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TERMINATE ME MATT!!!
TERMINATE ME MATT!!!
TERMINATE ME MATT!!!
TERMINATE ME MATT!!!
TERMINATE ME MATT!!!
TERMINATE ME MATT!!!
TERMINATE ME MATT!!!
bigmellons,
is Matt part of this?
The Latest Spin From The NY Press; Are Whistleblowers In Danger?
Location: Blogs Bob O'Brien's Sanity Check Blog
Posted by: bobo 7/2/2006 3:04 AM
Someone sent me an article that appeared in Barron's over the weekend - that august publication that managed to pretend that there was no issue at Refco for months, and which credulously parrots the hedge fund party line at every turn - almost as often as the WSJ, but that's another story...
The article, written by Michael Santoli, contained typical misstatement we've come to expect from the NY financial press. It is only noteworthy because of the stunning amount of info that exposes the lie in the words:
"IT'S HARD TO MISS THE IMPATIENT hunt for scapegoats around the Street, and perhaps it says something about the mood among investors and the public at this market moment.
Last week saw hedge funds placed on mock trial in a congressional hearing room (see Roundtable Rascals?3), a venue once reserved for investigating treasonous acts or criminal enterprises. The forum featured several critics casting ominous but vague charges about the funds' rapacious tactics and nefarious motives.
(Funny, but with an average 3.4% return this year through June 20 for a broad Merrill Lynch hedge-fund index, just how ingeniously evil can hedge-fund managers possibly be?)
Earlier in the week came news that a couple of trading firms were suing several major brokerage houses, charging them with abetting "naked" short selling -- that is, selling shares short without first arranging to borrow them. This practice is improper, but the suggestion that the largest brokers are conspiring to encourage it indicates a certain inflated sense of grievance among those thrashing for villains to blame when their stocks go down."
A certain inflated sense of grievance.
Huh.
I suppose that the author didn't see the recent FOIA data showing that OSTK, one of the more visible players in this drama, had 25% of its float FTDs. That's 12.5% of all outstanding shares.
I wonder what level of "improper" trades in one's company's stock would result in "justified" grievance, if 12.5% being FTDs is causing an "inflated" sense of grievance? On one day, 107% of all the trading in OSTK was FTDs. Is that enough to cause justified grievance? Or is no amount of fraud worthy of Barron's acceptance of justified grievance?
Just another in a long string of NY press corps absurdity.
---------------------
I was chatting with a friend this weekend, and we were speculating as to the actual level of danger whistleblowers and high profile players in this crisis are actually in.
Is a Gary Aguirre in more danger now of being hit by a bus, or having his plane go down, or choking on something, or dying of auto-erotic asphyxiation, or committing suicide by firing two bullets to the back of his head, than he was two weeks ago?
These are huge stakes being played for now. And it is looking like Wall Street is in real danger of being exposed.
Recall from the Pecora hearings that Anaconda Mining President James Ryan passed away under mysterious and sudden circumstances before he was ever able to take the stand, as did Percy Rockefeller - his longtime illness apparently became too much for him, fortuitously before he could testify.
Given that history tends to repeat itself, what is the likelihood that an Aguirre, or a Patrick Byrne, or an Easter Bunny, could suffer from bad luck?
We've already seen the SEC threaten Aguirre with civil and criminal charges, and we've seen Patrick now being probed by the SEC.
I know it is far fetched, but I wonder aloud how far the bad guys will go to make their problems and critics and whistleblowers disappear?
If I was Aguirre, or any other whistleblower, or even Byrne, I'd be watching my back. Less than lilly-white players have been known to operate on Wall Street, and I sense that this wouldn't be the first time a key player was harmed to send a message - recall the whistleblower in the mutual fund frontrunning case being hit in the face with a brick by an unknown assailant. Odd things can happen to those who take on the power structure.
I hope they aren't downplaying the level of personal risk involved in going against Wall Street. There is historical precedent for concern...
---------------
Chris Byron reprises his article from a year or so ago, wherein he calls for the SEC to be dismantled.
We apparently agree on something.
And the WSJ has a 2 page special on Refco, and how a ton of money was lost and hidden. Or rather, that is what it purports to report on - but nowhere does anyone explain what the exact nature of the bad debt was, or how precisely it was lost - this after a ton of ink, and two writers on the case.
It's wild that one of the bigger frauds can still be covered up like this - someone is STILL running interference over who did what to whom, and precisely what it was that was done.
No doubt the Journal feels that they have now done their final summary of the story, and can put it to rest.
How unexpected that Refco would ultimately be swept under the rug, in plain view, by the media lackeys of Wall Street?
On a somewhat related note, I do so love when these articles about hedge funds say they are "lightly regulated" - and some even point out that they are already heavily regulated, in that they are required to obey federal securities laws.
How dishonest can you get?
That is like saying that hedge funds are exactly as regulated as the Easter Bunny, in that I have to obey securities laws as well.
What a load of hogwash.
Who do they think is buying this pap? I mean, really...
Copyright ©2006 Bob O'Brien
DISMANTLE THE SEC
COURT'S SLAP OVER HEDGE FUNDS IS LATEST IN A LITANY OF FAILURES
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July 3, 2006 -- IT looks like the Securities and Exchange Commission has finally come up with a plan for dealing with the devastating Court of Appeals decision two weeks ago that nullified the SEC's efforts to regulate the hedge fund industry.
The strategy: Do nothing - except perhaps pout a bit and blame everything on the media.
Eighteen months ago in this space, I called for dismantling the SEC - a bureaucratic anachronism from the New Deal that lacks the power, the resources or the political support to oversee and enforce the law on Wall Street. Now I repeat the call.
For its thoroughly inept handling of the hedge fund industry alone, the 72-year-old agency should either be reorganized top to bottom, with a new charter and new leaders armed with broader powers of criminal enforcement, or it should be shut down entirely and its existing functions distributed to other government agencies.
Faced with a federal budget cash deficit that the Congressional Budget Office expects to top $477 billion in the year ahead, taxpayers simply cannot afford to be wasting nearly $1 billion a year on a 3,916- employee federal bureaucracy, sprinkled across 11 regional offices, that doesn't do the basic job for which it was created - namely, to enforce the law.
THE SEC's three-year- long struggle to regis ter and regulate hedge funds is the climax to this legacy of failure. The initiative was launched with laudable enough intentions in early 2003 by then-SEC Chairman William Donaldson, who wound up resigning in defeat two years later with the job half-done.
Donaldson's successor, an Orange Country, Calif., conservative Republican named Christopher Cox, vowed to continue with the program. In doing so, Cox placed the prestige and credibility of the SEC on the line again - only to have a federal appeals court declare the effort null and void as an arbitrary and illegal use of the SEC's rulemaking powers.
The Court of Appeals gave the SEC 45 days, until Aug. 7, to appeal or ask for a rehearing, stipulating that if the SEC takes no action and simply sits on its hands, the roughly 1,000 hedge funds that have been registered under the program to date can simply de-register themselves.
So how has the SEC decided to deal with this self-created debacle? According to one well-placed commission official, there will be no appeal of the Court of Appeals ruling. Instead, the SEC will simply wait until the 45 days are up and then see just how many funds actually decide to de-register themselves from what will then become nothing more than a voluntary program.
Said the source, "Hedge funds ought to find it helpful to be able to promote themselves to potential investors as being 'SEC-registered' whether the program is voluntary or not." The source added that "some of our critics in the media" haven't been helping by constantly bringing up topics like the competence of the SEC itself.
But competency is only one of the questions that properly comes up when a regulatory body like the SEC behaves this way.
Wall Street's official cop on the beat set out three years ago to police a rising tide of fraud in an unregulated sector of the market that is rapidly taking over all of Wall Street.
Three years later we now find the very same agency, having made a total hash of its ensuing regulatory effort, suggesting that its best way out of the mess will be, in effect, to turn the great seal of the SEC into a kind of SEC Stamp of Approval for any hedge fund willing to stay registered in the program.
HAS it occurred to any of the brilliant minds at the SEC just who would hold the real power in this arrangement? A voluntary program is just that - voluntary - meaning that any hedge fund can drop out at any time, for any reason - or even no stated reason at all.
Under such circumstances, how willing will the SEC be to bring cases against voluntarily registered funds when keeping the program alive involves maintaining the goodwill of the funds still in it? Human nature being what it is, one can well foresee a time when the program winds up overflowing with crooked funds, while the SEC hems and haws about investigating any of them.
There is no doubt that the unregulated profileration of hedge funds represents a direct threat to the stability and integrity of America's capital markets. An SEC staff study estimated that somewhere between 6,000 and 7,000 hedge funds, having roughly $700 billion of assets under management, were operating in the U.S. in the autumn of 2003. Now, says the SEC, just those funds registered under the program have somewhere between $1.2 trillion and $2.4 trillion of assets on their books.
But the SEC already had all the power it ever needed to uncover hedge fund fraud without demanding that they register with the commission. And the best evidence that more power wasn't needed is what happened once the doomed hedge fund program went into effect at the start of this year - the opening of just 12 hedge fund fraud cases by the SEC since January, which is typical for the agency during any such six-month period in recent years.
HERE are four things the SEC can and should do now to clean up this mess. And to do them it doesn't need a single new law or ruling from anyone. All it needs is the willingness to use the powers it already has.
1. Track domestic and offshore hedge fund auditors. So far as I have been able to determine, the SEC has set up no institutionalized system for tracking the activities of auditing firms involved with any hedge funds, let alone the fishy ones. To compile such a list, the SEC could begin with the names, addresses and phone numbers of auditors for publicly traded penny stocks; the linkages between penny stocks and hedge funds would astonish them, often leading to offshore hideouts in places like the Netherlands Antilles.
Such a list would also be useful for names that are not on it, instantly disclosing, for example, that the accounting firm of "Richmond-Fairfield Associates," listed as auditor of record by the now defunct Bayou Management hedge fund group, was bogus and did not exist.
2. Read SEC Forms 13D and 13F. From these forms, which holders of significant stakes in public companies must file with the SEC, can be teased a vast array of information on fraudulent investment schemes involving hedge funds. The SEC rarely looks at any of it. The forms can disclose when a fund acquires a controlling block of stock in a company that suddenly spurts in price. And often, when a fund fails to file the forms, the evidence of control can be found in the audited financials of the issuing companies.
3. Read private litigation cases for leads. Nearly all major SEC investigations lead eventually to parallel private lawsuits by victimized plaintiffs. But SEC investigators seem largely oblivious to what can be found in the resulting case files.
Following the collapse of the Lancer hedge fund three years ago, private lawsuits produced a mind-boggling array of documents directly implicating Citco Fund Services, one of the biggest hedge fund administrators, in the Lancer fraud. The SEC has acted on none of it.
4. Have a "Show Trial" or two. For years now, the entire mindset of the SEC has been focused on the filing of complaints and little else. After that, the cases are simply left to gather dust, at the end of which process they are settled by plea bargain agreements in which the defendant promises never to break the law again - without even being forced to admit that he broke it the first time.
Last week, I asked the SEC's national office in Washington for a list of current and recent cases that the commission had actually pursued to trial, and they could not cite even one. This simply must be changed if the lawbreakers of Wall Street are ever to take the SEC seriously again.
These are the sorts of things the SEC can do, and should do, to rescue itself from the rubble of its hedge fund fiasco. But my guess is you'll hear 20 excuses for why they can't do any of them - if indeed you hear anything at all. And that's why I say, to hell with them. They've had their shot and they've blown it. So shut 'em down.
cbyron@nypost.com
The $24 Trillion Dollar Beast....
« Thread Started on Yesterday at 11:20pm »
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By: my69z
01 Jul 2006, 07:58 PM EDT
Msg. 313129 of 313164
Jump to msg. #
....The $24 Trillion Dollar Beast....
After reading these statements,,,some "CMKX" things came to mind.
It's a little long,,,,,,sorry.
But it all says to me,,,CMKX WON"T file a Fed case,,,,yet.
Because if they do that,,,,they'd be placing a gag on themselves.
I think CMKX will be the "need for certs"(IF needed) example of this attack on the Hedgies and their crews....aka...The $24 Trillion Dollar Beast
Would "we" rather be in a court room???...or on Natl T.V.??
Explains for me why we got all the info we did from each agency....think Maheu would go before a Committee without all this info??
