Elite Pharmaceuticals Inc (ELTP)

[no2koolaid]

Joe, I am not a stock trader, I am a guy who knows business. However, the issue of Elite having its stock price manipulated was caused me to do a little digging. While I have shared this link previously, it is worth doing so again.

https://www.griproom.com/fun/tag/stock+manipulation

Additionally, I found this quote from someone who worked on Wall Street....it's a little long but worth the read...

NAKED SHORTING: Conventional Wisdom on Dealing with Stock Manipulation

I worked on Wall Street as an analyst for nearly 40 years and was involved in the stock market on a day-to-day basis. Throughout this time, I was focused on fundamental developments that would give an insight into the potential for a company to grow its sales and profits and then trying to translate that into future stock performance. Like many investors, I believed that this was the overarching factor in predicting future stock performance. I had no inkling and I would have been shocked if someone had told me ten years ago what the experience of the past decade has taught, i.e., in many, many cases (particularly for small companies) fundamentals are not the most important factor determining the stock price.

Market Makers
The role of a market maker is to create a market for investors to buy or sell securities. They are obligated to make markets in specific securities by posting at the same time a bid (to buy stocks at a specific price) and an offer (to sell stocks at a specific price). Market makers are wholesalers who trade for their own account and try to make money from the spread or difference between the bid and offer; these are known as principal trades. Market makers are constantly entering and adjusting quotes to clear buy and sell orders. They provide the essential role of providing liquidity for the market.

The key difference between a broker and a market maker is that brokers execute a trade on behalf of others to whom they have a fiduciary obligation, while market makers execute trades on their own behalf. Maintaining markets requires that market makers put significant amounts of capital at risk. Once again this is a situation in which firms like Goldman Sachs, Merrell Lynch, Morgan Stanley, JP Morgan, UBS et al, provide a critical role in providing liquidity to the market and yet the potential for conflict of interest is also very high. This is a pattern that seems to pervade most operations of these firms.

? The securities laws are very complex and obviously I am not a trained lawyer. The SEC and the financial industry hire legions of lawyers to write and interpret these laws. As a layman with no training in the law, there is much that I do not know or understand.
? The hedge funds and market makers who engage in widespread illegal naked shorting have been perpetrating this scheme for nearly three decades and have honed their skills to the point that they make Swiss cheese out of laws on illegal naked shorting by sculpting incredibly sophisticated strategies to avoid detection.
? The data that is needed to determine the extent of illegal naked shorting is held in non-transparent, proprietary data bases lodged with the Prime Brokers and DTCC (owned by Prime Brokers) who tightly guard and block access to this data.
? The illegal trades are done in a Wall Street that is now dominated by high frequency and algorithmic directed computer trading and is conducted often in dark pools in which trades are not reported publicly. Much illegality can be and is conducted in this shady environment. We outsiders can have no idea as to what is going on, nor apparently does the SEC.

Illegal Naked Shorting
? The SEC publicly states that naked shorting plays an important role in the functioning of the stock market by improving liquidity. (I can make a strong counter argument that this allows a collaboration between hedge funds and market makers to swamp the market with sell orders and decimate the stock price of a targeted company.) The SEC recognizes that Fails to Deliver may be indicative of illegal naked shorting if they are prolonged beyond T+2, lasting for weeks, months or years. Such shares are counterfeit because the company never registered or sold them and if the FTD is not corrected, these counterfeit shares are traded as if they are legitimate shares. This is blatantly illegal and later I will go into how this is perpetrated by hedge funds acting in concert with Prime Brokers and the DTCC (owned by Prime Brokers).
? Illegal naked short selling allows hedge funds acting in concert to flood the market with phantom or counterfeit sales of a targeted company’s shares. They can sell an unlimited number of phantom or counterfeit shares to overwhelm natural buying interest in a stock. The object of this manipulation scheme is to drive the stock price down allowing the short seller to cover at much lower prices. The Holy Grail is to drive a company into bankruptcy and never have to cover. The hedge fund, Prime Broker/ DTCC collaboration has devised many strategies for illegal naked shorting.