MARKET REFORM MOVEMENT-NSS/FTDS&RELATED ISSUES

[bartermania]

Posted by: PalmBeachAJ In reply to: bartermania who wrote msg# 18535 Date:7/30/2006
7:00:44 PM
Post #of 18551

Hey Barter, what's your take on this?

Industry sues to block Utah securities law
Measure requires brokers to report any illegal naked short selling
By Steven Oberbeck
The Salt Lake Tribune

The Securities Industry Association filed a federal lawsuit Friday to overturn a new Utah law requiring brokers to report any occurrence of an illegal trading practice known as naked short selling.
The association, which represents the nation's stock brokerages, argues the state is placing burdensome record-keeping requirements on brokerages that are different from federal law. And it argues the authority to place such requirements on brokerages rests with the U.S. Securities and Exchange Commission, not the state.
The law was strongly supported by Utah's Overstock.com Inc., a money-losing, Internet-based closeout retailer that has vocally complained that naked short selling has driven down the price of its shares by artificially creating more sellers than buyers.
"This is a sunshine bill that was meant simply to shed light on an abusive market practice," Overstock.com Chief Executive Officer Patrick Byrne said. "The fact that the brokerage industry is freaking out says a lot. Cockroaches are always afraid of the light."
Short selling is a legal practice in which a brokerages allows investors to borrow a company's stock on the hope its price will drop, so they can buy shares back later at a lower price. Once the shares are purchased, they are returned to the brokerage.
Naked short selling, which is illegal, takes place when a brokerage allows a investor to sell stock without first borrowing it. In market parlance the seller is "naked." The outcome of naked short selling is that it creates an artificially high volume of shares that are for sale, and that can drive down a company's share price.
With naked short selling, the transaction is never truly completed because the short seller doesn't really possess the stock that was sold. And that means they cannot deliver the shares to buyers - which in market parlance is called a "failure to deliver," or FTD.
Stock brokers argue that such failures to deliver can occur for a number of reasons and actually represent only a tiny fraction of the trades that take place on any given day in the stock market. And they maintain the problem corrects itself over time.
Utah Gov. Jon Huntsman Jr. signed the naked short selling bill into law in May after a special session of the Utah Legislature.
At the time he said it would make Utah a more attractive place for small and midsize companies that could be vulnerable to the predatory trading practice.
"We continue to feel we acted in the best interest of Utah businesses by adopting this law," said Mike Mower, Huntsman's deputy chief of staff. "It helps shine a spotlight on the challenges that companies face with naked short selling."
The lawsuit asks Salt Lake City's U.S. District Court to declare the Utah law invalid. It also is seeking a preliminary injunction to stop the law from taking effect on Oct. 1.

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My reply:

Yes...Utah is doing the right thing! IMO, the Fed/DTCC runs (because they own it) Wall St., as they run the rest of the national banking system...using fractional reserve banking. $1 is held in reserve for every $10 that are loaned out. This is a fraud. It's the law (their law)...but, it's very wrong. If, one looks at USXP which the CEO and his general counsel both claimed last Dec. that the total naked short position on their stock was 8x their authorized shares (I believe it was the authorized...but, even the O/S at that time was quite high...it still proves my point) then, one should be able to see the connection. IMO, the Fed/DTCC allows a company's shares to be leveraged...another word for manipulated and/or watered down or pumped up to perhaps a 10 to 1 ratio. If, one understands the truth about the Federal Reserve and how they operate and the fact that they claim to own this country via the US's declared bankruptcy in 1933...and their army of lawyers and sycophants...well, it should all make completely disgusting and extraordinarily corrupt sense. They seem to always win...and anyone with an opposing position always seems to lose. They wrote the laws...they stole our gold, they own us, all our assets, and our currency by laws they shoved down our throats. Amazingly, this was done without most folks having any idea of what was really happening...and/or is actually now the case/ie. true.

So, the appeal is just more of the same BS from the world's most corrupt people. IMO, this must change