------------------------------------------------------
Matthew Friedrich, Principal Deputy Assistant Attorney General
and Chief of Staff of the Criminal Division
UNITED STATES DEPARTMENT OF JUSTICE
"...I would like to assure you that the Department shares your concerns regarding integrity in the marketplace.We are dedicated to utilizing our law enforcement tools to ensure the integrity of the markets and protection of investors and the public from fraud."
"...At every level – federal, state and local – we’re enforcing the laws that protect the integrity of our government and corporate institutions."
"...Integrity in government and business is essential for a strong America."
"...The President’s Corporate Fraud Task Force....."
"...From its inception in 2002 through this past December,"
---Think of the rumored Mahue arrival dates/Burrel's comments of Mahue only going where he's sent and Jay's refrence to POTUS )
" Moreover, in addition to bringing corporate and securities fraud prosecutions, the Task Force has also brought a number of tax prosecutions through the Tax Division,.."
" The Department’s enforcement efforts have also sought to prevent the recurrence of criminal activity by requiring significant reforms from corporations under investigation. The Department has applied this approach in resolving investigations involving, among others, PNC Corporation and Computer Associates. Those reforms have included requirements that the companies establish a restitution fund, agree to new policies in connection with financial reporting, perform additional internal audits, and, where appropriate, consent to the monitoring of these procedures by independent auditors. "........
---Remember Conversion Services and their SOX compliant and financial reporting systems??,,,the same company "CMKX Extreme" invested a few millions in...how ironic.
"...The most important law enforcement entity in this arena is the FBI."
"...The FBI’s expertise and resources are a cornerstone of our white collar crime enforcement efforts." (HMMMMM)
--- Remember...Mahue said,,,some of our contacts go back 40/50 years and we're told things others aren't.
And remember what the OSS's slogan is.... ( Talk Kills )
"...The SEC obtained court approval of a plan to distribute more than $500 million and 10 million shares of MCI stock valued at $250 million, that it obtained from WorldCom, to a fund to compensate the victims of the company’s widespread accounting fraud.
---I think FTD's could be an "accounting" issue?? )
"...In February 2006, the Department of Justice and the SEC each reached an agreement with AIG Insurance in which AIG accepted responsibility for its involvement in two fraudulent transactions and agreed, among other things, to pay $25 million in penalties to the United States, to cooperate in the government’s ongoing criminal investigation, and to simultaneously pay the SEC a fine of $100 million and disgorge $700 million."
---There's that word Pj,,,, "disgorge"
"...InVision disgorged almost $600,000 in profits and paid a criminal penalty of $800,000,"
"...It is also important to note that our corporate fraud enforcement efforts encompass health care fraud prosecutions."
--- Wasn't it always said,,,alll of the market to be cleaned up??...think beyond just "stocks"
"...At the same time, we have achieved success in addressing the problem of an underlying corrupt corporate culture in cases like HealthSouth, where the company agreed to pay the Government $325 million plus interest and.."
"...Third, stock brokers are prohibited from inducing "the purchase or sale of, any security by means of any manipulative, deceptive, or other fraudulent device or contrivance" Section 15 of the Exchange Act "
-- Remember the Jefferies letter??
"...Fraud and stock manipulation cases require significant resources Most cases lack a single star witness or document, e-mail or memo.Rather, most fraud and manipulation must be proven by developing a complex set of facts and evidence.Complexity and cost are significant obstacles to enforcement actions."
--- Is CMKX a "fact" waiting to happen?? And remember it's been said,,,,"everyone" has a role,especially when your taking on a $24 TRILLION dollar...Unregulated Beast.
"...These efforts are a cornerstone to the Department’s efforts to strengthen the integrity of the market place, protect the public, and restore confidence in our corporate institutions."
------------------------------------------------------
ATTORNEY GENERAL RICHARD BL.UMENTHAL
"...and assure confidence in the integrity of the markets "
"...but these financial tools may also be susceptible to invest01 fraud and abuse --"
--- Frizz said the fraud goes against the most basic market concepts
"...Greater transparency will help enhance investor confidence in this increasingly important and influential part of the market. "
"...Lack of aggressive enforcement can make any law meaningless, leaving investors and markets unprotected. "
-------------------------------------------------------
Next was Mr. Gary J. Aguirre
Former Investigator
U. S. Securities and Exchange Commission
* Read his 18 page report if you haven't,,,,I think he'll qualify as a "fact".
-------------------------------------------------------
TESTIMONY OF MARC E. KASOWITZ
He talked about manipulating companies through various ways and read the 11/10/05 TF update..." CMKX stock seemed to be a poster child for this illegal trading
technique." ---- remember all the negative articles published?? LOL
"...That erosion in turn artificially depresses
stock prices, exaggerates market reactions to bad company news, and suppresses market reactions to positive company news. Moreover, even the mere existence of such disinformation in the marketplace invariably leads the media and regulators to investigate the rumors, and the resulting publicity and investigations exponentially aggravate the severity and duration of the negative effect.
What results is a self-sustaining downward pressure on a stock that is extremely difficult -- if
not impossible -- to reverse. And although this pressure is artificial, the devastating impact on the company and its shareholders can be and often is enormous. "
--- The TF also said in the 11/10/05 update:...
" Since it works to the short sellers advantage by causing
the stock to go down when they naked short a stock, it should work in the opposite direction to cause a stock price to go up when the stock is hard to find because of their short selling techniques.Many people bought this stock because of this possibility."
"...likewise short-sellers and their analyst co-conspirators may not spread false, misleading,
unfounded, or exaggerated information for the purpose of
creating or accelerating a decline in stock price. "
--- This reminds me of Frizz saying..." Our stock is not trading at the moment, so the shorts can’t simply send some bashers to the boards and buy the stock at a discount to close out their positions.
--- And think about the unprecedented bashing of CMKX,,,and it's ok....cause like Frizz said,,,,the stock isn't currently trading, so don't expect to buy it back at a discount. LOL
----------------------------------------------------
Think of this in a military way....what does the U.S. military do in all out war today??
They attack you form the rear...cut off your food,water,communications, etc....
You are a "fact" to cut the head off a $24 Trillion Dollar Beast
That's what CMKX's role was with the FTD's and that's why we aquired all that info the last 18+ (?) months...IMO.
Think about it...nothing, nothing the Govt. does effects "CMKX".
So what the Senator said NSS wasn't illegal...where do you get NSS'd??
On the market.And I agree with someone who said about 2 weeks ago that this will be swept away under "back dating options". ( sorry, can't remember who right now)
And when was the last time CMKX or the TF made "NSS" the main issue?? It's now..."FTD'S" & CMKX is poster child to counter anyone wanting to do away with certs.
Sooo,,,what are the odds that 7 months ago CMKX...or as I call it,,,Pinkie Tha Bull...said before all these committee people did on 6-28-06,, that their mission was to restore the "Financial Integrity" of our markets??? :
TF update from 11/10/05---
As a UNITED FRONT, this loyal group of shareholders
has a chance to not only make history, but to start
rebuilding the financial integrity of our U.S.
markets for the sake of our children and
grandchildren!
You start by
Gltua!
Chris
bigmellons, thats from: Patrick Byrne
Founder and President of Overstock.com
A simple and animated look at the problem of “Failures to Deliver” in the marketplace.
Part 1
Part 2
Part 3
Part 4
http://www.cmkmtaskforce.com/
the bashers song, no “Failures to Deliver”
I love how there no “Failures to Deliver” in the marketplace.
The DTCC wants to eliminate paper certificates - they're so messy, and icky, and stuff
Location: Blogs Bob O'Brien's Sanity Check Blog
Posted by: bobo 3/23/2006
I was just sent this little slice of heaven http://www.dtcc.com/nomorepaper/index.html in my email inbox. It is filled with smiling, fleshy faces promising a world of eternal happiness, and sunny days, and perfect health...if only we eliminate paper certificates.
Because the DTCC, which is owned by the exchanges and the brokers (and the exchanges really are the brokers - they are owned by the brokers as well), is getting ready to help us - some more.
Now, I admittedly am suspicious whenever Wall Street wants to "help" investors. Usually that is akin to the IRS helping one with taxes - the person being helped is usually far worse for it.
I'm particularly suspicious when the help being offered is to eliminate the single mechanism investors have to verify that their brokers aren't lying to them about the investors' ownership of stock. That kind of makes me nervous. Very nervous.
You think that might be because the DTCC lies?
We caught them lying when they claimed they had never been invited to the NASAA conference. We caught them lying when they invented statements and inserted them into Cam Funkhouser's mouth.
Dr. Byrne, CEO of OSTK, contends that they are lying through their teeth. Said so publicly, just recently.
No suit over that, BTW. Byrne went on Rob TV and called the DTCC an organization run by criminals, that was lying through its teeth, and invited them to sue him - and nothing. Not a peep.
Odd. Why wouldn't the DTCC sue Byrne, unless it wanted to avoid discovery, and exposure of its crookery? Maybe they want to avoid having to take the fifth, like Grasso recently had to, when questioned about the larcenous dealings of the specialists?
But anyhow, here they are with a warm offer of help.
Think of how helpful the Stock Borrow Program has been - consider the enormous assistance that not having to deliver shares has been for sellers intent upon driving the price of a stock through the floor. Very helpful, that DTCC. Very, very helpful.
And now, these beaming Stepford faces assure us that our world will be so much better without paper certificates - or as I like to call them, "proof of genuine shares."
We are invited to consider all the money companies will save by eliminating them. Actually, that doesn't help me much. We are also told that we won't be subjected to the annoyances of having to hassle with lost certificates. Actually, that doesn't help me much, either - I've never in my life sold stock and then failed to deliver it.
Upon consideration, the only people actually helped are the DTCC and their broker/owners. They can process more trades, faster, and there is no mechanism to replace the paper certificate as the ultimate proof that you own what you paid for.
If one was cynical, one could speculate that this would be the ultimate way to cure the fail to deliver problem - simply eliminate the only mechanism most have to prove ownership - and then we are all reliant upon the DTCC, and their broker/owners, to be honest.
You know, the brokers who are being fined constantly for crookery, and the DTCC, which has been caught in two lies by the Bunny, just recently.
Why do I feel like I have to check my wallet when I read stuff like this?
In fairness, the DRS promises to be a decent substitute - direct registration with the issuer. But here's my problem: The same liars and cheats that compose much of Wall Street will be in charge of that system, and at the end of the day, I don't have any proof like a paper certificate. None. Just someone's electronic word - from the pathological liars on Wall Street.
That's a problem. A big problem. That the DTCC has been able to ramrod this past all the states is frightening at a profound level.
When the DTCC wants to help you, my hunch is that it wants to help itself to your money.
Call it a gut feel.
Copyright ©2006 Bob O'Brien
http://thesanitycheck.com/BobsSanityCheckBlog/tabid/56/EntryID/170/Default.aspx
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DIRTY ROTTEN SECRETS By George Chelekis
The Dirty Rotten Secrets of the Small Cap Markets were previously unwritten rules, passed along verbally among stock promoters, company insiders, stock brokerage firm principals and many who are close to the outer fringes of this very exclusive club. Amazingly, many US and Canadian securities regulators have also been members of this very closed group. It is always interesting to discover how the head of a stock exchange's surveillance department, upon retirement from "public service," ends up as a senior vice president at the brokerage house with which he once squabbled or, vice versa, the favorite son of a brokerage firm later becomes the head of a securities commission. The financial markets are truly a revolving door, whereby this year's company insider was once a stockbroker; whereby a highly aggressive SEC attorney pursuing a scandalous media personality "suddenly" retires and becomes a senior executive at the Smith Barney brokerage firm. One thing is for certain, in the apparently uncertain world of "the business," YOU are on the outside looking in.
The stock market is rigged against you and in ways you may never discover. The rules, laws, secrets and axioms I've listed in this essay should give you a much clearer understanding about the inner workings of the financial marketplace. No one has previously codified the "omerta," or code of silence which is rampant throughout the financial markets. One would become a pariah, an undesirable or an outcast, by writing these down and broadly disseminating them. You are NOT supposed to know these unwritten rules and God help the individual who passes them onto you.
1. LAW OF THE PEZ. This is dedicated to Murray Pezim, once the most powerful stock promoter in all of Canada. According to legend, Mr. Pezim, upon hearing that someone had made a killing on his stock play, immediately remarked, "Shareholder profits are short-term loans." Ultimately, if you continue your small-cap speculations, you will lose. Either the markets will turn or you will drop your guard, but eventually, you will lose. One should understand that the small cap stock markets run pretty much like a casino.... the longer you stay at the tables, the greater your chances of failure.
