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Hey OD, the same to you Bud.
Wishing you, Missy and all....... the best.
Holidays would be better if we were at 11 bucks instead of .11 cents...lol...I wanna be rich like Fred...the friendly one.
I replied to ya earlier on AB's.
Peace to all and to all adios.
OK Tech KIM......now
maybe old Helpurn will pay his vendors...they've been waitng for many months to get paid....almost a year!!!!!!!!
Way to go Fred!
I thought about it too....but......
New years Res....buy lo..sell Hi....LOL
Happy Holidays to ya Bud.
resq..you've got mine. :)
Here ya go Cassie,
more fodder....
http://www.investrend.com/articles/article.asp?analystId=0&id=21292&topicId=137&level=13....
Smaller Public Companies, Representing 80% Of Issuers, May Become Exempt From Sarbanes-Oxley Costly 404 Provisions / Information
Some 80 percent of U.S. public companies, with market capitalizations under $700 million, may soon be exempt from Section 404 of the Sarbanes-Oxley Act, which requires internal controls, and those under $100 million may become exempt fro “SarBox” altogether, if the U.S. Securities and Exchange Commission adopts the proposals of its Advisory Committee on Smaller Public Companies.
Companies that would be fully exempt would include Isonics Corp. (NASDAQ: ISON) and Generex Biotech (NASDAQ: GNBT), along with most OTCBB and PinkSheets quoted issuers. Companies that would still have to comply with Sarbanes-Oxley but not the more onerous Section 404 requirements would include Charles and Colvard (NASDAQ: CTHR) and Taser International (NASDAQ: TASRE).
All of these companies have received coverage by Investrend Research or its affiliates. The committee is also urging the SEC to encourage public companies that have no research coverage to sponsor their own research through such programs. Investrend and its affiliates subscribe to the “Standards For Independent Research Providers” at http://www.firstresearchconsortium.com, and their coverages are enrolled for investor-monitoring by the Shareholders Research Alliance (http://www.shareholdersresearch.com).
The SEC appointed its advisory committee, whose members include James A. (Drew) Connolly, director of corporate development for Investrend Communications, Inc., parent to Investrend Information, publishers of FinancialWire, and also parent to Investrend Research, in an effort to determine how much relief from the exhorbitant costs associated with SarBox should be afforded smaller public companies and their shareholders.
During the year-long series of meetings and public comment, the advisory committee learned that a large proportion of public company shareholders might suffer financial problems if companies that could not afford compliance were to delist, or “go dark,” and the committee’s proposals are in part an attempt to prevent this from happening.
The proposals, overwhelming adopted by an 18-1 vote, are not yet final. On January 9, the committee will hold its sixth meeting to consider the draft final report. The committee’s master schedule is at http://www.sec.gov/info/smallbus/acspc/acspc-mastersched.pdf . Then, on January 17, the first draft of the final report will be published in the Federal Register and opened to public comment until February 16. There will be another meeting in March to adopt the final report, and submit it to the Commission.
The SEC so far has been very responsive to its committee, and has adopted requested interim measures.
“We value internal controls strongly,” James C. Thyen, CEO of Kimball International and co-chair of the advisory committee told the New York Times. “We see the goodness in it, but we think there has to be some proportionality in costs versus benefits.”
--------------------------------------------------------------------------------
Go to InvestorPower pages of companies
Go to SEC Committee Master Schedule
Go get 'em Greg..the Brit's are getting fat....
http://www.breitbart.com/news/2005/12/16/051216193457.beavpxab.html
By: Ginovanneli
16 Dec 2005, 02:27 PM EST
Msg. 1234182 of 1234189
Jump to msg. #
Was sunpoop wired?
good one!
It sure would be great ..I hear that Gregory and company still owe at least one vendor many dollars...after a year or more....guess he's a shrewd business man..or is that screwed? Makes me start wondering about that 25 million of shareholders money he's squandered over the last few years from other ventures.
Maybe this company is a scam....again!!!!! I hope not as I bought into this company after seeing what was possible....from the horses mouth!!!!
These vendors sure would like to get paid Greg....while you run around in your Jap crap Lexus 4 wheeler and saying.... ha so.
C'mon Greg...pay your bills!!!!!!!!
One thing is for sure.
every time, and I mean everytime, these posters who have these chats always forget a name or something. Did ya ever see them come back with it when and if they ever do remember?????
NOPE!
I wished i could remember whom i was refering to now...lol.
I guess Wolfy's the only sane one
on Agoracon.
Did everyone else forget the similar type reports from others in the past...same sh*t, different day.
Subject: RE: Genius? Hero? Sweetheart? WTF??/HEW WOLFY...LIGHTEN UP
From wolfy
PostID 437296 On Thursday, December 15, 2005 (EST) at 12:34:56 PM
Response To: wolfy PostID 437241
--------------------------------------------------------------------------------
And by the way, I am really pleased that my musings cause you to ''gag''. I didn't know I had that effect on anyone but knowing its you ''makes my day''
Sorry, Frank, you'll have to find another way to get your rocks off today. I didn't say your post made me gag. I said all the ''all this swooning over Frank's report'' made me gag. I mean ya gotta admit, they were really over the top.
''Hero'' they said ... heroes run into burning buildings when others run out. ''Genius'' they said ... A genius might add another decimal place to Pi, or write music that makes us feel something, or figure out how some basic component of the universe works. ''Sweetheart'' they said ... well, suffice it to say what my sweetheart does for me is nothing like what you do for this board.
Frank, you went someplace nearby, you talked to somebody and you reported, unwisely I think, some small amount of what was said. Although I am also very very anxious for some good news, I think the gross overreactions indicate how desperate the followers of edig are for something positive. Chimera, mirage, exaggeration or falsification, it doesn't matter, so long as it is positive some of them will get all giddy.
Some others have a longer memory. Count me among them.
Wolfy
the only guy that can understand that crap is FRED....
he works with fractions...lol.
That's her...she was alot of fun. Musta hung around in a few bars....lol....or drove a truck :)
lmao.........
you got about everybody...
what happened to the fiesty gal from Michigan?
Was it S...something?
Looks like your KKD is finally off the naked short list as of yesterday. It was on for 234 days.
http://www.buyins.net/tools/short_list.php?ssd=20051209
Look at the 12/9 naked short list
http://www.buyins.net/tools/short_list.php?ssd=20051209
and then look at 12/12's naked short list.
Big difference..somethings happening????
or is it normal?
Cass, With ATCO on the Naked short list..
moving in with them would make them one big happy family.
http://www.buyins.net/tools/short_list.php?src=1,7,9
you bet it's an interesting site./
Were you known as
Fat Fingered Fred"?
ohhhhhhhhhhhhhhhhhhhhhhhhhh................
Get even with dem neked guys..
http://www.buyins.net/
ummmFred....
which finger did ya use?
That's a good one...lol.
I'll have to put a Hemi in mine ta catch 'em
Then..............
