The SEC Is Conflicted On the Principle Issue
Underlining the Temporary Suspension
Of “Naked Shorting” and the Federal Whistleblower Law
The SEC has violated the federal Whistleblower Protection Act of 1989, 5 U.S.C. Secs. 1213 et seq., in its actions against the Company, its President and Mr. Gunderson, its General Counsel.
The naked shorting scandal is known as “Stockgate”
The naked short selling manipulations reached catastrophic financial proportions by July 2001, the date of Universal’ s first multi-million dollar judgment against some involved in its victimization through such a scheme.
The SEC’s exposure in what has already been publicly exposed despite its efforts to silence the Company, its President and General Counsel, among others, is the result of its earning a fee on every naked short trade executed, along with the fees on such sales earned by the Depository Trust Clearing Corporation (“DTCC”), resulting in hundreds of millions of dollars in fees, and the humongous scope of the scandal and the billions of dollars worth of unsettled naked short trades.
A very brief sampling of the Stockgate revelations and condemnations are filed as Exhibit A.
As indicated, in 2003, the Denver office SEC commenced a pattern of harassment against the Company and its President and General Counsel from attorneys at its Denver office.. The Company’ General Counsel initially volunteered to provide information on the contracts for proposed acquisitions and funding sources for those acquisitions. Before these documents were even received by the attorneys at the Denver office they were calling those acquisition candidates’ and funders senior officers, threatening them with reprisals so that they would move away from the Company. This pattern of intimidation was successful since several large acquisitions totaling more than $160 Million Dollars were terminated.
The SEC’s attack on the Company and its General Counsel as whistleblowers on naked shorting was in full swing in 2003, and continues to date.
The Company, its President and General Counsel has been bullied by the SEC, a conflicted regulatory agency which has failed the investing public on this national naked shorting scandal in favor of Wall Street interest, in clear violation of its Charter to protect investors.
The SEC commenced its case against the Company on March 22, 2004, twenty-two days following the filing of an action by the Company against the SEC in federal court in Florida on March 2, 2004. The Company’s sued the SEC for extensive and sustained harassment of the Company and its officers, including its President and General Counsel, to silence them on the naked shorting scandal and, in addition, sued the SEC for failure to take any effective action to stop naked shorting. Conveniently and typically, the SEC relied on its “immunity” to defeat this action in order to further cover-up its cooperation with the naked shorters for over ten years and to silence the Company and its officers.
Publicly available facts prove, among other things, (i) that the SEC ignored the Company’s and others’ repeated voices of concern and increasing public criticism regarding naked short selling of stock for years, (ii) the SEC had enormous financial interest in allowing the continuation of naked short selling, (iii) the naked short selling of stock had turned into a nationwide scandal known as “Stockgate”, (iv) that by July, 2001, the Stockgate scandal was well known within the SEC to have reached staggering range of hundreds of billions of dollars, (v) the SEC literally sat on a proposal initiated outside of the SEC to ban naked shorting of stock in 2001 for almost 2 ½ years, and even currently condones, if not fosters, delays in implementing any material preventative measures.
Universal, its President and General Counsel have been out in the forefront of publicly and openly challenging the SEC since 1997 on its improper inaction on naked shorting. See some samples of Company press releases on the naked shorting scandal issued by the President and General Counsel as Exhibit B.
The Company, assisted by the testimony of its President and General Counsel, received a $389 million dollar judgment victory in July 2001 and later its $137 million dollar judgment in April 2003, which substantially fueled the movement against the SEC and others to ban naked shorting. It is clear that the harassment by the SEC against the Company which commenced in May, 2003, one month after the Company’s second jury verdict against the naked shorters, was a response by an embarrassed SEC to silence the Company, its President and General Counsel. Its civil action was nothing more than a transparent contrivance to further silence these whistleblowers.
All of these actions by the SEC to harass and intimidate the Company, its President and General Counsel for ten years were designed to silence them for their public protest against the SEC’s long-term failure to act in the national scandal of naked shorting, and such actions were and are violations by the SEC and its minions of the Whistleblower Protection Act with respect to the Company, its President and Mr. Gunderson, its General Counsel, as whistleblowers, generally, and under the Act: Garcetti v. Ceballos, 126 S.Ct. 1951, 164 L. Ed.2d 689 (May 30, 2006); Graham County Soil & Water Conservation Dist. v. U.S. ex rel. Wilson, 545 U.S. 409, 125 S. Ct. 2444, 162 L. Ed.2d 390 (June 20, 2005); Desert Palace, Inc. v. Costa, 539 U.S. 90, 123 S. Ct. 2148, 156 L.Ed.2d 84 (June 09, 2003); National Whistleblower Center v. Nuclear Regulatory Commission, 531 U.S. 1070, 121 S.Ct. 758, 148 L.Ed.2d 66 (January 08, 2001); Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 114 S.Ct. 2239, 129 L.Ed.2d 203 (June 20, 1994); Waters v. Churchill, 511 U.S. 661, 114 S.Ct. 1878, 128 L.Ed.2d 686 (May 31, 1994); Saudi Arabia v. Nelson, 507 U.S. 349, 113 S.Ct. 1471, 123 L.Ed.2d 47 (March 23, 1993); English v. General Electric Co., 496 U.S. 72, 110 S.Ct. 2270, 110 L.Ed.2d 65 (June 04, 1990; City of St. Louis v. Praprotnik, 485 U.S. 112, 108 S.Ct. 915, 99 L.Ed.2d 107 (March 02,1988) U.S. v Fausto, 484 U.S. 439, 108 S.Ct. 668, 98 L.Ed.2d 830 (January 25, 1988); Bush v. Lucas, 462 U.S. 367, 103 S.Ct. 2404, 76 L.Ed.2d 648 (June 13, 1983).
