Only time will tell the truth
of what they have in store,
but anything is possible,
and I am so much more
hopeful, than I've ever been
that change is in the air
and finally, an end to wrongs
that brought so much despair,
and harmed us all, financially,
the nation as a whole.
To see a sea-change in 06,
our hope, our dream, our goal!
BBBabe
New Year's Eve
2005
Guess What? Finally, what some of us have been fighting for for a very long time....over 5 years....to get the OTCBB out of the hands of those who have allowed this abusive naked shorting to continue for so long! Now, the NASD, the only entity on Wall Street has taken over the OTCBB market and will police it as is necessary to bring fair-play back to small investors and the companies that are struggling to succeed, like those with the potential of DNAPrint....and I could not be happier. So, bashers, don't try to continue to claim that naked shorting does not exist. This is proof positive and a bad omen for the abusers of small cap companies and their investors.
please take a moment to read the article from Dow Jones...it's what we had hoped for...fought for...for over five years.
Babe
Dow Jones)- The NASD heads into 2006 with a focus on the small- capitalization stock market and a plan to make greater use of technology in routine examinations of brokerage firms.
NASD Vice Chairman Mary Schapiro is overseeing the regulator at a time when the Nasdaq Stock Market has decided to transfer its over-the-counter bulletin board business to the NASD, formerly known as the National Association of Securities Dealers.
"Because the OTC bulletin board has been transferred from Nasdaq to the NASD," she said Tuesday in an interview, "we will have a real focus on the regulation of over-the-counter equities next year as well, and that will bring in with it abusive short selling."
Schapiro said that the NASD is conducting "dozens" of investigations into abusive short selling since a Securities and Exchange Commission regulation went into effect earlier this year. In short sales, investors sell borrowed shares, hoping to buy the stocks back at a lower price and return the shares, pocketing the difference. A type of abuse known as naked short selling occurs when a borrowing arrangement isn't in place so that investors are able to deliver promised shares within three days.
Another area that remains a concern: PIPEs, an acronym for private investment in public equity, a financing technique that is used most often by smaller public companies. The NASD in 2005 banned broker John Mangan Jr. from the brokerage industry and fined him $125,000 on allegations that he obtained company stock through a PIPE offering and then improperly shorted the stock and profited from the sale.
"We've done several cases, and it's going to be high on our agenda for 2006," Schapiro said.
As for its own examination program, Schapiro said that the NASD plans to place greater emphasis on technology-driven risk-based examinations.
"What it may mean is that in some areas we will be doing more or less continuous surveillance of activities, whereas other areas we may be able to do off-site, through data feeds, and for some firms it may mean we are there more often," NASD official Mary Schapiro said.
Schapiro said that the increased use of analytical tools is unlikely to reduce the number of exams the NASD conducts every year, and that "the key is not to be driven by the calendar but rather the risk profile of the firm."
The NASD collected a record $125.4 million in disciplinary fines in 2005 and filed a record 1,412 disciplinary actions. It began 6,600 for-cause examinations, down from 10,658 in 2004, a drop that Schapiro said doesn't necessarily signify that the NASD will announce fewer actions next year.
"I frankly wouldn't have predicted 2005 would be at this level," Schapiro said.
- By Siobhan Hughes, Dow Jones Newswires; 202-862-6654; Siobhan.Hughes@ dowjones.com
Corrected December 27, 200518:
Part II
To date, the broad-based inquiry has led to the criminal conviction of a former SG Cowen managing director on insider trading charges, and a $1.45 million civil settlement with a former First New York Securities hedge fund manager. Emanuel Friedman, former co-CEO of Friedman Billings Ramsey (FBR:NYSE - news - research - Cramer's Take), also faces potential civil charges, as does the investment firm he co-founded.
Other Wall Street firms that face potential regulatory action arising from the probe include Knight Trading (NITE:Nasdaq - news - research - Cramer's Take) and Refco (RFXCQ:Other OTC - news - research - Cramer's Take), the scandal-tarred commodity and derivatives brokerage.
http://www.thestreet.com/markets/matthewgoldstein/10255157.html
•
important read....imo.
Another Hedge Fund Discloses PIPEs Probe
By Matthew Goldstein
Senior Writer
12/1/2005 7:12 AM EST
Click here for more stories by Matthew Goldstein
Cornell Capital Partners, a hedge fund that specializes in finance for ailing penny-stock companies, is being investigated by securities regulators for its trading activity in shares of nine companies.
The Jersey City, N.J.-based hedge fund, which has more than $200 million in assets, disclosed the investigation in its most recent audited financial statement, a copy of which was obtained by TheStreet.com. Copies of the hedge fund's 2004 financial statement were mailed to Cornell investors in late August.
The Securities and Exchange Commission investigation of Cornell stems from a broad-based regulatory inquiry into allegations of manipulative trading in the $17 billion-a-year market for PIPEs, the Wall Street acronym for private investment in public equity.
For the past two years, securities regulators have been looking into the activities of hedge funds that invest in PIPEs and the brokerages that help arrange these private stock sales for companies in desperate need of cash. TheStreet.com previously reported that at least three other hedge funds -- HBK Investments, Gryphon Partners and Alexandra Investment Management -- are being investigated by regulators.
PIPEs are a popular financing route for tiny, cash-strapped companies, which raise money by selling discounted shares to investors in a privately negotiated transaction. But the ability of a big trader to purchase thousands of shares of discounted stock also makes the PIPEs market ripe for abuse by unethical short-sellers -- traders who bet a stock will decline in price.
Mark Angelo, the founder and president of Cornell, says regulators haven't told him they've found any wrongdoing involving the hedge fund. Angelo says Cornell is probably being investigated because it's a major PIPEs player and is involved in so many deals each year.
"I think they're looking at all people in the PIPEs space,"' says Angelo. "Most of our investors view it as non-issue."
Since its inception in 2001, Cornell has provided financing to more than 120 speculative, mostly money-losing companies, many of which trade shares on the over-the-counter Bulletin Board. In the third quarter of this year, Cornell was the ninth most active PIPEs investor, sinking $38 million into 10 different deals, according to PlacementTracker, a private placement research firm.
The PIPEs market has been a profitable niche for Cornell. In 2004, it realized a $20 million net gain on investments, according to the financial statement. It took in another $3.4 million in investment income.
The investigation of Cornell began in July 2004 with the SEC requesting information about its "funding of and trading" in shares of Bio-One, a defunct nutritional supplement company that had operated out of Winter Springs, Fla. Cornell had been the primary investor in two PIPEs deals that raised $25 million for Bio-One and enabled the company to make two small acquisitions.
By this summer, the SEC investigation had expanded to include eight other companies Cornell had invested in. The audit doesn't disclose the names of the other companies. However, the 13-page report notes that Cornell received a subpoena from the SEC on July 18, 2005, seeking documents "related to the funding of and trading in the common stock of Bio-One and eight other portfolio companies in which the partnership is invested."
Two months ago, the SEC reached a settlement with Bio-One over allegations that its financial statements failed to disclose an August 2004 default on a $15 million promissory note to a company it had acquired earlier that year.
Angelo says the SEC began investigating Cornell because it had provided financing to Bio-One. But he says Bio-One company kept the default on the promissory note hidden from Cornell, too.
"We have no idea why we were named in this, other than that we are an investor," says Angelo. "I have no idea why we were named."
Angelo declined to discuss the eight other companies the SEC has asked for information about. An SEC spokesman declined to comment.
One of the allegations regulators are looking at in the PIPEs probe is that some hedge funds routinely shorted a stock once they learned a PIPEs deal was in the works. Regulators contend that such premature short trades are illegal, because knowledge of such deals is confidential, nonpublic information.
It's not uncommon for stocks of companies doing PIPEs deals to drop in price after it becomes public that the company has sold thousands of shares at a discount.
Hedge funds, however, aren't the only target of the investigation, which is being coordinated with the National Association of Securities Dealers and in some instances, the Department of Justice. Investigators also have targeted brokerage firms that serve as placement agents for PIPEs deals by lining up investors.
Part II follows:
Now that's being a brat! Come on Hopeful, drop some bread crumbs along the way to help us find it.
I find it hard to believe that anyone is that close to answers that could bring a cure for Alz....but would be very pleased if that were to be the case. That tangled, hardened mess in the brain seems not to be amenable to drugs alone. Now, if they could find a gene they felt was responsible and ace it...that might be doable.
Look...many of us are in need of some very good news about now...all the RS's out there, etc. and this
seemingly endless war...and weather battering..I live in hurricane alley. And I could use some real good news about now! So don't be mean, just spill the beans! tia. Babe
games...MMs play every day...still shorting this stock...with the help of a friend.
They open most otcbb's lower than the closing price the day before. This had better stop!!! DNAG must confront this immediately! Or else, no matter what the news is, how great the potential is, the company will continue in the mire of the otcbb quicksand...
and at the mercy of the shortsellers..naked, everyone.
this was on another board...
fwiw.
November 8, 2005
Overstock.com (Nasdaq: OSTK) President, Dr. Patrick Byrne, has continued to up the ante in his vocal public battle against a coordinated campaign of short sellers who have allegedly targeted his company's shares. After appearing over the summer on a CNBC Street Signs segment with anchor Ron Insana, Byrne continued to emphasize that "what's at stake here is innovation and entrepreneurship in America." With strong words, Byrne said that his "company has been attacked and I'm not going to take this lying down."
Overstock.com, which launched its website in 1999 to sell products at wholesale prices, now has annual revenues of approximately $500 million. In the financial world, however, the company is not as well known for its business, but the controversy surrounding an alleged campaign to denigrate the company. Towards the end of the summer, Overstock.com filed suit against Rocker Partners and Gradient Analytics, alleging that the hedge fund and research company conspired to drive down the company's stock in a scheme known as naked short selling. Generally speaking, naked short selling is defined as selling a security short without borrowing the necessary securities to make a delivery, thus resulting in a failure to deliver the securities to the rightful owner. The main goal of naked shorting is to engage in harmfully affecting the stock price of a company in order to manipulate and create downward pressure on the security, affecting a company's ability to raise money on the open market, and ultimately profit from the downward movement in the company's shares.