I'll TP 'em....paperworks not done till then. ;)
I'm thinking like Mark...go after them personally..like the Enron boys. They made statements that were lies..they should and probably can be held accountable...if not we'll just have to go over and beat the living daylights out of them :)
HH,
just a quick note here....
we need to band together as a group and sue the piss out of these B*****ds.
I've had enough.
at what price?
OT: well.
yippeee...dammit
gonna unload EDOG...watch for a nickel soon :(
should make Dabooby and Fat emma happy to buy lower.
OT: Fred..
Maybe this one (CXN) will make up for EDOG.
She's been going up nicely for a bit now.
looks like good news
http://www.pinksheets.com/quote/print_filings.jsp?url=%2Fredirect.asp%3Ffilename%3D0001013762%252D05...
http://biz.yahoo.com/e/051129/cxn8-k.html
Items 1.01. Entry into a Material Definitive Agreement.
On November 23, 2005, the Company entered into a binding Letter Agreement
(the "Agreement") with George Foreman Enterprises, Inc. ("GFME") pursuant to
which both parties will form a new limited liability company ("Newco") for the
purpose of promoting the Company's zero calorie fat replacement food ingredient,
Z-Trim(R) (the "Joint Venture"). Under the terms of the Agreement, GFME will
contribute to Newco $150,000 cash and certain rights to George Foreman's name
and likeness in exchange for a 50.1% membership interest, and the Company will
contribute to Newco $150,000 cash and up to 5 million shares of common stock in
exchange for a 49.9% membership interest. GFME will also be entitled to two
seats on the Company's board of directors and the Company has agreed not to use
any spokesperson for Z-Trim(R) other than George Foreman or the Company's
current spokespersons without GFME's consent.
During the term of the Agreement, if the Company's sales of Z-Trim(R)
produce revenues of $30 million or gross profits of $10 million in any one year,
GFME shall receive a cash bonus of $100,000; if the Company's sales of Z-Trim(R)
produce revenues of $50 million or gross profits of $15 million in any one year,
GFME shall receive a cash bonus of $200,000; if the Company's sales of Z-Trim(R)
produce revenues of $70 million or gross profits of $20 million in any one year,
GFME shall receive a cash bonus of $300,000; if the Company's sales of Z-Trim(R)
produce revenues of $90 million or gross profits of $25 million in any one year,
GFME shall receive a cash bonus of $400,000; and if the Company's sales of
Z-Trim(R) produce revenues of $110 million or gross profits of $30 million in
any one year, GFME shall receive a cash bonus of $500,000.
In addition, whether or not the Company achieves increased sales of
Z-Trim(R), GFME has the right under the Agreement to convert its interest in
Newco to up to 50% of the then-outstanding common stock and other equity (if
any) of the Company upon achieving certain milestones including the creation of
Newco, launching a national public relations campaign, and George Foreman's
promotion of Z-Trim(R) via national media. The Company is obligated to register
with the Securities Exchange Commission and list with the American Stock
Exchange any shares of common stock of the Company into which GFME converts its
Newco interests.
The Joint Venture is subject to GFME's limited due diligence cancellation
condition in the event that third-party analysis of Z-Trim(R) shows results
inconsistent with the Company's claims of benefits and safety, or based upon
GFME's determination after meeting with food manufacturers regarding the
prospects of securing contracts utilizing Z-Trim(R) and George Foreman in future
product campaigns. GFME has 60 days from the date of the Agreement to exercise
this right. Furthermore, the Company is required by American Stock Exchange
regulations to obtain shareholder approval prior to issuing 20% or more of the
Company's common stock pursuant to the Joint Venture.
In connection with forming Newco, the parties will enter into more
definitive detailed documentation that will contain more detailed terms of the
Joint Venture consistent with the Agreement.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
No. Description
------ --------------------------------------------------------------
10.1 Letter Agreement between Circle Group Holdings, Inc. and George
Foreman Enterprises, Inc. dated November 23, 2005 (portions of
which have been redacted pursuant to a confidential treatment
request).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CIRCLE GROUP HOLDINGS, INC.
By: /s/ Gregory J. Halpern
-----------------------
Gregory J. Halpern
President and Chief Executive Officer
Dated: November 29, 2005
EXHIBIT INDEX
No. Description
------ --------------------------------------------------------------
10.1 Letter Agreement between Circle Group Holdings, Inc. and George
Foreman Enterprises, Inc. dated November 23, 2005 (portions of
which have been redacted pursuant to a confidential treatment
request).
Exhibit 10.1
CIRCLE GROUP
HOLDINGS, INC.
1011 Campus Drive
Mundelein,
Illinois 60060
847.549.6002
fax 847.549.6028
www.crga.com
AMEX: CXN
November 23, 2005
George Foreman Enterprises, Inc.
100 N. Wilkes-Barre Blvd., 4th Floor
Wilkes-Barre, Pennsylvania 18702
Attn: Efrem Gerszberg, President "Letter of Agreement"
Ladies and Gentlemen:
This letter agreement (this "Letter") sets forth our mutual understanding
with respect to a transaction (the "Transaction") between Circle Group Holdings,
Inc. ("CXN") and George Foreman Enterprises, Inc. or any of its affiliates
("GFME"). Based on discussions between CXN and GFME, each of CXN and GFME hereby
agrees to the following:
1. A new limited liability company ("NEWCO") shall be created and shall be
owned 50.1% by GFME and 49.9% by CXN. NEWCO shall be created and the joint
venture between GFME and CXN shall be documented after GFME's satisfactory
completion of its due diligence.
2. GFME shall contribute to NEWCO the rights to use George Foreman's name and
likeness in connection with the sale and promotion of Z-Trim. NEWCO's
rights to use George Foreman's name and likeness shall be subject to the
limitations and restrictions imposed on GFME.
3. GFME shall earn the right to convert its interest in NEWCO, in whole or in
part, based upon the agreed performance milestones highlighted in point 4
hereunder, into an aggregate of up to 50% of the fully-diluted shares of
CXN common stock and up to 50% of any other class of equity securities, if
any, authorized by CXN. As GFME converts its interest into CXN common
stock, its corresponding interest in NEWCO shall become owned by CXN.
4. GFME's interest in NEWCO shall, based upon the agreed performance
milestones herein, be convertible into up to 50% of the fully-diluted
shares of CXN common stock and 50% of any other class of equity securities
(in each case after giving effect to the issuance of stock to GFME) upon
GFME satisfying any of the following milestones which cumulatively add up
to 50% based on the percentage assigned to each milestone. GFME is not
required to satisfy milestones equaling 50% before it is eligible to
convert. GFME may, from time to time, in its sole discretion convert its
interest in NEWCO or any part thereof, into CXN's shares based on the
percentage interest assigned to each earned milestone. By way of example,
if CXN has 50 million shares of common stock outstanding and no other
securities, and GFME satisfies milestones equaling 25% of GFME's potential
50% interest in CXN, GFME can convert all, or any portion of that 25% into
12.5 million shares of CXN. Although the total number of shares assigned to
the milestones below, if all achieved, exceeds 50 million shares, GFME
shall only be entitled to convert its interest into Newco into a total of
50% of the fully diluted shares of CXN common stock and 50% of any other
class of equity securities. The milestones can be achieved in any order.
