UNIVERSAL EXPRESS CASE PROFILE - December 1, 2009
Universal Express (USXP) operated as a pristine and exemplary small public company for 17 years.
It was ignominiously silenced by some rogue government officials in days.
For the good of our future economic trading system and other vulnerable United States public companies the following facts need to be exposed and understood.
We ask the interested public to simply allow these chronological facts in this profile to speak for themselves.
Was justice served? When will it be served?
Does the present Securities and Exchange Commission and the United States Court of Claims need to address these facts?
On July 27 2009 the SEC, after more than ten years of denial, finally admitted that the naked shorting of the shares of all public companies including small public companies like Universal Express was a huge national problem. (I)
On August 5, 2009 the SEC after more than ten years of actually denying to the public and the courts that this illegal counterfeiting process existed, announced it had brought its first enforcement action against only selected small house brokers who only naked shorted from 2005 to 2007. (2)
These long though overdue but ineffective tentative actions were initiated by the present SEC administration and its new Chairman. (3)
Then on October 21, 2009 United States Senator Edward E. Kaufman in a floor speech to the Senate urged the SEC to finally and effectively ban naked shorting which had been a huge national problem for all public companies, finally including small public companies as well. (4)
In his speech Senator Kaufman referred to Senate Bill No. 605 which is to ban naked short selling. He and a number of other Senators have introduced and cosponsored Bill No. 605. He concluded, “We need to send a strong message to the SEC that the United States Congress will not tolerate (its continued) inaction on this critical issue.” (5)
However the previous SEC administrations had failed for more than a decade to take any effective regulatory or enforcement action against illegal naked shorting or naked shorters themselves (6)
These non-regulation and non-enforcement failures of the previous SEC administrations to stop naked shorting borders on criminality, cover-up or, at the least, gross fraud. (7)
Our case involves the failure of previous SEC administrations to stop naked short sellers and SEC employees from destroying Universal Express and thousands of other small publicly-traded companies. (8)
The core issue of the naked shorting scandal underlies these paragraphs. Naked short selling is selling shares one does not own, will never purchase nor deliver. Each such sale is an illegal violation of the securities laws and the anti-counterfeiting statutes of the United States. It is also grand larceny under the laws of every State. This illegal process was long covered-up by previous SEC administrations in favor of culpable Wall Street interests and has been a significant cause of the present financial global crisis. (9)
Previous SEC administrations denied and ignored frequently-requested assistance by Universal Express and its officers to combat the naked shorting of its shares. (10)
The long-term naked shorting scandal by Wall Street firms of the shares of small public companies under previous SEC administrations destroyed thousands of those companies and the investments of millions of ordinary Main Street investors including over 65,000 Universal Express shareholders. (11)
The previous securities regulators total failure to enforce existing securities laws as well as its own regulations and its active cover-up of the naked shorting scandal was a gross breach of its fiduciary duty to small public companies, their investors, officers and employees. (12)
The previous SEC administration’s willful destruction of Universal Express and its vindictive attempts to silence its officers as whistleblowers on the naked shorting issue constitutes gross fraudulent misconduct. (13)
The naked short sellers operated like gangs or economic terrorist cells usually from or within Wall Street houses such as Bear Stearns and Lehman Brothers. They would attack the stock of small companies for the purpose of driving the stock down in value and pushing the targeted companies into bankruptcy. They could sell what they did not own. (14)
The naked shorters who attacked Universal Express combined their raid with internet postings of more than 700,000 false messages on the Company’s chat board thus attempting to drive the Company into bankruptcy. Significantly Universal Express heroically fought long and hard since 1998, although Bear Steams and Lehman Brothers collapsed in only one weekend under the same type of internet and naked short sale stock attacks. (15)
The purpose of pushing these public companies into bankruptcy was that the naked shorters would be able to keep the entire proceeds of their illegal naked short sales because they were never forced to cover or deliver when a company failed. It was a common practice that these SEC protected naked shorters did not even have to report these ill gotten revenues on their taxes. (16)