2. MOTTO OF THE STOCK PROMOTER. Sell when everyone is buying and buy when everyone else is selling. Actually, more often it is, sell when everyone else is buying, completely exit the play, and go find something else for them to buy later. It may even be: Start shorting your deal when you've sold out your entire position so you can score even more profit on the way down. There are corollaries to this motto, such as "never get married to a deal," or "never believe in your own deal," or "have a new deal ready to rock & roll as soon as the current one flops."
3. LAW OF THE UPTICKS. Stocks that are running higher are said to be upticking. Despite every effort I have made to emphasize that the best time to buy a stock is when it is low and boasts a sorry-looking flatline stock chart, speculators inevitably chase stocks to new highs. Stock promoters and insiders buy, or obtain a position, at the low and sell during the promotion or "discovery." Sadly, there will always be some type of promotion that will create upticks and speculators will chase that stock to a new level. Greed generates upticks. What stock promoters know that you don't is this law: A herd of speculators will only buy on the UPTICK.
4. AXIOM OF GREED. In an earlier essay, I isolated that greed originated from a "perceived" lack of speculative opportunities. This false perception causes a speculator to get greedy and chase a stock to a new level. If one has a hundred speculative opportunities on their plate, one is less eager to chase any specific stock. The lesser the number of opportunities one reviews, the greedier one becomes to chase a heavily promoted stock. A stock promoter will, thus, make "his stock" appear to look like the only game in town worth playing. Greed essentially emanates from deprivation.
5. RULE OF CONFUSION. The only time one rushes into a quick decision is when they are confused or disoriented or misled. The stock promoter's greatest weapon is CONFUSION: Catch a speculator off guard and sucker him into a stock. The more disoriented or confused the speculator, the greater his chances of being snared. Stock promotions include an overwhelming amount of data, reports, corporate reviews and so forth that are packaged in such a way as to confuse the speculator. If, at any time, you are overwhelmed with out-of-control emotions or data which you don't understand, it is better to stay out of the play.
6. SECRET OF EXCITEMENT. You've heard about the "forbidden fruit" or "unknown pleasures." As long as something remains a mystery, it can create an "excitement." Excitement is a sensation which one commonly associates with pleasure. Therefore, when an exciting proposition is offered, you may readily accept it in order to experience THAT sensation. When someone heaps excitement after excitement, upon you, in either the written or spoken word and/or with graphics (visuals, photographs, charts, drawings, etc.) and especially in a loud or emphatic manner, you become disoriented and confused. One overcomes this "sensation of the unknown or forbidden" through experience, often with a rude and unpleasant awakening. Stock promoters abuse your inexperience, and naiveté, to sell you stock. ALL mining speculations are exciting until the assays come back or a mine goes into development. Then reality sets in.
7. LAW OF WAITING. The longer you wait, the greater your chances for failure. This applies to both holding a stock which is declining and to a stock which is running. The odds are greater than 90% against you... that you will fail in a speculation, if you wait for it to recover or if you chase a stock which has already begun its run. Generally, a stock moves up in less than two weeks, often in two to five days. The waiting period, for a stock to allegedly recover, is the slow, dragged out retreat you later observe in the share price. As believers stop believing, the share price declines, often never recovering. Of course, if one wants to wait forever, then eventually the stock may recover. The longer one waits, during a runup, the smaller one's potential profits and the greater one's exposure to losses. (One important caveat: Occasionally, there are a few good deals--about 20 or 30 annually--when one SHOULD wait for the company to mature. Almost always, they come out of left field and, rarely, does anyone know in advance which company will become tomorrow's success story.)
8. AXIOM OF BELIEVING. The higher your expectations in a stock, the greater your chances of losing money in that speculation. All of the promotion is geared to make you a "believer." Most speculators are betting on a tip or a rumor. They are taking someone else's "word" for the outcome. Absolutely no one should invest or speculate in a stock without understanding the risks as well as the reward. Stock promoters create believers by providing ONLY the reward potential, without also including the risk factors. Believers eventually discover the risks, long after the stock has begun its decline.
9. LAW OF LOSERS. Oddly, those most attracted to speculative markets are failures in other aspects of their lives. They may be wealthy, but consider themselves, in some way, as having "failed." Medical doctors are prime targets of stock promoters, as they are not only affluent may have "settled for less" in their lives or feel they "are owed more" for the work they do. Whoever has failed, in some key aspect of their life, often tries to make up for it by gambling....often speculating in these markets. The loser is always trying to compensate for a failure in another part of his life and continues to heavily lose as a speculator. (Note: I stay in touch with certain losers and use them as a yardstick for my trading -- when they buy, I sell; when they sell, I buy. The loser has a knack for exiting his position, a day or a week before a major runup; or he/she simply always buys at the top of the runup. The downside to communicating with losers is that they are so darned indecisive and fretters; their worrying can and does rub off and creates a confusion for oneself.)
10. LAW OF THE SUCKER. PT Barnum was right: A sucker is born every minute. For every speculator that is wiped out, a fresh one is champing at the bit to start betting. Stock promoters prop up their plays by finding new blood to drain. The greener the speculator, the redder the carpet laid out for him. If there were no new suckers coming into the game, it would all be over.
11. SECRET OF THE AREA PLAY. Virtually all area plays fail. Rarely is there a long-term beneficiary to that area play, other than the initial company which made the discovery. The secret of the area play depends upon #1 (Law of the Pez). Those who profited from the share price runup of the company making the discovery are then offered a "second chance" or a third or a fourth with the rush of new companies into that area. Primarily, these companies are trying to finance other explorations elsewhere, but the fact that they staked some ground or bought some cheap claims doesn't stop them from parlaying that into an artificially inflated market capitalization. Inevitably, 99% of these companies fail to deliver, which is soon reflected in their vaporized share prices. Stock promoters, knowing well their chances of success were always very slim at best, long ago dumped their shares. The last one into the area play tends to have the worst chances of success.
12. THE GURU AXIOM. The least profitable time to follow any guru (stock promoter, newsletter writer, company insider) is immediately following his last successful play. The cliché that "he is only as good as his last play" is a promotional device effectively utilized to attract new money into a new play. If one looks at some of Canada's recent success stories in the mining business, the BEST time to follow the guru is immediately after his or her failure. Those who "had it," failed miserably and later bounced back seem to offer the highest probability of success. Often, there is a rush of money into the guru's "new play," which quickly exits when they discover that "this ain't the same one as the last one." It never is. Of course, every guru is keen on pointing out all of his previously successful plays and forgets about his failures. Self-fulfilling prophesies require substance in order to survive. Catch the "gurus" when they are down and out and heed their advice at that point in their careers. You may increase your chances of success. Hint: Sheer desperation drives them to repeat their success or to completely leave the business.
13. CANADA'S BEST KEPT SECRET. Many Canadian speculators don't pay for their stock. These Canadian speculators bet on stocks, against the equity in their account. We've heard about T-3, etc. That is bull. The truth is often, more like T-12 or T-20 (as in 12 or 20 days to settle instead of the required three days). Brokerage firms have been known to extend, to their best clients, the time they can hold "unpaid stock" for weeks. What is also not very well known is that brokerage firms can, and frequently do, short sell any stock which remains unpaid (they do so to protect themselves). Thus, during an exciting runup, one observes (or hears about) massive shortselling of a stock -- the stock wasn't paid for, so the brokerage firm shorts it. A brokerage firm's credit manager can quite excitedly extend your "credit terms" so that you have "more time to pay for your stock." Essentially, you end up betting against yourself, under these circumstances, because the brokerage firm is shorting your purchase. Later, you end up selling at a loss and the brokerage firm covers at a profit. The house nearly always wins. Your stockbroker gets his commission whether you lose or not.
14. THE CANADIAN LAW OF SHORT SELLING. While it is very expensive and deadly for the unsophisticated speculator to short a Canadian stock, brokerage firms can easily short stocks. They short against their "inventory." Generally, any rush of excitement into a stock is done under a short, speculative time frame (whereupon the speculator doesn't actually pay for his stock). Brokerage firms short sell against the unpaid speculation and drive the stock price down, down, down. As very large Canadian brokerage firms also accept many US stock orders, they short sell virtually every order which arrives. While the US investor pays for his/her stock, the Canadian firm can short sell against it, because rarely is delivery ever taken on that stock. As long as the certificates remain in the brokerage firm, it can be shorted.
15. AXIOM OF MOTION. What emotionally upsets any speculator is a LACK of motion. It is the absence of motion which prevents a speculator from patiently accumulating shares in a flatline stock (the share price remains constant at, or near, the floor of its stock chart). Speculators are eager to make their money work for them. Thus, if a stock doesn't move, they panic. Gradual downward motion rarely creates a panic. Imagine yourself in a well-lit room with a dimmer light. Stock promoters gradually turn down the lights until you finally discover you are sitting in the dark. Conversely, when they want to create the excitement, they abruptly turn on the lights. A stock forever trading at the same price creates an emotional upset, thus the gradual "up and down" motion manufactured by stock promoters and insiders and brokers. "Get it to move" is their motto if they want you to hold your position. UP offers hope and a recovery of your initial investment or (finally!) a profit after having waited so long. DOWN drives fear up your spine and you remain fixated in the stock, like a deer in a car's headlights.
16. SECRET OF PANIC. If you hold a position in a stock and are panicking, you should not be holding that stock position. You probably don't know enough about the company or have mentally spent that money for some other purpose than speculating in that stock. You are also very low on the food chain of information. A stock promoter's investor relations department primarily exists to minimize, reduce or eliminate the panic you feel in obtaining and holding your stock position. Panic is manufactured in approximately the same way excitement is created. The secret to overcoming panic is this: When it all looks like the end of the world, that may be the best time to buy; when it all looks like the world is made of cream cheese, run for the exit doors. Please realize that, generally, if someone has created a panic within you, it is for some ulterior motive -- they are aggressively trying to get you to do the opposite of what you should be doing.
17. LAW OF STOCK OPTIONS. Insiders like to hold free stock, just like anyone. Stock options exist so that insiders and promoters can cause runups, thus selling off their stock and subsequently issuing new stock options. This law reads as follows: The ONLY reason stocks are runup is because of incentive stock options. If stock options didn't exist, we wouldn't see any stock runups. Because most small cap companies are broke, they pay promoters with stock options. Thus, the promoter has a vested interest to get a company's share price above a particular level.
18. AXIOM OF HISTORY. Leopards almost never change their spots. The same guy running a shoddy stock promotion, a few years ago, is going to run a similar disaster again. It behooves every speculator to dig deep and find out who are the characters in this current play. Many times, the dishonest stock promoter runs the play from a background cover using a front man. You will find them, by looking for their associates. Crooks run in the same circles. Occasionally, you can be thrown off by a new name. He has a history. Find out what it is before speculating. No matter the cost, it is a lot cheaper than the losses you may incur in your speculation.
19. LAW OF PAPER. Share certificates are like corpses until a stock promoter gives them life. All paper is intrinsically worthless unless there is someone who wants to pay you, to take the stock off your hands. If there were no promoters in this world, then you would never be able to exit your position.
20. RULE OF THE EQUIPMENT. The speculator who has the most sophisticated quotation equipment, knows how to use this equipment, understands the quotes and what they represent, effectively uses his equipment, and also the fastest phone line to the trader, gets in and out of his paper the fastest.
21. LAW OF THE INSIDER. The speculator who actually knows what the insider is doing, whether it is accumulating or dumping his position, will be the most successful speculator. Everyone else is guessing and will have a greater or lesser degree of failure in his speculation.
(cont'd)
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Re: DIRTY ROTTEN SECRETS By George Chelekis
« Reply #1 on Yesterday at 10:56pm »
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22. THE SPOUSE FACTOR. This could also be a corollary to Murphy's Law for a deal. The wife wants a new house, a new car, etc. And the promoter or insider sells, sells, sells to afford these new toys. Down goes the stock price.
23. AXIOM OF THE BID. A new wave of buying into any stock is a method for an insider, promoter or disgruntled shareholder to exit the position. One should look at "the bid" as the key which unlocks the door and permits one to exit a stock position. Conversely, one may wish to consider "the offer" as the trapdoor which could send a speculator to the bowels of hell.