In the civil complaint against Gradient Analytics, Inc., Rocker Partners LP., David Rocker, Marc Cohodes, and others, Overstock filed on the basis of unfair business practices. It was filed by John O'Quinn and his legal consortium, which has been instrumental in helping other naked short embattled companies in the past. The complaint alleges that Gradient Analytics, Inc., an influential company that sells reports and analyses on publicly traded companies to hedge funds, traditional mutual funds, and provides them to financial commentators such as MSNBC, is closely aligned with various stock hedge funds. The complaint goes on further by alleging that the Gradient and Rocker Partners LP, which is owned and controlled by David Rocker and Michael Cohodes, individually or through Rocker Offshore or Rocker Management, conspired to denigrate Overstock's business in order to reap personal profits for themselves.
While the financial press has been slow to document this, media coverage of this scandal gained momentum with another spirited Byrne conversation, this time on Fox News' Your World Today, with market veteran Neil Cavuto. During his appearance, Byrne claimed that there were "at least twelve Refco's buried in the system" that could result due to this ongoing problem of continuing fails to deliver, or naked short sales. According to the Financial Times, Refco (NYSE: RFXCQ) has over ten billion dollars worth of securities sold, that have not yet been purchased. It is rumored that these dollar amounts represent massive naked short sales, currently under review by major regulatory bodies.
When looking into the Securities and Exchange Commission legislation that should be able to enforce naked short sales, Regulation SHO, with its threshold security list, appears to be a miserable failure. This can be shown through Overstock's presence on the list for well over 100 straight days. In an exclusive interview that Ant & Sons conducted with the President of Overstock.com, Dr. Patrick Byrne, said that he agreed.
When discussing why the SEC had not initiated a buy-in or taken any enforcement action against those failures to deliver, he stated that the SEC is plagued by the fact that they are in an especially difficult situation because they are a "captured regulator." In other words, Byrne believes that "this is not a hard problem to solve," yet "it is just a hard problem to solve without a couple hundred guys on Wall Street getting their asses handed to them." While this may be considered blunt and extreme, it is Byrne's way of calling things as he sees them. However, intelligent investors could argue that Byrne's opinion on the lack of enforcement is quite accurate and is often seen as the unspoken truth on Wall Street. When asked about a potential solution to the problem, Byrne said in his plain spoken style that all that simply needed to be done was to "force settlements."
A while back, Ant & Sons spoke with Eagletech's CEO, Rodney Young, about his company's battle and ultimate downfall because of its inability to raise funds due to naked short selling. At the time, Young was labeled as being out of touch with reality because he claimed that there were potentially thousands of companies that have been "manipulated out of business" due to naked short selling. It now appears though that the problem is much more far reaching than previously thought, even though it has not gotten the appropriate attention in the financial press.
Although this may be the case, Byrne is quick to point out that an investor should first differentiate between the general problem of naked short selling, and his fight of battling against an orchestrated short selling campaign. Still, he admits that there are "hundreds, and historically, perhaps thousands" of cases where naked short selling has led to the downfall of many publicly traded corporations.
In response to this, naysayers tend to believe that Overstock's share price troubles are its own fault, due in part mostly to disappointing earnings results and its lack of a successful business model. Overstock has had many critics on Wall Street, including Jeff Matthews, an internet blogger and General Partner at Ram Partner Capital. He contends, like numerous other critics, that Overstock's allegations of a naked short selling conspiracy is only a cover up for the fact that Overstock's financial performance has not gotten better.
Byrne defended his company by speaking the truth, saying that "Q3 was rough" and it was "(his) bad." Last week, earnings came in below analyst expectations. Not shying away from the tough questions, Byrne said honestly that the company "bit off more technology projects than my colleagues could chew" and the "last bite, an ERP implementation, was one bite too many, and we choked on it."
He also acknowledged the intense criticism "for taking my eye off the ball to pursue a jihad" with his deluge of complaints and lawsuits against Rocker Partners and Gradient Analytics. Some financial journalists have targeted Byrne for going off into the deep end. In a past conference call, he stated that he started to realize that "…there was actually some more orchestration here being provided, by what I am calling here the Sith Lord, or mastermind" that was apart of a conspiracy to manipulate Overstock shares. Filing a lawsuit against Rocker Partners and Gradient is evidence that Byrne and company have confidence in their ability to expose the short selling "Sith Lord" and help to put to rest that these allegations are not just another stock market conspiracy.
For now, the bottom line is that Overstock will have to continue to rely on its own proactive approach and legal team to combat its naked short selling woes. Even with Chris Cox's public statement that the SEC is a "regime for law enforcement," there seems to be no follow through in action to his tough public words. The SEC has merely taken a back seat in all of this, failing to take any enforcement action when necessary, highlighting the continued ineffectiveness and regulatory failure of the SEC. However, with increasing evidence that naked short selling is not just a myth or fantasized market scandal, the pressure will only increase for regulatory bodies to do something meaningful about naked short selling.
And that is this month's real deal.
Money4nothin'...thanks so much for sharing that information. It is very good news that Time is
reporting on this. The story is huge really, and hopefully, others will follow its lead.
I sent it all over the place. and as you suggested, we should all do so.
I am so glad you posted this!
Thanks again,
Babe
p.s. Mich ~ please tell us about yourself..Do you live in Germany? Is it freezing cold there now or
what? I was looking up the climate and found it to be brrrr cold. Was asked to visit a city there by the mayor a few years ago...because of a poem I wrote...that he liked, but of course, didn't.
I hate to fly...wish I didn't...so many places to go and see.
Babe
Sorry Michiko...I can't do it in French...took the easy way out and studied spanish, instead, to my long regret. Should have learned both. Besides, it won't rhyme in any other language...but believe me, you are not missing much..LOL..take care. Babe
sorry typo at the getgo..
had to correct it..here.
The Lollapalooza effect, you say?
Now. who could not agree?
This thing is so enormous,
it even shocks po me!
It's outta hand, outta sight;
they're totally outta their minds,
these greedy, thievin' hedge
fund brats,
stealin' yours and mine!
So, watch them run to daddyO,
to fix it once again,
like old Greenspan's bandaid did,
some years ago, now, when
these reckless, brainless idiots
made some stupid trades,
shorted stuff that just went up
and so, taxpayers paid...
or did the Fed just bail them out?
But ain't that Fed a part
of our financial system,
as they said 'bless yo heart,
you hapless, hopeless hedge fund boys.
You made a wee mistake
and so you come to Daddy O
to cut you guys a break?'
We're sick and tired of this deceit,
these games that Wall Street plays.
I hope they get what's comin', soon,
one of these Winter days,
when the sun shines brightly on
their corrupt misdeeds,
for the world to see and know
of their shameless greed,
santioned by our government,
who looks the other way.
It's a great big Lollapalooza, alright,
that'll blow sky high one day!
BBBabe
Hurricane Alley
Winter 2005
Public Reply |
To you and other longs, here.
The Lollapalooza effect, you say?
Mpw. who could not agree?
This thing is so enormous,
it even shocks po me!
It's outta hand, outta sight;
they're totally outta their minds,
these greedy, thievin' hedge
fund brats,
stealin' yours and mine!
So, watch them run to daddyO,
to fix it once again,
like old Greenspan's bandaid did,
some years ago, now, when
these reckless, brainless idiots
made some stupid trades,
shorted stuff that just went up
and so, taxpayers paid...
or did the Fed just bail them out?
But ain't that Fed a part
of our financial system,
as they said 'bless yo heart,
you hapless, hopeless hedge fund boys.
You made a wee mistake
and so you come to Daddy O
to cut you all a break!'
We're sick and tired of this deceit,
these games that Wall Street plays.
I hope they get what's comin', soon,
one of these Winter days,
when the sun shines brightly on
their corrupt misdeeds,
for the world to see and know
of their shameless greed,
santioned by our government,
who looks the other way.
It's a great big Lollapalooza, alright,
that'll blow sky high one day!
BBBabe
Hurricane Alley
Winter 2005
money4nothin....They darn well had better not put the onus on us...rather the naked shorters who have done these deeds and are destroying our otcbb markets. There is no way we, the shareholders, could legally be asked to give up what we 'think' we have. If they tried that...well, all h@ll would break loose, believe me. And those who'd even dare to suggest such an outcome would be in court so fast getting sued by all of us..in the biggest class action suit of all time..it would make your head spin. O'Neil would just love to get his lawyer teeth into that one...and if the sec or anyone gov. entity ever tried to punish us financially for what the hedgeguns are doing...well, just imagine the biggest stink in the USA...with the whole world watching. Our markets would be the laughing stock of everyone. If it ever came to the gov. telling us that because shorters could not cover after creating
counterfit stock, sold but never possessed, that we must be penalized..LOL..that would be the biggest
mistake they could ever make. No one would sit still for that...and 98% of all investors vote..including those in small caps...and there would be heck to pay by the politicians and huge law suits against brokerages, hedgefunds and all concerned. and we would win in a jury trial...
So, to ans. your Q., not I do not expect the gov. to
let this go in that direction..no way. It would be political suicide for this or any administration..having been seen as on the side of the crooks, without any doubt whatsoever.
Something must be done and soon..I'm posting in a moment a post from the 5G board on this subj. fwiw.
Good news today...imo...what we have been waiting for, among other things.
Babe
Michiko ~ thanks for reading and responding...Something has to change and very, very soon. Investors are becoming more aware of this
situation every day, and one day, it will have to be dealt with in a fair and rational way...if wall street even understands the meaning of 'fair', that is. GLTY Babe
Winbig...and other longs, the 'market' could care less about dnag...no matter what the news is or has been, until there is some evidence of profit forthcoming in the very near future. And even then, the game playing will continue. This stock has been shorted for a very long time as we all know. And unless and until Congress demands that this charade end, it will continue here in the otcbb and even in other larger exchanges, as witnessed by recent revelations in the press. When we buy, the market makers, part of this problem, just sell against us.
