MARKET SCAMS

[Dallas Boy50]

Friends,
I will call this the timeline to financial terrorism. The timeline I am about to show you will define dates and times by which our US Securities Regulators and US Law Enforcement Officials began to realize the magnitude of a manipulation scheme that has, to date, never been resolved for reasons I will discuss at the end of this memo. Reasons that will identify why our Securities Regulators are now playing Russian Roulette with Human lives to protect big business revenues.

The Financial Terrorism is perpetrated through illegal offshore stock manipulation using “Naked Shorting” and it has created massive issues in our US Financial Institutions as our Brokerage firms accepted these trades for commission revenues.

Timeline:

1996 – 2000 Securities and Exchange Commission (SEC) and FBI investigate Pacific International in Canada and their links to US Organized Crime. Pacific International being the conduit to Organized Crime Money Laundering. (http://www.rgm.com/articles/cornucopiaofcrooks.html)

1999 – SEC has an open comment period on Short Selling and receives more than 2000 comment letters addressing the abuses of Naked Shorting. No actions or reforms came from those comment letters.

September 2000 – SEC speaks in front of Congress to discuss Organized Crime infiltration into Securities Markets. They speak heavily about the Micro-Caps as the easiest to infiltrate. (http://www.sec.gov/news/testimony/ts142000.htm)

September 2000 – National Association of Securities Dealers (NASD) meets with Congress to discuss Organized Crime in the Markets and also discusses the Micro-Caps as the easiest to infiltrate. The NASD being an SRO consisting of the member bodies of Wall Street. (http://www.nasdr.com/1420/goldsmith_04.asp)

2000 – 2001 Sedona Corp. Addresses the SEC over trading abuses and stock manipulation taking place on their Security. They are accusing Rhino Advisors of Stock manipulation. SEC begrudgingly initiates investigation.

January 2001 NASD bars Fiero Brothers from Industry and fines them $1 Million for Stock Manipulation, Illegal Shorting, and Extortion. No reforms came from this action. (http://www.nasdr.com/news/pr2001/ne_section01_003.html)

2001 – Naked shorting campaign begins by Micro-cap companies to address the short selling abuses. Many going public over the abuses they see in their stocks trading patterns. Complaints begin to pour into SEC and NASD over Brokers failures to deliver shares in physical form and failure to settle trades. Lawsuits are initiated against brokers for settlement failures on short sales.

October 2001 NASD submits a reform bill to SEC for approval to “Close a Loophole” in offshore shorting practices. Request changes to Affirmative Determination requirements to address non-member shorting abuses (Offshore shorting). No response from SEC, Loophole and abuses remained in place.
2002 – Naked shorting campaign heats up with more than 100 publicly traded companies going public with their problems. Many try to take action by moving to “Certificate Only” trading and to exit the Electronic Settlement System of the Depository Trust (DTC).

June 2002 – Genemax (OTCBB:GMXX) is the first of 6 Companies that had successfully exited the DTC Trade settlement system for “Certificate Only” Trading. Shareholder failures in receiving Certificates was evidence of counterfeit shares manipulating the Markets. SEC and NASD failed to take any actions for correction.

August 2002 – Operation Bermuda Short – Joint FBI Royal Canadian Mounted Police (RCMP) sting operation concludes with nearly 60 arrests of offshore bankers and brokers associated with stock manipulation. Sting Operation took 3 years to complete. The manipulation of our Markets continued while this sting was in play. (http://www.globeandmail.com/servlet/ArticleNews/business/RTGAM/20020818/818bcbc/Business/businessBN/... )
(http://www.globeandmail.com/servlet/ArticleNews/business/RTGAM/20020816/wxmain/Business/businessBN/b... )

2002 – Foreign press initiates coverage on the “Naked Shorting” Problem with evidence of US Regulators working with Canadian Regulators on ‘Loophole” used to manipulate our markets. Even with Coverage in place, no real emphasis on corrections are being made. Entire situation is being downplayed by all.
( http://www.rgm.com/articles/blamecanada.html )
( http://www.rgm.com/articles/predatororprey.html)
(http://www.rgm.com/articles/nakedreview.html)

December 2002 – Paul Lemmon pleads guilty in Operation Bermuda Shorts. Given light sentence for disclosing mechanisms to fraud and names. No net actions to date have been taken by the FBI or our Securities regulators based on the evidence provided by Mr. Lemmon (http://www.rgm.com/articles/tk2.html )

January 2003 – DTC seeks support of SEC to stop all Companies from exiting the electronic trading system for “Certificate Only” trading practices. Evidence to date by those that did exit was a disclosure of the settlement failures within the DTC settlement process. It became better to cover up the problem than expose it at the present time. In June the SEC supported the DTC’s request to stop future exiting from the system. Cite “potential” of Counterfeit paper and lost paper as a rationale while accepting the electronic counterfeit shares to remain in place. (http://www.dtcc.com/PressRoom/2003/nakedshorts.html)
(http://www.sec.gov/rules/sro/34-47978.htm)

February 2003 – SEC fines Rhino Advisors $1 Million for stock manipulation and short selling abuses to Sedona Corp. Stock. What will later be learned is that the SEC had evidence in hand regarding the bribery of US and offshore brokers to manipulate this security. No actions against a broker has ever taken place. No attempts at restitution to shareholders taken and no demand for unsettled trades to be settled by brokerage firms. Sedona’s stock remains oversold/manipulated to this day. (http://www.sec.gov/news/press/2003-26.htm )