24. LAW OF THE HOLY ROLLER. Jesus threw the moneylenders out of the temple. Anyone running his play under the guise of Jesus would anger the Almighty and bring ruin to his shareholders. I guess the only reason a promoter might turn to religion is that no one except God will forgive him for what he has done to his fellow man.
25. THE LAW OF WASH TRADING. Insiders, stockbrokers and marketmakers "fabricate" trading volume by trading shares among each other, in order to deceive investors into thinking that the stock is liquid. In the hands of a madman, of which there are many, wash trading becomes an artistic manufacturing of massive trading in the stock. A promoter or insider (market manipulator) can set up three to twenty brokerage accounts and cleverly trade the stock, up and down the charts. As soon as "new blood" comes into the stock, suckered in by a quick runup, down comes the stock as the market manipulator dumps and shorts his own stock. In one recent case, the intricacy of one promoter's trading got so complex that he relied on computerized buy/sell signals so he, himself, didn't lose his shirt.
26. AXIOM OF FREE STOCK. Everyone would love to get free stock. Clever speculators, insiders and stock promoters are generally those that actually DO get free stock. Insiders simply blow out all of their paper into the strength of any liquidity and then re-load with stock options and/or warrants, maintaining their stranglehold on the company while lining their pockets. Stock promoters secretly demand under-the-table share certificates, channeled usually through an "independent" third party into a hidden account. Successful speculators monitor stock charts, buying low and selling most (or half or all) of their position, wait for the stock to retreat, and then re-load. There's no free lunch in this business. All of the above takes work. IF all speculators/investors knew this, there would probably be less market manipulation, or at the very least, market manipulators would have to come up with a new bag of tricks.
27. LAW OF NAME-DROPPING. In an effort to strengthen bidding in a stock, promoters and insiders may claim a BIG name is getting behind the company, i.e. a famous (wealthy) individual is buying the stock (lots of it), a big-time promoter is getting behind the stock, a highly regarded analyst will recommend the stock, or a well-known newsletter writer will bring his subscribers into the stock. It's all just "noise," generated by the promoters so they can prop up their share price and offload their on paper. This law is a variation of the next law.
28. LAW OF THE TAKEOVER. If you hear there is going to be a takeover, someone is offloading their position in that company and anticipates doing so at a higher price. Takeovers are done quietly and carefully so that the conquering company doesn't have to overpay for their shares.
29. AXIOM OF THE LEAK (RUMOR). Any rumor is manufactured by an insider or stock promoter in order to dump their position onto the gullible. Unless one is a prankster.
30. LAW OF THE MEDIA. The Media are the last to know about anything. No one in their right mind trusts or likes the media. The media, in order to appease the regulators, only report bad news and routinely challenge or distrust good news and put a "bad news spin" on good news. Further, the media distrust anyone who makes more money than they do, especially the guy who owns the newspaper.
31. SECRET OF INVESTMENT CONFERENCES. These occur at a hotel or convention center where insiders and promoters exhibit their wares and praise their company's future in order to dump part or all of their stock position onto investors, stockbrokers and money managers who don't know any better.
32. AXIOM OF MOTIVATION. When properly motivated, stock promoters can create "miracles", if only temporary in the share price appreciation. Generally, the greater the payoff, the more liquid the trading volume. Signs to look for include lucrative investor relations contracts and/or plenty of stock promoters all touting the stock to their groups. Nothing replaces the best motivation of all, for the insider, like private placement paper becoming free trading.
33. SECRET TO QUICK MONEY. The quicker you try to make your money, the faster you lose it. Quick money is usually made dishonestly (drug dealing, racketeering, insider trading, etc.) or in a lottery. Nothing replaces burning the midnight oil, long hours of toiling, effective data gathering and data analysis and bright ideas. Many try using short-cuts, which ultimately become
dead ends.
34. THE TRUTH ABOUT MOTHERS. Everything your mother ever told you about life, applies to the stock markets. Everything parents told their daughters about boys also applies to stock promoters.
35. LAW OF ORPHANS. No one is willing to own up or take responsibility for a disastrous crash in a stock or a failed stock promotion. Whenever there is a major success story, everyone takes credit for that company's success. The further you are out of the loop, the harder it will be for you to determine who was responsible for a company's success or failure.
36. FLAVOR-OF-THE-MONTH AXIOM. No individual ever survives as a Flavor of the Month. One can have an enviable string of successes, but eventually the insiders, shortsellers or stock promoters will destroy him. Failing that, the media will ruin him. Failing that, the regulators will handcuff and gag him, or even jail him. No one has ever survived past all of those roadblocks. Each roadblock wears the superstar down to the point, where he can no longer think straight and wonders if "all of this is worth doing anyway." Flavors-of-the month, like ice cream, eventually melt down to a dribble.
37. THE SECRET OF THE NEWSLETTER WRITER. Any newsletter writer providing ongoing reportage on Canadian mining or small cap stocks has a vested interest, whether disclosed or not. Someone is paying the freight and rarely is it the subscriber. (The writer either has a position or is being paid or hopes to become "famous" by covering a specific stock.) Publishing a newsletter is a very expensive proposition, with a high casualty rate. Look at which "popular" newsletters were published during the late 1960s or the early 1980s and see if any are still being published today.
38. AXIOM OF SECRETS. If there really is going to be a big discovery or a big contract or a big deal, the stock promoter or insider will never tell you first, if at all, until the news is made public. He knows it would be illegal to give you inside information so he won't. Whatever he does tell you may have no bearing in reality. The more desperate the promoter, the more outrageous the promises; the more incredible the deal.
39. THE SECRET TO HOWE STREET. All any of these stock promoters want to buy with the profits they make off you is this: Respectability. Instead, they buy drugs and booze. They utterly lack any self-respect, from the best to the worst. They are criminals who have whistled past the graveyard, more times than a cat with nine lives, praying that they can avoid being caught. At the very best, they hope to parlay their worthless share certificates, through a somewhat credible promotion, into bigger real estate and cash. At their worst, they merely wish to cover their annual bar tab. The average person, whom they routinely fleece, has far more self-respect than any of these promoters will ever achieve. None of them will ever become respectable, especially not in their own minds. This absence of self-respect may help explain the rampant alcoholism and drug abuse among stock promoters in Vancouver.
40. THE LAW OF MONEY. History shows us that Money is attracted to the individual who can effectively and articulately communicate. Stock promoters routinely can repeat a good story. The most successful speculators are those whose communications skills match or surpass the best promoters. The best CEO is the most effective communicator.
41. AXIOM OF TECHNICAL ANALYSIS . Technical analysis does not deceive the speculator. A stock promoter's worst enemy is the stock chart. Correctly interpreted stock charts never lie, although many speculators have no clue as to how to read a stock chart. Analysis may also vary from chartist to chartist.
42. THE HYPE FACTOR . Hyperbolic statements can artificially inflate a stock's price, temporarily. Long enough for a shortselling syndicate or a group of professional traders and insiders to reap huge rewards. Often, a combination of a speculator's naiveté and his enthusiasm about a company can lead to "over the top" statements. Eventually, he learns his lesson. Stock promoters favor newsletter writers who are inexperienced in the business, as they can be told what to write and are eager to be offered that opportunity.
43. THE LAW OF SEASONS. When it comes to mining plays, buy in December and sell in May. Buy when the promoters are out of town; sell when they are in full swing.
44. AXIOM OF DRILL RESULTS. Buy when the drill goes down; sell when the shaft comes up. In other words, the heady promotional statements and expectations are issued during the drill campaign and while awaiting assays. That is when a speculator most likely benefits from a stock's runup. Because most drill results are disappointing, the smart speculator is completely out of his position before the assays are announced.
45. THE LAW OF NEWS RELEASES. Buy on mystery, sell on history. Buy on rumor, sell on the news. These are well-worn clichés that rarely disappoint. Occasionally, a company's stock will run strongly after a news release. In the small cap stock sector, most news releases are a promotional device, used by insiders, to generate fantastic trading volume so they can exit a portion of their position.
46. THE SUCCESS FACTOR. Most mining success stories are complete accidents. On the order of a "Jed Clampett" finding oil in the TV series, "The Beverly Hillbillies." With many important discoveries, throughout the history of mining plays, one or many insiders had virtually blown out of their entire position and/or were shorting their own stock, in anticipation the company's drill results would be a disappointment. Part of the stock's runup might also have included covering their shortselling and obtaining a fresh, new position.
47. AXIOM OF NOISE . The more noise you hear during a stock promotion, the harder the stock will fall when the promotion is completed. Stock promoters are only interested in trading volume, for share-dumping purposes, which can only be created with a series of loud bangs in the media world. Generally, by the time you hear about the stock, the runup is over and the distribution phase has already started, followed by a slow or abrupt decline in the share price.
48. THE LAW OF LIARS. They repeat their lies and falsehoods again and again and again. They don't just tell one white lie and feel guilty. They lie in every aspect of their life. One can use this against the liar by doing the exact opposite of what he tells you to do. Liars are suckers for other liars.
49. AXIOM OF TRADING VOLUME. Trading volume is increased solely to distribute a large position from a single shareholder, or a few shareholders, to the masses. All an insider ever wants is trading volume so he has enough liquidity into which to dump his position. This is the only reason stock promoters are hired.
50. THE ULTIMATE RULE. Paper is paper and cash is cash. The only reason you are holding paper instead of cash is you honestly believe your paper will eventually be worth more than the cash. Amateurs buy paper. Professionals convert their paper to cash. Cash is King. Paper is essentially worthless if there are no buyers.
Conclusion...
This essay was not intended, but may serve, as a sociological study of the criminal minds at work within the financial marketplace. Speculators also have to agree to be criminals, to a degree, in that they expect something for nothing. The essence of the criminal is to get something for nothing. While theft, larceny, insurance fraud and burglary are broadly condemned within this society, it appears perfectly "all right" for the speculator to swoop into and out of a stock, for a quick profit. That is pickpocketing, plain and simple, and should be branded as such. Thus, it is no great surprise, to me, that an increasing number of the Internet "gurus" have told me they'd like to launch their own deal, i.e. to become an insider or stock promoter, themselves. It is a quick slide into the loony bin for anyone aggressively speculating in these markets.
The entire problem of the small cap stock market is the illegal transfer of wealth from the naive investor to the sophisticated trader. Institutional fraud runs uncontrolled throughout the fabric of these markets. Bribing stockbrokers appears to be the "only way to do business" in many circles. Bribing fund managers is nearly mandatory if a mining company wants European financing. What amazes me is that October's FBI sting of insiders and stock promoters wasn't even the tip of the tip of the iceberg -- they didn't even scratch the surface, nor did they nab the key figures. For all the hoopla and the celebration of the regulators over the recent successes in "stopping fraud," they all know, too well, that hardly a dent occurred. The actual depth of the amount of stock fraud, outright deception, bribery and dishonesty in the financial markets is far greater than any securities regulatory body is willing to admit. They know about the fraud -- but then, they have "their future" to look out for, as well. There's a job at Merrill Lynch, Charles Schwab, Canaccord or Smith Barney waiting for them. It's OK to "get the little guy," but they know better than to tangle with the powers that be, which run the financial markets from New York to Tokyo, from London to Vancouver, and everywhere in between.
Essentially, the securities regulators hold their esteemed positions, and are backed by their respective state/provincial/federal governments, for no other reason than to ensure that the small investor CONTINUES to get screwed every which way but Sunday. For if all the small investors always made a profit in their investments or speculations, the poor professionals wouldn't be able to steal as handsomely as they do now. This may also explain why market makers continue to FREELY rape small companies, while the regulators focus their attention on the stock promoters and insiders.
It is a dirty business, one which is filled with rotten tricks. The intricacies of the scams, which are run on the innocent investor, is the subject for a future essay.
Copyright 1996 by George Chelekis. All rights reserved.
End
The Times June 29, 2006
Dismissed SEC official fears crisis in markets
By James Doran
GARRY AGUIRRE, the former SEC official who turned whistle-blower when he was fired for mishandling an investigation into allegations of insider trading, believes that hedge funds could cause a market crisis like the crash of 1929.
Mr Aguirre made a series of stinging attacks on the hedge fund industry and the US Securities and Exchange Commission during a hearing before the Senate Judiciary Committee in Washington yesterday.
