glaszman, i think you have hit the nail on the head. Megas can't tell us what to do or tell us exactly what is going on without getting himself in deep trouble with the SEC. He has fed us as much as he possibly can without crossing that line. It is up to us to figure out what is going on, who is to blame, and what to do about it because he can't without being accused of illegally creating a short squeeze.
For anyone reading this message, please read ALL of it and post a reply, letting me know if you will join me on the crusade. I will keep a list. We need as many shareholders as possible to be involved if there is ever going to be a chance for us to win.
I think we know enough to have concluded that the DTC & the brokers is where the problem lies. The brokers either purchased counterfeit certs and passed them on to the DTC so that all the DTC has is counterfeit certs, or the brokers naked shorted the stock and cannot request certs from the DTC without exposing their crime. In either case, the DTC is unable to send a legitimate cert to the TA in order to get new certs.
How do we rectify the problem? First, we all must order certs for our shares. There is no need to worry about getting stuck with a cert you cannot redeposit because they obviously cannot get you a cert anyway. By everyone requesting a cert, we send a message to the brokers and the DTC that we know where the problem is and that we intend resolve it, en masse.
Once everyone gets an email from their broker stating they cannot get them certs, we move to phase two and demand proof that they did indeed send a legitimate cert to the TA with the proper transfer request form asking for a new cert. The reply they got from the TA refusing to exchange the certs will be sufficient.
Now if they send us a made up reply then they have perjured themselves and I don't think they are going to do that. We will see what the next excuse for not being able to provide proof is. Phase 3 will depend on the responses we get. Please post the responses you get from the brokers so that we all can see the excuses they come up with.
I already have a Mr Lee C. Robinson, Staff Attorney, Division of Enforcement - U.S. Securities & Exchange Commission in the loop on this and I provided him with all the pertinent information this morning. I have also been in contact with imsoweary and got him to write a reply back to TD Ameritrade. Here is what he sent:
Dear Ameritrade Client Services,
A copy of your original reply to my request for a certificate is at the bottom of this email.
After receiving your email stating that you could not provide me with a certificate for my shares of BCIT because the Transfer Agent was not currently printing certificates for the security, I wrote to the CEO of the company and asked him why this was so.
He stated, "There is no bar with the transfer agent. If they send the old certificate in and it has been properly issued they will get a new one in your name. Ameritrade has never sent the old certificate to the transfer agent with a transfer request. This process can occur without the stock actually trading, all Ameritrade has to do is send in the old certificate and the transfer agent will issue a new one."
The CEO's comments do not match Ameritrade's claims, so I checked with the TA's office and they stated that they will, on receipt of legitimate old 05968X106 certificates, provide brokers with new 05968X205 certificates.
So I went back to the CEO and asked him about this and he stated, "The transfer agent will transfer shares vested through any legal certificate from one party to another party on presentation to them with a duly executed transfer form."
The CEO also said, "It may be that the shares held for you are in the DTC depositary in which case it is up to the broker to get the shares from DTC and send them on to the transfer agent." Furthermore, he went on to say, "If they cannot do that then you must sue whoever sold you the shares to deliver them physically to you."
By law, if I request a certificate for my shares, then the brokerage must provide said certificate. If you are telling the truth and the CEO & TA are not, then I need documented proof. A copy of the notification you received from the TA rejecting your request, after you had submitted a legitimate old certificate with a proper transfer request form, for a new certificate to be issued in my name will suffice.
However, if the CEO and the TA are telling the truth and you cannot provide the certificate that I have requested, there can only be a two reasons for this: 1) you nor the DTC hold any legitimate 05968X106 certificates to exchange for 05968X205 certificates, or 2) You do not hold any certificates at all (naked shorted shares). In either case, it is not my problem, it is yours, and if I have to, I will pursue legal recourse with you.
There has been a lot of finger pointing with this security over the last 2 years and it is time for the pointing to end. Never mind who did what. The bottom line is that there are over 1200 small investors being seriously harmed by not being able to trade and not being able to get legitimate certificates. It is incumbent on both parties to ensure that the investor is utmost in their minds or the entire securities market is at risk for loss of faith. With the current fears in the markets over the sub-prime issue, the possibility of banks failing and even the possibility of the dollar collapsing, there is already great concern by the American public.
Any attempt to hide an impropriety in the securities market by the brokerages will only serve to exacerbate those fears. I suggest you put your heads together with the CEO and work out whatever the problem is between the two of you. I will not wait long for you to resolve it yourselves before requesting a jury hearing. With the degree of distrust in the market already, I have no doubt which way they would go and the publicity would be detrimental to the industry.
Of the numerous small cap companies I have invested in, the vast majority have ended with a loss due to failures in the security industry, whether with the companies themselves, or with the brokers. Outright fraud is rampant. One only need to look in the papers to see the number of brokers being indicted daily including most recently the 38 brokers across many brokerages indicted for naked shorting.
As a TD Ameritrade Apex customer, I look forward to your response and the resolution of this matter.
Sincerely,
Edward Kelley
Atlanta, GA 30350
CC: Lee C. Robinson
Staff Attorney, Division of Enforcement - U.S. Securities & Exchange Commission
-----Original Message-----
From: TD AMERITRADE Client Services
Sent: Friday, September 28, 2007 2:31 PM
To: undisclosed-recipients:
Subject: Certificate Request (KMM40938068I17490L0KM)
Dear Valued Client:
We recently received your request to have a certificate issued for shares currently held in your account. However, we are unable to process your request at this time. We have received notification that the transfer agent for this company is not currently printing certificates for this security.
If you have further concerns or inquiries, please email us from our secure Web site's "E-mail Us" link. For security reasons, we do not answer account specific questions that originate from a source other than the secure Web site.
Sincerely,
Reorganization and Safekeeping
TD AMERITRADE, Division of TD AMERITRADE, Inc.
RGSK