After the naked short sellers drove down the company’s stock price, it destroyed the ability of the company to obtain credit lines and maintain existing credit relationships. This further resulted in shareholders’ lack of confidence and often to predictable panic selling forcing corporate failures. (17)
On numerous occasions since 1998 Universal Express and its officers complained to the previous SEC administrations about these illegal practices, but surprisingly the SEC always helped the naked short sellers by their denials. First, by fraudulently doing nothing, and then by actually attacking Universal Express and its officers. (18)
Failing to get any help from the SEC, Universal Express was forced to sue some of the naked short sellers directly. The Company proudly obtained two Florida jury verdicts totaling $700,000,000 against the naked short sellers. These were the same judgments which the previous SEC administrations seized by fraudulently forcing Universal Express out of business and attempting to permanently silence those facts which the two juries determined appropriate for victim compensation. (19)
The Company filed 68 annual and quarterly reports with the SEC over a 17 year period without receiving any questions or criticisms. The previous SEC administrations disregarded the rights of Universal Express and its officers and shockingly went to the aid of the illegal short sellers. Despite the SEC’s fraudulent statements of denial and mistruths to the courts, Universal Express had the absolute right to issue stock under its bankruptcy exemptions to counteract the protected naked shorting of its shares. By obtaining a summary judgment fine with SEC fraudulent statements, Universal Express and its six subsidiaries were improperly closed, liquidated and corporate documents shredded despite an ongoing request for a trial or appeal. (20)
It might be further observed that in due course the same naked short selling wolf turned on two of its own. When Bear Stearns and Lehman Brothers were allegedly having financial difficulties during the last half of 2008, the naked short sellers were there to drive Bear Stearns and Lehman Brothers out of business in the same fashion. (21)
While Universal Express was being attacked by the SEC, Bernie Madoff was writing with the SEC’s blessing the short selling rules for the financial industry. He was, as we sadly note today, one of the biggest unregulated naked short seller for decades. (22)
Finally on July 15, 2008 and September 15. 2008 the previous SEC administration admitted under intense media exposure that naked shorting was a huge national problem underlying the failure of major financial institutions as a major cause of the financial meltdown. It was during this period of shockingly breaking public disclosure on naked shorting that the SEC incarcerated and sought with great efforts to fraudulently maintain in chained solitary confinement for 83 days Universal Express’ CEO, Richard Altomare, the most prominent speech giving whistleblower on naked shorting. (23)
At that point, the previous conflicted SEC administration actively sought to protect from the naked shorting scandal only selected Wall Street banks that were doing the naked shorting of thousands of small public companies for these same ten years. Many of these banks now turned on each other in their own insatiable and unregulated greed adding to unregulated confusion. (24)
The SEC had denied for over a decade that naked shorting was a problem and failed to take any enforcement action to prevent the issuance of trillions of counterfeit and unregistered shares sold into the market by vulture-like Wall Street interests in the names of small public companies destroying their market prices, in violation of the anti- counterfeiting statutes and securities statutes of the United States Congress. (25)
As a result of this ongoing regulatory failure and cover-up by previous SEC administrations of the naked shorting scandal, thousands of small public companies were destroyed and forced into bankruptcy by the naked shorters, millions of small investors lost their life savings and hundreds of thousands of employees lost their jobs. (26)
Universal Express was one of those estimated ten thousand small public companies to be destroyed by the naked shorters in league with previous SEC administrations, which has been paid (yes, paid) for every counterfeit share traded. (27)
Universal Express, it’s President and CEO Mr. Richard A. Altomare and Mr. Gunderson, its General Counsel, had been prominent whistleblowers against naked shorting for more than ten• years. Instead of supporting and protecting these whistleblowers, they were fraudulently and illegally harassed and targeted by previous SEC administrations in order to silence them even by closing down and defaming their 17 year business model. (28)
The previous SEC administrations denied the existence of naked shorting as a problem for stock marketplaces and failed to enforce its own regulations to stop the practice. They also were determined after years of fraudulently targeted harassment to continue to try to silence by any and all means these very persistent whistleblowers, Universal Express and its CEO who was also a former United States Marine. (29)
