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Insiders in the context used means those unethetical people working within and associated with the securities industry ... insiders of NASD SEC DTCC ... etc
"The SEC must take a stronger position on finding, preventing and punishing abuses by insiders"
Well you're wrong ... SHO isn't working.
Obviously you missed the admonitions SEC Chairman Wm. Donaldson received from Senator Bennett at the Senate & Banking committee hearing on March 9th
View the video archice by clicking on it and drag the slider fast forward to 1:19:35 then make note of what takes place.
http://banking.senate.gov/index.cfm?Fuseaction=Hearings.Detail&HearingID=140
Maybe you're not aware SHO isn't working. The SEC is not doing its job as can be seen from this article.
A Distracted SEC Failed to Find Abuses
Thu Apr 21, 9:14 PM ET White House - AP Cabinet & State
By MARCY GORDON, AP Business Writer
WASHINGTON - The Securities and Exchange Commission failed to uncover trading abuses throughout the mutual fund industry that cost investors billions because it had other priorities, congressional investigators have found.
Congress' Government Accountability Office (GAO), in a report being released Friday, said the SEC's inspectors should have detected the market-timing abuses prior to September 2003, when New York Attorney General Eliot Spitzer brought the violations to light and regulators began an industry wide crackdown.
The chairman and the senior Democrat on the House Judiciary Committee seized on the GAO report to roundly criticize the SEC. Such concerted bipartisan attacks on the agency have been rare in recent years.
"The SEC was years late in uncovering these massive abuses that are nothing short of theft," panel chairman Rep. James Sensenbrenner, R-Wis., said in a statement. "The SEC must take a stronger position on finding, preventing and punishing abuses by insiders, or Congress will be forced to take another look at how mutual funds are examined and regulated."
The ranking Democrat, Rep. John Conyers of Michigan, said the report shows that the SEC "was asleep at the switch."
Market timing of mutual funds, which involves rapid in-and-out trades, is not illegal but is prohibited by many funds because it can disadvantage ordinary shareholders. In many of the cases brought by Spitzer and the SEC, mutual fund companies allowed favored clients such as hedge funds to engage in market timing.
Before September 2003, the SEC "did not examine (funds) for market-timing abuses because agency officials viewed other activities as representing higher risks," the GAO report says. "SEC can strengthen its capacity to identify and assess evidence of potential risks."
The SEC staff believed that fund companies "had financial incentives to establish effective controls" against trading abuses, according to the report.
The report cited estimates that market-timing abuses in the $7 trillion mutual fund industry — which it called a "persistent risk" before September 2003 — cost fund investors some $5 billion a year.
The GAO's findings point especially to the SEC's Office of Compliance Inspections and Examinations, known as OCIE.
Its director, Lori Richards, in a recent letter to the GAO investigators, said that after the fund misconduct came to light, "the SEC took comprehensive action, including ... enhanced examination oversight."
"The SEC's examination program has adopted a risk-based approach to oversight that emphasizes the prompt identification and investigation of emerging compliance risks," Richards wrote.
SEC spokesman John Nester declined further comment Thursday.
The National Association of Securities Dealers, which is the brokerage industry's self-policing organization, also failed to detect the trading abuses prior to September 2003 in its inspections of brokerage firms selling mutual funds, the GAO report noted.
NASD spokesmen couldn't be reached for comment Thursday evening.
Spitzer's office discovered the misconduct during the summer of 2003 by following up on a tip from a hedge fund insider.
The scandal spread rapidly across the mutual fund industry, which had long enjoyed an untarnished reputation. Dozens of fund companies, including some of the nation's largest, were fined in civil settlements with the SEC, authorities in New York and Massachusetts and other regulators.
In addition, investors nationwide are suing Janus Capital Group Inc., Strong Capital Management Inc., Bank One Corp., Bank of America Corp., Putnam Investments and Alliance Capital Holding in private litigation.
___
On the Net:
Securities and Exchange Commission: http://www.sec.gov
Government Accountability Office: http://www.gao.gov
A Distracted SEC Failed to Find Abuses
Thu Apr 21, 9:14 PM ET White House - AP Cabinet & State
By MARCY GORDON, AP Business Writer
WASHINGTON - The Securities and Exchange Commission failed to uncover trading abuses throughout the mutual fund industry that cost investors billions because it had other priorities, congressional investigators have found.
Congress' Government Accountability Office (GAO), in a report being released Friday, said the SEC's inspectors should have detected the market-timing abuses prior to September 2003, when New York Attorney General Eliot Spitzer brought the violations to light and regulators began an industry wide crackdown.
The chairman and the senior Democrat on the House Judiciary Committee seized on the GAO report to roundly criticize the SEC. Such concerted bipartisan attacks on the agency have been rare in recent years.
"The SEC was years late in uncovering these massive abuses that are nothing short of theft," panel chairman Rep. James Sensenbrenner, R-Wis., said in a statement. "The SEC must take a stronger position on finding, preventing and punishing abuses by insiders, or Congress will be forced to take another look at how mutual funds are examined and regulated."
The ranking Democrat, Rep. John Conyers of Michigan, said the report shows that the SEC "was asleep at the switch."
Market timing of mutual funds, which involves rapid in-and-out trades, is not illegal but is prohibited by many funds because it can disadvantage ordinary shareholders. In many of the cases brought by Spitzer and the SEC, mutual fund companies allowed favored clients such as hedge funds to engage in market timing.
Before September 2003, the SEC "did not examine (funds) for market-timing abuses because agency officials viewed other activities as representing higher risks," the GAO report says. "SEC can strengthen its capacity to identify and assess evidence of potential risks."
The SEC staff believed that fund companies "had financial incentives to establish effective controls" against trading abuses, according to the report.
The report cited estimates that market-timing abuses in the $7 trillion mutual fund industry — which it called a "persistent risk" before September 2003 — cost fund investors some $5 billion a year.
The GAO's findings point especially to the SEC's Office of Compliance Inspections and Examinations, known as OCIE.
Its director, Lori Richards, in a recent letter to the GAO investigators, said that after the fund misconduct came to light, "the SEC took comprehensive action, including ... enhanced examination oversight."
"The SEC's examination program has adopted a risk-based approach to oversight that emphasizes the prompt identification and investigation of emerging compliance risks," Richards wrote.
SEC spokesman John Nester declined further comment Thursday.
The National Association of Securities Dealers, which is the brokerage industry's self-policing organization, also failed to detect the trading abuses prior to September 2003 in its inspections of brokerage firms selling mutual funds, the GAO report noted.
NASD spokesmen couldn't be reached for comment Thursday evening.
Spitzer's office discovered the misconduct during the summer of 2003 by following up on a tip from a hedge fund insider.
The scandal spread rapidly across the mutual fund industry, which had long enjoyed an untarnished reputation. Dozens of fund companies, including some of the nation's largest, were fined in civil settlements with the SEC, authorities in New York and Massachusetts and other regulators.
In addition, investors nationwide are suing Janus Capital Group Inc., Strong Capital Management Inc., Bank One Corp., Bank of America Corp., Putnam Investments and Alliance Capital Holding in private litigation.
___
On the Net:
Securities and Exchange Commission: http://www.sec.gov
Government Accountability Office: http://www.gao.gov
Janice ... I don't follow your line of thought.
Why dhould there be a restriction on dentists?
What careers are acceptable in your mind?
Talk about knowing your subject!
He warned the SEC way in advance: they did not listen.
Dr. Jim DeCosta is the worlds' leading expert on naked short selling and the disaster it is creating for investors. He predicts the end to market makers privileged positions in the USA within 5 years. He says the US system will be changed to a system like Canada’s pesent system; Canada's system has NO market makers. Also, the Canadian stock market does not have a naked shorting problem, nada, zero, zip.
I would very much like to ask Dr. DeCosta, what he thinks CMKM's total naked short is; what does he suggest CMKM must do to beat these thieves? I wonder how much he charges as a consultant; I'll bet he is very expensive and well worth it.
Below is a small part of a very long letter Dr. DeCasta wrote to the SEC warning it that the NSSing problem is massive and must be stopped. Here is just a taste of what Dr. DeCoast wrote:
"The only intent was and is the bankruptcy of the victim company. Naive micro cap investors have been getting their pockets picked systematically by Wall Street "professionals" for decades. FRAUDSTERS ARE SELLING ENTITIES THAT DON'T EXIST AND NAIVE INVESTORS ARE SPENDING BILLIONS OF DOLLARS SCOOPING UP THESE PERCEIVED BARGAINS TRADING AT TINY PERCENTAGES OF BOOK VALUE."
Dear Mr. Katz [The SEC Chief when letter was written]
We thank you for this opportunity to offer comments and suggestions in regards to the proposed Regulation SHO. We are of the opinion that the rampant "naked short selling" of stocks and the associated epidemic of failures of "good delivery" and loans made to mask "failures to deliver" that we are currently experiencing, threatens the very core and integrity of our financial system. These problems need to be dealt with IMMEDIATELY, even before the implementation of the proposed Regulation SHO.
As each day goes by, the investment losses pile up, another handful of micro cap companies go bankrupt, and the inevitable loss in investor confidence once this little "industry within an industry" is exposed increases. This is occurring at a time when the system can ill-afford any new scandals involving perceived regulatory apathy. Our comments will first address some specific suggestions and then some generalizations based on 21 years of research on the phenomenon known as "naked short selling."
[Later in the letter]
"Since drug consumption and national security issues are at play here, we feel that the U.S. market makers and clearing firms acting as conduits in this activity OWE THE U.S. PEOPLE BIG TIME IN THIS REGARD. WE UNDERSTAND THAT SOME HONEST U.S. MARKET MAKERS AND CLEARING FIRMS HAVE BEEN PLAYED LIKE A FIDDLE. THE DISHONEST ONES ARE, OF COURSE, COMPLICIT WITH THIS ACTIVITY AND ARE IN COLLUSION WITH THESE CRIMINALS. WE BELIEVE THAT MANY BASICALLY ETHICAL MARKET MAKERS HAVE JUST FAILED TO RECOGNIZE THE EXISTENCE OF VICTIMS, BOTH U.S. CORPORATIONS AND THE INVESTORS THEREIN, IN THESE HIGHLY COMPETITIVE POST-DECIMALIZATION MARKETS AS WELL AS THE DELETERIOUS EFFECTS ON HOMELAND SECURITY AND THE INTEGRITY OF OUR FINANCIAL MARKETS IN GENERAL.
We feel that the SEC is in a once in a lifetime position to bolster the intent of the USA Patriot Act. Please buy in these "open positions" now and you will be accomplishing a lot more than improving the integrity of the largest financial system on earth. As we mentioned earlier, we're fresh out of "middle ground", it's time to make a stand. The SEC has had a recent history of being REACTIVE to the States Attorneys General leading the way on these types of frauds. Perhaps as it relates to naked short selling frauds, the SEC can take the lead and act in a more PROACTIVE manner."
SOLUTIONS TO THE PROBLEM
1) Realize that there is indeed a problem, and then locate its source. Look at the DTCC records showing the age and magnitude of outstanding loans made to hide all of these failed deliveries for companies trading on the OTC: BB and Pink Sheets. Keep in mind that these naked short "open positions" are constantly being "kited" by wash trades and matched orders made in an effort to "rejuvenate" the age of the "fail".