The milestones are as follows:
o 10% interest upon creation of NEWCO (including full documentation
of NEWCO's operating agreement and execution of the definitive
agreement contemplated by Section 21 below).
o Up to 25% interest upon the launch of a national public relations
campaign which can be earned as follows: The term "Z-Trim Story"
shall mean an article in which Z-Trim is prominently mentioned
and/or Z-Trim's relationship with George Foreman is included in
the article.
[**]
[**]
[**]
[**]
[**]
[**]
[**]
o Up to 20% interest upon George Foreman's promotion of Z-Trim on
national TV, which can be earned as follows.
[**]
[**]
[**]
_______________________
[**] Material has been omitted from this Exhibit 10.1 pursuant to a request
for confidential treatment and that material has been filed separately with
the Securities and Exchange Commission.
o Up to 17% interest upon George Foreman's promotion of Z-Trim on
Radio, which can be earned as follows:
[**]
[**]
o [Up to 13.5% interest upon certain additional specified
public activity].[**]
o 10% interest upon GFME using or promoting Z-Trim in relation to a
launch of Z Trim usage in any restaurant in which George Foreman
is a spokesperson for the restaurant chain or Z-Trim or both.
o Up to 50% interest upon George Foreman making himself available,
at a time and place convenient to George Foreman to NEWCO for
five (5) days to promote Z-Trim based on the following timeline:
[**]
[**]
[**]
[**]
Any request by CXN for appearances by George Foreman is subject to George
Foreman's availability. CXN may request that George Foreman be available
for any or all of the 5 days at anytime after the creation of NEWCO. CXN
must request the appearance days within 365 days after they are granted,
which dates are set forth above. In the event that CXN requests George
Foreman to be available prior to the dates set forth in the preceding
schedule, GFME shall have the right to convert a 10% interest in NEWCO into
CXN stock for everyday George Foreman is made available to CXN. GFME will
be credited with achieving milestones listed above whether they occur
before or after execution of a definitive agreement and/or the creation of
NEWCO.
_______________________
[**] Material has been omitted from this Exhibit 10.1 pursuant to a request
for confidential treatment and that material has been filed separately with
the Securities and Exchange Commission.
5. Immediately upon GFME's request, but subject to a liquidity and price
formula mutually acceptable to GFME and CXN that is materially
non-detrimental to CXN's market value, CXN shall file with the
Securities Exchange Commission and the American Stock Exchange to
register all shares of CXN common stock and/or any other relevant
equity securities that GFME converts under this Letter.
6. GFME shall receive a bonus in the amount of $100,000 if CXN has Z-Trim
related revenues of $30 million or gross profits of $10 million in any
fiscal year; a bonus of $200,000 if CXN has Z-Trim related revenues of
$50 million or gross profits of $15 million in any fiscal year; a
bonus of $300,000 if CXN has Z-Trim related revenues of $70 million or
gross profits of $20 million in any fiscal year; a bonus of $400,000
if CXN has Z-Trim related revenues of $90 million or gross profits of
$25 million in any fiscal year; a bonus of $500,000 if CXN has Z-Trim
related revenues of $110 million or gross profits of $30 million in
any fiscal year.
7. CXN shall contribute $150,000 and a maximum of 5,000,000 shares of
common stock of CXN to NEWCO to be used for promotion and marketing of
Z-Trim, but CXN shall only contribute any such shares if GFME and CXN
mutually agree that the shares will be provided to other third parties
pursuant to a deal that is beneficial to CXN.
8. Utilizing the contributions by GFME and CXN provided for in Points 7 &
9 herein, GFME and CXN shall allocate to NEWCO an agreed-upon amount
of expenses associated with marketing Z-Trim.
9. GFME shall contribute $150,000 to NEWCO and shall use its best efforts
to sign a cross promotional arrangement with Mark Burnett Productions
or another major reality production company. GFME and CXN shall not be
responsible to make additional contributions to NEWCO.
10. GFME shall be given 2 board seats on CXN's Board of Directors upon the
signing of this Letter. CXN agrees that the number of directors on its
Board of Directors shall be limited to 10.
11. CXN and GFME shall mutually agree on the use of any spokesperson being
affiliated with Z-Trim other than George Foreman. GFME recognizes that
CXN has existing or pending commitments with other celebrity
spokespeople, and will not unreasonably object to CXN retaining the
services of the celebrities referred to in the following sentence.
Existing celebrities who are in various stages of negotiations to
develop relationships with CXN and Z-Trim have been identified
confidentially. GFME and CXN shall agree on the marketing of the three
aforementioned existing celebrities.
12. For a period of forty-five (45) days commencing on the date of this
Letter, CXN shall not, and shall cause its directors, officers,
employees, representatives (including, without limitation, attorneys
and accountants) or agents (collectively, "Representatives") not to:
(a) directly or indirectly, solicit, initiate or encourage any
inquiries or proposals from, discuss or negotiate with, provide any
non-public information to, or consider the merits of any unsolicited
inquiries or proposals from any person or entity (other than GFME)
relating to (i) any transaction directly or indirectly involving the
subject matter of this Letter, including without limitation any of the
rights to distribute, manufacture and/or promote Z-Trim (the "Z-Trim
Rights") or (ii) any other transaction involving the sale, transfer or
other disposition of any substantial portion of the stock or assets
(including the Z-Trim Rights) of CXN (any such transaction, an
"Alternative Transaction"); (b) provide any non-public information
concerning CXN or Z-Trim to any person or entity (other than GFME or
any Representatives of, or other professional advisors to, GFME) with
respect to any of the Z-Trim Rights or in connection with an
Alternative Transaction; or (c) enter into any discussions or an
agreement with any person or entity (other than GFME) with respect to
any of the Z-Trim Rights or with respect to an Alternative
Transaction. Notwithstanding the foregoing; CXN, its directors,
officers, employees, representatives may provide any relevant
information or pursue any transaction already in place, already being
pursued, or being otherwise contemplated presently as follows (i) any
financing transaction already in process or being contemplated between
CXN, its representatives and any other third party whose relationship
to the parties necessitates being bound by CXN's Non-Disclosure
Agreement, (ii) any food companies that CXN has already contacted or
will contact in the future to discuss an opportunity involving Z-Trim
and George Foreman.
13. GFME and CXN recognize and acknowledge that the final approval of the
total transaction contemplated herein, shall be subject to the
appropriate proxy filing as well as regulatory and shareholder
approvals. However, CXN, Greg Halpern, the CXN directors and the
company insiders agree to vote their shares and use their best efforts
to obtain shareholder approval.
