but he also noted that even the famous law firm of John O'Quinn, after many years and perhaps millions of dollars spent, hasn't been able to get the SEC to move on this problem
The SEC??!! They can't even get the Courts to go along with their malarkey. Two losses within a month? When are people going to wise up? Why didn't they just donate the millions to a worthy cause?
Team O'Quinn/Christian
Wins = 0
Lost = too many to keep track of
RIDGEFIELD, Conn., Feb. 14 /PRNewswire/ -- Southridge Capital Management, LLC ("Southridge") has won a decisive legal victory against Vyta Corp., formerly known as Nanopierce Technologies Inc. (OTC: VYTC) ("Nanopierce"). On January 28, 2008, a U.S. District Court in New York granted summary judgment to Southridge, certain of its former employees and Harvest Court LLC ("Harvest Court"), a fund sub-advised by Southridge, dismissing securities fraud and manipulation claims brought by Nanopierce.
Tuesday, February 26, 2008 3:19 PM
By Carol S. Remond
OF DOW JONES NEWSWIRES
A lawsuit challenging a Securities and Exchange Commission-approved program to facilitate the clearing and settlement of securities in the U.S. has been dismissed.
A federal judge in the U.S. District Court for the Eastern District of Arkansas ruled that a complaint filed by Pet Quarters Inc. (PDEN) against the Depository Trust and Clearing Corporation is preempted by federal law and granted DTCC's motion to dismiss with prejudice. That means that Pet Quarters cannot file an amended complaint. DTCC manages the clearing and settlement of securities in the U.S.
Pet Quarters, an Arkansas corporation that at one point sold pet supplies online, alleged that DTCC's stock-borrow program resulted in the creation of nonexistent or phantom stock and contributed to the illegal short-selling of the company's shares.
Pet Quarters' complaint was almost identical to lawsuits brought by Whistler Investments Inc., since renamed Hybrid Technologies Inc. (HYBT), and Nanopierce Technologies Inc., since renamed Vyta Corp. (VYTC), which also challenged DTCC's stock-borrow program. Those two lawsuits have also been dismissed and the companies are appealing.
All three companies are represented by a group of class-action lawyers - led by Texas lawyer John O'Quinn and law firm Christian Smith & Jewell - who have been trying to build cases against short sellers.
The law firms and their clients generally allege a conspiracy to illegally depress stock prices. Their strategy has morphed over the last several years, evolving from allegations involving so-called death-spiral financing and illegal short selling to more complex accusations that brokerage firms and the entire securities clearing system managed by DTCC are complicit in bear raids on unsuspecting companies. O'Quinn also represents online retailer Overstock.com (OSTK) in its lawsuit against short-selling fund Copper River Partner LP and research firm Gradient Analytics Inc. in California state court.
Short-sellers typically borrow shares to sell them short and profit when the price drop. Trading without a borrowing agreement is called naked short-selling. It is illegal for most investors, but legal for firms that make markets in stocks and bring liquidity to the market.
Under its stock-borrow program, DTCC facilitates the lending of shares from one brokerage firm to the other in the event a firm is unable to deliver stock to settle a transaction on time. The program is designed to facilitate trade settlement and is approved by the SEC.
Finding that Pet Quarters' claims conflicted with Congress's intent to have a uniform and efficient system for settling and clearing securities transactions, Judge Rodney Webb granted DTCC's motion to dismiss the company's complaint.
Pet Quarters sued DTCC in Arkansas state court in 2004. The case was later remanded to federal court.
Wes Christian, a lawyer representing Pet Quarters, wasn't immediately available to comment.
-By Carol S. Remond, Dow Jones Newswires; 303-997-5783; carol.remond@dowjones.com
(END) Dow Jones Newswires
26-02-08 2019GMT
Copyright (c) 2008 Dow Jones & Company, Inc.
IBAFT:The original team was chased away from completing their goals with threats of prosecution, as they engaged in unlawful acts for the purposes of exposing the naked short.
AI