2) Make the commitment to act quickly so that no more victim companies go bankrupt while the DTCC participants try their best to stall the implementation of Regulation SHO. TIME IS OF THE ESSENCE!
3) Quickly formulate the list of all victim companies whose arithmetical sum of "failed deliveries" and "loans made to mask failed deliveries" exceed the Rule 11830 parameters.
4) Demand that these excesses above the Rule 11830 parameters be brought into compliance within a given amount of time via the guaranteed delivery buy-in of "real" shares from "real" shareholders. The good thing about guaranteed delivery buy-ins is that the bill will, as if by magic, land in the lap of the guilty party or the clearing firm that cleared for the guilty party. The identification process is an automatic. This addresses the preexisting naked short positions prior to Regulation SHO's implementation. ANY INDUSTRY PLAYER THAT OBJECTS TO THIS SOLUTION IS IN ON THE SCAM. ASK YOURSELVES, WHY SHOULD THEY CARE IF THEY ARE NOT IN ON IT? WHY WOULD THEY WANT THE MANIPULATORS TO GET AWAY WITH THEIR CRIMES? The next job is to pass Regulation SHO to level up the playing field for future investors.
5) This solution should not at all be seen as burdensome to those perpetrating this fraud because it does not even address the damages done to those thousands of victimized corporations and their millions of shareholders which have already gone bankrupt. There, the crooks have already won.
6) The SEC has to dig deep and do the right thing to make up for their complacency in the past. If those DTCC participants that perpetually claim that there is no such thing as abusive naked short selling are correct then there will be no buy-ins. Please do not have the audacity to approach a company whose share price has just tumbled from $5 to a penny and try to arbitrate a solution involving the victimized corporation selling the perpetrators of the crime large blocks of stock at a penny or two. We don't think the investors that bought shares at $4.90 will look upon this too favorably. Keep in mind the immense amount of money sitting in front of those that sold these nonexistent entities to these investors because it matches to a penny the amount of money these investors have lost on paper or have realized by selling at a loss.
We thank you for this opportunity to help address this massive fraud being perpetrated on U.S. micro cap investors and look forward to working closely with you on its solution.
Dr. Jim DeCosta
Hmmmm, I wonder what else he knows?
Here is the link to the full letter:
http://www.sec.gov/rules/proposed/s72303/decosta122203.htm
Hunni ......kaos
You been soaked and pulled through a hedge backwards?
Looks like it.
From the April 11, CMKX 8K, listing our holdings:
"On or about November 25, 2002, Cyber entered into a Claims Purchase and Exploration Rights Agreement with Urban Casavant, Individually and as Agent for Fort A LA Corne Diamond Fields, Inc., Buckshot Holdings, Ltd., Commando Holdings, Ltd, 191919307 Saskatchewan Ltd, 101012190 Saskatchewan Ltd, 101027101 Saskatchewan Ltd and Morgan Minerals, Inc."
Good find Zen ...
Robert Shapiro has always put together hard hitting letters on this NSS topic.
http://www.investigatethesec.com/shapiro.htm
Robert J. Shapiro writes to DTCC.
http://www.investorshub.com/boards/read_msg.asp?message_id=6095038
100:1 ... kaos?
You mean chaos ???????
Note To Depository Trust & Clearing Corp.:
This Is What An ‘Opinion’ Looks Like / FinancialWire®
April 18, 2005 (FinancialWire) Personal Privilege By Gayle Essary / We at Investrend were recently as stunned and disturbed as anyone else when the powerful and reclusive Depository Trust & Clearing Corp. became a prime suspect in the sudden and inexplicable “indefinite postponement” by General Electric’s (NYSE: GE) “Dateline NBC” of what was expected to have been a shocking expose of the DTCC’s purported role now and over the years in the counterfeiting of electronic certificates supporting illegal naked short sales.
After all, the DTCC is presided over by such otherwise seemingly responsible and luminous institutions as the NASD and the NYSE, its two “preferred” shareholders, along with Jonathan E. Beyman, Chief Information Officer, Lehman Brothers (NYSE: LEH); Frank J. Bisignano, Chief Administrative Officer and Senior Executive Vice President, Citigroup / Solomon Smith Barney's Corporate Investment Bank (NYSE: C), and John W. Cummings, Senior Vice President & Head of Global Technology & Services, Merrill Lynch & Co. (NYSE: MER).
Surely none of these would be party to shenanigans that lead to the censorship or disabling of any media. But wait, you say, there is no proof. Maybe, not yet, but we don’t have to wait for proof that the DTCC engages in such un-American activities as press censorship.
The DTCC, an agent of SROs that gives it quasi-government status, has admitted outright that it has engaged in communications that are not only tortuous interference but that more to the point, seem to have put it in the glaring headlights of the First Amendment to the Constitution of the United States of America, that protects media from interference by any government institution:
“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.”
A prominent law school overview of the First Amendment is at http://www.law.cornell.edu/topics/first_amendment.html
The organization’s outside counsel, Proskauer Rose LLP, has written FinancialWire counsel Marshal Shichtman, Esq., not only readily admitting to its mischief, but actually expressing pride at its bullying.
The letter is posted in its entirety at http://www.investrend.com/Admin/Topics/Articles/Resources/349_1113403487.pdf
In the letter, attorney Charles S. Sims, in classic Orwellian double-speak, actually references the First Amendment as giving his clients the right to interfere with another’s First Amendment rights. Which, of course, is how we wind up here further exercising our opinion about his opinion about our opinion of the First Amendment, ad infinitus, we guess. The only difference is that neither this opinion nor our regular news are now distributed to the readers of Investors Business Daily or to finance news users at Yahoo (NASDAQ: YHOO), because the DTCC didn’t just express its opinion. Its communications were designed to squelch our rights to publish, and resulted in Investors Business Daily immediately taking down our news feed.
What was the “First Amendment opinion” stated by the DTCC that cause this harm not only to our business but also to our rights of free expression? It was that FinancialWire is “not a bona fide news” provider.
We beg to differ, of course. No, we are adamant in our differing.
If our news articles leaned against counterfeiting of shares and naked short sales that’s because we have been working under the illusion that both are actually illegal. We have to say, however, that the recent postings by bureaucratic staff members on the SEC.gov site that says “not all naked short selling” is illegal and further, that those who did engage in illegal naked short sales before the beginning of 2005 have been granted a kind of stock market manipulation “amnesty” by a “grandfathering” that to our knowledge was neither asked for nor approved by the Congress or the President was another shocker that by now has just been layered on to a cacophony of shockers.
However, in the end that is something our readers will and can sort out and judge. Our readerships continue to grow rather phenomenally, even after the loss of these two outlets, so if you accept this readership growth as the measure, the “opinion” of the DTCC is dead wrong.
Whatever the case, the bottom line is that the readers at Investors.com and Yahoo! Finance no longer get to make that choice. The DTCC has made that choice for them.
If you’re a user of one of those services and that’s okay with you, we have no concerns. If it’s not okay with you, you can express your own opinion of this press censorship and interference to other media, to the two outlets, to the DTCC, to the two “preferred shareholders,” to any of the 21 DTCC board members, or in whatever means suits you.
Why did we call this un-American? First and foremost, you can contrast the variety of news you receive in America due to our Constitutional protections to those the public is allowed to receive in say, China, or say, Syria, or say, Myanamar, or say, Russia, or any authoritarian government. The press is your proxy. You do not have the time to ask questions or to dispute the statements of governments, institutions, or bureaucracies, so it is the role of the media to do that for you.
When an institution such as the DTCC takes it upon itself to decide for you what is news and what is not, simply because it does not like what it is reading, or it is asking too many questions or raising disturbing issues, we have a difficult time not seeing parallels.
Perhaps you were not yet an adult or fully aware of the press restrictions in oppressive regimes such as the Nazis or the Communists, but you most certainly were aware only four years ago that Russian President Vladimir Putin unilaterally shut down NTV, the only non-state-owned television channel in Moscow and replaced it with state-employed reporters and producers. You have surely seen the results of this in the scant Russian coverages of the Moscow theatre and school hostage situations, not to mention the Yukos debacle.
Maybe this comparison of the DTCC and Putin is more graphic to us because we were actually in Moscow when NTV was being shut down. This writer was on other business but accompanying the partner of Ted Turner, who was seeking to acquire NTV. Turner and our mutual business colleague met with Putin and in classic Turnerese, lectured the Russian president on the importance of a free press in his desires for a free market economy.
Putin would have nothing to do with Turner’s arguments, but did keep up the charade of allowing potential acquisition meetings to occur throughout the week this writer was present. Meanwhile the owner of NTV had already fled the country, and his second-in-command was under house arrest. We had the privilege of having an outing one evening with a dozen or so of the brave NTV editors, writers and producers, along with our business colleague, and they were already living in fear. They had their own armed guards stationed at all of the exits, to attempt to repel any sudden Putin-directed forces.
This writer shared an automobile back to the Metropole Hotel, whose balcony Lenin used to direct his revolution, and we were a little uneasy at various checkpoints since the hotel already had us mistakenly involved in the acquisition, and the Metropole was famously known to have been bugged. When our colleague was out, the hotel had called our room to ask us to retrieve a fax to him from Ted Turner, so if there was a sweep, we knew we were going to be in it.
Having escaped all this intact, it never occurred to us that Putin would be waiting for us back on American shores.
So, now that we have begun here to actually express “opinions not news,” which is an equally responsible role for the media, we’re going to move right on to three opinions:
1. The Depository Trust and Clearing Corp. has become too large, too encompassing, too powerful, too unresponsive to those it serves, primarily the investing public, too unresponsive to the Congress under whose auspices it should be operating, and most of all, too arrogant.
First, it is time to unconflict it, with real public representations on its board.
Second, it is time to break it up, with its various duties provided by smaller agencies under separate unconflicted boards.
2. General Electric, the world’s second largest corporation, is beginning to show that it can not be both a multinational comglomerate and a faithful media steward.
First, it is time for General Electric to think about divesting NBC to a group whose sole business is to manage a free, untethered press and media establishment.
Second, if it will not do that, then it should put its news operations in the hands of an independent, journalistic board that is not answerable to the conglomerate. This is not a bad idea for CBS, ABC and FOX as well.
3. The SEC should take its unilateral decision about legal illegal naked short sales and its amnesty program to Congress and get its authority, or at the least, vote up or down at the Commission before letting its staff double-speak away law-breaking and law breakers.
So, now, DTCC, you have three examples of “opinion” to point to.
Why that disqualifies us from First Amendment protection or protection from your bullying, tortuous interferences, however, is beyond us.
Now, before ending this opinion piece, let’s enumerate your bosses, since we have not yet heard from them as to whether they support your Un-American tactics:
The DTCC’s two preferred shareholders are the New York Stock Exchange and the NASD, a regulatory agency that also owns the Nasdaq and until recently, the American Stock Exchange.