14. Within 60 days from the date of this Letter GFME may, after completing
a food analysis of Z-Trim assisted by an independent third party,
terminate this Letter and have no further obligations or liability to
CXN if such analysis is not consistent with the known benefits and
safety of Z-Trim. Additionally, within 60 days from the date of this
Letter GFME may, after completing its due diligence by meeting with
food manufacturers, terminate this Letter and have no further
obligations or liability to CXN; however GFME may only so terminate in
the event that after completing its due diligence with regard to the
various food companies working on projects that could incorporate
Z-Trim, it becomes apparent to GFME that the parties will be unable to
secure sufficient contracts utilizing Z-Trim and George Foreman
together in a future product campaign.
15. Within 30 days of completion of due diligence by the parties, George
Foreman will make himself available for one morning or afternoon of
his choice to do a photo shoot with various brand name products that
will be mocked up with the Z-Trim Logo where such photos will be used
to pitch the idea of George Foreman with Z-Trim on such brands to the
major food companies that manufacture them. The photo shoot will be
paid for by CXN and be arranged at a time and place convenient to
George Foreman. The photos shall be the property of CXN provided,
however, in the event this Letter is terminated for any reason and/or
the final Transaction is not consummated, CXN shall return all of the
photos of George Foreman to GFME.
16. This Letter contains the entire understanding between the parties
hereto with respect to the Transaction and supersedes and replaces all
prior and contemporaneous agreements and understandings, oral or
written, with regard to such Transaction.
17. This Letter shall be exclusively venued, formed, construed and
governed by the laws of the state of the defendant in any action
without regard to principles of conflicts of laws.
18. This Letter may be amended only in writing executed by both of CXN and
GFME.
19. In the event that any one or more of the provisions contained in this
Letter shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, then to the maximum extent permitted by
law, such provision shall survive to the extent it is not so held, and
all of the other provisions of this Letter shall remain in full force
and effect.
20. This Letter may be executed by fax and in counterparts, each of which
shall be deemed to be an original and all of which, taken together,
shall constitute the same Letter.
21. Provided GFME does not terminate this Letter as provided in paragraph
14 hereof, GFME and CXN shall, within 90 days from the date of this
Letter, enter into a definitive agreement incorporating the terms of
this Letter and such other provisions customary in transactions of
this type. Either Party may terminate this Agreement in the event of
material breach by the other party, upon giving at least 30 days'
written notice to the other Party, during which 30-day period the
Party notified of breach shall have the opportunity to cure the
breach, for any breach susceptible of cure.
[Remainder of Page Intentionally Left Blank]
If the foregoing correctly sets forth your understanding, please so
indicate by signing an enclosed counterpart of this Letter and returning it to
CXN, whereupon it will constitute a binding agreement between CXN and GFME.
Very truly yours,
CIRCLE GROUP HOLDINGS, INC.
Name: Gregory J. Halpern
-------------------
Title: C.E.O.
Accepted and agreed to as of
the date first above written:
GEORGE FOREMAN ENTERPRISES, INC.
By: /s/ Efrem Gerszberg
--------------------
Name: Efrem Gerszberg
Title: President
It's getting deep...DTCC
http://www.investrend.com/articles/article.asp?analystId=0&id=20044&topicId=160&level=16....
November 7, 2005 (FinancialWire) The Depository Trust and Clearing Corp., the pervasive national clearing house that is an agent of two SROs, NASD, Inc., and the New York Stock Exchange, has once again directly, deliberately and recklessly sought to interfere with news coverage of its role in the still-unfolding StockGate naked short selling scandal.
November 7, 2005 (FinancialWire) The Depository Trust and Clearing Corp., the pervasive national clearing house that is an agent of two SROs, NASD, Inc., and the New York Stock Exchange, has once again directly, deliberately and recklessly sought to interfere with news coverage of its role in the still-unfolding StockGate naked short selling scandal, according to attorney Marshal Shichtman, Esq., Carle Place, NY, in a letter to each of the 20 members of DTCC’s board.
Those receiving the letter include Jill M. Considine, Chair and CEO, and Donald F. Donahue, COO, DTCC, Frank J. Bisignano, CEO Global Transaction Services, Citigroup (NYSE: C), Michael C. Bodson, Managing Director, Morgan Stanley (NYSE: MWD), Eileen K. Murray, Managing Director, Credit Suisse First Boston (NYSE: CSR), Heidi Miller, CEO JPMorgan Chase (NYSE: JPM), Catherine R. Kinney, President and Co-Chief Operating Officer, New York Stock Exchange, and Douglas Shulman, President, NASD, Inc.
The latest effort, the week of September 18, followed the DTCC’s successful interference with FinancialWire’s distribution via Investors Business Daily and Yahoo, Inc. (NASDAQ: YHOO) on February 7, 2005, a deed to which attorneys for the DTCC admitted to in a letter to Shichtman in April, in what appears to have been at the time a full-court press against unfriendly news.
On April 10, for example, a much-vaunted expose on General Electric’s (NYSE: GE) Dateline NBC program was abruptly and suspiciously cancelled, and run weeks later in an extremely truncated form that made no mention of the DTCC, said to have been the program’s primary target. The extent of potential interference in that programming remains a mystery, as those close to it have all declined to discuss it.
If there was interference, it would surely denigrate NBC in stark contrast to the standards set by CBS’s 60 Minutes in the infamous “Big Tobacco” expose that became a highly-acclaimed movie, “The Insider,” and more recently the movie “Good Night, and Good Luck,” about how that network stood up to Joe McCarthy in the Communist media-baiting era of the 50s.
On or about the same time, the DTCC had castigated EuroMoney after a March, 2005 article on illegal naked short selling quoted then U.S. Securities and Exchange Commission Head of Market Regulation Annette Nazareth’s assistant, James Brigagliano that prior lawbreakers were “grandfathered” because “we were concerned about generating volatility where there were large pre-existing open positions, and we wanted to start afresh with new regulation, not re-write history.” Nazareth, now an SEC Commissioner, had previously told the New York Times that naked short selling amounted to no more than complaining shareholders “who want their stock to go up.”
Since, one of those “large pre-existing open positions,” apparently in the neighborhood of $10.5 billion, has come back to haunt the SEC, in the form of a line item, “securities sold, not yet purchased” in the bankruptcy filing of Refco (NYSE: RFX; OTC: RFXCQ), according to the Financial Times. These events apparently have created a huge crisis of confidence in the institutions previously believed to be there to protect the individual investor and create a level playing field.
A recent Investrend Poll at http://www.investrendinformation.com showed that a whopping 89% of online respondents believe the SEC should be “hugely” blamed for the Refco meltdown. An even more lopsided 92.05% stated that the DTCC should “be punished” for censorship violations of the First Amendment. And in the current Investrend Poll, 50% so far believe that these new scandals will keep individual investors on the sidelines and out of the markets.