These SEC actions to fraudulently harass, destroy and silence Mr. Altomare on behalf of the naked shorters culminated on May 2, 2008 at the behest of the SEC in the brutal incarceration of Mr. Altomare into chained solitary confinement for eighty three (83) days for purged civil contempt which Mr. Altomare, after a 40 pound weight loss, sadly proved was improper. (30)
In a few days, at the behest of the previous vindictive and conflicted SEC administration, this viable and growing American small public company that was Universal Express having a market capitalization during its fiscal year 2006 of $111 Million Dollars was fraudulently defamed in the business marketplace and improperly liquidated for $35,000. (31)
It is also estimated that since naked shorters never need to deliver or “cover” their positions with actual shares of companies thus forced into bankruptcy, their gains from these illegal activities have never been reported to the government. The Wall Street Journal stated in July 2007 that the naked shorting losses to American taxpayers was valued at $2.5 billion daily. Accordingly, the lost tax revenues from this illegal trading permitted by the previous SEC administrations over the relevant period was conservatively more than $7 trillion - sufficient to pay off our national debt. (32)
It is clear that the culture of previous SEC administrations was to defer to and not to regulate powerftrl Wall Street elites, but only to focus on small, less powerftil companies. Despite the fact that the SEC’s Charter mandates protection for ordinary investors not just brokers and hedge fluids this fact remains painfully true. (33)
The revolving door of the SEC leading to huge accounting, legal and consulting salaries with these same Wall Street elites also fostered this SEC lack of regulation culture. (34)
Presidential Candidate Senator John McCain on September 18. 2008 called for the firing of former SEC Chairman Cox for failing to regulate the naked shorting scandal. (35)
On December 18, 2008 President-Elect Obama, in nominating the new SEC Chairman, stated that the SEC, as the regulator assigned to oversee Wall Street had failed to regulate and had “dropped the ball” over the years, substantially causing the present financial crisis. (36)
On January 27 2009 the Senate Banking Committee at hearings accused the previous SEC administrations of a total failure to regulate Wall Street. (37)
On February 4, 2009 the House Financial Services subcommittee determined at hearings that the previous SEC administrations had totally failed to regulate Wall Street and that the SEC had operated only to protect Wall Street institutions and not ordinary Main Street investors as it is charged by Congress in its charter. (38)
On March 18, 2009 the Office of Inspector General of the SEC issued a report finding that previous SEC administrations had failed to regulate the naked shorting scandal, that naked shorting was a significant factor in the present financial collapse and that the SEC had ignored many thousands of complaints on naked shorting from small public companies and investors. (39)
On June 2, 2009 the Chief Executive of the NASDAQ told the U.S. Chamber of Commerce that naked shorting was the real problem underlying the present financial crisis. (40)
On March 3, 2009, April 1, 2009, June 24, 2009 and July 22, 2009 numerous United States Senators sent joint letters to the new SEC Chairman urging that the SEC ban naked shorting as a huge problem and a principal cause of the present financial crisis and the cause of great damage to and destruction of public companies, especially smaller public companies like the now destroyed Universal Express. (41)
On June 25, 2009 United States Senator Edward E. Kaufman in a floor speech to the Senate stressed in great detail the “fierce urgency” for the SEC to ban naked shorting as a huge problem and a principal cause of the present financial crisis and the cause of great damage to and destruction of public companies, especially smaller public companies. (42)
On July 27, 2009 the SEC, after more than ten years of denial, finally admitted that the naked shorting of the shares of all public companies, including small public companies like Universal Express was a huge national problem. (43)
On August 5, 2009 the SEC finally, after more than ten years of actually denying that this illegal process existed, announced it has brought its first enforcement action against only small house brokers who naked shorted from 2005 to 2007. (44)
These actions were taken after more than a decade of previous SEC administrations denying that naked shorting existed or was even a problem. It ignored naked shorting. It actively covered-up and failed to regulate the naked shorting scandal. Its’ inactions bordered on criminality and, at the least, gross fraud. Its’ inactions were in the long-term and perpetual interests of Wall Street banks and firms who were illegally committing the naked shorting in the first place. (45)
On October 21, 2009 United States Senator Edward E. Kaufman in a floor speech to the Senate urged the SEC to finally and effectively ban naked shorting which has been a huge national problem for all public companies, now finally including small public companies as well. (46)