Other DTCC board members include Michael C. Bodson, Managing Director, Morgan Stanley (NYSE: MWD); Gary Bullock, Global Head of Logistics, Infrastructure, UBS Investment Bank (NYSE: UBS); Stephen P. Casper, Managing Director and Chief Operating Officer, Fischer Francis Trees & Watts, Inc.; Jill M. Considine,Chairman, President & Chief Executive Officer, The Depository Trust & Clearing Corporation (DTCC);
Also, Paul F. Costello, President, Business Services Group, Wachovia Securities (NYSE: WB); John W. Cummings, Senior Vice President & Head of Global Technology & Services, Merrill Lynch & Co. (NYSE: MER); Donald F. Donahue, Chief Operating Officer, The Depository Trust & Clearing Corporation (DTCC); Norman Eaker, General Partner, Edward Jones; George Hrabovsky, President, Alliance Global Investors Service; Catherine R. Kinney, President and Co-Chief Operating Officer, New York Stock Exchange; Thomas J. McCrossan, Executive Vice President, State Street Corporation (NYSE: STT); Bradley Abelow, Managing Director, Goldman Sachs (NYSE: GS); Jonathan E. Beyman, Chief Information Officer, Lehman Brothers (NYSE: LEH); and Frank J. Bisignano, Chief Administrative Officer and Senior Executive Vice President, Citigroup / Solomon Smith Barney's Corporate Investment Bank (NYSE: C), Eileen K. Murray, Managing Director, Credit Suisse First Boston (NYSE: CSR); James P. Palermo, Vice Chairman, Mellon Financial Corporation (NYSE: MEL); Thomas J. Perna, Senior Executive Vice President, Financial Companies Services Sector of The Bank of New York (NYSE: BNY); Ronald Purpora, Chief Executive Officer, Garban LLC; Douglas Shulman, President, Regulatory Services and Operations, NASD; and Thompson M. Swayne, Executive Vice President, JPMorgan Chase (NYSE: JPM).
Gayle Essary is CEO of Investrend Communications, Inc., and serves its Investrend Information unit as Publisher of FinancialWire. He has been a practicing journalist since 1958, is a member of the Online News Association and has been a member of both the Texas and National Press Association.
http://www.investrend.com/articles/article.asp?analystId=0&id=14720&topicId=160&level=16...
StockGate: Note To Depository Trust & Clearing Corp.:
This Is What An ‘Opinion’ Looks Like / FinancialWire®
April 18, 2005 (FinancialWire) Personal Privilege By Gayle Essary / We at Investrend were recently as stunned and disturbed as anyone else when the powerful and reclusive Depository Trust & Clearing Corp. became a prime suspect in the sudden and inexplicable “indefinite postponement” by General Electric’s (NYSE: GE) “Dateline NBC” of what was expected to have been a shocking expose of the DTCC’s purported role now and over the years in the counterfeiting of electronic certificates supporting illegal naked short sales.
After all, the DTCC is presided over by such otherwise seemingly responsible and luminous institutions as the NASD and the NYSE, its two “preferred” shareholders, along with Jonathan E. Beyman, Chief Information Officer, Lehman Brothers (NYSE: LEH); Frank J. Bisignano, Chief Administrative Officer and Senior Executive Vice President, Citigroup / Solomon Smith Barney's Corporate Investment Bank (NYSE: C), and John W. Cummings, Senior Vice President & Head of Global Technology & Services, Merrill Lynch & Co. (NYSE: MER).
Surely none of these would be party to shenanigans that lead to the censorship or disabling of any media. But wait, you say, there is no proof. Maybe, not yet, but we don’t have to wait for proof that the DTCC engages in such un-American activities as press censorship.
The DTCC, an agent of SROs that gives it quasi-government status, has admitted outright that it has engaged in communications that are not only tortuous interference but that more to the point, seem to have put it in the glaring headlights of the First Amendment to the Constitution of the United States of America, that protects media from interference by any government institution:
“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.”
A prominent law school overview of the First Amendment is at http://www.law.cornell.edu/topics/first_amendment.html
The organization’s outside counsel, Proskauer Rose LLP, has written FinancialWire counsel Marshal Shichtman, Esq., not only readily admitting to its mischief, but actually expressing pride at its bullying.
The letter is posted in its entirety at http://www.investrend.com/Admin/Topics/Articles/Resources/349_1113403487.pdf
In the letter, attorney Charles S. Sims, in classic Orwellian double-speak, actually references the First Amendment as giving his clients the right to interfere with another’s First Amendment rights. Which, of course, is how we wind up here further exercising our opinion about his opinion about our opinion of the First Amendment, ad infinitus, we guess. The only difference is that neither this opinion nor our regular news are now distributed to the readers of Investors Business Daily or to finance news users at Yahoo (NASDAQ: YHOO), because the DTCC didn’t just express its opinion. Its communications were designed to squelch our rights to publish, and resulted in Investors Business Daily immediately taking down our news feed.
What was the “First Amendment opinion” stated by the DTCC that cause this harm not only to our business but also to our rights of free expression? It was that FinancialWire is “not a bona fide news” provider.
We beg to differ, of course. No, we are adamant in our differing.
If our news articles leaned against counterfeiting of shares and naked short sales that’s because we have been working under the illusion that both are actually illegal. We have to say, however, that the recent postings by bureaucratic staff members on the SEC.gov site that says “not all naked short selling” is illegal and further, that those who did engage in illegal naked short sales before the beginning of 2005 have been granted a kind of stock market manipulation “amnesty” by a “grandfathering” that to our knowledge was neither asked for nor approved by the Congress or the President was another shocker that by now has just been layered on to a cacophony of shockers.
However, in the end that is something our readers will and can sort out and judge. Our readerships continue to grow rather phenomenally, even after the loss of these two outlets, so if you accept this readership growth as the measure, the “opinion” of the DTCC is dead wrong.
Whatever the case, the bottom line is that the readers at Investors.com and Yahoo! Finance no longer get to make that choice. The DTCC has made that choice for them.
If you’re a user of one of those services and that’s okay with you, we have no concerns. If it’s not okay with you, you can express your own opinion of this press censorship and interference to other media, to the two outlets, to the DTCC, to the two “preferred shareholders,” to any of the 21 DTCC board members, or in whatever means suits you.
Why did we call this un-American? First and foremost, you can contrast the variety of news you receive in America due to our Constitutional protections to those the public is allowed to receive in say, China, or say, Syria, or say, Myanamar, or say, Russia, or any authoritarian government. The press is your proxy. You do not have the time to ask questions or to dispute the statements of governments, institutions, or bureaucracies, so it is the role of the media to do that for you.
When an institution such as the DTCC takes it upon itself to decide for you what is news and what is not, simply because it does not like what it is reading, or it is asking too many questions or raising disturbing issues, we have a difficult time not seeing parallels.
Perhaps you were not yet an adult or fully aware of the press restrictions in oppressive regimes such as the Nazis or the Communists, but you most certainly were aware only four years ago that Russian President Vladimir Putin unilaterally shut down NTV, the only non-state-owned television channel in Moscow and replaced it with state-employed reporters and producers. You have surely seen the results of this in the scant Russian coverages of the Moscow theatre and school hostage situations, not to mention the Yukos debacle.
Maybe this comparison of the DTCC and Putin is more graphic to us because we were actually in Moscow when NTV was being shut down. This writer was on other business but accompanying the partner of Ted Turner, who was seeking to acquire NTV. Turner and our mutual business colleague met with Putin and in classic Turnerese, lectured the Russian president on the importance of a free press in his desires for a free market economy.
Putin would have nothing to do with Turner’s arguments, but did keep up the charade of allowing potential acquisition meetings to occur throughout the week this writer was present. Meanwhile the owner of NTV had already fled the country, and his second-in-command was under house arrest. We had the privilege of having an outing one evening with a dozen or so of the brave NTV editors, writers and producers, along with our business colleague, and they were already living in fear. They had their own armed guards stationed at all of the exits, to attempt to repel any sudden Putin-directed forces.
This writer shared an automobile back to the Metropole Hotel, whose balcony Lenin used to direct his revolution, and we were a little uneasy at various checkpoints since the hotel already had us mistakenly involved in the acquisition, and the Metropole was famously known to have been bugged. When our colleague was out, the hotel had called our room to ask us to retrieve a fax to him from Ted Turner, so if there was a sweep, we knew we were going to be in it.
Having escaped all this intact, it never occurred to us that Putin would be waiting for us back on American shores.
So, now that we have begun here to actually express “opinions not news,” which is an equally responsible role for the media, we’re going to move right on to three opinions:
1. The Depository Trust and Clearing Corp. has become too large, too encompassing, too powerful, too unresponsive to those it serves, primarily the investing public, too unresponsive to the Congress under whose auspices it should be operating, and most of all, too arrogant.
First, it is time to unconflict it, with real public representations on its board.
Second, it is time to break it up, with its various duties provided by smaller agencies under separate unconflicted boards.
2. General Electric, the world’s second largest corporation, is beginning to show that it can not be both a multinational comglomerate and a faithful media steward.
First, it is time for General Electric to think about divesting NBC to a group whose sole business is to manage a free, untethered press and media establishment.
Second, if it will not do that, then it should put its news operations in the hands of an independent, journalistic board that is not answerable to the conglomerate. This is not a bad idea for CBS, ABC and FOX as well.
3. The SEC should take its unilateral decision about legal illegal naked short sales and its amnesty program to Congress and get its authority, or at the least, vote up or down at the Commission before letting its staff double-speak away law-breaking and law breakers.
So, now, DTCC, you have three examples of “opinion” to point to.
Why that disqualifies us from First Amendment protection or protection from your bullying, tortuous interferences, however, is beyond us.
Now, before ending this opinion piece, let’s enumerate your bosses, since we have not yet heard from them as to whether they support your Un-American tactics:
The DTCC’s two preferred shareholders are the New York Stock Exchange and the NASD, a regulatory agency that also owns the Nasdaq and until recently, the American Stock Exchange.
Other DTCC board members include Michael C. Bodson, Managing Director, Morgan Stanley (NYSE: MWD); Gary Bullock, Global Head of Logistics, Infrastructure, UBS Investment Bank (NYSE: UBS); Stephen P. Casper, Managing Director and Chief Operating Officer, Fischer Francis Trees & Watts, Inc.; Jill M. Considine,Chairman, President & Chief Executive Officer, The Depository Trust & Clearing Corporation (DTCC);
Also, Paul F. Costello, President, Business Services Group, Wachovia Securities (NYSE: WB); John W. Cummings, Senior Vice President & Head of Global Technology & Services, Merrill Lynch & Co. (NYSE: MER); Donald F. Donahue, Chief Operating Officer, The Depository Trust & Clearing Corporation (DTCC); Norman Eaker, General Partner, Edward Jones; George Hrabovsky, President, Alliance Global Investors Service; Catherine R. Kinney, President and Co-Chief Operating Officer, New York Stock Exchange; Thomas J. McCrossan, Executive Vice President, State Street Corporation (NYSE: STT); Bradley Abelow, Managing Director, Goldman Sachs (NYSE: GS); Jonathan E. Beyman, Chief Information Officer, Lehman Brothers (NYSE: LEH); and Frank J. Bisignano, Chief Administrative Officer and Senior Executive Vice President, Citigroup / Solomon Smith Barney's Corporate Investment Bank (NYSE: C), Eileen K. Murray, Managing Director, Credit Suisse First Boston (NYSE: CSR); James P. Palermo, Vice Chairman, Mellon Financial Corporation (NYSE: MEL); Thomas J. Perna, Senior Executive Vice President, Financial Companies Services Sector of The Bank of New York (NYSE: BNY); Ronald Purpora, Chief Executive Officer, Garban LLC; Douglas Shulman, President, Regulatory Services and Operations, NASD; and Thompson M. Swayne, Executive Vice President, JPMorgan Chase (NYSE: JPM).