Mr Aguirre appeared before the committee to reiterate his claims that the SEC, the FBI, the US Justice Department and several key Wall Street figures colluded to stop his inquiry into allegations of insider trading at an influential hedge fund.
However, he also used the occasion to issue a warning to investors. “I believe the nation’s capital markets face a growing risk from unregulated pools of money — now called hedge funds — just as they did in the 1920s from unregulated pools of money — then called syndicates, trusts or pools,” he said.
“Those unregulated pools were instrumental in delivering the 1929 crash.”
Dear DTCC,
Press Release Source: Overstock.com
Overstock Celebrates New Spirit of Glasnost at DTCC
Friday June 30, 3:50 pm ET
SALT LAKE CITY, June 30 /PRNewswire-FirstCall/ -- Overstock.com® (Nasdaq: OSTK - News; www.overstock.com ) CEO Patrick M. Byrne issued the following statement today in response to a Depository Trust & Clearing Corporation press release about its "failure to deliver" data.
ADVERTISEMENT
Dear DTCC,
On Wednesday you issued a clarification regarding a statistic about which you feel there has been, "a conscious attempt to mislead the investing public and undermine the confidence in the workings of our capital markets." For the last year a handful of lawyers and economists (who think that your firm is "engaged in a conscious attempt to mislead the investing public and inflate the confidence in the workings of our capital market"), have repeatedly asked for clarification concerning the $6 billion "fails" number which you have yourself publicized (Former Undersecretary of Commerce Dr. Robert Shapiro asked about it point blank in his public letters to "Euromoney" magazine and to Jill Considine, CEO of the DTCC).
If it is true that your $6 billion figure counts the value of the fail separately on both sides, it's unique in financial reporting: all other trades as reported by the DTCC and the stock exchanges -- daily trading volume, or the value of all daily, monthly or annual trades -- count values or costs once, not twice. Moreover, if that is the system you use to come up with the $6 billion figure, you have taken a long time to clarify the record (you might mention it to the SEC, which uses "fails" and "fails to deliver" synonymously in their Freedom of Information Act responses). So I suspect I speak for all of us when I say that I am touched by the new spirit of glasnost that animates your communications.
While I applaud this new spirit of transparency from DTCC, I wish to take advantage of it by requesting additional clarifications that will go far to allay any remaining skepticism of the investing public.
1. I want to know the difference between the number of shares a company
has issued and the total number of long positions of everyone in the
world in that stock. I believe the difference is the sum of the short
position, failed to deliver short sales, failed to deliver long sales,
failed to receive long and short sales, open positions, desked trades,
and ex-clearing balances. My questions here are: Did I miss any nook
or cranny? Do market-making and ex-clearing balances always fall into
one of these categories? Do failed to receive long and short sales
double-count precisely the failed to deliver ones precisely (and if
so, should not be counted)?
2. Ex-clearing seems like a fascinating and unfairly maligned practice.
Together we can clear up the suspicions that linger concerning this no
doubt honorable activity. Your General Counsel Larry Thompson gave a
kind of self-interview
( www.dtcc.com/Publications/dtcc/mar05/naked_short_selling.html )
where he asserted that 18% of fails are addressed by the DTCC's Stock
Borrow Program (SBP). I think that means that 82% aren't, but feel
free to correct my math on that. In any case, presumably this 82%
resides in ex-clearing. This would suggest that the total number of
fails in a stock should equal (100/18) = 5.55 X the number that reside
within the DTCC. Many DTCC skeptics believe that these items and
practices expand exponentially the number of shares in a company's
float, though the shares represented are "manufactured" by the
brokerage community and were never issued by the company: market
participants in the Caribbean privately suggest, however, that the
real ratio is 10-20 to 1. Which is correct, 5.55 or 20? Are you aware
of the practice of "bed & breakfasting shares" and could you describe
its impact on ex-clearing balances? Most respectfully, are you aware
of all ex-clearing balances?
3. I'd like to work through one example in an effort to dispel the
aspersions cast on your fine firm. A recent SEC Freedom of Information
Act response
(thesanitycheck.com/Blogs/DavePatchsBlog/tabid/66/EntryID/344/Default.aspx)
shows that in 2005, during a period when Regulation SHO was in full
operation, "fails" (as the SEC calls them) in OSTK were 36,681 shares
at the start of the January, then rose steadily to end 2005 at
2,062,328 shares (and actually topped 2.3 million once in the fourth
quarter of 2005). If the number of OSTK's fails track Mr. Thompson's
statistic, Mr. Thompson's math suggests that the true fails thus
reached 2.3 million X 5.55 equals approximately 13 million fails. If
I believe the Caribbean ratio, then fails reached 2.3 million X 20 =
46 million fails. Of the roughly 20 million shares issued and
outstanding of OSTK, 12 million are closely held (mostly in paper),
and only 8 million see their settlement entrusted to the DTCC. What I
think this means is that the total fails position in OSTK as a
percentage of the float reached either 25% (if I believe the SEC) or
163% (if I believe DTCC General Counsel Larry Thompson) or 675% (if I
believe some Caribbean wise-guys). Since I would never want to be one
of those making, "a conscious attempt to mislead the investing public
and undermine the confidence in the workings of our capital markets,"
I wonder if you might (in the spirit of glasnost) indulge me an
additional "clarification" on this detail.
With regret, I must inform you that some cynics continue to doubt you. For example, you note that you settle $266.5 billion of trades per trading day but only $3 billion, or 1.1%, remain unsettled at the end of each day, and 15% of these are bonds. Skeptics, however, indicate that if one consistently leaves bonds out of the count, then 85% X $3 billion equals approximately $2.5 billion equities fail are unsettled at the end of every day, and since you only settle $82 billion of equity trades per day it means that 3% of trades remain failed. In addition, as your website boasts that 96% of trades are settled through your Continuous Net Settlement system, it would appear that the accumulated fails are somewhere between 1/3 and 1/2 of a day's trading. These skeptics note also that these numbers count the current value of the failed stocks, not the value of stocks at the time the failures occurred, nor the value of stocks that have been delisted or represent ownership in companies that have gone bankrupt. Finally, they believe that you have glossed over the issue of the huge numbers of protracted fails documented in the Boni report (which indicates that fails persist for an average of 56 days) and attested to indirectly at least by the Regulation SHO Threshold Securities lists and the SEC FOIA responses on total numbers of outstanding fails. Such cynics argue that real disclosure would include percent of value, percent of trades and percent of shares alongside dollar value, number of trades and number of shares.
But I, for one, am convinced that you will continue your efforts to keep America's capital markets as transparent as they are today.
Sincerely,
Patrick M. Byrne
CEO, Overstock.com
Overstock.com, Inc. is an online "closeout" retailer offering discount, brand-name merchandise for sale over the Internet. The company offers its customers an opportunity to shop for bargains conveniently, while offering its suppliers an alternative inventory liquidation distribution channel. Overstock.com, headquartered in Salt Lake City, is a publicly traded company listed on the NASDAQ National Market System and can be found online at http://www.overstock.com.
Overstock.com is a registered trademark of Overstock.com, Inc.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030520/LATU020LOGO-a )
--------------------------------------------------------------------------------
Source: Overstock.com
bigmellons,
My balls are the size of your bigmellons!!!!
GO PYCT!!! Thanks GO FOR IT
DTCC claims FTDs trivial. Bobo says, why, sure they are...
Location: Blogs Bob O'Brien's Sanity Check Blog
Posted by: bobo
6/28/2006 10:13 AM
The DTCC is now saying that the FTD problem isn't nearly as big as we all thought it was up until this late morning. You can read a copy of their release here.
http://finance.messages.yahoo.com/bbs?action=m&board=8729314&tid=nfi&sid=8729314&mid...
So it isn't $6 billion per day, it's $3 billion or so.
Huh.
Of course, that doesn't include the ex-clearing fails, which are routinely moved out of the DTCC's grasp, and thus their count. I've been told that number is 10 times as large as the "in-system" fails.
But here's the irony. You have the DTCC scrambling to assure investors that the FTD issues is small, and simultaneously, you have the SEC saying that it is large enough to justify grandfathering all past fails prior to 2005, so as not to destabilize the markets with volatility.
So which is it? A trivial problem, or one so large it could destabilize the markets?
Of course, neither firm will actually tell us how large that problem is in dollars or shares - far better to keep it secret. So we have to use our best guesses...
We can then turn to the FOIA data we have, and watch OSTK climb from no fails, up to 12.5+% of all outstanding shares failed, all in a matter of months, and all since being on the SHO list. We can view NFI's massive FTDs, and look at days where they accounted for 40%+ of the total trading volume for the stock.
Now, how much of that is likely due to the dog eating your certificates?
Let's assume that THIS TIME the DTCC isn't misstating the facts, as they did with Cam Funkhauser's comments, or the tall tale about not being invited to the NASAA conference. Let's assume they are telling the truth.
If that rolling $3 billion or so represents the current mark to market value of the fails, what would the actual value be if they were bought in?
Sky's the limit.
I wonder if issues like Delta are simply purged from the list when they go BK or are de-listed. That would be a convenient way to keep the number small.
And there is the ex-clearing issue, wherein the DTCC claims to be powerless, because of their own rules they passed, to police the settlement of ex-clearing trades, uh, well, you know, just because. I mean, who could expect the SRO chartered with policing its members/owners to actually do so, or that is chartered with upholding securities laws requiring prompt settlement to actually be able to do so? That's just too much to dream for!
No, I think moving the FTDs into ex-clearing, proclaiming that it is on the honor system, and then refusing to divulge how large that is speaks to a much better system.
I'm quite sure that the brokers who own the DTCC agree.
-----------
In other news, Gradient is claiming that the testimony from Demetrios delivered to the Senate today is somehow tainted.
Read all about it here.
http://users1.wsj.com/lmda/do/checkLogin?mg=wsj-users1&url=http%3A%2F%2Fonline.wsj.com%2Farticle... 128.html
Why tainted? Because apparently it had been handled by someone at OSTK.
Wow. That is coming from the same lady who claimed that journalists didn't have access to the Gradient reports real time, and then had to change her, ahem, story, when it Herb Greenberg's real-time access was exposed. So assign as much weight as you like to that perspective.
Want my guess? One of the attorneys who has acted as a contact and adviser to him was asked to look over the testimony to ensure that it wouldn't get him sued - a liability examination. That attorney now works at OSTK.
Mystery solved.
But no, Gradient claims that it is all a construct of an elaborate conspiracy by OSTK, and Biovail, and....well....you know, all the rest of those persecuting these proud freedom fighters.
That's an awful lot of conspiracy theory chatter from the camp that regularly mocks me as a conspiracy theorist, wouldn't ya say?
Most things have simple explanations. Who are you going to believe - established professional misstating raconteur spokeswoman for Gradient, or the Easter Bunny?
This one is an easy call. Although it is funny to me how desperate everyone is to denigrate the testimony in whatever way possible.
Aguirre? CNBC says it isn't believable because he didn't present any evidence - other than the 46 page evidence he presented to the Senate Banking Committee, that is. Oh, and he did mention that the SEC threatened him with criminal and civil charges if he did present any.
Noticing a pattern here?
Copyright ©2006 Bob O'Brien
June 28, 2006 02:47 PM US Eastern Timezone
DTCC Clarification on Fails to Deliver
NEW YORK--(BUSINESS WIRE)--June 28, 2006--The Depository Trust & Clearing Corporation (DTCC) today issued a clarification of a statistic it reports each year in its annual report. The clarification is intended to provide a more accurate description of a statistic on failed transactions - including "Fails To Deliver" (FTD) - that certain third parties have persistently misinterpreted or misrepresented, seeking to buttress their contention that the levels of FTDs is evidence of abusive short selling and "naked short selling." These parties cite DTCC's reported statistic as the amount of FTDs each day. Their characterizations are grossly inaccurate and paint a distorted picture of the reality of the marketplace.
National Securities Clearing Corporation (NSCC), a subsidiary of DTCC, acts as a central counterparty to virtually all broker-to-broker trades in the U.S. As such, the numbers NSCC reports relating to "failed transactions" reflect both buy and sell sides of a trade. These numbers include both fails to deliver and their offsetting fails to receive, so that the number thus doubles the amount involved (i.e., the same transaction is counted twice, once on the "deliver" side and once on the "receive" side).