We can buy 100,000 shares and they can sell 500 and bring it back down. They even open lower than the previous day's close and then during the am...let it move green for a while, perhaps, but still lower than the high of the day before, which should not be the case. They have their fat, ferocious finger on the sell button at the ready...and use it whenever possible. Remember, they admittedly shorted this and all other otcbbb stocks at the getgo and do not want it to ever soar..anymore...remember how they attacked it when we moved here from the pink sheets?
It did nothing but go down to this disgusting state it is now in. The otcbb is nothing more than a
playground for the hedgefunds and other shorts and chump change for the MM's for their recreational habits.
It really upset me when my youngest son bought a bunch of this at .07+. I warned him...about it going back down as per usual, but the article in USA Today convinced him that it had to be bought then.
It's hard to face those who have followed this stock and bought it at much higher prices...after suffering the awful RS...and then to see this.
It is up to management to DEMAND that this shorting END now. And to threaten to sue if it does not.
Someone has to watch the trading...and make notes of what is transpiring. I can ask nasdaq to watch it, which I have, from time to time...but it is up to
R.G. to make certain this is done.
If they allow this to continue, the shorts will win, and the company will just keep inching downward, day by day...even though our news has been substattial.
The government must begin to give as much attention to the 'small business' that is publicly traded, as they brag about doing for small bus. in general.
No one gives a hoot about these small, struggling stocks, except a few on-line guys who use their own money and time to alert investors to what is transpiring.
Between the traders and hedgefunds, broker/dealers, etc., otcbb has become merely a trading vehicle for
greedy gut shorters and day traders. It is a crime, indeed, that a company with so much promise has been treated in this manner. However, we as shareholders are helpless to help them out of this mess...alone..they have to get on the ball and
make it happen...make this manipulation that I have preached about for over five years now..END!
It's either or...and time is running out.
If change is not made and soon on the otcbb, American markets will be viewed as not reliable, as crooked, etc. and rightly so..if the SEC does not end this nightmare.
Maybe a prayer would help...Injustice and theft is wrong and sinful and should be exposed and remedied. wherever it exists. I'm adding this to my prayer list tonight...because DNAG can, if allowed, if unmanipulated, and if funded in a fair and reasonable way, help mankind in so very many ways.
Jmho. Babe
Arch...every country who trades our stocks is involved, but it all started right here with the hedgefunds in the late 90's. Broker/dealers, hedge funds, market makers have been after small cap stocks for years now. They short them at the getgo and continue to try and keep them down. We buy on good news and though some traders take profits, it is mostly the market makers walking them right back down by selling small amounts of shares...as if to say to the buyers...'drop dead'...you don't have a chance to get this stock up.
Also, with all this exposure going on and court cases in the wings, all involved would prefer to totally kill off as many highly naked shorted otcbb stocks as possible, so as to never have to cover.
We cannot blame anyone except our own regulators and government oversight that has totally ignored this criminal activity for decades. The first crash was caused by naked shorters...and there is proof of that now. We are told very little, while the inside club contines to steal our investments for their
own crooked gain. As I wrote over five years ago, we are mere fodder for the players on Wall St. and
no one gives a hoot about how we are treated.
This is so serious, so horrific that it should have hearings immediately.
Why any investors could accept that the small investors who care abourt innovative technology and who try to help good, startup companies to succeed,
should be treated in this manner is beyond me.
Here, the Fox is guarding the chickens and the silence of the many, allows the few greedy guts to
make a killing and destroy not only our investments but medical and other advances that could help mankind. It is a crime pure and simple and it's time to clean house.
Babe
Followup from Financial wire re: REFCO, naked shorting, etc. fwiw:
October 31, 2005 (FinancialWire) Citing FinancialWire coverage of the widening financial scandals associated with naked short sales, Financial Express has said the Securities and Exchange Board of India (Sebi) must rethink any automated trading systems such as those used and proposed by the Depository Trust and Clearing Corp., which it said American investors no longer trust.
Columnist Sucheta Dalal cited manipulative scandals involving Refco (NYSE: RFX) and Overstock.com (NASDAQ: OSTK) as reasons M. Damodaran, Sebi chief, should go slow on permitting short-selling by institutional investors. Short sales abuses have vexed and embarrassed American regulators as well as institutions such as Goldman Sachs (NYSE: GS) and Credit Suisse First Boston (NYSE: CSR).
Financial Express said that automation has its downsides. "Unless the regulatory system is constantly alert, ingenious crooks are always working to identify weak links."
The article is at http://www.financialexpress.com/fe_full_story.php?content_id=106477
Dulal said that a "lending and borrowing mechanism is expected to prevent rampant price manipulation and keep out naked short-sales, that led to the demise of the old badla-based system of forward trading. Will it achieve this aim?
"It is pertinent to look at the growing US controversy over illegal naked short-sales and its consequences. FinancialWire … posted an article in March 2005 about a Michigan man, Robert C Simpson, who acquired 100% of the issued and outstanding stock of Global Links Corp. Two days later, he found over 50 million shares of the company shares were traded on the bourses. This case came up for discussion by the Senate Banking Committee and was probably the earliest official acknowledgement of naked short-sales (without first borrowing shares, as is legally required)."
"Since then, Patrick Byrne, CEO of a company called Overstock has gone public with the fact that his company's float changed hands four or five times in a day. How, in a perfectly functioning lending and borrowing mechanism? And where are all the extra shares coming from to give delivery, unless there is a large incidence of illegal naked short-sales? Byrne has publicly alleged his father failed to get delivery of 200,000 shares purchased by him through a blue-chip brokerage firm. He is quoted as saying anywhere between 5-20 million counterfeit shares are currently in the marketplace, presumably on the major exchanges alone.
"The US debate is important, as their trading system has become the global standard for capital markets. It is, hence, pertinent to note that extraordinary trading volumes (yet unexplained phenomena in highly manipulated Indian stocks as well) and short delivery during settlements are increasingly being flagged as manifestations of a possible scam.
"More startling, many investors have accused The Depository Trust & Clearing Corpo-ration (DTCC), a holding company that clears and guarantees almost all trades in the US, of engineering naked short-selling schemes. The DTCC has faced 12 lawsuits in this connection. Most of these were dismissed, but the corporation itself has admitted, in a Q&A posted on its website, that naked short-selling occurs, but the extent to which it occurs is unclear.
"The DTCC's stock lending and borrowing programme also continues to be under regulatory scrutiny by the NASD and other government agencies. The US debate attributes naked short-selling to counterfeiting and collusion between brokers, dealers and, of course, shadowy hedge funds. In most cases, the sales, accompanied by large, unexplained trading volumes, aimed to destroy the value of small companies.
"An October 13 report by FinancialWire also suggests research analysts, especially Net-based ones, also have a role to play in setting the stage for shorting. It quotes specific examples of alleged collusion between broker-dealers and independent research firms to publish negative information, to beat down the prices of target companies.
"This raging American debate over rampant price manipulation and misuse of automated trading systems is extremely relevant for us, since Sebi plans to permit short-selling by institutional investors. Indian investors, too, have noticed that a large and unexplained spurt in trading volumes always signals the start of a big price ramping operation. Our stock exchanges and regulators simply sleep over this phenomenon, even when these are pointed out to them.
"Second, Indian regulators are clueless about the true beneficial ownership of the most powerful market segment, namely, foreign institutional investors. Add Sebi's record of poor prosecution of important cases and our slow judicial system and we have a recipe for serious trouble. Sebi may end by attempting to regulate institutional short-sales, while remaining partially blindfolded."
Meanwhile, according to Financial Times, the $10.590,379,000 "securities sold, not yet purchased" line item in the Refco (NYSE: RFX) bankruptcy balance sheet is not only naked short selling, it is under intense investigation by authorities. The article is at http://www.efinancialnews.com/index.cfm?page=home&pdigest=18500000000074245&uid=5405-7710-92...
FT says that the firm's IPO underwriters Goldman Sachs (NYSE: GS) and Credit Suisse First Boston (NYSE: CSR) both have investigators looking into the illegal but allegedly widely practiced manipulative practice among essentially unregulated hedge funds and other financial institutions that now appears to be a naked short sales bubble that could imperil the U.S. and worldwide financial markets.
Overstock's CEO Patrick Byrne appeared on News Corp.'s (NYSE: NWS) Fox with Neil Cavuto to state that there are at least twelve Refco's "buried in the system," and Cavuto said some say it could be as many as 60 institutions ready to implode. He said a "systemic" problem could cost the Depository Trust and Clearing Corp. as much as $100 billion to clean up.
The video for this is at http://www.vmsdigital.com/MyFiles_Detail.aspx?mediaId=86578&onum=CDD7589F-A1E6-4B07-B635-4731FE7...
The line item was so unbelievably monumental that two of the major critics of naked short selling, Dave Patch, of InvestigatetheSEC.com, and Bob O'Brien, director of the National Coalition Against Naked Short Short Selling, were reluctant to positively identify the $10.5 billion as Refco's naked short position. The Financial Times says investigators are not so reticent, and "have been unable to find which shares, if any, were involved."
The document is at http://bankrupt.com/refco.txt
Critics have said that if you lift the covers off similar financial institutions and hedge funds, and even many of Wall Street's top investment banks and brokerages, the $10 billion exposure at Refco could be multiplied 100 times over, and may inhabit every nook and cranny on the Street. Few companies initiate buy-ins, and such exposure is just bounced around, or "borrowed" from a DTCC. that may also be at significant risk should it be forced to call in its "loans." The DTCC has also said that there are $6 billion in "fails to deliver" every single trading day. That could add up to some $1.5 trillion every year, not counting attrition from late deliveries.
Already the SEC and the U.S. attorney is probing a $1.4 billion hedge fund, Alexandra Investment Management LLC, and it is not yet known what that investigation will uncover. The fund has revealed that regulators are investigating "numerous participants" in PIPEs, an anacronym for private investments in public equities. Often such investigations end, however, with only a knuckle knock, with no restitution to shareholders of targeted small public companies.