The DTCC remains under intense pressure from regulators over its controversial “stock borrow program,” its move to automated settlements that has unsettled many in the financial community, including foreign exchanges such as Sebi in India, according to the Financial Express, that are now reconsidering copying such a system, and from a score of lawsuits claiming the agency’s policies and loans have undermined the financial system and hurt hundreds of small public companies and thousands of individual investors who have lost millions.
The DTCC itself admitted in its front-page editorial complaining of Euromoney and the charges it expected from Dateline NBC, that $6 billion of securities go unsettled every day. The admittance was in the form of a boast that this amounted to just a small segment of each day’s clearances.
In his letter, Shichtman noted that while the DTCC’s standing of an SRO, is “highly disputed,” and with it “any claim to any type of immunity,” that it has a “heightened responsibility to the public” as a quasi-SRO “solely owned by SROs,” meaning NASD and the NYSE. He asked the DTCC directors to set a proper “tone at the top” by reigning in the media-bashing and news interferences practiced by the DTCC’s top executives.”
He said that the DTCC’s guise of its interference as “free speech” does not excuse slander, libel and tortuous interference, nor, if the DTCC is held to be a government-aided organization, the clear violation of FinancialWire’s First Amendment rights.
DTCC board members include Gerald A. Beeson, Senior Managing Director and CFO, Citadel Investment Group, Chicago; Jonathan E. Beyman, CEO, Lehman Brothers (NYSE: LEH), New York; Frank J. Bisignano, CEO Global Transaction Services, Citigroup (NYSE: C), New York; Michael C. Bodson, Managing Director, Morgan Stanley (NYSE: MWD), J. Charles Cardona, Vice Chair, The Dreyfus Corp.; Stephen P. Casper, Managing Director and Chief Operating Officer, Fischer Francis Trees & Watts, Inc., New York; Arthur Certosimo, Executive VP, Bank of New York (NYSE: BNY), New York;
Also, Jill M. Considine, Chair and CEO, The Depository Trust & Clearing Corporation (DTCC), New York; Paul F. Costello, President, Business Services Group, Wachovia Securities (NYSE: WB), Charlotte, NC; Randolph L. Cowen, Global Head of Technology and Operations, Goldman Sachs Group (NYSE: GS); Donald F. Donahue, Chief Operating Officer, The Depository Trust & Clearing Corporation (DTCC), New York; Norman Eaker, Principal, Edward Jones, Des Peres, MO; Allan D. Greene, Executive VP, State Street Corp. (NYSE: STT), Boston, MA; and
Also, Catherine R. Kinney, President and Co-Chief Operating Officer, New York Stock Exchange, Boston; Heidi Miller, CEO, JPMorgan Chase & Co. (NYSE: JPM); Eileen K. Murray, Managing Director, Credit Suisse First Boston (NYSE: CSR), New York; Ronald Purpora, CEO, Garban LLC, Jersey City, New Jersey; Dianne Schueneman, Senior VP, Merrill Lynch & Co. (NYSE: MER), New York; Douglas Shulman, President, NASD, Inc., Washington, DC; and Timothy J. Theriault, President, The Northern Trust Co. (NASDAQ: NTRS), Chicago.
Citing FinancialWire’s 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.
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.”
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.
Overstock CEO Patrick Byrne, for instance, has released transcripts of discussions between himself and Morgan Stanley (NYSE: MWD) over shares that he could not get delivery on, and says his father has still not gotten delivery on 75,000 shares that he bought.
Byrne said that he believes between 5 million and 20 million counterfeit shares are currently in the marketplace, presumably on the major exchanges alone.
He has also added libel to the list of legal charges against Rocker and Gradient and others.
Former Refco CEO Phillip Bennett has been arrested on charges of deliberately misleading shareholders when they purchased shares in the company’s recent public offering. He had been placed on leave by his company as it launched an investigation into $430 million the company said was owed by an entity he controlled in a transaction that was hidden from the public.
The company had already lost $1.65 billion in market value, leaving investors in the public offering extremely angry.
Also fired was Santo Maggio, president of Refco Securities, whom the company said was believed to have known about Bennett’s activities.
According to the New York Post, Maggio was already “in the middle of an SEC probe that would have probably gotten him suspended one year from his supervisory duties” related to Refco’s relationship with Rhino Advisors, a hedge fund that illegally shorted the stock of Sedona Corp.
The new case winds its way right back to the growing StockGate scandal as the Post quotes a “source familiar with the investigation” that the receivables in the latest probe “probably came from short sale positions made from a shuttered hedge fund.”
The levees protecting the underworld of naked short selling, despite efforts of many regulators to try to prop up a system on weakened stilts appear to be crumbling, forecasting a potential Wall Street disaster that would not be unlike what happened in New Orleans and in other low-lying real estate.
An undermining of confidence in the “independence” of subscription-based institutional research, in the financial media that could even involve General Electric’s (NYSE: GE) CNBC and of course, the undeniable clout of already besieged hedge funds and the “King of Shorts,” David Rocker, whose targets are said to include Martha Stewart Living Omnimedia (NYSE: MSO), would be disastrous in the event of any one of them, but altogether, it could result in a total collapse as investors look for safer investment and savings venues than “crooked” markets.
In a commentary, Motley Fool said any “mirth” regarding “sith lords” and other irrelevant allegations are “obscuring a case with fairly broad implications for security analysis, First Amendment rights, and the credibility of our public markets.”
It said that in an affidavit recently acquired by The Motley Fool, and also apparently acquired by DealFlow and others, Demetrios Anifantis, who identifies himself as a former employee of the research firm Gradient Analytics, alleges that the company conspired with David Rocker of the hedge fund Rocker Partners to publish damaging information "for the purpose of negatively influencing the price of Overstock shares so that Rocker could profit from its existing or intended short positions in Overstock shares.
“Two additional sworn statements in our possession, ostensibly by former Gradient employees Robert Ballash and Daryl Smith, also allege that Gradient provided biased research on behalf of its clients. Both Anifantis and Ballash additionally accuse Gradient of running a hedge fund advisory called Pinnacle Investment Advisors, contrary to the company's public statements at that time.”
Motley Fool notes “the most detailed and apparently most damaging affidavit, if it is true, was delivered by Anifantis. He worked as a customer service representative for Gradient from November 2003 until November 2004. New York Post reported that he was fired from the research firm for forwarding his employer's client list to his personal email.
“According to his statement, Anifantis recalled being on phone discussions, during which "David Rocker, Marc Cohodes, or other representatives of a hedge fund called Rocker Partners, LP, requested that the special report contain more negative information, or that the report emphasize a specific negative fact and that the report downplay any positive facts.
“Anifantis also states that customers like Rocker would ask that Gradient not disseminate a negative report ‘to the public for a specific period of time, so the customer could get their own position in the stock before the public got the information.’ This conspiracy went beyond just Vickrey and Rocker, according to Anifantis, who also says that it "appeared" to him that Herb Greenberg, who then wrote for TheStreet.com, joined in coordinating the attacks on Overstock.