In his speech, Senator Kaufman referred to Senate Bill No. 605, to ban naked short selling, which he and a number of other Senators have introduced and cosponsored. He concluded, “We need to send a strong message to the SEC that the United States Congress will not tolerate (its continued) inaction on this critical issue.” (47)
In conclusion, Universal Express had corporately developed and had become globally recognized despite the rogue SEC harassment supporting the unrelenting attack since 1998 by naked short sellers, unscrupulous Wall Street financial interests, fraudulent brokers, hedge funds and market makers who sold into the market billions of USXP unregistered and counterfeit shares. This caused the collapse of the Company’s stock price from $2.00 to $.02 (2 cents) per share and, thereafter, kept the Company’s stock price well below fractions of a cent, despite the strong growth of the Company’s businesses, including a tripling of revenues each quarter for more than five years. (48)
In more than 100 press releases, letters and visits to government officials and in worldwide speeches• and webcasts as well as a full page New York Times announcement, Universal Express, its President and its General Counsel, proved that naked short selling existed upon the attack by the naked short sellers on the Company’s shares. They even showed by statistics that the volume of the Company’s shares traded was 11 times the Company’s outstanding shares and more than 68 times its average daily volume. (49)
As stated, State court juries in Florida in 2001 and 2003 awarded the Company verdicts exceeding a total of $700,000,000 against naked short sellers. In a press release issued on September 23, 2003, entitled “Universal Express.. .Declares War on ‘Naked Short Selling’,” the Company stated “If normal everyday people acting as juries can understand this naked shorting scheme, why can’t the SEC “? (50)
Within a month after the Company’s second jury verdict against the naked shorters and the very wide publicity attending the Company’s verdicts, an embarrassed SEC, through its Denver office, commenced a fraudulent program of harassment against the Company with more than 13 subpoenas for thousands of documents demanded to be produced in only a few days. Not one attempt to aid the Company was offered by the SEC. (51)
The Company volunteered to provide information on contracts for current proposed acquisitions and its’ funding sources for those acquisitions. (52)
Yet, before these documents were even received by the attorneys at the Denver office of the SEC, agents were actually calling and visiting those acquisition candidates’ and flmders’ senior officers, threatening them with reprisals or tax audits so that they would move away from the Company and its success. (53)
This horrific and inappropriate SEC pattern of intimidation attempting to prevent Universal Express’ continued success was in frill swing and successful since several large proposed acquisitions were then terminated. (54)
The SEC’s fraudulent harassment of the Company and its officers, as whistleblowers on naked shorting and the harassment of its business partners and potential business partners and finders continued unabated thereafter. (55)
The Company, its President and General Counsel, who value free speech under our Constitution, were determined not to be bullied by a conflicted and improperly paid regulatory agency, which had failed the investing public on this national naked shorting scandal in favor of Wall Street interests in clear violation of its Congressional mandate. (56)
This scandal, clearly ignored by previous SEC administrations, had destroyed the ongoing American dream of taking small private companies public and growing those businesses through the growth of their stock base. (57)
Thousands of lost developmental products beneficial to the public including Universal Express’ innovative logistic businesses never had a chance for the national market. (58)
Trillions of dollars have been siphoned from the capitalizations of public companies by the naked shorters with the intent and result of bankrupting those companies so that the naked shorts would never have to be “covered” by delivery of actual shares. (59)
The present SEC’s recent admission on July 27 2009 that naked short selling has been a huge problem for all public companies, including small public companies like Universal Express and its announcement on August 5. 2009 of its first enforcement action against only small house brokers who naked shorted, constitute complete vindication of Universal Express and its officers in their over ten year battle against naked shorting, incriminates former SEC perjurers and sadly cements the history of the previous SEC administrations’ fraudulent conduct against these dedicated whistleblowers. (60)
Further historical information is also available on the following website:
www.richardaltomare.com
Exhibits supporting each of the aforementioned paragraphs are available upon request by contacting raaltomare@yahoo.com or chgunderson@gmail.com.
December 1, 2009