The U.S. Securities and Exchange Commission is under heavy scrutiny as well over Refco since many claim it is just the tip of the iceberg in the illegal naked short selling scandal known as StockGate. Some 89% of those voting in The Investrend Poll at http://www.investrendinformation.com say the SEC should be "hugely" blamed for the Refco implosion.
Said the New York Post:
"It is believed the monies at the heart of the Refco scandal are in fact unsettled funds related to the illegal naked short selling, and many have theorized that there may be untold billions of dollars in other financial institutions and hedge funds in the same leaking lifeboat."
The Post said no new laws are needed. Enforcement is needed.
When SEC Commissioner Annette Nazareth, the former head of SEC market regulation, was asked about the SEC's lax attitude towards the Refco's and its peers, she told the New York Times (NYSE: NT) that it was much ado about nothing, and that the uproar was only from people who "want their stock to go up."
One can only theorize that it is this attitude that has resulted in the complete collapse of public confidence in the enforcement division of the SEC, as was the collapse of public confidence in FEMA. In his Fox appearance, Byrne said he does not expect the SEC to be able to clean up this situation, and hinted that it will require either judicial or Congressional intervention.Gadfly David Patch's CNBC interview questioning the SEC's involvement is at http://www.vmsdigital.com/MyFiles.aspx?Onum=8FD88353-D1CF-49AB-96FB-F5B3D748534D
His site, http://www.investigatethesec.com , has long held that the SEC has scrambled to protect illegal manipulators for fear that the lawbreaking had gone on so long and that it is so huge that it threatens the nation's financial underpinnings. On CNBC, Patch again asked why the SEC can sit by and watch scores of companies listed on the Regulation SHO threshold list for almost a year, signifying that they are in continuous default of settlements required by the law.
He also asked why the SEC would try to "grandfather" the millions of settlement failures that preceded Regulation SHO, which went into effect in January. The "grandfathering" still hasn't been court-tested as to whether it may be a kind of "pardon" that only a President may issue.
The SEC and the Depository Trust and Clearing Corp. continue to stonewall any attempt to require transparency in the marketplace as to the extent of fails to deliver, which some see as just a euphanism for "counterfeit shares."
This scandal comes hard on the heels of allegations of misdeeds by Gradient Analytics and employees of TheStreet.com (NASDAQ: TSCM), in conspiracy with David Rocker and Rocker Partners in manipulating the stock of Overstock.com (NASDAQ: OSTK) and others comes another explosive case, this time against Refco Inc. (NYSE: RFX), one of the primary alleged miscreants in destroying Sedona Corp. (OTCBB: SDNA), once a Nasdaq-listed company.
Not since the Enron and Worldcom scandals has the financial markets been under such growing suspicion, except this time the cancer is not just in a treatable part of the body. This time it has spread through the lymph nodes and appears to be present in every vital organ as scores of companies seem permanently entrenched in the threshold lists maintained by Nasdaq and the NYSE, signifying over three-quarters of a year of the existence of counterfeit shares and unsettled trades.
(continued - link below)
http://financialwire.net/articles/article.asp?analystId=0&id=19816&topicId=160&level=160
interesting read...
Sunday, October 23, 2005
The $10.5 Billion REFCO Smoking Gun
The listing for the assets and liabilities of REFCO was just made available, and guess what just happens to be hiding in the liabilities column?
A $10.5 billion liability, at TODAY's mark to market valuation, called "Securities sold, not yet purchased."
$10,590,379,000 - to be precise.
Securities that have been sold. But haven't been bought. And they haven't been borrowed, either - see item 3 below.
Welcome to the wonderful world of naked short selling.
Now, one might say, "hey, wait a minute, but Thompson of the DTCC said it's only a $6 billion per day problem."
Only.
$6 billion per day.
And here is REFCO with well over $10 billion of securities it sold, but hasn't delivered.
There are three possible explanations:
1) Mr. Thompson parsed the truth with such dexterity that the number he advanced was incorrect in the extreme.
2) The number Mr. Thompson advanced did not include ex-clearing FTD's. For a complete primer on the implications of this, as well as the terminology, Click Here.
3) Those are all legitimate short sales. Possible. Somehow though my gut says that isn't the case. Legitimate short sales would have shares borrowed prior to selling, and would have the borrowed shares shown as an asset, offsetting the sold shares - but there's only about $2.5 billion as a receivable for "securities borrowed." There's about an $8 billion divergence between the two, and what sure looks like about $8 billion of FTD's.
But why speculate?
I think it's time that we find out, no? Why guess any longer - let's get it out on the table.
Because the way it looks to me, REFCO is only one entity, and has over $8 billion on the books of FTD's. And until I see differently, there's not one bit of data to suggest that most of the $8 billion is legit.
These guys were being sanctioned for being involved in a prior naked short selling scheme, and were known as the go to guys for questionable types desiring greater "flexibility" in their trading. They lied to their auditors, the SEC and the public about their financial condition. Their CEO has been cuffed. I think there's reason to believe that this liability is the smoking gun the industry has been dreading.
What we do know is that the wild eyed conspiracy theories that I have been accused of spinning now look tame. One company appears to have at least $8 billion in FTD's. That is no longer a speculation or a conspiracy theory. It is a fact. As in immutable, manifest, and clear.
You heard about this here first. Many months ago. In March, when I was speculating about a catastrophically large level of fails in the system, being covered up by the brokers and the SEC. When I was writing about special purpose entities being used to hide the size of the problem.
And here we are.
The whole BK filing can be viewed here.
I'm not going to go into the $1.25 billion of their claimed assets that are intangibles and "goodwill." Or the offsetting assets which collateralize the FTD's (cash, which is what you'd expect with FTD's). It doesn't really matter. If I'm right. the first time some of those shares are bought in the $8-$10 billion will likely jump to $20 billion, and several large hedge funds will likely vaporize as their cash requirements eclipse their assets.
This is the systemic risk issue I've been warning about.
And this is just REFCO. One company. Only one.
I think we need to know what the composition of the $10 billion actually is.
Because the problem is now one of credibility. Our regulators and the DTCC appear to have been misstating the extent of this crisis to the point where their numbers don't even begin to speak to the real size of the problem. No wonder they hate discussing it. No wonder they grandfathered in all the prior fails. No wonder it justifies secrecy rivaling the Manhattan Project.
I'd like to see a list by security of those FTD's. There's no point in keeping them secret anymore. I'd like to see how many NFI shares, and OSTK shares, and TASR shares, and NAVR shares are in there. And I'd like to understand who is violating the rules to the tune of $8-$10 billion just at REFCO. I think that is reasonable. The hackneyed platitudes that the SEC "doesn't want to cause volatility or give away the trading secrets of the participants" are hollow. We don't want speculations and more guesses as to how much of the $10 billion are FTD's. We deserve facts now.
And guess what? We know the trading secret now. You just print shares in the back room to your heart's content. It isn't a secret. And frankly, IT NEVER SHOULD HAVE BEEN.
I'd like to see a Congressional hearing immediately, and I'd further like to hear Shelby share with us why he didn't feel that it was time yet to convene the Senate Banking Committee about the matter, when Bennett was pushing for it.
I'd like to see a special prosecutor cut through the secrecy and BS and tell us how many billions, hundreds of billions, have been stolen from us, and by whom.
And I'd like to see the system do its bare minimum job, and settle the trades.
This is going to be the biggest crisis to hit Wall Street in our generation. Mark my words. Cat's out of the bag now. And the SEC and Wall Street have some explaining to do. And some stock to buy, seems like.
$8 billion with just one company at today's wildly depressed prices. If those are all, or mostly FTD's, Houston, we have a problem.
If you've been wondering why your stocks don't ever seem to go up much, you now have a likely answer. The system has been printing billions and billions and billions of dollars worth of shares and selling them with predatory, unbridled aggression.
The class action attorneys are going to go crazy over this. What do the other, larger brokerages have hiding in the back room? How much bigger can this get? Are we talking trillion dollar real world contingent liability? Can anyone even guess at this point?
Is it really possible that the SEC has allowed Wall Street to steal trillions from us, using counterfeit shares? I don't know about you, but it sure now seems like any money I've lost in the market wasn't so much a function of bad luck or ineptness. It was theft, pure and simple. I was robbed. So were you. And now we see that the robbery isn't in our imaginations.
It's no longer speculation.
It is now a matter of the public record, and it is a national disgrace. Tell us what the $10 billion means. Level with us. It's about time.
And if those are FTD's, it's time to settle the trades, and make the perpetrators start paying their bills.
posted by bob obrien at 4:47 PM 10 comments
Thursday, October 20, 2005
An Introduction to Naked Short Selling - Failing To Deliver
I've been asked a number of times over the last week to come up with a one-stop shop where interested readers could learn enough about the naked short selling crisis to be dangerous. It isn't an editorial so much as it is the intro to a chapter in the book I am working on, thus it has been moved to a more appropriate place than the Sanity Check op-ed blog.
The piece has been made a permanent part of the NCANS.net site. It can be viewed here.
posted by bob obrien at 12:00 PM 10 comments
Tuesday, October 18, 2005
Shadows On The Wall Of The Cave
Of late, my little commentaries and vignettes have been attracting a fair degree of attention, and I've been getting an increasing amount of email asking what I think is going to happen - how all this is likely to end.
Before I offer my cheery view, let me ask some questions, the likes of which were first asked in this column in March of 2005.
1) REFCO has significant contingent liabilities of heretofore unknown characterization. What percentage of the liability is naked short sales - failure to deliver? Specifically? (That one wasn't asked, but if you go back and read the rants, you will find it was, in a general way). REFCO has two DTC accounts, "REFCO Securities, Inc." and "REFCO Securities, LLC - Securities Lending." How big a part did the latter play in this?
2) Ex-Clearing (non-CNS settlement) is a large problem, and we know there are many hundreds of millions of FTD's from the FOIA requests. Where are those contingent liabilities booked and represented on the balance sheets of the publicly traded brokers? I've read their 10K's and can't find them. They are large enough to be material. So where are they?