2003 – More companies join in war against short sellers. Public opinion of SEC cover-up grows. Grass Roots organization seeks full congressional investigation into the SEC’s criminal liabilities in allowing continued stock manipulation. (www.investigatethesec.com)

October 2003 – SEC proposed regulation SHO to address shorting issues including “Naked Shorting”. SEC admits in background to proposal that “naked shorting” and settlement failures exceed the entire float of a company. (http://www.sec.gov/rules/proposed/34-48709.htm ). Comments to this reform include a letter from the North American Securities Administrators Association (NASAA) identifying that small companies and investors have been victimized by the short selling abuses. (http://www.nasaa.org/nasaa/Files/File_Uploads/Short%20Sales%20Comment.37990-38287.pdf)

October 2003 – Forbes article identifies “naked shorting” as “Wall Street’s Next Nightmare”. Coverage of issue remains sparse. (http://www.forbes.com/forbes/2003/1013/066.html)

November 2003 – SEC approves 2001 request by NASD to close offshore short selling loophole.

December 2003 – Department of Justice (DOJ) arrest Andreas Badian (Rhino Advisors) under criminal indictment for Stock manipulation. Thomas Badian fled country just prior to arrest. DOJ provided audio tapes by SEC with Badian bribing US Brokers to “Collapse” stock. Like the SEC (Feb. 2003) the DOJ leaves the Brokers untouched in the criminal actions. (http://www.rgm.com/articles/DJwire6.html)

January 2004 – Senate Banking committee council member identifies that a joint SEC/NASD task force is looking into the “Naked Shorting” abuses including the investigation into specific companies. Still no public address of the issue to prevent further abuses from evolving.

January 2004 – NASD notifies members of the new rule change that was approved in November of 2003. Rule change to plug ‘loophole” used to manipulate our sock markets. Time table for incorporation – February 20, 2004 nearly 2.5 years from the original proposal to close loophole. (http://www.nasdr.com/pdf-text/0403ntm.txt)

February 18, 2004 – NASD pushed out proposed rule change to April 1, 2004. Members request extension to closing “loophole” because February date was too inconvenient for them. Stalls on bringing closure to manipulation and abuse. (http://www.nasdr.com/filings/rf04_31.asp) Some within SEC and elsewhere identify that this “Extension” is the first of what could be several extension. The rights of member “Convenience” is put above the rights of investor protection. NASD and SEC decided it is better to deal with the additional manipulation than to have the members slightly inconvenienced until they can get their systems ready. Ready for changes they saw coming in 2001 when the NASD made these proposals.


Now that you have seen a timeline that is extraordinary if you think about it, understand this. The revenues generated by this abusive practice has been quoted as being tremendous. (http://globeinvestor.com/servlet/ArticleNews/story/GAM/20040216/RREG16/stocks/news?ba). It is because of the revenues that this creates from both sides of the borders that the SEC and NASD have been so willing to let it slide. The SEC has never fully accepted the values of the Micro-cap stocks and thus, contrary to their September 2000 Congressional Hearing, they have elected to ignore protecting these companies. Companies whose primary investors are middle to lower class retail investors and not the wealthy or institutional buyers. The timeline alone demonstrates that. Now, however, the pressure is on and now the SEC is trying to protect the Wall Street institutions and Wall Street settlement systems integrity. To do so, they must continue to use these investors and these companies as the pawns. This decision brings them into criminal liabilities should they continue this practice.

At the present time, our brokerage firms sit upside down on their books with the micro-cap positions they hold. Their shareholders combined have an example of 100 Million shares in micro cap positions. At the DTC Clearing House however, the DTC has only 5 Million in settled positions for that firm. That one firm is short a combined 95 Million shares and this is only 1 firm. Every firm is situated with a similar problem as the micro-caps have collectively been oversold by multiples of the registered shares. This is the problem the SC and member firms are trying to hide because, if these firms cannot back bill the original seller (Organized Crime in many cases) they then would be responsible for the buy-in of these positions. A solution that is not in the best interest of the member firms but is the best and most immediate restitution to the investors who have been defrauded. Ultimately it is about Money and who can lobby our congress and regulators best to acquire it.

Finally, why the SEC is playing Russian Roulette with the lives of US people. There have been 4 people I am aware of that have had their lives threatened for fighting this abuse. To correct this problem will cost players (Organized Crime, Wall Street, etc…) some hundreds of billions to trillions in buy-in restitutions across the hundreds to thousands of abused companies. That loss in monies certainly can make some people angry and certainly groups known for their less than ethical manners in dealing with such situations. The SEC and DOJ are fully aware of this and the players involved and yet they continue to stall. They continue to allow further manipulations to happen and to let the situation continue to grow. They have no out that protects our Wall Street firms and thus they are willing to risk an actual event to happen in the mean time. An event that if it did happen would put our Country into complete turmoil if exposed. The gamble is to which comes first – Correction or Death?

For those of you who have made it this far through the package I want to thank you. This has been long and detailed but it must be to show the proper trail of events that highlights a travesty of justice being perpetrated on the retail investor and Micro-cap stocks they invest in. In reality, this is the abridged version of a tale much more detailed and much more alarming that has consumed the lives of many for years. We have lived under this financial terrorism for years with no means of getting back out clean. Companies have gone bankrupt in the process and the US consumed those workers into our unemployment figures. We simply want it to end and we simply want restitution for the crimes committed upon us by Wall Street and the Wall Street Regulators.