By: gr8hiker
19 May 2006, 07:33 PM EDT
Msg. 317728 of 317755
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Nice post:
Just got off the phone with a nice lady at First Global Stock Transfer, LLC, who indicated to me that Helen Bagley, with whom I normally talk, is out of town until next week.
I thanked her and asked her to extend my thanks to the rest of the group there for their hard work in printing and delivering the THOUSANDS of certs they have done since the cert pull began.
I asked her if it was possible for them to continue to print certs past the 703 Billion O/S, and she said it was not. She then took the time to explain how things work to me.
When a company issues an O/S, bulk certs are created for any brokerage house that wants to sell shares in the company. Rather than having every buy/sell go through the transfer agent, the brokerage houses simply buy and sell against the bulk cert they are holding in house.
When I, as a customer, ask my brokerage house for certs of my shares, they have to issue a request to the stock transfer agent for a cert to be issued in MY name and sent to me directly or returned to the brokerage house. The bulk cert the broker is holding is then decreased by the number of shares I'm asking for in cert form.
See how this works? If First Global had never issued more than 703 Billion shares in bulk cert form originally, and since they require a bulk cert to be decreased whenever they issue a new cert to an individual, they have established a closed loop system. It is IMPOSSIBLE to create a cert that wasn't part of the originally issued O/S.
So, then, how does naked shorting occur? She explained that to me as well. When a brokerage house sells a share to a customer and they do NOT have that number of shares represented on a bulk cert, they are creating a naked short. The brokerage houses cannot ask the stock transfer agent to legitimize a naked shorted share because the brokerage house does not have a bulk cert entry to justify the share. Once the brokerage house has exhausted the bulk cert shares, they are stuck with whatever shares they sold to the public above and beyond the original bulk cert value.
As an example, if XYZ Brokerage got a bulk cert for a million shares, and they sold 2 million shares, they CAN cert the first million shares of requests, but they cannot cert the remaining million. This means that they took money from their customers and didn't actually sell them a share of stock.
This, my friends, is illegal.
So I asked this nice lady (who asked to remain nameless) which brokerage houses were the liable ones who have sold more shares than they were allowed to. She said she couldn't tell me that. I asked her if she knew which specific brokerage houses were the most at fault. She said she could not answer that question.
I mentioned that that was okay, I understood her position. She said thanks for understanding. I then stated that the #### is gonna hit the fan now that we have pulled enough shares to clearly expose which brokerage houses sold more than their allottment. She said Yup, that some previously well-regarded brokerage houses are now showing their true colors.
That's the end of the conversation. Coupling what she was telling me (and NOT telling me) with what Bill Frizzell told me a couple days ago, I can start to see a pattern. We've drained the pool friends, of legitimate stock shares, and those brokers who have more shares left to put into certificate form are holding, frankly, illegal shares. If they sold shares above and beyond their allotment because CMKX, like all other failed pinkies, would just go away, they are now caught, like cockroaches, holding an inventory of stock shares that they cannot explain.
We have proof, now, of brokerage houses selling naked shares. They are responsible, since they have to settle within 72 hours of the trade or refund the money, for making good on the fact that they performed illegal actions.
If there is going to be a settlement, this is where it will come from...brokers.
Lou
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