3) How does the system deal with the legal risk of issuing electronic book entries that have no associated bundle of voting rights, nor any of the other rights of a genuine share, in the event of a class action lawsuit against the issuing company? Given that the FTD's are not entitled to legal redress as they aren't real, who shoulders that liability, and where is that liability represented on the books of these publicly traded entities?
4) When a clearing broker fails, like REFCO, what happens to the contingent liability of the fails? In a bankruptcy proceeding? Who is on the hook if the hedge fund client implodes (as they are doing frequently now) and then the clearing broker goes belly up? How is that handled?
5) Why are settlement failures occurring at all? Why does our system tolerate them? Rule 17A mandates that transactions be cleared and settled promptly. Why isn't that happening?
6) Who decided it would be a good idea to split clearing and settling apart, and pay all commissions and fees at clearing (the agreement to try to get shares), and require no performance in terms of delivery (settlement)? What other financial industry pays upon inking a non-binding contract to try to perform? Is that what Congress had in mind when it said both clearing AND settling had to happen promptly for there to be fair markets?
7) Why are participants given the ability to create electronic book entry shares at will, with no shares to back the electronic book entries? Why does the DTCC have an ex-clearing function that leaves the settlement up to the participants, out of view? Why wouldn't the participants abuse this as we see them doing daily? Who is stopping them?
8) The SEC and the DTCC take the position that they don't have the authority to get involved in settlement arrangements, as those are contractual. When did Congress authorize brokers to decide when, if at all, they will deliver, with no SEC oversight? That is the net effect of the ex-clearing and resultant SEC and DTCC passing of the buck.
The simple way of framing many of these is: Why won't the SEC make the system settle the trades promptly, as Congress mandates?
Those are some pretty decent questions that remain unanswered and ignored. Nobody fields them. My motives and CV are attacked regularly by anyone who is industry-based, but they don't actually answer the questions, or if a response is tendered, it is a carefully parsed non-answer, or partial answer.
Now to the big question - how do I think this will end?
My view is that it will end with a token reform of the current system that comes after the horse has bolted, at the expense of investors and taxpayers.
Here's how I think it will play out.
REFCO may well be swept under the rug - I heard a few minutes ago that Senate Hearings are to take place, and our first clue as to the direction this is likely to take will come from those hearings; by the questions that are asked, or rather aren't.
My fear is that we will have hours of acrimonious table pounding, long rants about how this is inexcusable, hangdog expressions from regulators who will make token attempts to defend their enabling these crooks to go public (we've already seen the first of this, where the SEC takes the position that they aren't in the business of verifying and double checking all the financial disclosures and such - begging the question what they are in the business of, in light of the 1933 Act) while facing sanctions for past crookery, hard line statements about how we won't tolerate this any longer, assurances that substantial parts of the business are viable, further assurances that the markets are healthy and viable, and ultimately blame being placed at the feet of the already acknowledged crooks.
What won't be done is a breakdown of the liabilities that caused the meltdown of the company. The question you won't hear asked is how much of the contingent liability arose from delivery failures. And if it is asked, expect a hubba de hubba answer, with plenty of hand waving, and assurances that it is minimal. But you won't hear a hard number, nor a commitment to make the facts known. Instead, you can expect to hear a lot of rhetoric, a fair amount of technical discussion, but the topic of naked short selling and the fact that the company was facing sanctions for participating in a massive scheme to serial kill companies will probably not come up.
This will be your signal that this will not end well.
If REFCO's failure is allowed to go through the media and the review process without any real examination of the impact that naked short selling played in bringing it down, then I would prepare for the worst.
So that begs the question, what's the worst? Total systemic collapse? Global meltdown? Hellfire and brimstone? Cats dancing with dogs, a rain of fire, locusts, Biblical-level calamity?
Nope. Unlikely. Too many asses on the line.
No, the likely end will be much more mundane. What we will see is a steadfast silence in the American media. Events like Dr. Byrne of OSTK being unable to get his shares for months will be ignored, as they have been to date. More of these clearing brokers will fail over time, and the domino effect will continue from REFCO - they are the first. There are more. Question is which one is next?
Once the next one fails, or a hedge fund implodes with significant exposure to fails, then you will start to see the cracks more obviously, and it will become clear to even the most dim that this is a significant systemic issue, not an isolated occurrence.
Consider this: There are many hundreds of millions of electronic book entries trading around in the system, treated as genuine by the participants, for which no offsetting share or parcel of voting rights exists. That wholesale stock creation machine has generated a second float for hundreds of companies, and is so large that it can never be covered without vaporizing the system - there isn't enough cash with all the folks out there that have played the game to cover all the shares. This is the systemic risk.
I don't for a second believe that the bad guys in this will be forced to do what the law requires, which is to settle the trades, and buy the shares in. Rather, I think that REFCO will provide some hints, as does the new law that quietly passed recently wherein the FDIC is empowered (read burdened) with moving "derivative contracts" from failed institutions to healthy ones. Those institutions include securities firms. The term market participants is used. I find this ominous.
One of the questions I've been asked is "what happens to the naked short obligations in a BK for a clearing broker like REFCO, assuming that the hedge fund clients have stuck them with contingent liabilities that they have been carrying on their books?" I don't know, and none of the attorneys I've talked to are sure.
I have a sneaking suspicion I know how it will play, though. I think that our regulators and elected officials will come up with some euphemistically termed workout, the "Fallen Soldiers and Grandmothers and Future Children of America, Anti-Terrorism and Drug Addiction, Good For the Environment, Protect Our Financial Futures" bill, which will come up with some sanctioned way to get the market system out of their bad trade - and the taxpayer will foot the bill. How will that work?
I envision a mandated cash return to shareholders at some premium, say $1.50 on the dollar, where the failed institutions can pay cash to shareholder owed the shares, rather than being forced to buy in the market to cover their debts. It will be lauded as a fair and decent ending to a dark period - who will be able to complain about receiving $1.50 for every dollar of stock they hold? Any ingrates will be branded as greedy opportunists who want to get rich off a national crisis, and thus reprehensible, or traitorous. Forgotten will be the fact that they bought it at $20 and that it now trades for a dime because of the hundreds of millions of fake shares the participants flooded the markets with. The cone of silence will descend on that too, and instead we will be treated to a flurry of feel good articles about the bright future of the newly sanitized markets, suitable for retirement savings, Grandma's mad money, your children's education funds.
I envision this being sanctioned "for the good of the markets, for stability, to put this bad period behind us and let us move forward, having learned our lessons." It will have to be an act of Congress, as it will be fundamentally illegal, and unethical, and will end this particular chapter of the rip off of the investor by the machine, and will require Congressional approval. But it will also be necessary, as the alternative will be the meltdown of the financial markets as desperate hedge funds and prime and clearing brokers struggle to cover a fraction of the open positions that made them hundreds of billions, and which long ago was converted into jets and mansions and ski chalets and pied a terres on Maui or Aruba or St. Baarts.
I don't see that happening.
What I see happening is the aforementioned bill, and healthy institutions taking on the contingent liabilities of the failed ones, and like Perelman in the S&L fiasco, being compensated for taking them over, likely with tax credits and concessions that will be a windfall for the new stewards of the problem - in the S&L crisis, Ron Perelman (Revlon king and a Milken adherent) took on the failed Vernon Savings and First Gibraltar, with a total of $12.2 billion in assets, and a sweetheart $5 billion FSLIC assistance package (to help cover the workouts). For this stewardship, he paid $315 million, and in return he got almost $900 million in tax deductions. Walter Fauntroy, the Washington, DC Representative, in the House Banking Committee hearings on the scandal, commented upon hearing all the pieces of the deal, asked one of my favorite questions of all time: "Why is it only white folks who get that kind of a deal?"
I fully expect that sort of a solution to a problem of Wall Street's own creation, a creature of regulatory complicity and unbridled greed triumphing over our rule of law.
I see the taxpayers ultimately bailing out Wall Street via some sort of the aforementioned mechanism, because Wall Street is too big, and too important, to be allowed to suffer the consequences of doing the time for the crime.
Wall Street is too important to be allowed to fail, even if it means shafting investors who have already been fleeced of their savings, and then shafting them again by creating a tax burden they will be forced to shoulder, so that Wall Street can keep the place in the Hamptons and the Maybach and the Gulfstream.
Most won't even know or understand what has been done to them. That will be the art of it. It will be so complex and so impossibly boring that they will doze off even as every man, woman and child is clipped for a future $3 or $4K, and investors robbed of hundreds of billions get $1 back for every $50 they lost.
That's the worst case that I can see, as the ramifications of allowing a clearing and settling system to print shares at will become clear. The wilder, destabilized markets scenarios are too fanciful. I'm far too cynical and pragmatic to believe that a worst case where the bad guys all go to jail, and the investors win as their stocks go through the roof, will ever happen. We may see covering in the larger issues, if there is liquidity. We will likely see a heating up of delisting companies, to clear maybe 30% of the problem by removing the liability at a stroke of the regulatory pen. But we won't ever see investors winning on this one.
That's now how Wall Street works.
I've spent the last 3 years studying it, and it hasn't ever worked that way.
But look at the bright side. It won't all be bad.
Just imagine how safe everyone will be in this new, improved market!
I really hope I'm wrong on this.
Really.
Sorry, just ignore message posted re 5G moments ago. I did not read the information above before posting..was in a rush and didn't realize this was only for in and outer traders. Nevermind..
Babe
AMEN to 'Watch FGWC'! This,imo, is a sleeper stock if there ever was one. It has been decimated in price to an unrealistic level, .005 ~ They are on the move, as per news and present efforts and should
begin to gain the attention of investors very very soon, indeed!
Just like WDAM did last week...bought a lot more at what I felt strongly was the low, .003 and it went all the way to .049 during the run up. I've been in both a long time, lean time and felt that WDAM's day was dawning right then and there, that Friday and it began on Monday....and feel the same about 5G. Not certain when it will begin with this one...but imo, it's way past due. The news has been all good...
large float, yes...but in time, that could be
fixed. WDAM's float is also large...but time alone will tell, won't it? I see both as investments though, after taking some profits, of course, for the future, and as stocks I would wish to still be in, in some measure, in the years to come. All just MO, of course.
