Private investor sues market maker
NanoSignal Stockholder Sues Major Wall Street Institutions for ``Counterfeiting'' Shares
Tuesday August 31, 9:01 am ET
LAS VEGAS--(BUSINESS WIRE)--Aug. 31, 2004--A lawsuit filed in Las Vegas County Court today by a major stockholder in NanoSignal Corporation (OTC:NNOS - News) alleges that a group of major Wall Street institutions has systematically damaged the market for the stock of NNOS and many other companies by flooding the market with fraudulently manufactured, virtually counterfeit shares.
By mis-using its "Stock Borrow Program" for the personal profit of its members, rather than the purposes for which it was originally established in 1981, New York's Depository Trust Company (DTC) has created artificial shares in NNOS and other publicly-traded companies, the lawsuit (Case No. A491236) filed by Las Vegas resident Gary W. Walters claims.
One defendant in the lawsuit, Jersey City-based stockbroker Knight Trading Group, Inc. is presently "short" 447 million shares of NNOS, Mr. Walters' lawsuit alleges. That's more than double the number of NNOS legitimately issued and outstanding shares. This is only possible because DTC and its National Securities Clearing Corporation subsidiary (NSCC) have created hundreds of millions of "counterfeit" electronic shares that don't actually exist, Walters says.
The market value of NanoSignal's shares has been reduced by these illegal practices, Mr. Walters' lawsuit states, and he seeks to recover his damages from the defendants in this suit. "I believe that investors in many other companies have been hurt by the conduct of these defendants," Mr. Walters states. "I hope that my lawsuit will remind them once again that in all of their activities, the financial institutions that comprise Wall Street must always put the interests of the small investor first. If my suit prevails, Wall Street will have to undergo a major paradigm shift."