“At first glance, the affidavits raise troubling questions about the nature of ‘independent research.’ If the three former employees of Gradient are telling the truth, the alleged conspiracy between the research firm and Rocker Partners would represent an egregious example of market manipulation, which most likely would have seriously harmed individual investors, as well as Overstock itself.”
The Fool points out that “the veracity of these individuals has not been established, and Rocker Partners and Gradient vigorously deny the charges.
“As New York Post has reported, at least two of the affiants may have credibility issues or reasons to hold grudges against Gradient. If this case makes it to trial, Anifantis, Ballash, and Smith will have to testify in court and withstand cross-examination by top defense attorneys. It will be interesting to see whether their charges are supported by documentary evidence, such as emails, revised reports, notes of phone calls, and the like. Within the affidavits are charges that would prove quite persuasive if supported with concrete documents.
“For example, in support of the charge that Rocker had considerable input on the creation of reports, Anifantis's affidavit refers to an "exhibit 5" (which we did not receive) allegedly containing revised reports on Overstock with Rocker's revisions in brackets.
“Ultimately, we believe that these affidavits raise important questions for investors about the integrity of our financial system. Unlike a lot of the silliness in the media relating to Overstock, this complaint is not frivolous on its face, and although Overstock will need to prove its allegations, the case must be taken seriously. The question to us is why the atmosphere around this lawsuit has, from the beginning, been comical. If the behavior set forth in these allegations is true, then the implications of the ease at which the financial professionals can manipulate the public markets are stark.”
The affidavits, from former employees of Gradient, according to DealFlow state that the research firm provided “hatchet jobs” on companies chosen by clients “coordinated to deliver maximum trading benefits to them.” The affidavits state that reporters for TheStreet.com “leaked” Gradient’s negative reports to the market ahead of their release. It notes that Rocker Partners is the largest shareholder in TheStreet.com and that Rocker is a contributing columnist. The affiants also say that former TheStreet.com columnist Herb Greenberg had an office at Gradient where he ghost-wrote research reports for Gradient clients such as Rocker.
The former employees, one of whom had been fired after raising questions about Gradient’s practices, said the firm stated its team of 18 to 20 analysts were comprised of CPAs and CFAs when none of them had advanced credentials, and were instead recent college graduates with business-related degrees.
They also note that the research firm’s executives, Donn Vickery and James Carr Bettis, also managed hedge funds and a mutual fund that traded in the securities of companies covered by the research side.
If so, this, among the other allegations, is a violation of the “Standards For Independent Research Providers” at http://www.firstresearchconsortium.com.
Gradient is a member of InvestorSide, which told FinancialWire that a violation of its code of ethics, if proven, would disqualify any member from further participation in that organization.
Former employee Demetrios Anifantis, in a sworn statement, said that Gradient would regularly generate “custom reports” for clients, after receiving specific instructions from the clients on whether it should be a “negative” or “positive” report.
Many of the reports were redistributed to PIPES traders and hedge funds by Sagient Research, which distributes the Placement Tracker database of PIPES transactions. Sagient reportedly said it has not distributed Gradient reports since August, 2004. Release dates on the reports were said to have been often delayed for three to five days while Rocker and other Gradient partners secured short positions. These allegations were contained in several affidavits.
The affidavits said that an associate editor working with Greenberg, now at Marketwatch.com, Brian Harris, worked for Gradient to draft research, and had an office in a Gradient office in Seattle. It was noted that TheStreet.com removed Harris’ name as an associate editor shortly after Overstock’s lawsuit was filed.
The affidavits contain numerous other explosive allegations.
In other naked short selling developments, the Depository Trust and Clearing Corp., reportedly itself under NASD scrutiny for its controversial stock lending program that some, including an 11 state state North American Securities Adminitrators Association task force headed by Connecticut’s chief securities officer, and former NASAA president, apparently believe facilitates the illegal naked shorting industry, has been very secretive about the status of shares for individual companies, stonewalling even companies’ efforts to determine their true ownerships and short positions.
Brokerage and clearing firms are apparently under intense NASD pressure to settle failed short trades in Regulation SHO threshold securities or have their clearance firms do it for them at possible substantive losses.
The NASD is in turn acting under political and regulatory pressure from the 11-state task force.
Lambiase had publicly asked the SEC to “fix” the DTCC “problem” as it was considering the adoption of Regulation SHO last year, but taking a page from numerous U.S. Senators, he and other state regulators have grown tired of waiting for Regulation SHO to do more than simply shine a magnification light on the massive fails-to-deliver problem.
DealFlow said NASD officials are concerned that stock loan programs are being used to settle failed short trades in Reg SHO threshold stocks, which must be closed out voluntarily or through forced buy-ins within 13 days. “The regulators are concerned that the stock loan are being used instead of market purchases to provide the shares needed for settlement, creating new transactions that will ultimately fail to settle as well.”
The state regulators, DealFlow said, have been “highly critical of the SEC's decision to ‘grandfather’ settlement failures resulting from naked short sales up to levels that trigger threshold status under Reg SHO.”
NAASA was particularly concerned about Regulation SHO, because it excluded the small cap market from any meaningful regulation. “NASAA said the proposal included replacing the so-called ‘tick test’ with a rule that would provide a uniform price test using the "consolidated best bid" as the reference point for permissible short sales. This, however, would not address problems relating to the naked short selling of smaller, less liquid securities, because , NASAA argued, the requirement of the consolidated best bids meant it could not be applied to securities that were not subject to real-time consolidated quotes. That included Nasdaq Small Cap, OTCBB, and Pink Sheet securities.
NASAA also questioned the wisdom of grandfathering settlement failures under the threshold level, asking why the SEC was willing to permit significant settlement failures at all.”
“While there are instances when settlement may be legitimately delayed, existing regulations provide for extensions for settlement. If the Commission continues to allow settlement failures, it may well facilitate the harm that the proposal is designed to remedy,” Lambiase warned the SEC.
According to DealFlow, Lambiase urged the SEC to reconsider its stance regarding the role of the stock borrow program operated by the Depository Trust Corp. (DTC). NASAA wrote that as a threshold matter, NASAA believes that the Commission should explicitly prohibit the DTC from lending more shares of a security than it actually holds. The utility of the overall proposed rule would be severely impaired unless the Commission undertakes to implement such a prohibition."
Brent Baker, an attorney with Woodbury Kesler in Salt Lake City and counsel to naked shorting target and eight-month old threshold list company Overstock.com, previously spent 14 years at the SEC, including time in the Division of Enforcement, was quoted as saying he believes that the SEC tried, with Regulation SHO, to put "their finger in the dike" but failed.
“Three or four years ago naked short selling was being perpetrated by promoters in the micro cap world," he says. "they would publish 'exposes' on the Internet... and they would bring pressure on these little companies."