Babe
Mike ~ 'what the heck did you expect?'...I expected the rules to be followed for the microcaps as they are for the small,mid and large cap stocks.
The rules the SEC set up for the otcbb did not include the right to naked short those shares. They allowed the market makers, (big mistake) to continue shorting in this way to LOL even the markets out..so they say. But some have ended up in court for doing it for an individual shorter out to damage the company...
At any rate..we expect our money/investment to be
shown the same respect as that of the large investor. It does not ...go with the territory...as some assume...that one group of stocks can be
manipulated, shorted beyond their floats and ultimately in many cases, be destroyed.
If DNAG gets under a penny..(what an outrage that would be)...the shorters will just try to kill it off totally. BECAUSE, if court cases in the works
are won by companies and their shareholders being abused, then these same shorts will have to cover..and if a stock is 'dead'...they'll never have to put out a dime for the destruction they have wrought.
If they are on the SHO list...they are being illegally naked shorted. and they are...on that list and they are being manipulated by some entity.
They may be selling stock as some claim..but someone else is shorting it in large numbers..for them to appear on that list.
so..what do I expect? I expect my investment in a company with a lot to offer the world in new science and technology not to be destroyed by whomever.
And I intend to find out who is doing this.
If it's DNAG, alone, I'll soon be gone. But companies don't naked short their own stock. No way...so it has to be someone else involved.
period.
OTCBB stocks, if allowed to grow and prosper, can add jobs, commerce and better health and well-being to mankind. This isn't some gambling casino...it's supposed to be a place where men dare to dream great dreams and have the chance to make them a reality.
It's an incubator for future science and technology
that could make this a safer and better world.
Don't write about it as if it was intended to be merely the playground of hedge funds and day traders... what it has become, mostly....because it is a place where courageous men and women bring companies public...and where those that are
of great import should be allowed to grow and to
succeed beyond anything they might have imagined.
This does not belong to the hedgefund brats...nor the furtive daytraders...it belongs to America..
to her future well-being. And one day, it will be as intended and the manipulation will end, once and for all..and the DNAGs to come will not have to suffer such incredible greed and unfair treatment at the hands of lenders and shorters. The courts will demand it...watch and see!
This is what I expect!!!!
Babe
fly ~ yes, they are being naked shorted. And it most likely is the lenders doing it, which is illegal. Most likely, for their $$ lent DNAG, they get more shares when it's cheaper. This kind of arrangement is deadly to all concerned.
Legit lenders can see the potential in a young company and most often, lend on that future gain expected. They don't sell at dirt-cheap prices...
a stock that they have invested in by loaning money to enable the company to succeed. This is a crooked, greedy-gut loanshark scam...and I warned DNAG over and over, giving them evidence of the toxic nature of these kinds of loans way back.
Political connections are more important than anything today for small business to succeed.
That is something they should have worked on very hard, if they didn't, and it would have paid off
far more than some toxic loan ever could.
If it is as Bag8 says...the lenders selling to give DNAG money...then why are we on the SHO list?
It is very difficult for just an individual investor to short a stock on the otcbb unless they have an in with a broker/dealer or market maker. Otherwise, it is too much trouble to attempt to do.
But hedge funds get away with stock murder...so they freely naked short as DC looks the other way.
So question that must be answered....are lenders naked shorting still? If not, who is?
This cannot continue...otherwise, the stock will be worthless soon and delisted from the otcbb.
As investors, we deserve a direct and honest answer from the company as to what is actually going on to cause this drop. If they don't know, then someone who'd make it his or her business to find out, should be hired.
Tired of being jerked around by this stock price..
it is getting very, very old and something is not right here. People will begin to throw up their hands and just walk away, if it does not stop!
they say they are looking into being on the SHO list...but I hope they won't accept some lame
response from those overseeing their stock..
rather, demand to know who is shorting their stock.
If it is the lenders, then they should go to O'Neil the lawyer rep. other otcbb shorted companies and join the court battle to come.
This is beyond belief...and I really wish I had never mentioned this company or stock to anyone dear to me. No explanation covers the financial harm done to those who dared to invest in DNAG...only to have themselves RSed to death and now, to have their stock crash day in and day out.
Enough is ENOUGH! Babe
Hopeful NOT...do you know that for a fact or are you just assumming it's true? IF true, it would be rather pathetic for a company with so much promise to practically give away their shares, dirt cheap.
They had said they were having their attorney look into the SHO list where they are shown to continue being naked shorted and not covered as per the so-called, but not followed, new rule.
If you or anyone knows for certain that DNAG is doing this selling, please post it here....it would make a world of difference to me if that is the case...
selling some at seven cents is one thing...but here in the pits, no way that makes sense. tia.
Babe
Thanks EB for sharing that...on webtv and could not access it.
One thing we need to know ~ his comment about the Pipes funding effect on the lowering of the share price ~ Question that should be answered is ~ are they outright selling shares or are they shorting the stock through a broker/dealer or MM, to be able to get more shares for the money they lent DNAG?
Why would they be selling so soon a company with so much promise? That makes no sense at all, at these stupidly low prices. If they are shorting the stock to gain more shares...it is illegal, absolutely!
Do you are anyone else here know the answer to that question? If so, please respond!
Someone who has access to levelII...should be watching the trading from time to time of this stock...preferably the company itself, but it doesn't appear that they are that concerned.
Everytime I buy, the MM's drop the price right afterwards...shorting it again and again.
Is it the pipes lenders behind this or the MM's who are also short the stock...or hedge funds that do this to make pocket change every day?
Any thoughts...anyone?
Tired of buying and holding a company's stock that
is allowed to be manipulated. Babe
NASAA agrees that naked shorting is destroying small public companies...an excellent letter, a must read.
NASAA comments to Investigatethesec.com
September 8, 2005
Dear Mr. Patch,
Although REG SHO is a solid first step in eliminating certain abusive practices, a significant number of issues remain with respect to naked short selling. As you know, the emphasis of REG SHO is, by and large, the "threshold" stocks traded on the NYSE and the NASDAQ. It appears that the SRO's have begun to pay attention to naked short selling now that it has become an SEC rule. Nevertheless, it seems clear that had the SRO's and the SEC exercised greater diligence in enforcing pre-existing rules, REG SHO would likely have been unnecessary.
The most egregious abuses pertaining to naked shorting are occurring on the bulletin board and pink sheets. This fact is particularly troubling because REG SHO fails to address or provide any meaningful reform in these marketplaces. I believe this failure is due, in large part, to the lack of resources committed to these markets and the resultant lack of transparency.
Regulators must devise and implement solutions that will offer the maximum effect without hindrance to the legitimate financial marketplace. REG SHO, once enhanced, should have such an effect. However, there remains a substantial distance between REG SHO and the ultimate goal of including substantive protections for small business issuers.
It is these small businesses in our communities who take entrepreneurial risks to grow their companies through listings on the OTCBB and Pink Sheets. These small businesses not only provide employment for the residents of their communities, but also offer the general public the opportunity to invest in local businesses with promising products or services.
While it may be true that a number of small companies lack the financial depth to succeed, they are nonetheless entitled to succeed or fail by their own honest business decisions and not as a result of the corrupt acts of abusive short sellers.
Without transparency, we cannot, as yet, precisely identify each small business that failed as a direct result of abusive naked short selling nor quantify the exact number of jobs lost to our local economies when these companies are forced to close their doors. However, we can say to a certainty that the impact on many of our local communities has been injurious. As a result, we have observed an unmistakable loss of investor confidence by the arguably millions of investors who have lost their monies.
Members of Congress are confronted with a myriad of constituent concerns, many of which may, at first blush, appear to have a more direct affect on constituents than the problem of abusive naked short selling. In fact, abusive short selling poses a direct threat to the economic well being of small business and the entire community.
Congressional legislators want and, by necessity, must have the utmost confidence in governmental agencies' capacity to carry out their legislative mandates. The SEC is moving slowly forward as REG SHO in its current state is studied and debated seemingly ad infinitum. While slight modifications to the existing Rule may result from such an approach, a far more threatening pattern of abuse is certain to continue unless wholesale reforms are made to remedy the concerns of the small business community. Without further substantive reform to REG SHO, many more small companies in our communities will succumb to failure - not through the mechanism of the marketplace but at the hands of manipulators.
The fact that you, along with an ever-growing group of concerned citizens, have continued to champion the issue of reform in the naked short selling area for so long is the primary reason we are beginning to see reform of any sort. I would caution people not to assume that because reform has begun that the issue of abusive short selling will soon become a thing of the past. Without both a concerted effort to inform and educate those in power on what issues remain and a commitment to implement real, workable solutions we are unlikely to see any meaningful reform.
Your determination and persistence in seeing that this wrong is righted is in part responsible for my interest, as well as that of other state regulators. We have established a working project group in this area and have been meeting with SRO's and issuers alike. We will continue to exert substantial effort to remedy the remaining abusive practices in naked short selling until we are confident at the state level that the companies in our communities and citizens that invest in them will no longer be the possible targets of abusive naked short sellers.
Sincerely,
Ralph A. Lambiase
NASAA Past-President and
Director, Connecticut Division of Securities
CC: Tanya Solov, Director, Illinois Securities Department
Tanya Durkee, Deputy Commissioner, Vermont Department of Securities
Rex A. Staples, General Counsel, NASAA
Arch...I know what you say is gospel. But in the current financial situation we, as a nation, find ourselves in, it's time for common sense to prevail. That's all I was asking for...that a company with the know-how get their share, rather than dole out our taxpayer money to those who are way behind in the science. That would be malfeasance of the worst kind. If that's impossible, then woe be to all of us. I say we demand what is right, not what is politically owed.just for once...ok? But I know what you mean....and agree. There is little hope unless you contribute to campaigns in advance...big time.Pathetic...if you ask me.Babe
make that "for RG to brag about"...not RB...
in the first sentence. Babe
jaber jaws...there are many excellent things for R.B. to brag about...espec. in front of investors in the latest medical tech and science...