Gayle Essary is CEO of Investrend Communications, Inc., and serves its Investrend Information unit as Publisher of FinancialWire. He has been a practicing journalist since 1958, is a member of the Online News Association and has been a member of both the Texas and National Press Association.
http://www.investrend.com/articles/article.asp?analystId=0&id=14720&topicId=160&level=16...
The shorts have a nice game they play with the SEC.
Step 1
Find a mark with questionable management practices or weak financials
Step 2
Initiate the bear raid and shock the market with sellside pressure
Step 3
Induce fear, create panic selloff
Step 4
Watch the shareholders and management squirm as they try to cope with the falling share price
Step 4a
Watch as management is forced to dilute share structure at micropenny PPS to pay the bills and continue operations, thereby, fulfilling the effect of the bear raid
Step 4b
Watch as management is forced into BK and never have to cover
Step 5
Should Step 4b not come around and management mangages to hold on with BILLIONS of shares out, get SEC involved to suspend trading and initiate proceedings to exploit poor management at the expense of shareholders
Step 6
Watch as company is singlehandedly crushed by regulatory agencies, eventually revoked and never have to cover
Wash, Rinse, Repeat
Except this time, the hunted has become the hunter...the shorts took the bait, hook, line and sinker.
http://cmkxdiamond.proboards32.com/index.cgi?board=general&num=1113705592&action=display&...
Confronting or Avoiding the Naked Short Selling Scandal
http://www.antandsons.com/faceoff/
By Thomas Catino
Chief Architect, Columnist
April 2005
Issue: The horrible practice and financially devastating effects of naked shorting in the financial marketplace. In general, naked shorting 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 short selling is to engage in harmfully affecting the stock price of a company in order to manipulate and create downward pressure on the security. This ultimately affects a corporation’s ability to raise money by selling stock to the public because its stock price becomes too depreciated. It is estimated that this harmful and serious practice that has caused billions of dollars in damage.
Confronting: Naked short selling has been fiercely combated by many corporations, including vigorous attempts by a small publicly traded company named Universal Express. "Universal Express, which has been in the forefront of the battle against the 'naked shorters' since 1997 has pending a viable suit for extensive monetary damages against the SEC and others in Federal Court in Florida,” according to Richard A. Altomare, Chairman & CEO of Universal Express. With the support of numerous organizations, individual investors and public companies have brought this issue to light and naked shorting is just now starting to come under the microscope. You can bet that this will be just the beginning of heated times.
Avoiding: The DTC has recently distanced itself from the naked short selling scandal. "The Depository Trust & Clearing Corporation (DTCC) has provided its bank and broker customers with a detailed explanation of its Stock Borrow program and the issue of naked short selling in an effort counter a widespread campaign of distortions and misleading information." said Stuart Z. Goldstein, managing director of DTCC Corporate Communications and spokesperson for the company. The latest press release from the DTCC indicates that their position to insist on their lack of responsibility in the naked short selling scandal will continue to stand. The press release goes on to read that the DTCC's "aim is simply to correct misstatements of fact. We have confidence that our regulators, who carefully review our activities, understand that short selling is a trading strategy and is not related to the post-trade clearance and settlement process." Clearly there is a denial of accountability of who is responsible for this ongoing problem.
Confronting: Recently, EagleTech Communications issued an open letter responding to the statements posted on the DTCC website by First Deputy General Counsel Larry Thompson similar to those of Stuart Goldstein. The company believes that the Stock Borrow Program clearly leaves the door open to naked short selling, citing evidence in the 73 page Treatise entitled, Short Selling, Death Spiral Convertibles, and the Profitability of Stock Manipulation by Professor Finnerty of Fordham University. One reason is that "sellers can continue to fail to deliver because the NSCC can borrow the shares it needs to meet its clearing obligations through the stock borrow program." Another is that the stock borrow program allows the shares to be recycled. Each stock loan gives rise to another stock futures contract. Any single share could actually be relent multiple times, giving rise to multiple futures contracts." This is certainly contrary to the position that DTC Counsel Larry Thompson holds. To conclude, the company pressed the DTCC in producing Eagletech's court ordered trading records, which will clear the air in showing the truth as to how the Stock Borrow Program has negatively affected Eagletech’s publicly traded shares. However, given the historical stance of the DTCC on this issue, it will be difficult to see if any resulting actions will be taken to rectify the situation.
Avoiding: It appears that the Securities and Exchange Commission has now backed down from their former toughened stance on naked short selling. In the Securities and Exchange Commission's own words, "naked short selling is not necessarily a violation of the federal securities laws or the Commission's rules." The reasons given involve the debate over the sometimes innocent causes of failing to deliver shares or stock certificates. According to the Securities and Exchange Commission, "failures to deliver may result from either a short or a long sale. There may be legitimate reasons for a failure to deliver. For example, human or mechanical errors or processing delays can result from transferring securities in physical certificate rather than book-entry form, thus causing a failure to deliver on a long sale within the normal three-day settlement period." At first glance, it appears that the Securities and Exchange Commission will fail to take additional force to strengthen Regulation SHO. Because the Securities and Exchange Commission has now given the impression that the ongoing battle against naked short selling is nearly an allusion, it will be a long while before the best interests of investors are finally defended.
You should know better than to put in a market order for a stock going through a market maker Janice. Maybe you do know better and work in concert with a market maker.
The newest StockGate shocker …
April 14, 2005 (FinancialWire)
The newest StockGate shocker, a letter from attorneys representing the Depository Trust & Clearing Corp. admitting to negative communications that resulted in Investors Business Daily canceling FinancialWire’s distribution, has been posted in its entirety at http://www.investrendinformation.com , FinancialWire’s parent, and was taken on rounds at the U.S. Senate Wednesday by an Investrend representative in Washington.
The letter, from Proskauer Rose LLP to FinancialWire counsel Marshal Shichtman, Esq. admitted to communications that resulted in the newswire’s forced censorship at Yahoo (NASDAQ: YHOO) Finance via Investors Business Daily and MarketWatch, now owned by Dow Jones (NYSE: DJ) but then partly owned by Viacom’s (NYSE: VIAb) CBS. It followed by only a few days a controversial “indefinite postponement” of what was purported to be a massive expose by General Electric’s (NYSE: GE) Dateline NBC.
NBC has not responded to follow-up questions as to when a new air date is intended, or to whether the piece is being reedited due to pressure from the corporation or from outside. Ironically, after FinancialWire’s distribution was curtailed via the Investors Business Daily feed, its publishers joked in an email to the producers that Dateline NBC might be “next.”
On February 7, Investors Business Daily asked MarketWatch, then co-owned by Viacom (NYSE: VIAb) but now owned by Dow Jones (NYSE: DJ), to shut off its FinancialWire feed that it also re-propogated to Yahoo (NASDAQ: YHOO).
An investigation by FinancialWire revealed that the newsfeed was shut down at the request of an official of the DTCC, who had complained to Investors Business Daily that FinancialWire publishes “opinions and not news.” FinancialWire learned that this is contained in emails sent by Investors Business Daily to the Dow Jones publication.
Despite the purported efforts by the DTCC, however, FinancialWire has since been provided to another 300 outlets.
In a letter to FinancialWire’s attorney, Marshal Shichtman, Esq., Charles S. Sims, a member of Proskauer Rose LLP contended that his client’s communication “is not actionable, and DTCC was fully privileged to send it under the protections for free speech afforded by New York and federal law.”
Sims appeared to be more concerned with Shichtman’s characterization of such interference as “cheap thuggery” and “strong-arm tactics more suitable to organized crime than an SRO,” and that he was “appalled” by “any conduct of DTCC.”
Sims said that “unlike the opinions stated in DTCC’s correspondence, for example that FinancialWire is not a bona fide news provider, these charges assert, and would be understood as asserting, criminal misconduct.”
He added that “DTCC takes the matter with utmost seriousness, and will hold you and your client responsible for any resulting harm. DTCC has a sterling reputation, as you seem to be aware, hard-won through years of responsible business meeting the highest standards of conduct, and it ought not be trifled with by careless, reckless charges such as yours.
“We demand that you cease any further dissemination of those charges, and further demand that you identify any and all distributions and copy us on the retraction of these charges that should be forthcoming from you as well.”
Shichtman, contacted at press deadline, said that he may have further comments after legal review, but as to the DTCC’s admittance of media interference and possible First Amendment violations, “I am stupefied.”
A major protagonist has sprung up via the National Coalition Against Naked Short Selling, with recent posts at http://bobosrevenge.blogspot.com and http://www.ncans.net/sanity1.htm It includes an open letter to the DTCC regarding what it perceives to be significant holes in the organization’s recently posted interview.
The sudden cancellation of the “Dateline NBC” expose, scheduled Sunday, April 10, has reminded many of the corporate conflicts in CBS’s previous ownership by Westinghouse that resulted in the infamous cancellation of the “60 Minutes” expose on Big Tobacco after Westinghouse was leaned on by Brown and Williamson, an RJ Reynolds (NYSE: RJR) unit. That resulted in an award-winning movie, “The Insider,” starring Al Pacino and Russell Crowe, and produced by Disney’s (NYSE: DIS) Touchstone Pictures and distributed by its Buena Vista unit.
The DTCC has been accused by many of acting with impunity, and is hardly a role model for unconflicted governance. Its 21 directors include Bradley Abelow, Managing Director, Goldman Sachs (NYSE: GS); Jonathan E. Beyman, Chief Information Officer, Lehman Brothers (NYSE: LEH); and Frank J. Bisignano, Chief Administrative Officer and Senior Executive Vice President, Citigroup / Solomon Smith Barney's Corporate Investment Bank (NYSE: C).
The largely unregulated DTC has become something of a defacto Czar presiding over the entire U.S. markets system, wielding more day-to-day influence and control than the SEC, the NASD and NASDAQ combined. Transparency is not of the DTCC’s strong suits. In the past it has stonewalled all requests for full and complete trading records.
The DTCC’s two preferred shareholders are the New York Stock Exchange and the NASD, a regulatory agency that also owns the Nasdaq and until recently, the American Stock Exchange.