“However, short selling has changed,” noted DealFlow. He believes the SEC does not realize that abusive short selling practices have been adopted by others and are now built into business models of large, mainstream hedge funds.
Meanwhile, the NY Post has reported that traders in Nasdaq stocks are racing to beat a rumored regulatory deadline to close out their positions — or take huge losses as clearing firms do it for them.
“Naked short sales are trades executed without borrowing stock beforehand. Naked short sellers can overwhelm an orderly trading market, since unlike traditional short sellers, there is technically no limit to how much stock can be sold short illegally, noted the Post.
The Post also reported recently that the NASD and numerous state securities regulators, led by Ralph Lambiase of Connecticut's Division of Securities and Business Investments, have vowed to increase scrutiny of naked short sales.
“A buy-in is the worst possible development for a short-seller, since he has to accept any price given,” it stated.
In a letter to constituent investor advocate Dave Patch, whose persistence in criticizing Federal regulators over the past several years for shareholder losses at the hands of illegal manipulators was at times a lone quest, often covered only by FinancialWire, Connecticut Division of Securities Director Ralph A. Lambiase, the immediate past president of the North American Securities Administrators Association outlined for the first time the efforts a “working group” of state regulators have been undertaking to assail abusive market practices that Lambiase said has been directly responsible for “an unmistakable loss of investor confidence by the arguably millions of investors who have lost their monies.”
It was an unusual move by Lambiase to outline the states’ enforcement plans in a letter to Patch, who has been vilified and scorned by many top regulators and institutions for his efforts, which includes the maintenance of a website, http://www.investigatethesec.com .
Lambiase said that his efforts, and efforts of others, such as Tanya Solov, Director of the Illinois Securities Department, Tanya Durkee, Deputy Commissioner, Vermont Department of Securities, and Rex A. Staples, General Counsel for NASAA, was stimulated by Patch, and an ever-growing group of concerned citizens who have “continued to champion the issue of reform in the naked short selling area for so long,” and added that it has been those grassroots efforts that constitute the “primary reason we are beginning to see reform of any sort.” Lambiase was clear in stating that it is “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.”
Lambiase, whose initial letter to the U.S. Securities and Exchange Commission stated that the SEC needs to look at the role of the Depository Trust and Clearing Corp. in allowing these abuse practices to continue, said that 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.”
He said his working group has begun meeting with SRO’s and issuers alike, and that it 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 companines in our communities and citizens that invest in them will no longer be the possible targets of abusive naked short sellers.”
It had been previously rumored that the reason the NASD has been issuing subpoenas to a dozen or more brokerages over their “fails to deliver” and their failures to enforce buy-ins is due to those regulating at the Federal level not wanting to be trumped again by a state investigation such as occurred in several Spitzer reform efforts.
Lambiase so far appears to be taking the posture that the state group is ready to step in if the Federal regulators do not, thus “inspiring” the current efforts rumored to be occurring at the Federal level.
To make the point, he told Patch in the letter obtained by FinancialWire that “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, Lambiase pointed out, “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.
In what some believe is another swipe at the secretive DTCC, he said that “without transparency, we cannot, as yet, precisely identify each small business that failed as a direct result of abusinve naked short selling nor quantify the exact number of jobs lost to our local economies when these companies are forced to close their doors.”
In what is an unmistakable prod to the SEC, Lambiase said that institution 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.”
He said that even Congress, whose members have also called the SEC on the carpet for the slow progress associated with Reg SHO may in fact be missing the point that “abusive short selling poses a direct threat to the economic well being of small business and the entire community.”
The 11-state task force reportedly was in serious strategy sessions a few weeks ago.
New York Post quoted one regulator as saying there is “an epidemic” of naked shorting. Regulation SHO has made that evident for the world to see. Numerous U.S. Senators have called the Regulation fully ineffective, and have repeatedly called upon the SEC Commissioners to get the practice under control.
The Post said that an SEC official confirmed to it “that no complaints have been brought in the nine months since Regulation SHO went into effect.”
It quoted one state securities regulator, Bill Reilly of Florida, as saying he expects the increased effort will result in more voluntary compliance from dealers, as well as enforcement activity.
That may or may not resolve the DTCC “problem.” Recently a stock transfer agent, Transfer Online Inc., had asked then-SEC Chair William Donaldson to put a stop to the control the Depository Trust & Clearing Corp. and Automatic Data Processing (NYSE: ADP) are fast gaining over the transfer business, and to demand DTCC transparency.
Excerpts from the letter, posted at http://www.faulkingtruth.com/Articles/LettersToEditor/1012.html , states: “Over the years as the amount of shares held at DTC has increased it has become more and more difficult to determine who owns the shares, who is trading them and if the trading is proper. This trend, and the resulting problems I will detail below, continues to increase because a minority of the total number of shareholders are reflected on the books and records of the corporation, most activity takes place behind the wall of ownership that is designated as Cede & Co. and neither the company nor the transfer agent has any access to the underlying information.
“Furthermore, DTC recently managed to put through a rule change (Release No. 34-50758A; File No.S7-24-04) that prohibits a transfer agent from representing any company who seeks to withdraw from the DTC system. This change effectively leaves companies with no voice or choice in the management of their stock and their ability to have any transparency as to what is actually taking place in the market in regard to their stock.
“I receive calls from companies seeking information as they watch millions of shares trade in a single day, who watch their share price decrease in value and who have no access to information regarding who is behind the trading of these shares, or if in fact the trades are at all legitimate. As the system now operates, most companies have a large percentage of shares on their books registered to Cede & Co.
“Given the importance of shareholder voting and communication one would assume that the same requirements placed on transfer agents as to accuracy and reporting would be placed on ADP and Cede & Co. as they usually hold or service the majority of the shares owned in any given company.
“I have found; however, that when presented with the tabulation reports from ADP the share totals they report sometimes exceed the total number of shares outstanding for the company. Let me restate this because it is a very important part of my concern about a system that is more and more headed in the direction of increased control by DTC. The shares presented by ADP, that are the shares voted by the brokers on behalf of the shareholders for whom they hold accounts, EXCEED when added to the shareholders of record the total number of shares outstanding.
“Where are these extra shares coming from? Why are there no controls on the number of shares held in the nominee name Cede & Co. vs. the ownership on the books and records of the brokers and why is the company not privy to any information unless it pays whatever fees it is told it must pay by the organizations that control the data?
“In fact, as the system is evolving, DTC is de facto becoming the largest transfer agent in the industry even though it is an organization formed by and working for the interests of the brokerage community. If, ultimately, the S.E.C. is in place to protect investors then this issue can not be ignored because in the end when the market is completely under the control of the brokers and the organizations that represent them then the market can neither be transparent nor fair.”
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Anyone use this?
http://www.circularlogic.com/
didn't take long..did it...
Porncasts Appear on Video-Playing iPod By RON HARRIS, Associated Press Writer
Fri Nov 4, 4:38 PM ET
SAN FRANCISCO - Purveyors of porn and entrepreneurs who spied a niche when Apple Computer Inc. unveiled its video-playing iPod are proving that sex even sells in tiny packages — especially when it is portable.