In DTCC's most recent annual report indicated that as of December 31, 2005, NSCC had fails outstanding worth approximately $6 billion. This value is persistently described by third parties as the value of FTDs as of that date. Since it is actually the value of all fails - i.e., both fails to deliver and fails to receive - effectively, the $6 billion cited by third parties actually represents $3 billion in fails to deliver, or about 1.1% of the $266.5 billion in trades processed on the average day by NSCC in 2005. Moreover, the $3 billion figure also represents all fails to deliver at NSCC, including fails in fixed income trades (corporate and municipal bonds). While the number of fails and percentage of fails in fixed income trades changes each trading day, on December 31, 2005, fixed income trade fails were equal to approximately 15% of all fails. Importantly, DTCC notes that this FTD total reported is not just for equities on the "threshold list" of companies, but rather reflects fails on all equities and corporate and municipal bonds.
For over one year, DTCC's Web site has reported that the $6 billion as "fails to deliver and receive" thus enabling people interested in the topic to understand that the figure reflects both halves of a transaction. (See http://www.dtcc.com/Publications/dtcc/mar05/naked_short_selling.html.) Nonetheless, third parties persist in applying the number to fails to deliver only. The DTCC Web site has also made clear that the figure is not a daily amount of fails, but a combined figure that includes both new fails on the reporting day as well as aged fails.
While DTCC does not know the reasons for a fail to deliver (this is only known by the broker-dealer and the marketplace), as the SEC has pointed out, "There are many reasons why NSCC members do not or cannot deliver securities to NSCC on the settlement date. Many times the member will experience a problem that is either unanticipated or is out of its control, such as (1) delays in customer delivery of shares to the broker-dealer; (2) an inability to borrow shares in time for settlement; (3) delays in obtaining transfer of title; (4) an inability to obtain transfer of title; and (5) deliberate failure to produce stock at settlement which may result in a broker-dealer not receiving shares it had purchased to fulfill its deliver obligations."
With information on the actual FTD situation readily available, DTCC believes the failure to use the proper number in any meaningful discussions of naked short selling reflects a conscious attempt to mislead the investing public and undermine the confidence in the workings of our capital markets.
Matt, I attacked (janice shell). I am wrong. I did (copy and paste) this from another board and have know idea if this was true. I am wrong! I will express my regret! Please let me out of jail soon. Thanks GO FOR IT
BUDDIE, I got my cmkx in june of 2004. Two years of reading everything about cmkx. I have everything in certs. And I believe that everything cmkx has done is to confuse the enemy, so to we fall victim because if we know the enemy knows! This is something to think about, why if cmkx is no longer trading is there so many bashers on the cmkx boards like on the ihub? Daytradders that bash and flip bash to make some money, but cmkx can not be daytradded. Also why are these bashers paying for a (Subscription) on the ihub just to bash? I think there in very deep! Thanks GO FOR IT
bigmellons, your right about the Paychest Inc (PYCT) Board, the bashers are in very deep on this stock in so many ways. They are working so hard to kill this before it can get off the ground. We are out numbered by the bashers, they control the board, and (MAYBE) they control Investors Hub? I know to (COMPROMISE SOMEONES PERSONAL IDENTITY) is very serious! Just look at the (Privacy Policy) here at the Investors Hub, http://www.investorshub.com/boards/complex_terms.asp#privacy
Be aware that the identifying information specific to your use of Investors Hub, including your IP address, name, and email address will be delivered when requested by a legal subpoena. If the subpoena is for a civil matter, you will be notified immediately by email and/or a message sent to your iHub account so that you may seek to prevent our delivery of this information or quash the subpoena. Thanks GO FOR IT
bigmellons, WOW!!!Look at our Paychest Inc (PYCT) Board. Its going down in a fire blaze with no fire fighters to help put out the ccmbustible post!!!
bigmellons, GOT CMKX ?
BUDDIE, we need to stick together! It's been discussed at length that the 600 billion O/S increase was/was not dumped on to the market. I'm in the camp that those shares never hit the open market,(By: lowriderbill)http://cmkxunitedforum.proboards70.com/index.cgi?board=general&action=display&thread=1148775...
and by putting this into the (Federal court approval)this would be (ASTONISHING) thats my belief (STING)!!!!!!!!!
To all CMKXers in the Jailhouse....I SALUTE YOU!!!!!!!!
June 20, 2006 -- The New York Stock Exchange's regulatory unit says it will soon take on short-sellers, a senior official said at a conference yesterday.
Oversight chief Susan Merrill kicked off the NYSE's annual regulatory conference by making clear that her group has a number of crooked short-sellers in its sights.
"This is an area where we have seen problems, and you can expect enforcement actions," said Merrill.
She indicated that future actions were likely to begin with short-sales related to secondary offerings.
While no details were provided about specific cases being watched by the NYSE market-surveillance and regulation units, Robert Marchman, the chief of the Big Board's market-surveillance unit, told the crowd that short-sellers might have artificially depressed prices prior to the issuance of some secondary offerings.
Marchman added that the NYSE's market surveillance had been in contact with the SEC on the topic of improper short-sales.
He said that his group was going to focus on brokers trading on behalf of hedge funds.
Traders may bet on a decline in the price of a stock by selling borrowed shares with the aim of buying them back at a lower price. Securities law bars traders from covering such "short sales" with shares from secondary offerings.
Short-selling in front of secondary stock sales has long been a common tactic of traders at many firms and hedge funds, who count on making a quick profit as a stock's price often temporarily dips when new supply hits the market.
The probe comes as the pace of secondary offerings has accelerated from 2005. Companies have raised $49.7 billion in 237 sales so far this year, according to Bloomberg data. That's the fastest start since 2004, when $51.5 billion was raised in 285 secondary offerings over the same period.
A secondary offering involves the underwritten sale of shares in a company that has already gone public. The stock may be sold by the company itself or its current investors.
June 20, 2006 -- The New York Stock Exchange's regulatory unit says it will soon take on short-sellers, a senior official said at a conference yesterday.
Oversight chief Susan Merrill kicked off the NYSE's annual regulatory conference by making clear that her group has a number of crooked short-sellers in its sights.
"This is an area where we have seen problems, and you can expect enforcement actions," said Merrill.
She indicated that future actions were likely to begin with short-sales related to secondary offerings.
While no details were provided about specific cases being watched by the NYSE market-surveillance and regulation units, Robert Marchman, the chief of the Big Board's market-surveillance unit, told the crowd that short-sellers might have artificially depressed prices prior to the issuance of some secondary offerings.
Marchman added that the NYSE's market surveillance had been in contact with the SEC on the topic of improper short-sales.
He said that his group was going to focus on brokers trading on behalf of hedge funds.
Traders may bet on a decline in the price of a stock by selling borrowed shares with the aim of buying them back at a lower price. Securities law bars traders from covering such "short sales" with shares from secondary offerings.
Short-selling in front of secondary stock sales has long been a common tactic of traders at many firms and hedge funds, who count on making a quick profit as a stock's price often temporarily dips when new supply hits the market.
The probe comes as the pace of secondary offerings has accelerated from 2005. Companies have raised $49.7 billion in 237 sales so far this year, according to Bloomberg data. That's the fastest start since 2004, when $51.5 billion was raised in 285 secondary offerings over the same period.
A secondary offering involves the underwritten sale of shares in a company that has already gone public. The stock may be sold by the company itself or its current investors.
It's people at the grass roots level like the people here, other boards etc that are applying public pressure. The email campaigns...the letters.. the calls... over and over again! We cannot begin to thank you all enough. That folks...is what is changing this. We have the attention of a big section of the media now...and some pretty influential people on the Hill. If they do nothing but listen to us....we will have taken a HUGE leap.
We are not done yet... but we ARE winning this battle
From what I was told...there is an 8 day delay in order for the media to come fully onboard. I look at this as a huge positive for the reform movement.
The cry-babies can cry all they want... the media wants in on thiS BIG TIME... this is bigger than Enron, Wcom and a few others all put together... they are going to whine a lot...but it isn't going to stop the MacK Truck headed their way IMO
States are a comin......... Ralph's a comin!!
"POSTPONED--Examining Short Selling Activities of Hedge Funds and Independent Analysts "
Senate Judiciary Committee
Full Committee
--------------------------------------------------------------------------------
DATE: June 20, 2006
TIME: 02:00 PM
ROOM: SD-226
OFFICIAL HEARING NOTICE / WITNESS LIST:
June 16, 2006
NOTICE OF FULL COMMITTEE HEARING POSTPONEMENT
The hearing on "Examining Short Selling Activities of Hedge Funds and Independent Analysts" scheduled by the Senate Committee on the Judiciary for Tuesday, June 20, 2006 at 2:00 p.m. in the Dirksen Senate Office Building Room 226 has been postponed.
By order of the Chairman
TESTIMONY
MEMBER STATEMENTS
http://judiciary.senate.gov/hearing.cfm?id=1953
UPDATE ON VISITOR DATA
Please Note*** The spider monitored IHUB and Raging Bull for only 11 days in the past month. AOL users are pre-filtered out of this database
AOL users are warned that their activity on the Raging Bull site is currently being captured and mirrored (logged) to a web server located in Australia - just coincidentally, the Homeland Security data collection center is located in Australia.... draw your own conclusions.
FIRST - Some Interesting Visitors
3M COM
ALCONBURY ROYAL AIR FORCE BASE
AMCORE BANK
ATLANTA JOURNAL & CONSTITUTION
BANK OF AMERICA
CALIFORNIA POLYTECHNIC STATE UNIVERSITY
CAMARILLO CA - DAVID PEDLEY/KOREM OF THE DOM
CAPITAL AREA DISTRICT LIBRARY
CEDARVILLE COLLEGE
CEO OF IPMG
CHICAGO FAUCETS
COCA COLA BOTTLING COMPANY OF NEW YORK
DELOITTE & TOUCHE
EXELON-CORPORATION
FINANCE CANADA AND TREASURY BOARD SECRETARIAT
FLORIDA DEPARTMENT OF BANKING AND FINANCE
GATE5-SANDIEGO.NMCI.NAVY.MIL
GLOBAL CROSSING
GOVERNMENT OF THE PROVINCE OF ONTARIO
HQ, 5TH SIGNAL COMMAND US ARMY
HUGHS ELECTRONICS
MARY GREELEY MEDICAL CENTER
MCDONALD'S BATON ROUGE - (the rumors are true!!! eeeeek!)
MICROSOFT
NATIONAL INSTRUMENTS CORPORATION
NATIONAL INSTRUMENTS CORPORATION
NYS OFFICE OF THE ATTORNEY GENERAL
PERDUE UNIVERSITY
ROCHESTER CITY SCHOOLS
ROCHESTER GAS AND ELECTRIC CORPORATION
SAN DIEGO NAVY CADET TRAINING CENTER
SASKATCHEWAN EDUCATION TRAINING AND EMPLOYMENT
SEC - SECURITIES AND EXCHANGE COMMISSION
SIERRA TEXTILE
SITA-SOCIETE INTERNATIONALE DE TELECOMMUNICATIONS AERONAUTIQUES
SUFFOLK UNIVERSITY
SULLIVAN & CROMWELL
UAL LOYALTY SERVICES
UNIV OF NC
UNIVERSITY OF CALIFORNIA LOS ANGELES
UNIVERSITY OF DELAWARE
UNIVERSITY OF HAWAII
UNIVERSITY OF WISCONSIN - MILWAUKEE
US DOI BUREAU OF LAND MANAGEMENT
US MILITARY OUT OF QUANTICO VA
USDA OFFICE OF OPERATIONS
VAN NESS FELDMAN LAW FIRM
WESTBEND SAVINGS.COM
WORLD AIRWAYS
Where our visitors hail from - with counts
Numbers shown in brackets [ ] indicate the number of different visitors (people)
-------------------------------------------------------
ALBERTA
. . . [3] - EDMONTON
. . . [1] - EDMONTON
ARGENTINA
. . . [2] - BUENOS AIRES
AUSTRALIA
. . . [2] - NORTH RYDE
AUSTRIA
. . . [2] - VIENNA WIEN
. . . [1] - VIENNA WIEN
BELGIUM
. . . [3] - BRUSSELS??