Other DTCC board members include Michael C. Bodson, Managing Director, Morgan Stanley (NYSE: MWD); Gary Bullock, Global Head of Logistics, Infrastructure, UBS Investment Bank (NYSE: UBS); Stephen P. Casper, Managing Director and Chief Operating Officer, Fischer Francis Trees & Watts, Inc.; Jill M. Considine,Chairman, President & Chief Executive Officer, The Depository Trust & Clearing Corporation (DTCC);
Also, Paul F. Costello, President, Business Services Group, Wachovia Securities (NYSE: WB); John W. Cummings, Senior Vice President & Head of Global Technology & Services, Merrill Lynch & Co. (NYSE: MER); Donald F. Donahue, Chief Operating Officer, The Depository Trust & Clearing Corporation (DTCC); Norman Eaker, General Partner, Edward Jones; George Hrabovsky, President, Alliance Global Investors Service; Catherine R. Kinney, President and Co-Chief Operating Officer, New York Stock Exchange; Thomas J. McCrossan, Executive Vice President, State Street Corporation (NYSE: STT); Eileen K. Murray, Managing Director, Credit Suisse First Boston (NYSE: CSR); James P. Palermo, Vice Chairman, Mellon Financial Corporation (NYSE: MEL); Thomas J. Perna, Senior Executive Vice President, Financial Companies Services Sector of The Bank of New York (NYSE: BNY); Ronald Purpora, Chief Executive Officer, Garban LLC; Douglas Shulman, President, Regulatory Services and Operations, NASD; and Thompson M. Swayne, Executive Vice President, JPMorgan Chase (NYSE: JPM).
In their comments to the U.S. Securities and Exchange Commission regarding Regulation SHO in January, the 50 state regulators, through their association, the North American Association of Securities Administrators (NASAA) issued what many consider to be a strong warning that if the DTCC is not dealt with in the final regulations, state regulators such as New York State Attorney General Eliot Spitzer may step to the plate.
In what many considered to have been explosive comments, Ralph Lambiase, then-NASAA president and Director of the Connecticut Division of Securities, warned "NASAA urges the Commission to reconsider its stance regarding the role of the Depository Trust and Clearing Corporation (the DTC). As a threshold matter, NASAA believes that the Commission should explicitly prohibit the DTC from lending more shares of a security than it actually holds. The ability of the overall proposed rule would be severely impared unless the Commission undertakes to implement such a prohibition.”
Many of the lawsuits believed to have been part of the program allege that the DTCC operates a “stock lending” program that aids and abets illegal naked short selling, and in doing so, admittedly takes in $1.67 million annually.
In a further rare display of transparency, however, while framing it in terms of a small percentage of daily transactions, Thompson has admitted in an interview posted at http://www.dtcc.com that some $4.9 billion, involving an estimated 20,000 daily transactions remain unresolved “fails to deliver and receive.”
“The markets check to see if the amount of fails to deliver is more than 1/2 of 1% of the total outstanding shares in that security,” said Thompson.
“If it is, then it goes on a ‘Threshold List.’ If it is then on the Threshold List for 13 consecutive settlement days, restrictions on short selling then apply. The “close-out” requirement forces a participant of a registered clearing agency to close out any “fail to deliver” position in a threshold security that has remained for 13 consecutive settlement days by purchasing securities of like kind and quantity. If the participant does not take action to close out the open fail to deliver position, the participant is prohibited from making further short sales in that security without first borrowing or arranging to borrow the security. Even market makers are not exempt from this requirement.”
In his questioning of SEC Chair Donaldson, Senator Robert Bennett (R-Utah) suggested, however, that a loophole in the regulation allows market makers to “pass along” these “fails to deliver” from one to the other, leaving them “unclosed out” indefinitely. A video of that exchange is posted at http://www.investrendinformation.com
While in the overall scheme of the U.S. markets system, the fails to deliver of that magnitude may “seem” insignificant, it actually represents the entire market caps of upwards of 500 smaller public companies every trading day, which if victimized in this admitted fashion, can find their survivals and the safety of the entire investments of their shareholders questionable indeed.
This comes hard on the heels of an ad in the New York Times (NYSE: NYT) from The Washington Legal Foundation, located at http://www.wlf.org, which has considerable clout in the Bush administration, with ten of its board members now serving in various capacities, including three, headed by U.S. Attorney General John Ashcroft, in the Bush cabinet. Its “In All Fairness” advertorial, “What’s Up With The SEC?” may be seen at http://www.wlf.org/upload/032805IAFSEC.pdf
The advertorial alleges that class action lawyers are colluding with short sellers “right under the noses of SEC investigators,” whose abuses cause “investors, employees, pensioners and companies” to “lose millions of dollars in stock value each year.”
The WLF said that the SEC has been “sitting on several complaints of misconduct” that it and the U.S. Chamber of Commerce have filed that detail “examples of questionable stock manipulation by short sellers and class action attorneys.”
The group says that the SEC is “looking the other way while class action attorneys enjoy a free-for-all, reaping millions in windfall fees to the detriment of shareholders,” and asks “why isn’t the SEC taking legal and regulatory action to prevent stock manipulation and to protect investors from the looting by plaintiffs’ lawyers? Shouldn’t there be rules and oversight to deter these trial lawyer abuses?”
For up-to-the-minute news, features and links click on http://www.financialwire.net
FinancialWire is an independent, proprietary news service of Investrend Information, a division of Investrend Communications, Inc. It is not a press release service and receives no compensation for its news or opinions. Other divisions of Investrend, however, provide shareholder empowerment platforms such as forums, independent research and webcasting. For more information or to receive the FirstAlert daily summary of news, commentary, research reports, webcasts, events and conference calls, click on http://www.investrend.com/contact.asp
The FinancialWire NewsFeed is now available in multiple formats to your site or desktop, free. Click on: http://www.investrend.com/XmlFeeds?level=268
The newest StockGate shocker …
April 14, 2005 (FinancialWire)
The newest StockGate shocker, a letter from attorneys representing the Depository Trust & Clearing Corp. admitting to negative communications that resulted in Investors Business Daily canceling FinancialWire’s distribution, has been posted in its entirety at http://www.investrendinformation.com , FinancialWire’s parent, and was taken on rounds at the U.S. Senate Wednesday by an Investrend representative in Washington.
The letter, from Proskauer Rose LLP to FinancialWire counsel Marshal Shichtman, Esq. admitted to communications that resulted in the newswire’s forced censorship at Yahoo (NASDAQ: YHOO) Finance via Investors Business Daily and MarketWatch, now owned by Dow Jones (NYSE: DJ) but then partly owned by Viacom’s (NYSE: VIAb) CBS. It followed by only a few days a controversial “indefinite postponement” of what was purported to be a massive expose by General Electric’s (NYSE: GE) Dateline NBC.
NBC has not responded to follow-up questions as to when a new air date is intended, or to whether the piece is being reedited due to pressure from the corporation or from outside. Ironically, after FinancialWire’s distribution was curtailed via the Investors Business Daily feed, its publishers joked in an email to the producers that Dateline NBC might be “next.”
On February 7, Investors Business Daily asked MarketWatch, then co-owned by Viacom (NYSE: VIAb) but now owned by Dow Jones (NYSE: DJ), to shut off its FinancialWire feed that it also re-propogated to Yahoo (NASDAQ: YHOO).
An investigation by FinancialWire revealed that the newsfeed was shut down at the request of an official of the DTCC, who had complained to Investors Business Daily that FinancialWire publishes “opinions and not news.” FinancialWire learned that this is contained in emails sent by Investors Business Daily to the Dow Jones publication.
Despite the purported efforts by the DTCC, however, FinancialWire has since been provided to another 300 outlets.
In a letter to FinancialWire’s attorney, Marshal Shichtman, Esq., Charles S. Sims, a member of Proskauer Rose LLP contended that his client’s communication “is not actionable, and DTCC was fully privileged to send it under the protections for free speech afforded by New York and federal law.”
Sims appeared to be more concerned with Shichtman’s characterization of such interference as “cheap thuggery” and “strong-arm tactics more suitable to organized crime than an SRO,” and that he was “appalled” by “any conduct of DTCC.”
Sims said that “unlike the opinions stated in DTCC’s correspondence, for example that FinancialWire is not a bona fide news provider, these charges assert, and would be understood as asserting, criminal misconduct.”
He added that “DTCC takes the matter with utmost seriousness, and will hold you and your client responsible for any resulting harm. DTCC has a sterling reputation, as you seem to be aware, hard-won through years of responsible business meeting the highest standards of conduct, and it ought not be trifled with by careless, reckless charges such as yours.
“We demand that you cease any further dissemination of those charges, and further demand that you identify any and all distributions and copy us on the retraction of these charges that should be forthcoming from you as well.”
Shichtman, contacted at press deadline, said that he may have further comments after legal review, but as to the DTCC’s admittance of media interference and possible First Amendment violations, “I am stupefied.”
A major protagonist has sprung up via the National Coalition Against Naked Short Selling, with recent posts at http://bobosrevenge.blogspot.com and http://www.ncans.net/sanity1.htm It includes an open letter to the DTCC regarding what it perceives to be significant holes in the organization’s recently posted interview.
The sudden cancellation of the “Dateline NBC” expose, scheduled Sunday, April 10, has reminded many of the corporate conflicts in CBS’s previous ownership by Westinghouse that resulted in the infamous cancellation of the “60 Minutes” expose on Big Tobacco after Westinghouse was leaned on by Brown and Williamson, an RJ Reynolds (NYSE: RJR) unit. That resulted in an award-winning movie, “The Insider,” starring Al Pacino and Russell Crowe, and produced by Disney’s (NYSE: DIS) Touchstone Pictures and distributed by its Buena Vista unit.
The DTCC has been accused by many of acting with impunity, and is hardly a role model for unconflicted governance. Its 21 directors include Bradley Abelow, Managing Director, Goldman Sachs (NYSE: GS); Jonathan E. Beyman, Chief Information Officer, Lehman Brothers (NYSE: LEH); and Frank J. Bisignano, Chief Administrative Officer and Senior Executive Vice President, Citigroup / Solomon Smith Barney's Corporate Investment Bank (NYSE: C).
The largely unregulated DTC has become something of a defacto Czar presiding over the entire U.S. markets system, wielding more day-to-day influence and control than the SEC, the NASD and NASDAQ combined. Transparency is not of the DTCC’s strong suits. In the past it has stonewalled all requests for full and complete trading records.
The DTCC’s two preferred shareholders are the New York Stock Exchange and the NASD, a regulatory agency that also owns the Nasdaq and until recently, the American Stock Exchange.
Other DTCC board members include Michael C. Bodson, Managing Director, Morgan Stanley (NYSE: MWD); Gary Bullock, Global Head of Logistics, Infrastructure, UBS Investment Bank (NYSE: UBS); Stephen P. Casper, Managing Director and Chief Operating Officer, Fischer Francis Trees & Watts, Inc.; Jill M. Considine,Chairman, President & Chief Executive Officer, The Depository Trust & Clearing Corporation (DTCC);
Also, Paul F. Costello, President, Business Services Group, Wachovia Securities (NYSE: WB); John W. Cummings, Senior Vice President & Head of Global Technology & Services, Merrill Lynch & Co. (NYSE: MER); Donald F. Donahue, Chief Operating Officer, The Depository Trust & Clearing Corporation (DTCC); Norman Eaker, General Partner, Edward Jones; George Hrabovsky, President, Alliance Global Investors Service; Catherine R. Kinney, President and Co-Chief Operating Officer, New York Stock Exchange; Thomas J. McCrossan, Executive Vice President, State Street Corporation (NYSE: STT); Eileen K. Murray, Managing Director, Credit Suisse First Boston (NYSE: CSR); James P. Palermo, Vice Chairman, Mellon Financial Corporation (NYSE: MEL); Thomas J. Perna, Senior Executive Vice President, Financial Companies Services Sector of The Bank of New York (NYSE: BNY); Ronald Purpora, Chief Executive Officer, Garban LLC; Douglas Shulman, President, Regulatory Services and Operations, NASD; and Thompson M. Swayne, Executive Vice President, JPMorgan Chase (NYSE: JPM).