No reason for him to be shy about telling our story. The p r o b l e m is that no one seems to be demanding that the illegal shorting/manipulation of our stock end! Investors won't buy into a company that allows its stock to be shorted and doesn't stand up to those doing it. The price of a stock IS very important...as is the trading thereof.
Ours has crashed repeatedly...and seemingly, without any flack from those at the top.
The SEC is called regularly by otcbb stocks that appear on the SHO list of shorted but not covered
(for weeks in our case) as is the new rule.
This rip-off of our investment over and over again has to end! Yes, they have tons to chat about...
except when listeners eagerly run to see the price and how it is being traded, etc., none of it will matter. People do not wish to invest in an equity that is in the captivity of the shorts. Ours is either that or insiders are selling...and that, too, without a timely admission is also illegal...do doubt that. Or the lender, shorting to gainh more shares for his initial loan..also illegal..called manipulation.
If it were just shareholders impatient, selling, we would not be on the SHO list. However, we are...and somebody at DNAG has to mind the store on that issue. It is paramount..once again...this is not a
charity...it is an investment.
We deserve a large piece of the gov. pie being doled out to some who do not. We'd better get on the stick and demand to be included, if we're not.
And I did not see our company in that article Arch posted today.
I saw pet texas universities...etc...but no Sarasota company in his brother's state. If not, why not?
last post on this for a long time.
Just fed up with this situation...to the max.
If I didn't believe in their science so much, I'd have sold a long time ago.
Our doomsday was getting on the otcbb way back when...it has been a nightmare ever since.
And no thank you...no more averaging down...
been there done that too many times...along with friends and family. I want some reality now..
no more pipe dreams.
Babe
Ann, thanks so much...will go and find it.
Babe
Arch, trouble is...another Texas Univ. is mentioned as one was the other day...as receiving grants for DNA related studies. We've done the 'study'...done the time, spent the $$$ we didn't have....and we have the GOODS that Justice needs NOW! Time to stop this let's pretend game...and demand that our Science is recognized, accepted, appreciated, and utilized. No way our taxpayers should have to foot the bill for a Texas Univ. to work on something we've already nearly perfected...as was suggested last week.
The Fl. Bro has to tell the D.C. Bro that it's time for his Florida company to get a big part of that pie! If it's politics as someone said the company said...then let's play politics!!! Let's tell the media what the politicians are up to..and how they are paying for science to be discovered that's already a done deal by DNAG!
As I mentioned, Joe of Scarbrough Country on CNBC
would love to know about this...he's big on his state, Fl..espec. that area....and has congressional connections to the hilt. Unless Dnaprint is included in this list, Arch..one way or the other, it will be close to criminal...and Justice Dept. should not be pleased with this kind of oversight.
America is broke...and we don't have the $$ to throw around to please the various states and contributors...to campaigns...so we will be forced to tap resources already out there, now.
Thanks for sharing the article, but unless and until DNAG's name is in there in a prominent way...it won't have any meaning at all, to us...the truly letdown, pushed around shareholders.
as I said 'Time's up'!
Babe
Unless the company demands that this manipulation of their stock ends NOW...nothing will be done.
I have suggested that they expose this theft of their worth immediately. It has gone on from the first week they left the pinks and entered the otcbb....crashed as the MM's and others shorted them into oblivion, as they have done to so many more.
DNAG has a special situation here...because anyone naked shorting this stock is also interfering with criminal justice. If they go under, under this yoke of abuse, with them will go all their dna expertise
and the science to help catch criminals and save law enforcement money and time and lives.
The Justice dept. could be called in by Dnaprint to investigate this illegal trading...and believe me, Chris Cox the new head of the SEC was a strong law & order Congressman from Calif....he doesn't approve of anything that would deter justice from being served to criminals. It's a matter of writing to him directly as Chairman of the SEC...easy to do...
and then to alert our congressperson that we have done that and why. His plate is full now...but small business is important to him...and if he realized just what was going on and what is at risk, he'd look into it. I really believe that.
He is one of the few straight shooters left in D.C.
and if he can be reached...if he is given the information by his staff....he would move as quickly as anyone. The past mistakes of the SEC cannot deter a cleanup now. That's why he was sent there in the first place.
The Senators who are demanding something be done about this naked shorting...need to be alerted as well.
DNAG is not some scam company..that is trying to con shareholders. However, it seems to be too busy with other things to take care of this situation with the share price crashing all around it.
IT is unfair to all of us...and has to be addressed. This is investing, not charity. And the shorters try to get stock prices so low, sub penny...so that even if it goes up on good news, it has so far to go that professionals ignore it....and don't dare invest. I know some of this is toxic lending..but that is also illegal...for a lender to short a stock to get more shares. Court cases have been won against them for so doing.
DNAG has to get up in arms over this, raise some h@ll with Congress...and also go to the media with it...to Joe Scarbrough on CNBC, Chris Mattews on CNBC, back to Ron Ensana on MSNBC...even Bill O'Reilly might take it and run with it...
as soon as the hurricane season slows down and there isn't so many drastic stuff going on.
It's pretty drastic to me...when a company with the potential to help mankind, like Dnaprint, gets
constantly abused and used by a few ... hedge funds, even possible competition through market makers..(cases on file about that as well)....
Something has to be done NOw...not next week...and the company has to take the ball and run with it.
We can do our part, but unless they get serious about this, it will be to no avail.
Busy or not..ready or not...Time's up!
Babe
Matt G. ~ I agree that they left themselves open for manipulation. However, naked shorting is now illegal in the sense that it must be covered as in nasdaq and amex stocks. You can't just short shares you don't own, don't borrow and cannot possibly pay back. This is a SCAM against the small investors and the small caps they invest in. It doesn't happen to NY stocks or most Nasdaq or amex..just a few...
but happens every day, every week, every month to otcbb stocks. Obviously, they have been singled out as a gambling vehicle for the hedgefund and day traders...making more money for the DTC and the SEC,each of whom get a percentage of every trade.
If you were a public company and suddenly realized you were not more than 'fodder' for the MM's., traders, hedge funds...what would you do? You can't get a fair lone...only a toxic one...you are treated like a worthless piece of whatever...and have three strikes against you from the getgo.
Funny, other countries fund their companies like DNAG who have science and tech that can better the
society and forensics. They don't allow them to become the target of vile shorters.
Shorter who are forced to cover are one thing. Those that are give free reign to destroy a given company's stock...are quite another...
Think about it....where on earth do you find any
fair play in this? I'm watchin' my Braves..suppose the rules where changed so that points on the scoreboard were removed if some betters were on the wrong side of the bet? This makes no sense. It is undemocratic, unamerican and the rip off of the century! Please don't excuse the naked shorters because dnag needs funding...and had to go begging for what the stupid gov. should have granted them years ago..to save lives, money in law enforcement and so much more.
DNAG is a victim of our pathetic agencies who don't know diddly sqaut about a lot.
Politics, my frend...follow the money.
Babe
Phil ~ thank you for your comments. I know from having read your posts in the past, that you will do all you can in this regard. Our efforts got them the attention of ABC and other media...our efforts can help them fight this powerful, monied, coddled group of naked shorters. But they have to help us expose this and protect their best interests as well as that of their loyal, long-time, extremely patient and more recent enthusiastic shareholders. To let all this wonderful exposure be for nought is not
acceptable. I have received three blasts of terrible news within my family, and this is not a good time for me to focus on investments.
But, injustice is injustice and it cannot wait.
all the best,
Babe
Ann ~ I remember you as well. That seems like a lifetime ago, doesn't it? Well, we're not going to let this stock be destroyed...no way! That would be CRIMINAL...and I'm sure the criminals would love for it to go away...
The shorting list posted this am just proves that DNAG is being manipulated. Either by the lenders, or hedgefunds or either by some imagined competition. But it is being done as some have claimed over and over again.
The bashers used to tell me on RB that I was making the naked shorting stuff up, totally...and that it did not exist! Nothing has ever deterred me from exposing these vicious, greedygut manipulators and nothing ever will.
DNAG has to become more stable in its trading and not crash after each piece of good news. These are some profit takers, day traders, yes...but many times it's the MM's and the sheer shorters at work.
I don't intend to just sit here and watch them destroy DNAG..no way. They will, if allowed, take it to sub penny. Let's not let them Ann...and the others here who know the true value of this stock and its great potential.
Joe S. may be the answer to helping us....but with so much at stake in the criminal justice system, we'll go wherever we need to to get this manipulation stopped. Chris Cox head of SEC is a pro-small bus. kinda guy. He would not want this happening.
I have been very busy lately...but I intend to get this looked at asap...by those who will do something about it...not the old crowd at the sec, rather the new leadership who will care about companies like DNAG. Let's all put our strongest efforts into this now...those who realize what has really been going on...and let's get DNAG into a position where it won't break investors' hearts every time we turn around. Your contributions here have been very helpful...I can't say enough about them..and those of other longs who genuinely care about the company
s future and the growth of their investment, which is as it should be.
Hope all read the post late last night that i put on. It is a must read, indeed.
all the best,
Babe
all the best.
Babe
samillon...can't thank you enough for posting this. I sent it to Tony...Please keep us informed when you can about DNAG's shorting.
This is the only way we can fight back...this and alerting Florida former Congressman of Scarborough Country on cable, Joe Scarbrough, to our situation...which I will do if Tony agrees.
Thanks again.
Babe
Thanks, Ann...Don't have a dvd player..only the older tape player...but my son does...may get it for him. appreciate it. Babe
Court TV show on dnaprint is on again now!
from another board...fwiw
Bob O'brien - Ugly State of the Union
http://bobosrevenge.blogspot.com/
An Ugly State Of The Union
I've been thinking about the whole ugly clearing and settlement system and resultant FTD mess, and the DTCC and SEC's culpability in the matter, and Reg SHO, and abusive naked short selling as part of a stock manipulation strategy, and after having been on vacation for a week, I can honestly say that I believe I have some clarity. In the interest of capturing my thinking for posterity, I thought I would do a September State Of The Union address, and recap my understanding of the current situation. So here it is, in no particular order:
1) Reg SHO is a failure.