. . . [1] - LOKEREN OOST-VLAANDEREN
BRITISH COLUMBIA
. . . [2] - KELOWNA
. . . [2] - VANCOUVER
. . . [9] - VERNON
. . . [1] - VICTORIA
CANADA
. . . [2] - DARTMOUTH NOVA SCOTIA
. . . [1] - OTTAWA
CHILE
. . . [2] - SANTIAGO
CHINA
. . . NO RECORD
COLUMBIA
. . . NO RECORD
EGYPT
. . . [2] - CAIRO AL QAHIRAH
ENGLAND
. . . [2] - LONDON
FRANCE
. . . [2] - NEUILLY
GERMANY
. . . [2] - HAMBURG
. . . [2] - MARL NORDRHEIN-WESTFALEN
. . . [2] - ROTTENBURG BADEN-WURTTEMBERG
. . . [2] - STUTTGART BADEN-WURTTEMBERG
. . . [2] - TRIER RHEINLAND-PFALZ
GUAM
. . . [1] - TAMUNING
HAWAII
. . . [1] - OAHU
INDIA
. . . NO RECORD
IRAN
. . . NO RECORD
IRELAND
. . . NO RECORD
ISRAEL
. . . [1] - PETACH TIKVA
JAPAN
. . . [1] - HIROSHIMA
KANSAS
. . . [1] - LANSING
KOREA (SOUTH)
. . . [1] - SEOUL KYONGGI-DO
KOREA S
. . . [1] - KOREA
MALAYSIA
. . . [2] - KUALA LUMPUR WILAYAH PERSEKUTUAN
NETHERLANDS
. . . [2] - EINDHOVEN NOORD-BRABANT
. . . [1] - ROTTERDAM
NEW BRUNSWICK
. . . [1] - ST. JOHN
NEW ZEALAND
. . . NO RECORD
NEWFOUNDLAND
. . . [1] - ST. JOHN'S
NORWAY
. . . [1] - OSLO
NOVA SCOTIA
. . . [1] - HALIFAX
ONTARIO
. . . [2] - BRAMPTON
. . . [2] - HAMILTON
. . . [2] - KANATA
. . . [2] - OAKVILLE
. . . [2] - OTTAWA
. . . [2] - THUNDER BAY
. . . [3] - TORONTO
. . . [17] - TORONTO
PANAMA
. . . NO RECORD
PHILIPPINES
. . . [2] - MANILA
PHILLIPINES
. . . [2] - ILOILO CITY
. . . [2] - QUEZON CITY
POLAND
. . . NO RECORD
PUERTO RICO
. . . [1] - LUQUILLO
QUBEC
. . . [1] - MONTREAL
QUEBEC
. . . [2] - MONTREAL
. . . [8] - MONTREAL
SASKATCHEWAN
. . . [2] - REGINA
SAUDI ARABIA
. . . [1] - UNITED ARAB EMIRATES
SPAIN
. . . [1] - MADRID
SWEDEN
. . . NO RECORD
SWITZERLAND
. . . NO RECORD
TURKEY
. . . NO RECORD
UNITED KINGDOM
. . . [2] - LINCOLN
. . . [3] - OXFORD
. . . [2] - SHREWSBURY
VENEZUELA
. . . NO RECORD
ALASKA
. . . [1] - ANCHORAGE
ALABAMA
. . . [2] - FAIRHOPE
. . . [1] - PRATTVILLE
ARKANSAS
. . . [2] - FT. SMITH
. . . [2] - SPRINGDALE
ARIZONA
. . . [2] - COTTONWOOD
. . . [2] - MESA
. . . [5] - SCOTTSDALE
. . . [1] - TEMPE
CALIFORNIA
. . . [2] - BEVERLY HILLS
. . . [2] - CAMARILLO
. . . [2] - CONCORD
. . . [2] - GRANADA HILLS
. . . [2] - HOMELAND
. . . [2] - LA CRESCENTA
. . . [2] - LAGUNA NIGUEL
. . . [2] - LOS ANGELES
. . . [15] - MARIETTA
. . . [4] - NAPA
. . . [2] - OAKLAND
. . . [3] - PLEASANT HILL
. . . [2] - RANCHO PALOS VERDES
. . . [2] - REDONDO BEACH
. . . [2] - SALINAS
. . . [2] - SAN DIEGO
. . . [11] - SAN FRANCISCO
. . . [10] - SAN FRANCISCO AREA
. . . [5] - SAN LUIS OBISPO
. . . [3] - SAN MATEO
. . . [5] - SANTA BARBARA
. . . [2] - THOUSAND OAKS
. . . [2] - VENTURA
. . . [2] - WEST HOLLYWOOD
. . . [2] - YORBA LINDA
COLORADO
. . . [2] - AURORA
. . . [3] - COLORADO SPRINGS
. . . [8] - DURANGO
. . . [2] - JOHNSTOWN
CONECTICUT
. . . [2] - SHELTON
. . . [1] - SHELTON
DISTRICT OF COLUMBIA
. . . [10] - WASHINGTON
DELAWARE
. . . [3] - WILMINGTON
. . . [1] - WILMINGTON
FLORIDA
. . . [3] - BRADENTON
. . . [2] - DAYTONA BEACH
. . . [3] - ENGLEWOOD
. . . [5] - FT. LAUDERDALE ??
. . . [2] - LAKE CITY
. . . [2] - LAKELAND
. . . [10] - MIAMI BEACH
. . . [2] - PALM BAY
. . . [3] - POMPANO BEACH
. . . [2] - TALLAHASSEE
. . . [5] - WINTER PARK
. . . [2] - WINTER PARK
GEORGIA
. . . [2] - ATLANTA
. . . [10] - DALLAS
. . . [2] - SAVANNAH
HAWAII
. . . UNKNOWN . . . [2] - HONOLULU
IOWA
. . . [2] - CEDAR RAPIDS
. . . [2] - RYAN
. . . [1] - RYAN
IDAHO
. . . [2] - EAGLE
ILLINOIS
. . . [2] - BLOOMINGTON
. . . [8] - CHICAGO ??
. . . [5] - DES PLAINES
. . . [2] - NAPERVILLE
. . . [2] - PEORIA
. . . [1] - ROCKFORD
INDIANA
. . . [2] - CHESTERTON
. . . [2] - LAFAYETTE
. . . [2] - MICHIGAN CITY
. . . [2] - VALPARAISO
. . . [1] - WEST LAFAYETTE
KANSAS
. . . [2] - LIBERAL
. . . [2] - WICHITA
. . . [1] - WICHITA
KENTUCKY
. . . [4] - OWENSBORO
LOUISIANA
. . . [4] - METAIRIE
. . . [2] - MORGAN CITY
MASSACHUSETS
. . . [2] - DEDHAM
. . . [2] - FRAMINGHAM
. . . [2] - LAWRENCE
. . . [2] - WILBRAHAM
. . . [1] - WOBURN
MARYLAND
. . . [3] - BEL AIR
. . . [2] - CAPITOL HEIGHTS
. . . [3] - COLUMBIA
. . . [2] - GERMANTOWN
. . . [2] - HAGERSTOWN
. . . [2] - LUSBY
MAINE
. . . [2] - BIDDEFORD
. . . [2] - PORTLAND
. . . [1] - YORK
MICHIGAN
. . . [2] - DETROIT
. . . [3] - FARMINGTON
. . . [2] - LANSING
. . . [2] - STOCKBRIDGE
. . . [2] - WARREN
. . . [1] - WESTLAND
MINNESOTA
. . . UNKNOWN . . . [2] - ST. PAUL
. . . [1] - ST. PAUL
MISSOURI
. . . [2] - CHILLICOTHE
. . . [2] - KANSAS CITY
. . . [2] - ST. CHARLES
. . . [2] - WARRENSBURG
MISSISSIPPI
. . . NO RECORD
MONTANA
. . . [2] - GLASGOW
. . . [1] - GREAT FALLS
. . . [1] - KEARNEY
NORTH CAROLINA
. . . [3] - ASHVILLE
. . . [2] - CARY
. . . [2] - FAYETTEVILLE
. . . [2] - GREENVILLE
. . . [2] - LEXINGTON
. . . [2] - WILMINGTON
. . . [1] - WINSTON SALEM
NORTH DAKOTA
. . . NO RECORD
. . . [2] - OMAHA
NEW HAMPSHIRE
. . . [2] - KEENE
. . . [1] - NASHUA
NEW JERSEY
. . . [2] - BRIDGEWATER
. . . [2] - LIVINGSTON
. . . [4] - MONMOUTH JUNCTION
. . . [4] - NEW BRUNSWICK
. . . [3] - NEWTON
. . . [2] - PALISADES PARK
. . . [2] - PISCATAWAY
. . . [1] - SOMERSET
NEW MEXICO
. . . NO RECORD
NEVADA
. . . [3] - RENO
NEW YORK
. . . [2] - BEDFORD
. . . [6] - BUFFALO
. . . [2] - HUNTINGTON STATION
. . . [2] - ITHACA
. . . [3] - NEW ROCHELLE
. . . [7] - PAVILION
. . . [2] - ROCHESTER
. . . [6] - SCHENECTADY
. . . [2] - STATEN ISLAND
. . . [2] - UNIONDALE
. . . [2] - YONKERS
. . . [1] - YONKERS
OHIO
. . . UNKNOWN . . . [2] - BOWLING GREEN
. . . [2] - CEDARVILLE
. . . [3] - DAYTON
. . . [3] - MANSFIELD
. . . [2] - MEDINA
. . . [2] - MINFORD
. . . [4] - REYNOLDSBURG
. . . [2] - WILLIAMSBURG
. . . [1] - XENIA
OKLAHOMA
. . . [2] - NORMAN
. . . [2] - OKLAHOMA CITY
. . . [2] - TULSA
. . . [1] - TULSA
OREGON
. . . [2] - ROSEBURG
PENNSYLVANIA
. . . UNKNOWN . . . [2] - ALTOONA
. . . [2] - ELKINS PARK
. . . [2] - KING OF PRUSSIA
. . . [3] - PHILADELPHIA
. . . [7] - PITTSBURGH
. . . [4] - SCRANTON
. . . [1] - SUMMERDALE
PUERTO RICO
. . . NO RECORD
RHODE ISLAND
. . . [2] - PROVIDENCE
SOUTH CAROLINA
. . . [3] - SUMMERVILLE
SOUTH DAKOTA
. . . UNKNOWN . . . UNKNOWN . . . [3] - HERREID
TENNESSEE
. . . [2] - CROSSVILLE
. . . [2] - HERMITAGE
. . . [2] - KNOXVILLE
. . . [5] - NASHVILLE
TEXAS
. . . [2] - AMARILLO
. . . [2] - AUSTIN
. . . [2] - CONROE
. . . [4] - HOUSTON
. . . [7] - KATY
. . . [2] - PEARLAND
. . . [2] - SAN ANGELO
. . . [4] - WICHITA FALLS
. . . [1] - WICHITA FALLS
UTAH
. . . [1] - SALT LAKE CITY
VIRGINIA
. . . [2] - ALEXANDRIA
. . . [2] - CHARLOTTESVILLE
. . . [2] - HERNDON
. . . [2] - MCLEAN
. . . [4] - SALEM
. . . [3] - VIRGINIA BEACH
VIRGIN ISLANDS
. . . NO RECORD
VERMONT
. . . [3] - HIGHGATE SPRINGS
WASHINGTON
. . . [2] - FARMINGTON
. . . [2] - KENMORE
. . . [2] - REDMOND
. . . [3] - SPOKANE
. . . [1] - TACOMA
WISCONSIN
. . . UNKNOWN . . . [2] - KENOSHA
. . . [7] - OSHKOSH
. . . [2] - SHEBOYGAN
. . . [2] - SURING
. . . [1] - WEST BEND
WEST VIRGINIA
. . . [1] - CHARLESTON
WYOMING
. . . [1] - SHERIDAN
HEDGE FUND MANIPULATION OF PINK SHEETS OVERLOOKED
June 19, 2006 -- TOMORROW, all 18 members of the Senate Judiciary Committee were scheduled to gather in a second floor chamber of the Dirksen Office Building for a familiar Washington ritual, an afternoon's worth of senatorial speechifying disguised as the questioning of witnesses at a hearing.
The hearing was set to deal with a subject discussed more than once in this column in recent months: The imaginary menace of alleged market-rigging collusion between stock analysts and hedge funds.
There are plenty of things hedge funds could properly be taken to task for by regulators and their congressional overseers, such as the possibility that hedge fund managers have begun spicing up their performance numbers by trading in the shares of easily manipulated penny stocks.