In their comments to the U.S. Securities and Exchange Commission regarding Regulation SHO in January, the 50 state regulators, through their association, the North American Association of Securities Administrators (NASAA) issued what many consider to be a strong warning that if the DTCC is not dealt with in the final regulations, state regulators such as New York State Attorney General Eliot Spitzer may step to the plate.
In what many considered to have been explosive comments, Ralph Lambiase, then-NASAA president and Director of the Connecticut Division of Securities, warned "NASAA urges the Commission to reconsider its stance regarding the role of the Depository Trust and Clearing Corporation (the DTC). As a threshold matter, NASAA believes that the Commission should explicitly prohibit the DTC from lending more shares of a security than it actually holds. The ability of the overall proposed rule would be severely impared unless the Commission undertakes to implement such a prohibition.”
Many of the lawsuits believed to have been part of the program allege that the DTCC operates a “stock lending” program that aids and abets illegal naked short selling, and in doing so, admittedly takes in $1.67 million annually.
In a further rare display of transparency, however, while framing it in terms of a small percentage of daily transactions, Thompson has admitted in an interview posted at http://www.dtcc.com that some $4.9 billion, involving an estimated 20,000 daily transactions remain unresolved “fails to deliver and receive.”
“The markets check to see if the amount of fails to deliver is more than 1/2 of 1% of the total outstanding shares in that security,” said Thompson.
“If it is, then it goes on a ‘Threshold List.’ If it is then on the Threshold List for 13 consecutive settlement days, restrictions on short selling then apply. The “close-out” requirement forces a participant of a registered clearing agency to close out any “fail to deliver” position in a threshold security that has remained for 13 consecutive settlement days by purchasing securities of like kind and quantity. If the participant does not take action to close out the open fail to deliver position, the participant is prohibited from making further short sales in that security without first borrowing or arranging to borrow the security. Even market makers are not exempt from this requirement.”
In his questioning of SEC Chair Donaldson, Senator Robert Bennett (R-Utah) suggested, however, that a loophole in the regulation allows market makers to “pass along” these “fails to deliver” from one to the other, leaving them “unclosed out” indefinitely. A video of that exchange is posted at http://www.investrendinformation.com
While in the overall scheme of the U.S. markets system, the fails to deliver of that magnitude may “seem” insignificant, it actually represents the entire market caps of upwards of 500 smaller public companies every trading day, which if victimized in this admitted fashion, can find their survivals and the safety of the entire investments of their shareholders questionable indeed.
This comes hard on the heels of an ad in the New York Times (NYSE: NYT) from The Washington Legal Foundation, located at http://www.wlf.org, which has considerable clout in the Bush administration, with ten of its board members now serving in various capacities, including three, headed by U.S. Attorney General John Ashcroft, in the Bush cabinet. Its “In All Fairness” advertorial, “What’s Up With The SEC?” may be seen at http://www.wlf.org/upload/032805IAFSEC.pdf
The advertorial alleges that class action lawyers are colluding with short sellers “right under the noses of SEC investigators,” whose abuses cause “investors, employees, pensioners and companies” to “lose millions of dollars in stock value each year.”
The WLF said that the SEC has been “sitting on several complaints of misconduct” that it and the U.S. Chamber of Commerce have filed that detail “examples of questionable stock manipulation by short sellers and class action attorneys.”
The group says that the SEC is “looking the other way while class action attorneys enjoy a free-for-all, reaping millions in windfall fees to the detriment of shareholders,” and asks “why isn’t the SEC taking legal and regulatory action to prevent stock manipulation and to protect investors from the looting by plaintiffs’ lawyers? Shouldn’t there be rules and oversight to deter these trial lawyer abuses?”
For up-to-the-minute news, features and links click on http://www.financialwire.net
FinancialWire is an independent, proprietary news service of Investrend Information, a division of Investrend Communications, Inc. It is not a press release service and receives no compensation for its news or opinions. Other divisions of Investrend, however, provide shareholder empowerment platforms such as forums, independent research and webcasting. For more information or to receive the FirstAlert daily summary of news, commentary, research reports, webcasts, events and conference calls, click on http://www.investrend.com/contact.asp
The FinancialWire NewsFeed is now available in multiple formats to your site or desktop, free. Click on: http://www.investrend.com/XmlFeeds?level=268
Pathetic Hasher ...
really pathetic. Put your toys away and go to bed.
America wants to Know!
Why won’t the SEC answer a simple yes or no question?
by: Kevin M. West
On April 9th, I wrote the SEC a simple question… It was a simple Yes or No question that had nothing to do with the matter of the particular case I was inferring to. The letter was addressed to CMKMdiamonds@sec.gov where all email directed to the SEC for this particular case was requested to be sent by Leslie Hakala of the SEC. Here is the entire email that was sent:
Just one simple Yes or No question for you;
I am a shareholder in CMKM Diamonds, is the SEC going to protect my rights as a shareholder in this hearing on April 25th?
To which, the SEC’s reply on April 12th was to return my letter with nothing except
“Auto forwarded by a Rule” on it.
So, I hit reply and sent it back with another letter which read:
Dear Ms. Hakala,
What kind of reply is this? I find it odd that I am asking a YES or NO question and you cannot respond to it with a simple answer.
Are you or are you NOT going to protect my rights as a current shareholder in CMKM Diamonds, at the hearing on 4-25-05?
Yes or NO please.
P.S. SEC's web site says.. The primary mission of the U.S. Securities and Exchange Commission (SEC) is to protect investors and maintain the integrity of the securities markets.
The answer should be a simple one if the above statement is the truth!
Sincerely,
Kevin M. West
CMKM Diamonds shareholder since 2-04
However, this time I sent it to: cmkmdiamonds@sec.gov Hakalal@sec.gov Bulgozdyj@sec.gov and CC: chairmanoffice@sec.gov Nazaretha@sec.gov Cutlers@sec.gov president@whitehouse.gov vice.president@whitehouse.gov
Now I get back a form letter to let me know they are BUSY! It starts out with the wording:
Thank you for your e-mail to the U.S. Securities and Exchange Commission. Your comments and concerns are very important to us. Unfortunately, because of the large volume of e-mail that we are receiving on this matter, we will not personally respond to “each”
message. We do read and carefully consider the opinions expressed in all of the e-mails that we receive.
OK, by this time I am wondering why Ms. Hakala would have taken the time to read my letter and CAREFULLY consider it, and then didn’t take the time to hit 2-3 keys on her computer to send back the Yes or No answer that I requested. Instead, the letter is forwarded to another email where this person takes the time to add the form letter and send it back to me. I point out the word “each” in their form letter here… they cannot say they don’t personally respond to anyone.
If the SEC’s mission truly is to protect investors and maintain the integrity of the securities markets, then why will they not answer the question?
I didn’t ask any questions about the case, I very SIMPLY asked if the SEC was going to do the job that we as taxpayers hired them to do.
I then called and talked to the very nice lady at the SEC by the name of Ann. Ann knew of my letter and was aware of the response I received. I informed her that I only wanted to have someone put a Yes or No in writing and send it back to me. I told her that if someone would do that, I would not bother them with this question anymore. She answered by telling me that it was the SEC’s job to protect investors. So, I then asked why no one was willing to put it in writing by answering Yes or No to my question. I was told she would pass on my request, but I have received nothing.
The answer to my question should be so obvious and it should be required to be answered to any citizen of this country that’s wants to know. Well, we know that the SEC’s top man, William Donaldson, has a copy of my letter as well as Annette Nazareth and other high level SEC employees. (employed by taxpayers)
We also know that President Bush has a copy of my letter and he wants us to put social security funds into the market that is supposed to be regulated by the SEC. The same SEC that won’t tell me they are going to protect my rights as a shareholder. Will someone respond?
America wants to Know: As taxpayers, American citizens and investors, is the SEC doing the job we are paying them for?
“Stand up America” and TAKE YOUR COUNTRY BACK!
Sincerely,
Kevin M. West
http://www.ahandup.us/america_wants_to_know_2.htm
You said Genemax was a scam too Janice.
... GMXX wasn't was it?
This is a sting Janice ...
PCBM was the learning curve.
ROTFL
They'll have the "mess" cleaned up soon Janice.
The "mess" is the phantom short mess created by the MMs that's becoming the talk of the town.
Wait awhile ...
Missing records are not
.... PERMANENTLY missing records.
Shorty's gonna feel sorry he stepped on this landmine.
LMAO
This is the part of the trap I like the most ...
The filings will miraculously appear.
Bwahahahaha
ROTFLMAO
U.S. Canadian Minerals Inc. Acquires Additional Mineral Rights Concessions in Ecuador
Wednesday, April 13, 2005 19:33 ET
LAS VEGAS, Apr 13, 2005 (BUSINESS WIRE) --U.S. Canadian Minerals Inc. (Pink Sheets: USCA) acquired 13,877 acres of land in Ecuador near its Yellow River and Santa Fe processing plants. There are a number of existing mineshafts on the land from which gold-bearing ore has been produced. The company expects to renovate the shafts as necessary and to begin producing gold-bearing ore within three months.
The company expects to extract gold and other precious metals from the ore from these new concessions in its own processing plants. The aggregate capacity of these plants, currently 200 tons per day, is expected to be great enough to accommodate all the ore from the company's newly acquired concessions and all the ore presently being produced from the American Shaft, in which the company has only a minority interest. The company does not have sufficient information to predict the initial or full amounts of ore that the new concessions are capable of producing, or when, if ever, such production will increase from initial levels.
It is expected that capital expenditures of $60,000 will be necessary to commence production from the new concessions. The company plans to finance these capital expenditures.
In order to prevent the newly acquired concessions from reverting back to the government, the company must spend $1 per hector exploiting the mineral rights during the next two years.
The company's CEO, Rendal Williams, said: "We wanted to acquire some additional mineral rights to complement our processing capacity. The beauty of processing ore that we own at plants we own is that we get all the gold produced, not just half of it, as is the case when we process ore that someone else owns. These new concessions are within 15 miles of our Yellow River plant and are even closer to our Santa Fe plant."
SOURCE: U.S. Canadian Minerals Inc.
U.S. Canadian Minerals Inc., Las Vegas
Rendal Williams, 702-433-8223
Letter from Frizzell:
FRIZZELL LAW FIRM
305 S. Broadway, Suite 302
Tyler, Texas 75702
(903)595-1921
Fax (903)595-4383
E-Mail bfrizzell@tyler.net
To: CMKX Owners Group 4-13-05
The prehearing conference was just concluded. The SEC was represented by Leslie Hakala and John Bulgozdy. Your company was represented by Donald Stoecklein. Judge Brenda Murray presided over the conference. I entered an appearance on your behalf. There was much discussion over re-scheduling of the hearing date. The rescheduling was required because of the many matters that need to be accomplished before the hearing. The Judge wanted to make the hearing convenient to the parties and suggested two alternative sites All parties agreed to Los Angeles as the city for the hearing. The site of the hearing is undetermined at this point. I expect the hearing to convene in a Federal Courtroom in Los Angeles.