It fails to protect investors, and fails to live up to the most basic requirements of a reasonable measure. The reason it is a failure is fundamental to the flaw in the thinking that created it, namely that some settlement failures are acceptable.
If one views the SEC's mandate, it is theoretically to protect investors, thus justifying a restored faith in the system following the Crash of '29 and subsequent financial chaos. One of linchpins of that restored faith was that trades would clear and settle in a timely manner, eliminating the potential for abusive short selling that typified that period. The thinking was that if one established a reasonable period for clearing (the processing of the order and the buy/sell transaction) and settling (the physical delivery of the shares and the funds, e.g. the conclusion thereof) that one could eliminate naked short selling, wherein a stock was sold into the ground with a stream of sells, and delivery was never made, or was delayed beyond a reasonable period. Back with 1934 technology, reasonable was five business days following the transaction day - T + 5, later ammended to T
+ 3 in the 80's.
That was great, and settlement failures were pretty academic - if there was no delivery of shares, then no payment was made, and the transaction was void - a broken trade. Seems reasonable - if you didn't deliver the goods, you didn't get any money, and no commissions were paid to either broker (buyer or seller). That worked well. Everyone was motivated to make the trades settle.
Because otherwise nobody got paid. And Wall Street loves to get paid. There were no extended settlement failures - rule 17(a) required timely settlement, and everyone's pay was based on timely conclusion of the trade.
Before we continue, understand that 17(a) still requires timely settlement of trades (the exact wording is "the prompt and accurate clearing and settlement of securities transactions including the transfer of record ownership"), and does not authorize anyone, not the DTCC, not the SEC, to just waive the requirement that trades settle promptly and reasonably (the part where delivery is achieved and ownership is transferred) - thus, the notion of grandfathering hundreds of millions of past settlement failures that SHO pronounced with a stroke of the pen violates one of their primary mandates - prompt settlement of trades. If it ever faces a legal challenge, I believe it would be struck down as unlawful. I know it, the SEC knows it, and the participants know it. The only reason nobody has sued is because there's no money in it. But make no mistake, it is unlawful. Now, the SEC will likely argue that the NSCC has Carte Blanche via Addendum C (which was passed by the NSCC to enable the now infamous Stock Borrow Program) and its allowance of "reasonable" settlement in light of "legitimate" failures to deliver, but I would simply direct everyone to consider the idea of "reasonable" settlement. Reasonable.
In 2005.
In a Six Sigma world of nanosecond technology. Professor Boni's research paper concluded that the average age of a fail was 56 days. Does anyone think that 56 days would survive the reasonableness test in 2005? It would have failed 71 years ago, and it would fail today - hence Reg SHO is a farce and a failure, and I believe illegal in its grandfathering provision. Now the DTCC will fall back on the NSCC's self-penned Addendum C, which allows for settlement failures for "Legitimate" reasons - but does anyone believe that hundreds of millions of FTDs aged for months are "Legitimate", much less reasonable?
2) Fast forward to the modern era, specifically to the 90's, when Congress agreed that it was a good idea to dematerialize paper stock certificates, and to let the DTC act as a bank, where the certificates would be kept, and one electronic book entry (tick) would be created for each legitimate share. Great in theory. No more paper running around the Street, and increased efficiency. The problem is that the DTCC, the parent of the NSCC and the DTC, decided that it was going to separate out clearing and settling, and no longer require that trades settle in order for everyone to get paid.
You read that right. On Wall Street, signing a contract to attempt to deliver stock at some point in the future now gets everyone paid. Imagine if selling a house worked like that - your real estate broker would get paid and your account debited at the point that he agreed to try to get you a house matching certain specifications. Or imagine a car salesman getting paid the second you sign the agreement, and you get an IOU instead of a car - he'll try to find you one just as soon as he can. Does anyone else see how badly broken this is? By breaking out clearing and settling as two separate items, the DTCC and the participants that own it have engaged in a nice little rhetorical fraud. They can "clear" the trade the same day it is entered, and the DTCC, the brokers, even the SEC all get paid, and the settlement portion is left as an afterthought that is not really a requisite for anything.
That creates institutionalized fraud, wherein your money is taken, you receive a brokerage statement indicating that you received "shares", but what you got was an IOU, which has no voting rights, and no ETA as to when it will be converted into real shares - IF EVER!!! One of the neat tricks the system set up was where the NSCC became the contra party in both sides of the trade, meaning that if the Stock Borrow Program was used in a settlement failure situation, there was no direct connection between the buyer and the seller. By intermediating the exchange, the NSCC now could create plausible deniability if shares didn't show up - it could "borrow" shares held in an anonymous pool, which would be credited to the buyer's broker's account, which would then go right back into the anonymous pool the next day - creating a virtually unlimited stock creation scheme, unlicensed and unauthorized by anyone (again, the DTCC will argue that addendum C gave them that right, to which I would direct them to the reasonable terminology, and the open-ended failures that are the reality - certainly more than 1934's standards, thus unreasonable given current technology). So we have a de facto stock manufacturing scheme, wherein the number of electronic book entries has nothing to do with the actual number of shares in the DTC vaults (that's how it was originally intended; 1 electronic share for 1 paper share) due to the Borrow Program's abuse by its participant owners - a function of the DTCC becoming a monopoly, with nobody to ensure that anything about the scheme was rational or reasonable - certainly not its participant owners, who now get paid without delivering anything, and for which failure there is no apparent deterrent or penalty. And it is all presided over by the SEC, who relies on the conceit that the brokers and the DTCC will act in good faith, in the shareholders' best interests, on the honor system. Institutionalized fraud.
Simple.
Absolute power corrupts. As always. And yet the SEC and the DTCC act as though this time in history is different than all other similar times in history. Why would any reasonable person believe that?
3) The worst is yet to come, though. If I am correct, the ex-clearing problem that was created when the DTCC decoupled clearing from settling is now wildly out of control, and is likely at least 5 times as great, if not 10 times or more as great, as the REG SHO Fails. Here's how the ex-clearing shell game works: The DTCC has a system wherein they will clear the exchange of money for the two parties, but then let the two parties arrange for settlement off-line, between the two of them. You read that right. Again, everyone gets paid, but now the DTCC is out of the loop, as it is just between the two brokers as to when the actual goods will be delivered - if ever. Now, does everyone get this? The brokers that own the DTCC get to decide when and if the shares get delivered, and they tell nobody at the DTCC - it isn't the DTCC's business what two companies do, after all - that's their business, and presumably they are obeying the rules and delivering promptly.
Am I the only one that understands that this creates a system where the brokers can literally create money at will, and as long as nobody breaks ranks, nobody ever has to deliver anything, ever? Does anyone see any difference between this and just printing as many shares of stock as a broker feels like? No cost of goods sold, and no real barriers as to how many shares can be sold into the market, as long as the den of thieves keeps its second set of books away from the prying eyes of the DTCC - who being owned by them, isn't particularly interested in upsetting the apple cart anyway.
This whole out-of-control scheme has now gotten to the point where I believe that the entire market system is dangerously jeopardized, and is in fact now constructed to ensure that companies which have been abusively shorted using Stock Borrow and ex-clearing FTDs stay depressed in price, or better yet, go out of business. Besides eliminating any effective requirement for delivery, one of the other nice things the DTCC came up with was to allow the sellers who sold the FTDs to have access to the cash they generated due to the FTD sale, over and above whatever the current mark to market price is today. What that means is that if Short Seller A sold a million shares of NFI naked and FTD'd them at $60 or so, and today's price is $35, Short Seller A gets to use and in fact keep the delta between $35 and $60 (with some remaining above the $35 for collateralization requirements). Call it a cool $20 million assuming that $5 was kept as a collateralization premium. Now, in what other world does the seller get the proceeds from a sale that he never delivered the product on, and which he likely never will?
But it gets better. If Short Seller A gets into bad trouble, and has 20 companies he's done this to, and if he goes belly up, guess what? The DTCC has the financial obligation to make good on buying and delivering the shares, along with the brokers that sold the FTDs, and which are also owners of the DTCC. Does everyone see how it is in the best interests of everyone in the system EXCEPT the company and the shareholders to ensure that once a company is under an attack that results in FTDs significant enough for the company to show up on the SHO list, that it stay chronically depressed, for the duration? How can one achieve that? Why, keep selling more FTD's, and take them ex-clearing! Folks, I believe that this is a centi-billion dollar problem now. The math bears that out. The DTCC says that the Stock Borrow Program satisfies 18% of the daily FTDs. If 82% of the daily FTDs are not handled by the Borrow Program, then the obvious answer to the question of where they all go is simple - they go ex-clearing. The end result is that now the brokers have significant skin in the game to ensure that the companies' share prices stay low in perpetuity. That is where I believe that the fraud is the worst. The brokers no longer have to deliver squat, thanks to rules that their SRO, the DTCC, passed, so their interests are no longer as the custodians of the shareholders' interests. Their interests are in fact the diametric opposite. They are alligned with their biggest customers - the short selling hedge funds. How convenient.
So that is where I have arrived, after working this issue for 6 months or so (NCANS was created in February) - we have the SEC knowingly violating its mandate to protect investors and ensure that trades are settled in a timely and reasonable manner, we have the DTCC and the participants removing the delivery obstacle to separating investors from their money, and we have a system that is now organized to perpetuate a systemic fraud that is large enough to where it likely exceeds the DTCC and the participants' NAV and ability to buy all the shares it has created - leaving it with the only alternative it can use - destroy most if not all of the companies that have been the most brutalized. Either that, or face financial Armageddon.
You can't be forced to buy millions of shares if the company is out of business, or is de-listed.
Does everyone completely understand just how far this has gone? Feel free to send this to your elected representatives, and your state securities representatives. Forget about the SEC - they are clearly part of the problem, IMO.