ADVERTISEMENT
One online social network of amateur pinup girls said it logged 500,000 downloads of the sexy "featurettes" — three- to five-minute video clips — in the first 24 hours targeting the new iPod-toting crowd.
It's a no-brainer: pornography to go.
The naughtiness is already finding its way into video handhelds through business models tried-and-true — along with some new ones — as the adult entertainment industry works to untether video content.
Soon enough, skin flicks whose viewing has been largely restricted to the privacy of homes and theaters could be on view in the open public of parks and mass transit, for all ages to see.
Porn is no doubt a big business on the Web.
Two in five Internet users visited an adult site in August, according to tracking by comScore Media Metrix. The company said 3 percent of all Web traffic and 2 percent of all surfing time involved an adult site.
The Internet accounted for $2.5 billion of the adult industry's $14 billion in U.S. revenues last year, about the same as revenues from cable and satellite pay-per-view showings, according to Adult Video News, a trade magazine.
Vivid Entertainment Group, a major adult video producer that already offers high-resolution still images, video clips and footage from "voyeur cams" through its Web site, now plans to shoot shorter films specifically for the iPod and other portables.
"It could be a huge percentage of our business," says the company's chief executive, Steven Hirsch. "People love watching adult movies and to be able to carry an adult movie in your pocket is a powerful tool."
Sin City, based in Chatsworth, Calif., already offers trailers of full-length adult films for the Sony PlayStation Portable, a handheld video game player. It now plans full-length adult films for the video iPod.
Apple wasn't first on the scene with a small digital device capable of playing good-quality video.
Creative Technology and iRiver are among companies with pocket-sized devices already on the market; they use Windows Mobile software to display video, audio and still images.
In addition, one early entrant, Archos, has a Jukebox that can store and play a whopping 400 hours of video in the MPEG-4 standard.
Yet the very marketing and deal-making finesse that helped Apple rise to dominate the portable music market make its new video-playing iPod a likely vessel for adult movies' expansion to portable porn.
The Apple's iTunes online story already features several hot and heavy podcasts, audio downloads geared to portability. The company isn't offering much in the way of sex on videos, though some of the music videos it sells for $1.99 each can tend toward titillation. Apple officials refused requests for interviews on whether they might offer adult content on iTunes for iPod owners.
For many high-profile companies, sex remains a tough sell.
Although wireless phone companies support devices that play video, they are reluctant to expose themselves to complaints from a large and valuable customer base.
One company that knows firsthand is Digital Orchid, which manages the delivery of streaming video to cell phones for top brands, including MLB.com, NASCAR.com, ESPN and the National Hockey League.
It also handles Hawaiian Tropic, the suntan oil company perhaps better known for its comely bikini models. That sort of content is about as racy as wireless carriers want to get, says Robert Betros, Digital Orchid's co-founder and chief technology officer.
"We won't cross that line because the carriers won't distribute it, and that's a majority of the revenue opportunity for us," Betros said. "Now they may change their tune, and in some places in Europe carriers are distributing this kind of content."
In the wireless industry, carrier-approved content exists within something referred to as a walled garden. In the United States, at least, that garden is generally safe for children.
Once users stroll outside garden walls and inside a Web browser, however, all bets are off.
A company called Xobile sells pornographic video clips for cell phones. No special operating system or other software is necessary: Just a Web browser, which is commonplace now for phones with access to digital data networks.
That it's now easier than ever for minors to view X-rated content on portable devices concerns media watch groups that seek to protect children.
The problem is that children are often quicker to grasp the technology than their parents, says Jack Samad, a senior vice president with the National Coalition for the Protection of Children & Families.
"The arena is wide open, unfiltered, unrestricted, for adult content," Samad said. "Children are very aware of where it is and how to download it."
___
Associated Press Writer Gary Gentile in Los Angeles contributed to this report.
only 7 trades?
E Digital
Quote News Releases
Quote: E Digital
**Market Closed**
Last Trade Time : Nov 03, 2005 15:46 ET EST
Last
0.1 Open 0.099
Change 0.001 Prev. Close 0.099
% Change 1.01% Tick Type N/A
Volume 335,987 Shares (last trade) 400
Day High 0.11 52 Week High 0.38
Day Low 0.099 52 Week Low 0.09
Bid 0.1 Ask 0.11
Bid Size 5,000 Ask Size 5,000
# Trades 7
Industry Electronic Equipment
Fundamental Data
P/E Ratio -4.95 Market Cap (m) 17.53
Earnings/Share -0.025 Shares Out (m) 175.26
Dividend per share N/A Exchange OBB
Current Div. Yield N/A Ex Dividend Date N/A
Quotes delayed at least 20 minutes for NYSE/AMEX, 15 minutes for other exchanges.
OT: Thanx Fred/ :(
I think you're full
of yellow beans....no one here wishes they had gotten out of this sweet investment ....
unless you're talking about Jan/Feb 2000!!!!
:):):)
Warner Bros. Fires Up to 300 Employees
Nov 02 6:40 PM US/Eastern
Email this story
BURBANK, Calif.
Warner Bros. Entertainment said Wednesday it has fired between 250 and 300 employees as a cost-cutting measure.
The cuts come during a record year for the studio. But Warner Bros., like other entertainment companies, is bracing for lower revenue in coming years as the growth of the DVD market continues to slow and the TV syndication market shrinks.
"We had to take some difficult measures to position the company for the future," Warner Bros. spokesman Scott Rowe said.
"We acknowledge that these decisions have affected people's livelihoods and to that end, we examined every aspect of our business in order to cut costs responsibly and to keep staff reductions to a minimum," he said.
All the cuts were at the studio's Burbank operations, where Warner Bros. employs 4,500 workers.
The cuts were across every division and at all levels, Rowe said.
Warner Bros. is a division of Time Warner Inc., the world's largest media company, which Wednesday reported an 80 percent increase in third-quarter earnings. Shares of Time Warner rose 33 cents, or 1.9 percent, to close at $17.90 Wednesday on the New York Stock Exchange, where they have traded in a 52-week range of $16.10 to $19.90.
The company is under pressure from investors to raise its slumping stock price and cut costs.
Gee, what a concept...let's get rid of a couple of officers...
I think Oz and JTDiii could run it better from their puters :o)
Feds raise interest rates Tuesday
http://news.ft.com/cms/s/40b96646-497f-11da-8686-0000779e2340.html
OT: watch the crooks
God, nothing is safe out there.
http://www.breitbart.com/news/2005/10/28/D8DH5BMG1.html
ahhh...but it doesn't seem bad either.....
haven't heard crap from there.
I agree with Fred..
start publishing...lol.
add some revisions while you're at it. :o)
lol...just imagine what you'd see with two eyes ;o)
I agree..same old..same old...this smacks of the Intel boys on board in the early days.