The new hearing date is May 10, 2005. We will receive an order from the judge regarding the place and time the hearing will convene. The judge discussed the issues presented by the SEC’s order and CMKM’s response. Mr. Stoecklein elaborated on the defenses he raised in the company’s response. In summary, the Judge seemed inclined to view the issues narrowly meaning the most critical issue is whether or not the required reports have been filed.
There were discussions about depositions and subpoenas that may or may not be requested as the parties prepare for the hearing. This hearing has the potential for numerous witnesses and the judge will include a deadline for the parties to tell each other and the court who the witnesses will be at the hearing. The Court agreed to consider any requests from the parties if subpoenas were necessary by either the company or the SEC. The SEC urged the Court to consider summary disposition (rule in favor of the SEC without a hearing) but the Court did not agree to do that at this time.
The Court ruled that if either party wished to present experts at the hearing, the party presenting such expert testimony would have to follow her procedure of having certain parts of that expert’s testimony ‘pre-circulated’. The judge has said very emphatically that this hearing is a fact finding hearing and she will consider all the evidence and hand down a ruling within the 120 days from the date the order was filed by the SEC. This judge is very dedicated to seeing that there is ‘transparency’ in these proceedings. She used this word in the order allowing us to intervene and she mentioned it again. This is a good thin g for the shareholders. Transparency in this sense means there should be no hidden agendas or evidence that is secreted or kept from the parties and the public.
There are complications in preparing for this hearing due to the UCAD investigation. It would not be appropriate for me to go into the details of the problems presented by the UCAD investigation. I will direct you back to the press releases which discussed subpoenas to certain company officials as a result of that investigation. I am pleased with how the Judge has agreed to handle any disputes between the parties over this separate investigation. My suggestions to the Court on how to handle the disputes over the UCAD investigation were not well received by the SEC attorneys.
This hearing went as good as could be expected for the shareholders. The company can use the additional time as they work through the problems presented by this SEC action. Donald Stoecklein is doing an excellent job representing the company. The SEC enforcement attorneys are representing their agency in earnest as well. There have been no discussions about resolving this proceeding in any fashion other than asking the Court to deregister the company. I am very impressed with the efforts of Judge Murray to remain an independent jurist befor e hearing any evidence in this case.
Many people are wondering about discussions of naked shorting and there was not a discussion of naked shorting during this prehearing conference. That is not surprising to me. Our investigation in this area is ongoing. The investigation we are conducting is separate and apart from the things I am working on to prepare for this hearing. I will continue our investigation with the company’s assistance while I prepare for the hearing.
We are discussing a meeting with the SEC in the next few days for a review of the file. The Respondents to this type of proceeding are typically allowed to view the administrative hearing file and obtain copies of certain parts of the file. If I attend that meeting I will report to you the results of this meeting when it occurs.
Sincerely,
Bill Frizzell
Letter from Frizzell:
FRIZZELL LAW FIRM
305 S. Broadway, Suite 302
Tyler, Texas 75702
(903)595-1921
Fax (903)595-4383
E-Mail bfrizzell@tyler.net
To: CMKX Owners Group 4-13-05
The prehearing conference was just concluded. The SEC was represented by Leslie Hakala and John Bulgozdy. Your company was represented by Donald Stoecklein. Judge Brenda Murray presided over the conference. I entered an appearance on your behalf. There was much discussion over re-scheduling of the hearing date. The rescheduling was required because of the many matters that need to be accomplished before the hearing. The Judge wanted to make the hearing convenient to the parties and suggested two alternative sites All parties agreed to Los Angeles as the city for the hearing. The site of the hearing is undetermined at this point. I expect the hearing to convene in a Federal Courtroom in Los Angeles.
The new hearing date is May 10, 2005. We will receive an order from the judge regarding the place and time the hearing will convene. The judge discussed the issues presented by the SEC?s order and CMKM?s response. Mr. Stoecklein elaborated on the defenses he raised in the company?s response. In summary, the Judge seemed inclined to view the issues narrowly meaning the most critical issue is whether or not the required reports have been filed.
There were discussions about depositions and subpoenas that may or may not be requested as the parties prepare for the hearing. This hearing has the potential for numerous witnesses and the judge will include a deadline for the parties to tell each other and the court who the witnesses will be at the hearing. The Court agreed to consider any requests from the parties if subpoenas were necessary by either the company or the SEC. The SEC urged the Court to consider summary disposition (rule in favor of the SEC without a hearing) but the Court did not agree to do that at this time.
The Court ruled that if either party wished to present experts at the hearing, the party presenting such expert testimony would have to follow her procedure of having certain parts of that expert?s testimony ?pre-circulated?. The judge has said very emphatically that this hearing is a fact finding hearing and she will consider all the evidence and hand down a ruling within the 120 days from the date the order was filed by the SEC. This judge is very dedicated to seeing that there is ?transparency? in these proceedings. She used this word in the order allowing us to intervene and she mentioned it again. This is a good thin g for the shareholders. Transparency in this sense means there should be no hidden agendas or evidence that is secreted or kept from the parties and the public.
There are complications in preparing for this hearing due to the UCAD investigation. It would not be appropriate for me to go into the details of the problems presented by the UCAD investigation. I will direct you back to the press releases which discussed subpoenas to certain company officials as a result of that investigation. I am pleased with how the Judge has agreed to handle any disputes between the parties over this separate investigation. My suggestions to the Court on how to handle the disputes over the UCAD investigation were not well received by the SEC attorneys.
This hearing went as good as could be expected for the shareholders. The company can use the additional time as they work through the problems presented by this SEC action. Donald Stoecklein is doing an excellent job representing the company. The SEC enforcement attorneys are representing their agency in earnest as well. There have been no discussions about resolving this proceeding in any fashion other than asking the Court to deregister the company. I am very impressed with the efforts of Judge Murray to remain an independent jurist befor e hearing any evidence in this case.
Many people are wondering about discussions of naked shorting and there was not a discussion of naked shorting during this prehearing conference. That is not surprising to me. Our investigation in this area is ongoing. The investigation we are conducting is separate and apart from the things I am working on to prepare for this hearing. I will continue our investigation with the company?s assistance while I prepare for the hearing.
We are discussing a meeting with the SEC in the next few days for a review of the file. The Respondents to this type of proceeding are typically allowed to view the administrative hearing file and obtain copies of certain parts of the file. If I attend that meeting I will report to you the results of this meeting when it occurs.
Sincerely,
Bill Frizzell
FRIZZELL LAW FIRM
305 S. Broadway, Suite 302
Tyler, Texas 75702
(903)595-1921
Fax (903)595-4383
E-Mail bfrizzell@tyler.net
To The Shareholder Owners Group:
Bill has requested that everyone refrain from listening to rumors. The conference call just ended about 20 minutes ago. He is busy writing his update to you, and it will be out shortly.
Than you for being patient.
For Bill,
John Martin
Well that was short lived
... yellow fades real quick. Don't use it joye.
Moss is growing on my ears ...
Where is de Judge ...?
Few know better than DB and Newmont ...
http://www.debeersgroup.com/NR/rdonlyres/2A6B924F-A377-4A6B-BE46-EE3494857999/737/DeBeers_AR2004.pdf
FALC is the wrong area of Saskatchewan for potash 100:1
Potash is in the Lanigan area midway between Saskatoon and Yorkton, with relatively minor deposits elsewhere like just west of Regina at Belle Plain.
http://www.ir.gov.sk.ca/adx/asp/adxGetMedia.asp?DocID=3568,3539,3538,3385,2936,Documents&MediaID...
Private Trading Systems, Inc. Engages Shareholder Intelligence Services
SCOTTSDALE, Ariz.--(BUSINESS WIRE)--April 12, 2005--Private Trading Systems, Inc. (Pink Sheets:PVTD) announces it has engaged the services of ShareIntel (Shareholder Intelligence Services LLC) to develop and maintain accurate and meaningful analytics protecting the interests of legitimate PVTD shareholders. Private Trading Systems anticipates the relationship with ShareIntel will allow the Company to thoroughly monitor and control parties who might consider trading PVTD shares in an inappropriate, improper, or illegal-trading manner.
Private Trading Systems states it has an explicit fiduciary obligation to its shareholders and will utilize Shareintel's services to fully protect the interests of its shareholders. Any form of malfeasant activities directed at the Company's shares, or any attempts to electronically counterfeit the Company's shares via the sale of unregistered securities or as a result of non-exempt naked short selling will be aggressively pursued and reported. ShareIntel will monitor the management, acquisition, analysis, surveillance, and compliance aspects of all trading and related trading records of PVTD shares.
"Private Trading Systems is one of a rapidly growing number of companies that recognizes a fiduciary obligation to protect its shareholders by utilizing our unique and proprietary suite of online services and analytics," states David Wenger, President & CEO of ShareIntel.
About ShareIntel (Shareholder Intelligence Services LLC)
ShareIntel tracks ownership, trading activity and physical and electronic custody of client company shares. Proprietary software and analytics enable identification out of balance relationships among the entities responsible for recording and reporting share trades, ownership, and physical and electronic custody of such shares.
ShareIntel creates timely, detailed shareholder intelligence reports for management, identifying by individual, institutional and brokerage firm, who is buying, who is selling, who is a new shareholder and who has divested. Corporate records of issued and outstanding shares are reconciled with share positions held at brokerages firms and private custody.
About Private Trading Systems, Inc.
Private Trading Systems, Inc. has been created by the merger of Mesa Gold, Inc. with certain assets of Private Treaty Markets Limited of London, England. Over the past three years, and in partnership with Societe Bancaire Privee of Geneva Switzerland, Private Treaty Markets Limited has developed a comprehensive proprietary turnkey exchange offering for utilization in the trading of any asset capable of being assigned a CINS/CUSIP number. Private Trading Systems is in the final stage of approvals to complete the full consolidation and acquisition of the PTML shares.
Private Trading System's exchange offering must be approved in its final form by the Swiss Federal Banking Authority. The Company anticipates concluding this process within the next six months subject to certain elements not fully under its control. Certain key proprietary aspects of the design and operation of the exchange model are intended for process patent protection and, as a result, the Company will not disclose these elements until its patent counsel has completed and filed the fully documented and approved intellectual property protection with the U.S. Patent Office and parallel filings under the Patent Cooperation Treaty. Private Trading Systems anticipates announcing the selection and retention of its Patent Counsel within the next ten days.
The intention of the Company is to offer an "exchange environment" access to unique situations where it can provide a quick, effective route to a secure and clean electronic market for any financial instrument not currently able to avail itself of such a venue. This exchange incorporates a completely unique and proprietary integration of functions currently not found in one product offering anywhere in the world. The system is also designed to specifically preclude specific forms of illegal manipulative trading of any security for which it provides exchange services.
Forward Looking Statements
This press release contains statements that are "forward looking" and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and federal securities laws. Generally, the words "expect", "intend", "estimate", "will" and similar expressions identify forward-looking statements. By their very nature, forward-looking statements are subject to known and unknown risks and uncertainties that may cause our actual results, performance or achievements, or that of our industry, to differ materially from those expressed or implied in any of our forward-looking statements. Statements in this press release regarding the Company's business or proposed business, which are not historical facts, are "forward-looking" statements that involve risks and uncertainties, such as estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made.
