I thought this was a great post on what can happen to PP shares. I wonder if Crestview is pulling any of this on GPXM shares? This could be worse on the Vancouver exchage? Don't mean to pump other stocks here.
Fritz
Re: Certificates for SGR....and some heresay
Posted by: res-investor on February 02, 2008 07:38PM
In response to: Certificates for SGR by rad
I once had a CIBC mellon account.... but I'm sure my present broker is not compliant either.
I have done hundreds of placements over the past 5 years and have now changed my proceedure for doing placements.
I used to just call my broker and take a piece of a PP and fill in the paperwork..... sign and let them fill in the appropriate addresses...... I seldom do this now.
Now I send a cheque, and have the cert and warrant in my name...... I hold that cert till it is near trading..... and I never send in the wt. I usually do placements directly with the companies.
Fact is when one does a PP the broker asks that the shares be registered as a global cert..... burried in the text of your account agreement is this carefully worded acceptance of relinquisment of a personal certificate. To this end the house.... Your brokerage firm can use your stock to sell into the market ( The house pro traders) They do not need to borrow your stock as it is allready in the companies name..... they simply owe you the stock.
I have often wondered why shortly after doing a placement I will see shares sold on a runup.... during " My hold period" sold from the same house...... co-incidence..... riiiiiiight! The 4 month hold is a 4 month trading oportunity for the house to trade what you cannot.
I recall a conversation with my former CIBC broker who mentioned that he was told by head office that CIBC had 7 million shares on it's books...... they were encouraging the individual brokers to short the stock. Trouble is, this broker also had a very large SGR position. He was very pizzed to say the least....
The context of this was when SGR was trying to raise the $20 million financing last year...... I wondered why the price was not specified at the time.......As it turned out it ws to be " Whatever the market will bear"...... The stock price immediately came under pressure..... droping from the $1.40 range down to $.90..... at which point the placement was called off...
Could it be that CIBC emaced a huge in house short.... which is still being recovered...
Case in point look at NKW...... A million share short was covered under mysterious circumstance..... There wasn't enough shares traded, or wts exercised during the time frame this was covered.. I reported this to RS.... Nothing came of it... I thought all transactions had to be through the market... or at least crossed in house.... This never happened.
Disclosure and enforcement are in short supply in the Canadian traded stocks.....
I now hold my certs at home where they are safe from unscruplous institutions...... I don't trust the brokers that are supposed to be acting in my best intrest..... I feel they are using my investments to bet the opposing short side.
I particularly do not trust enforcement or the market regulators to enforce the rules....... We the little guys are playing agaist the house....and the house cheats .... and has enforcement on their side.
The jr resource market is by far the most vulnerable because of the frequent PP required to advance the projects...... These placements end up being a rigged game..... only way to stop that rigging is to hold the paper in your own hand.
Dave D
