Zeev's Turnips Patch-No Politics (ZEEV)

[Mr. Bill]

Yes- they simply refused to enforce their rules and did so conditionally by ignoring the problem and cheating investors.

So the insiders and their friends who sold the ONE tradeable share in the float 138,000 times also sold the dividend as well. Hence they were short 414,000,000,000 shares of a stock with an OS of 33,000,000.

Can we say HUGE problem? The insiders/friends of insiders were technically bankrupt as the stock costed at least 100 times it's value at .0001 with 3M instead of 1 share due to the rounding up to get to .0001. Brokers were next on the hook to back up their customers. Market makers who shorted the stock were on the hook.

Investors who followed and abided by the rule should have made a fortune while brokers and market makers who had their head up their butts should have lost a fortune. That does no bode well on Wall Street so a method had to be found by regulators to protect them!

NASD member firms or their
registered representatives from
time to time respond to customer
inquiries regarding ex-dates relating
to dividend and other distributions.
In some cases, customers have
drawn erroneous conclusions
regarding ex-dates. In particular,
large dividends that result in the
designation of ex-dates after the
record and payable dates have
caused confusion in the case of
customers who effect sales
transactions after the record date
but before the payable date and
believe therefore that they are
entitled to keep the dividend.

The second method, under
subparagraph (b)(2) of Rule 11140,
provides that for dividends or
distributions that are 25 percent or
greater of the value of the subject
security, the ex-date shall be the
first business day following the
payable date. For example, if an
issuer has announced August 10 as
the record date and August 31 as
the payable date, then the ex-date
will be September 1, the first
business day after the payable
date. In this example, September 1
is the day on or after which a buyer
would purchase the security without
the dividend and, therefore, the day
on which the price of the stock is
adjusted downward. In this
example, a seller of the security on
August 15, even though the holder
of record to receive the dividend,
would have to relinquish the
dividend to the buyer. Indeed,
because the value of the security
on August 15 has not yet been
adjusted downward to reflect the
dividend distribution, the seller in
this example would be unjustly
enriched by keeping the dividend.
The seller would have received the
value of the dividend twice: first, as
fully reflected in the unadjusted
price of the stock on August 15;
and secondly, as subsequently paid
by the company to record date
holders.