The Company cannot assure that it will finally consummate the proposed final form of its acquisition of the final elements of Private Treaty Markets or that we will profitably integrate all of its business elements when and if the acquisition is completed in its final approved form.
Second Open Letter To Mr. Thompson of the DTCC
Friday, April 08, 2005
Dear Mr. Thompson:
I am again writing to you in the hope that you will take a moment to help me understand where I went wrong. It is important to me personally as well as to my organization, the National Coalition Against Naked Short Selling, to apprehend where our reasoning went awry.
In your recent @DTCC “interview” of March 5 you made a number of comments that would lead the reader to believe that the NSCC’s stock borrow program did not allow that subsidiary of the DTCC to lend out more shares than a participant firm held, or that were authorized and registered by the issuing company. The way the answers were worded, one could easily draw the conclusion that you had truthfully and fully addressed the issue.
You had apparently put to rest the nasty rumor that the DTCC created an unauthorized, unregistered float of shares over and above those legally authorized by the company in question – what some would argue convincingly is electronic counterfeiting of stock. In point of fact, in one artfully worded section, you went as far as to denigrate your detractors as either “intentionally misrepresenting” the “SEC approved system” or of being “profoundly ignorant” of the way the process works.
Your words: “Once a loan is made, the lent shares are deducted from the lender’s DTC account and credited to the DTC account of the member to whom the shares are delivered. Only one NSCC member can have the shares credited to its DTC account at any one time.
The assertion that the same shares are lent over and over again with each new recipient acquiring ownership of the same shares is either an intentional misrepresentation of the SEC-approved system, or a profoundly ignorant characterization of this component of the process of clearing and settling transactions.”
Strong language designed to end any idle and erroneous speculations by the dim, or the uninformed, or the dishonest.
This was in conflict with the way that I understood that the system worked, so I sent you an email around April first, requesting clarification, and offering a very specific description of how I believed the process functioned.
I can understand that you might be occupied with many important tasks and obligations, and thus might not have the time to get around to clearing up the issue for the largest entity of its kind, one of your main detractors, a coalition that has run full page advertisements in the Washington Post and has been involved in the only television footage ever aired that described the naked short selling abuse story. But I had hoped that you would seize that opportunity to disabuse us of our misunderstanding, so that we could fold up our tent, apologize for inconveniencing you, and move on to other things.
Because surely we had gotten it all wrong – you literally called us cretins or crooks for our flawed take on the matter.
It seemed reasonable to expect some response, given that you are the spokesperson for this issue that the DTCC has put forward to explain things. So far, nothing, but I have remained hopeful; cautiously optimistic, if you will.
Imagine my surprise today when I read Professor John Finnerty’s March, 2005 abstract titled “Short Selling, Death Spiral Convertibles, and the Profitability of Stock Manipulation” – in which the Professor of as venerated an establishment as Fordham University agreed with my supposedly incorrect understanding! Apparently he is either as intellectually dishonest or as “profoundly ignorant” as the members of NCANS are - not to mention the attorneys that are suing you, and the reporters you castigated at Euromoney.
So now to the problem. Either we are all badly wrong, or you are lying.
Given that you are an officer of the court, an attorney, and the representative of a self-regulatory organization that is dependent upon the investing public’s belief that you are honest in your dealings, I find it disturbing to consider that you might be bald-faced lying, in print - and therefore conclude that we must all have it wrong.
The alternative explanation would be that you are deliberately misleading the American public and mischaracterizing the operations of the NSCC, in an effort to obfuscate the truth. I find it hard to comprehend that you as an individual, as well as the DTCC, could be involved in this type of possibly criminal dishonesty. I’m hoping that you will grace us with the few moments it should take a gentleman of your robust and comprehensive knowledge of the system, and explain how, and where in the process, the professor has this wrong. To save you the time of looking it up, I have taken the liberty of excerpting pages 35 and 36 of his abstract:
“The NSCC was created in 1976 through the merger of three major clearing corporations (NYSE, AMEX, and NASD). NSCC works in conjunction with the DTC to provide centralized clearance and settlement for broker-to-broker stock trades in the United States. The NSCC clears and settles transactions through the Continuous Net Settlement (CNS) system. It guarantees completion of the transactions by assuming (a) the obligation of the buyers to pay for the shares upon delivery and (b) the obligation of the sellers to deliver the shares. During the trading day, the CNS continually nets all trades by its members in each security. The member’s previous trading day’s closing net long or short position is continually updated with the day’s purchases and sales. At the end of the trading day, the member’s updated net long or short position in each stock is communicated to the DTC for overnight processing. Each short position is compared to the member’s DTC account to determine if the member has enough shares on deposit to settle the short position. If so, then the DTC transfers the required number of shares from the member’s DTC account to the NSCC’s DTC account.
Based on instructions from the NSCC, the DTC transfers shares received from members with short positions to the accounts of members with long positions. If the member with a short position does not have enough shares in its account to cover the short position, then the NSCC has five choices. It can wait another day to see whether the seller cures the fail by delivering the shares. Second, if it determines that the open short position is a high-priority obligation, it can attempt to arrange to borrow enough shares through its stock borrowing program to satisfy the open position (NSCC, 2003). If it is unable to borrow the shares, then the DTC has the three remaining choices: (a) it can demand a dealer buy-in (forcing the selling broker-dealer to buy the shares in the open market and deliver them to the DTC), (b) buy the shares itself in the open market and charge the cost of the buy-in to the account of the seller, or (c) as a last resort, demand that the seller break the trade and compensate the buyer for the associated cost.
"The NSCC’s stock borrow program permits it to borrow shares from participating members to cover end-of-day open short positions that it deems to be of high priority. Addendum C-1 of the Rules and Procedures of the NSCC (2003) governs the operation of the stock borrow program. Members who wish to participate in the program inform the NSCC each day of the number of shares of each stock in their general un-pledged account at the DTC which they are willing to lend. After the NSCC determines the number of shares it would like to borrow to satisfy all high-priority open positions, it applies a formula to determine from whom it will borrow the shares. The formula favors members who have the lowest stock loans from the NSCC and who pay the most clearing fees to the NSCC. When it borrows shares, the NSCC debits the lending member’s DTC account but also credits that member with a long position in a special CNS sub-account set up specifically for the stock borrow program. The sub-account holds what is tantamount to an undated stock futures contract with the NSCC as the obligor. The NSCC also credits the lending member’s regular CNS account with funds equal to the market value of the borrowed shares, which the lending member may invest overnight in an interest-bearing account.
The DTC credits the borrowed shares to the NSCC’s DTC account, which eliminates its short position, and transfers them to the buyer’s DTC account. The buyer acquires all right, title, and interest in the borrowed shares – just as it would in any cash transaction that settles the regular way – including the right to vote the shares, receive dividends, resell them, or lend them (e.g., back to the NSCC through the stock borrow program).
The NSCC charges a fee to each member with a short position that triggered the NSCC’s need to use the stock borrow program. The NSCC returns the borrowed shares when it receives deliveries against outstanding short positions that exceed the amount of shares it needs to satisfy high-priority open short positions.
The stock borrow program can facilitate naked shorting in two ways.
First, sellers can continue to fail to deliver because the NSCC can borrow the shares it needs to meet its clearing obligations through the stock borrow program. It does not have to force the seller who fails to deliver to buy in shares, nor does it have to go into the market to buy in the shares. It simply borrows them from another member firm to effect the buy-in. Since the NSCC covers the short position, the buyer of the stock also never has to buy them in.
Second, the stock borrow program allows the shares to be recycled. Each stock loan gives rise to another stock futures contract. Any single share could actually be re-lent multiple times, giving rise to multiple futures contracts. Each futures contract credited to a broker-dealer’s sub-account at the DTC continues to be reported on the broker-dealer’s books as a share held either in its proprietary account or in a customer account. In either case, the account holder believes he owns a real share with all the rights attached to it.
Consequently, the stock borrow program effectively creates additional unauthorized shares of the issuer’s stock. These undated stock futures contracts, which the financial press has referred to as phantom shares, inflate the amount of stock that is available fortrading and also increase the amount of stock that is available for lending to short sellers (SEC, 2003b).”
Again: “Consequently, the stock borrow program effectively creates…additional …unauthorized….shares…of…the…issuer’s…stock.”
Now, I am likely a bit provincial, naïve, misinformed, dare I say, “profoundly ignorant.” The good Professor, however, seems to be both worldly as well as erudite, and fluent in the minutiae of the matter.
So please, favor us with a simple, short explanation of precisely where we have this wrong. Feel free to highlight the text from the Professor’s work, and provide a one or two sentence explanation of his error. I’m confident that the few minutes that will take you will pay enormous dividends in terms of ending this pervasive ignorance, which apparently infests the hallowed halls of academia, as well as the unsophisticated streets of Mainstreet USA. Feel free to use small words if you like, so that we all can follow along – let’s not leave anyone behind.
--------------------------
I would encourage anyone that is interested to email this, with my compliments, to Mr. Thompson at Lthompson@DTCC.com - or reach out and touch him at (212) 855-3240 and ask him to please respond. In fact, go ahead and post a comment here if you sent this to him, so that we can keep track of the number of folks he is too busy to respond to. I am a huge believer in giving one every opportunity to demonstrate one’s honesty and integrity. Or giving them enough rope…
http://bobosrevenge.blogspot.com/
Show me the evidence.
" .. I think Urbie managed to make Mahue angry. Very angry .."
I think you just like to read your own stuff ..
http://www.faulkingtruth.com/Articles/LettersToEditor/1011.html
Dateline, NBC, and GE: LET THE BOYCOTT BEGIN!
By Mark Faulk
April 8, 2005
An Open Letter to Dateline, NBC, and GE: LET THE BOYCOTT BEGIN!
Thank you for updating the readers of The Faulking Truth on the "upcoming" Dateline Stockgate story. After reading your email, it is clear to me that you have once again misled your viewers, and our readers. THE STOCKGATE SEGMENT WAS CONFIRMED, and your implication that it was all a big mix-up is both condescending and misleading. And your decision to blame it on "a very busy news cycle" (because of the death of the Pope, Prince Ranier, and Terry Schiavo), and then replace it with an interview with "American Idol" Ruben Studdard? Well, even you must realize how ludicrous that it.
At the very least, you should stand up and take responsibility for your actions, and admit it when you are wrong. In the case of this story, and your repeated decisions to sit on this segment while millions of Americans are being fleeced on a daily basis by unscrupulous con artists, you are clearly morally and ethically wrong. Is it an ongoing story? Then do the segment, and follow up on it as it develops. This is the very basis of your show, "multi-part investigations, and follow-ups that stretch over weeks and months". TELL AMERICA THE TRUTH NOW! Therefore, The Faulking Truth will continue to advise our readers to boycott Dateline, NBC, and any and all GE products until you do the right thing and AIR THIS PROGRAM! ....
Zen ... so UC can't make you hopeful, but he somehow managed to make Maheu hopeful. Would you call that a big plus?