That is exactly the sort of scary hedge fund practice Congress ought to be investigating, particularly now that the overall stock market is weakening while trading in penny stocks is shooting off the charts. Two recent studies show trading volume in these trash securities have nearly quintupled since January, and there can be little doubt that a lot of that action is coming from hedge funds.
Yet Washington has let itself become beguiled instead by the fanciful notions of a relentlessly whining CEO named Patrick Byrne, who founded and heads a Utah-based Internet retailer called Overstock.com Inc. Byrne would have liked nothing better than to see his ravings immortalized in a Senate committee hearing carried live on C-Span.
In Byrne's view of the world, Overstock.com's troubles, which basically boil down to hemorrhaging losses and a tumbling stock price, aren't his fault at all. According to Byrne, the true villains are a gang of hedge funds and research analysts who have cooked up a scheme to destroy the company by smearing it in the press.
Byrne is a campaign contributor to Sen. Orrin Hatch, a Republican from Utah who is a member of the Judiciary Committee. And that in turn may or may not explain why the committee agreed to take up Byrne's cause even though the Judiciary Committee has no apparent oversight authority for Wall Street and the capital markets.
Late last week, the committee fortunately decided to postpone - perhaps even scrap - its misbegotten hearing, apparently after staffers failed to round up a credible list of witnesses willing to testify that plots such as the one alleged by Byrne even exist, let alone that they represent a blight on the market.
YET it would be a shame indeed if Con gress were to wave away the broader concerns of hedge fund oversight in the process. These private mutual funds for the wealthy are a ticking time bomb at the heart of capitalism, and every day the ticking grows louder and more ominous.
Efforts by former SEC Chairman William Donaldson to defuse the bomb by registering and regulating the hedge fund industry under the Investment Company Act of 1940 wound up costing him his job.
And though his successor, Christopher Cox, has talked a good game about pressing ahead with Donaldson's initiatives, his efforts to date have led to little but the filing of reams of useless information by the funds. Does the SEC really need to know a fund's "normal business hours" of operation, or whether it has a Web site? The registration process requires answers to those and dozens of similar questions.
Funds are also required to prepare and submit highly detailed "compliance program" manuals outlining the procedures that management intends to follow to make sure the employees don't lie, cheat and steal from their clients or anyone else.
Such questions have spawned a cottage industry of outsourcing shops that handle the entire registration process, paying special attention to such SEC "hot button" documents as a fully elaborated "code of ethics" for the firm. Cost: $30,000 to $50,000 for a typical small-scale fund with maybe four employees and $30 million of assets under management.
Both Cox and Donaldson claimed the registration process will help the SEC to get a handle on how hedge funds operate, and to spot problems before they explode into market-rattling crises.
Yet oversight of the industry is not likely to accomplish anything of the sort. Though the SEC now has a huge new Rolodex of phone numbers and contact names to riffle through for snap audits on unsuspecting funds, the audits themselves are nothing but fishing expeditions in which the examiners don't even know what type of fish they're trying to catch.
To head off problems before they develop, the SEC really needs to know the one thing it isn't asking the funds to disclose: the actual and specific assets into which they are plowing their investors' money.
Separate SEC regulations do require hedge funds with more than $100 million of assets under management to file quarterly reports (on a so-called Form 13F) that list all portfolio holdings of Nasdaq and NYSE-listed stocks. But the rules don't require funds to include any holdings the funds may have in OTC Bulletin Board and so-called "pink sheet" penny stocks, which thus don't get reported at all.
Yet SEC officials have time and again singled out the penny stock arena as the most volatile, risky and crime-infested back alley of Wall Street, leaving investors to search tediously through the SEC's public records database, EDGAR, for evidence that a large and presumably well-managed fund may actually be secretly mired in penny stocks.
Some big hedge fund managers have been dabblers in penny stocks for years. A review of 13F filings by the $7 billion SAC Capital hedge fund empire of Steven A. Cohen of Greenwich, Conn., shows that in 1996, a Mafia-linked penny stock brokerage firm called D.H. Blair & Co. underwrote a penny stock company called Laminating Technologies Inc., which went through two name changes before landing in the portfolio of Cohen's hedge fund under the name Speedcom Wireless Corp. in early 2001.
Within two years, Cohen's fund held enough warrants to make him the largest single investor in the company, with a controlling 24.4 percent of its stock. Cohen bought into the company even though it had never made a dime of profit and had been delisted from Nasdaq and was trading on the OTC Bulletin Board.
SAC Capital is still listed in SEC filings as the largest owner of Speedcom, which is now known as SP Holding Corp. It is trading on the OTC Bulletin Board at $3.25 per share, though it hasn't reported any revenues in years and shows a checking account balance of $15,000.
ONE can find similar random examples scattered through Co hen's other portfolios, as well as various other hedge funds. But they are not comprehensive, and may or may not represent more than isolated examples.
I LOVE IT!
Much harded to BASH with a cash flow !!!!!!!!!
Internet bashers "deals with the devil"
What is out there? We now have a international national network of criminal and terrorist elements working together to crush this country by destroying its financial system. Look at Naked Short Selling, which in turn led me to look at Internet bashers, global hedge funds, broker-dealer operations, offshore banking and trusts, International Business Corporations, US and Foreign Regulator contradictions, complete Oversight Failures of responsible Government agencies, inane use of one or more criminal elements.....
This has simply turned too dangerous, literally insane!
PYCT is being naked shorted
BASHERS HIGHLIGHT NSS!
Bashers don't bash unless there is something for the dark side to gain.
“Failures to Deliver” in the marketplace! (NSS)
Take a bow, you deserve it!
Congratulations on your post!
My hat is off to you!
We see naked short selling is finally being recognized at the state level, with UTAH passing a law this month that punishes criminal naked short sellers.
At the same time, we see the Senate Judiciary Committee scheduled a hearing to investigate hedge fund practices. Commenting on the hearing, an aid for Senator Hatch is quoted stating "Naked short-selling is against the law, and we're concerned about it".
dual revenue streams between PayChest, Inc. and oil and gas acquisitions. Bashers don't bash unless there is something for the dark side to gain. (I HATE ALL BASHERS)
BLACK GOLD IS NEXT FOR PYCT
I HOPE ALL YOU BASHERS ARE HUNGER BECAUSE PYCT IS SERVING UP A PLATE OF BLACK GOLD NEXT!
OIL PR FROM PAYCHEST IS NEXT
PayChest, Inc. Closes Gas Deal Today!
Friday June 16, 2:34 pm ET
Oil and gas has reached an all time high. America and the world is addicted to petroleum. We're seeking to build our energy portfolio with oil and gas acquisitions and we feel the market has reached a very stable and liquid time for this new acquisition; also to balance out dual revenue streams between PayChest, Inc. and oil and gas acquisitions of the future.
OIL PR FROM PAYCHEST IS NEXT
PayChest, Inc. Closes Gas Deal Today!
Friday June 16, 2:34 pm ET
Oil and gas has reached an all time high. America and the world is addicted to petroleum. We're seeking to build our energy portfolio with oil and gas acquisitions and we feel the market has reached a very stable and liquid time for this new acquisition; also to balance out dual revenue streams between PayChest, Inc. and oil and gas acquisitions of the future.
BASHERS HIGHLIGHT NSS!
Bashers don't bash unless there is something for the dark side to gain.
“Failures to Deliver” in the marketplace! (NSS)
Paychest Inc, will continue to add to its portfolio of energy companies! (its portfolio of energy companies) YES!
Its portfolio of energy companies!
PLEASE READ:
NEW YORK, NY -- (MARKET WIRE) -- Apr 28, 2006 --
-- Proposed rule targets explosion of misleading spam email and fax
promotions on OTC stocks
-- Increased transparency and effective disclosure to protect investors
from "pump and dump" promotion schemes
Pink Sheets, LLC today proposed that the Securities and Exchange Commission ("SEC") under the Securities Act of 1933 adopt rules mandating increased protections for investors against fraudulent activities by securities promoters and their sponsors. The proposed rule provides for full disclosure of the identity, compensation and relationships of all participants (i.e., issuers, sponsors, third party promoters, etc.) directly or indirectly engaged in the promotion of stocks in the over-the-counter (OTC) market. The rule also targets the flood of unsolicited spam emails and faxes promoting OTC securities to individual investors.
"We are requesting that the Commission take immediate action to expose securities promoters, spammers and their financiers whose actions are particularly detrimental to the livelihood of smaller public companies and to the confidence and financial well being of investors in OTC securities," said Cromwell Coulson, President and CEO of Pink Sheets, LLC. "Effective disclosure and enhanced transparency in the marketplace will facilitate a healthier trading environment that will benefit both issuers and investors in the OTC marketplace."
Under the principle that transparency is the most effective form of investor protection, Pink Sheets is advocating the following strategies to combat illegal promotion and unfair practices in the market for OTC securities:
-- Promotional materials must not just disclose that consideration was
paid for the promotion but identify the promoters and their sponsors
accurately, as well as provide current contact information for those
entities.
-- Adequate current information regarding the issuer must be publicly
available at the time the promotion takes place.
-- All securities held by promoters and their sponsors at the time the
promotion takes place is restricted and cannot be sold without registration
or an appropriate exemption.
-- Stock promoters must provide issuers of the stock that is being
promoted with a copy of all promotional materials.
-- Promoters, their sponsors and issuers must inform transfer agents and
broker-dealers that stock that is held by or on behalf of promoters and
their sponsors is restricted.
"We believe that putting these straightforward requirements in place will enable investors to easily identify fraudulent stock promotions and unveil the miscreants who engineer them. Any company that does not have current information available has no business promoting its securities, since investors cannot make reasonable investment decisions in an information vacuum. By cutting off the ability of promoters, sponsors and affiliated parties to dump these stocks into the market, the rule will render fraudulent promotions unprofitable and set the stage for legitimate small company issuers to deliver information to the marketplace," said Coulson.
The rule also targets the torrent of unsolicited and often illegal fax and email spam on obscure OTC securities. Spam-oriented securities promoters may be paid by issuers or affiliates of the issuer, or increasingly third parties that may or may not be affiliates of the issuer. In most cases, these securities promoters and those who finance them hope to turn a quick profit when unsuspecting investors buy stocks based on unsupported or spurious claims -- leading the stock's market value to plummet as soon as these promotional activities cease.
"There is hardly a household in America that has not been inundated with spam emails making fantastic claims about easy profits to be made by any purchaser of some obscure stock -- with many schemes being launched without the consent or even knowledge of the issuer. Given that the OTC markets play an essential role in the capital formation of smaller companies and provide a portal for overseas issuers seeking to access the American capital markets, the Pink Sheets is committed to working with regulators to create a more orderly and legitimate marketplace for all participants," Coulson concluded.
The full text of the proposed rules is available at: http://sec.gov/rules/petitions/petn4-519.pdf
About Pink Sheets, LLC
Pink Sheets, LLC is the leading provider of pricing and financial information for the over-the-counter (OTC) securities markets. Its centralized information network includes services designed to benefit market makers, issuers, brokers and OTC investors. Pink Sheets information enhances the efficiency of OTC trading, provides better executions for OTC investors and improves the capital formation process for OTC issuers. For more information visit the Pink Sheets website at www.pinksheets.com.
Contact:
R. Cromwell Coulson
Chairman and CEO
Pink Sheets, LLC
1 (212) 896-4400
issuers@pinksheets.com
or
Saskia Sidenfaden
Media Relations
CCG Investor Relations
1 (212) 477-9800 x120
saskia.sidenfaden@ccgir.com
hasher5 the basher on Paychest?
GO BACK TO CMKX BASHER,
I BUY BECAUSE YOU BASH!
Bashers ! Your Why I Buy Up PYCT !
The Glass Is Half Full !
It's SO Striking And Unusually Good !
$20,000 x 50 = $1,000,000 per month
should make the company $20,000 per month; plus the company can drill up to 20-50 more wells on site
Paychest Inc, will continue to add to its portfolio of energy companies and develop its reserves in its effort to increase the cash flow into the company and reward all the shareholders that have invested in the company.
$20,000 x 50 = $1,000,000 per month
should make the company $20,000 per month; plus the company can drill up to 20-50 more wells on site
Paychest Inc, will continue to add to its portfolio of energy companies and develop its reserves in its effort to increase the cash flow into the company and reward all the shareholders that have invested in the company.