CMKM Diamonds Inc. (fka CMKX)

[Ignutz]

Talk about knowing your subject!

He warned the SEC way in advance: they did not listen.

Dr. Jim DeCosta is the worlds' leading expert on naked short selling and the disaster it is creating for investors. He predicts the end to market makers privileged positions in the USA within 5 years. He says the US system will be changed to a system like Canada’s pesent system; Canada's system has NO market makers. Also, the Canadian stock market does not have a naked shorting problem, nada, zero, zip.

I would very much like to ask Dr. DeCosta, what he thinks CMKM's total naked short is; what does he suggest CMKM must do to beat these thieves? I wonder how much he charges as a consultant; I'll bet he is very expensive and well worth it.

Below is a small part of a very long letter Dr. DeCasta wrote to the SEC warning it that the NSSing problem is massive and must be stopped. Here is just a taste of what Dr. DeCoast wrote:

"The only intent was and is the bankruptcy of the victim company. Naive micro cap investors have been getting their pockets picked systematically by Wall Street "professionals" for decades. FRAUDSTERS ARE SELLING ENTITIES THAT DON'T EXIST AND NAIVE INVESTORS ARE SPENDING BILLIONS OF DOLLARS SCOOPING UP THESE PERCEIVED BARGAINS TRADING AT TINY PERCENTAGES OF BOOK VALUE."



Dear Mr. Katz [The SEC Chief when letter was written]

We thank you for this opportunity to offer comments and suggestions in regards to the proposed Regulation SHO. We are of the opinion that the rampant "naked short selling" of stocks and the associated epidemic of failures of "good delivery" and loans made to mask "failures to deliver" that we are currently experiencing, threatens the very core and integrity of our financial system. These problems need to be dealt with IMMEDIATELY, even before the implementation of the proposed Regulation SHO.

As each day goes by, the investment losses pile up, another handful of micro cap companies go bankrupt, and the inevitable loss in investor confidence once this little "industry within an industry" is exposed increases. This is occurring at a time when the system can ill-afford any new scandals involving perceived regulatory apathy. Our comments will first address some specific suggestions and then some generalizations based on 21 years of research on the phenomenon known as "naked short selling."

[Later in the letter]

"Since drug consumption and national security issues are at play here, we feel that the U.S. market makers and clearing firms acting as conduits in this activity OWE THE U.S. PEOPLE BIG TIME IN THIS REGARD. WE UNDERSTAND THAT SOME HONEST U.S. MARKET MAKERS AND CLEARING FIRMS HAVE BEEN PLAYED LIKE A FIDDLE. THE DISHONEST ONES ARE, OF COURSE, COMPLICIT WITH THIS ACTIVITY AND ARE IN COLLUSION WITH THESE CRIMINALS. WE BELIEVE THAT MANY BASICALLY ETHICAL MARKET MAKERS HAVE JUST FAILED TO RECOGNIZE THE EXISTENCE OF VICTIMS, BOTH U.S. CORPORATIONS AND THE INVESTORS THEREIN, IN THESE HIGHLY COMPETITIVE POST-DECIMALIZATION MARKETS AS WELL AS THE DELETERIOUS EFFECTS ON HOMELAND SECURITY AND THE INTEGRITY OF OUR FINANCIAL MARKETS IN GENERAL.

We feel that the SEC is in a once in a lifetime position to bolster the intent of the USA Patriot Act. Please buy in these "open positions" now and you will be accomplishing a lot more than improving the integrity of the largest financial system on earth. As we mentioned earlier, we're fresh out of "middle ground", it's time to make a stand. The SEC has had a recent history of being REACTIVE to the States Attorneys General leading the way on these types of frauds. Perhaps as it relates to naked short selling frauds, the SEC can take the lead and act in a more PROACTIVE manner."

SOLUTIONS TO THE PROBLEM

1) Realize that there is indeed a problem, and then locate its source. Look at the DTCC records showing the age and magnitude of outstanding loans made to hide all of these failed deliveries for companies trading on the OTC: BB and Pink Sheets. Keep in mind that these naked short "open positions" are constantly being "kited" by wash trades and matched orders made in an effort to "rejuvenate" the age of the "fail".

2) Make the commitment to act quickly so that no more victim companies go bankrupt while the DTCC participants try their best to stall the implementation of Regulation SHO. TIME IS OF THE ESSENCE!

3) Quickly formulate the list of all victim companies whose arithmetical sum of "failed deliveries" and "loans made to mask failed deliveries" exceed the Rule 11830 parameters.

4) Demand that these excesses above the Rule 11830 parameters be brought into compliance within a given amount of time via the guaranteed delivery buy-in of "real" shares from "real" shareholders. The good thing about guaranteed delivery buy-ins is that the bill will, as if by magic, land in the lap of the guilty party or the clearing firm that cleared for the guilty party. The identification process is an automatic. This addresses the preexisting naked short positions prior to Regulation SHO's implementation. ANY INDUSTRY PLAYER THAT OBJECTS TO THIS SOLUTION IS IN ON THE SCAM. ASK YOURSELVES, WHY SHOULD THEY CARE IF THEY ARE NOT IN ON IT? WHY WOULD THEY WANT THE MANIPULATORS TO GET AWAY WITH THEIR CRIMES? The next job is to pass Regulation SHO to level up the playing field for future investors.

5) This solution should not at all be seen as burdensome to those perpetrating this fraud because it does not even address the damages done to those thousands of victimized corporations and their millions of shareholders which have already gone bankrupt. There, the crooks have already won.

6) The SEC has to dig deep and do the right thing to make up for their complacency in the past. If those DTCC participants that perpetually claim that there is no such thing as abusive naked short selling are correct then there will be no buy-ins. Please do not have the audacity to approach a company whose share price has just tumbled from $5 to a penny and try to arbitrate a solution involving the victimized corporation selling the perpetrators of the crime large blocks of stock at a penny or two. We don't think the investors that bought shares at $4.90 will look upon this too favorably. Keep in mind the immense amount of money sitting in front of those that sold these nonexistent entities to these investors because it matches to a penny the amount of money these investors have lost on paper or have realized by selling at a loss.

We thank you for this opportunity to help address this massive fraud being perpetrated on U.S. micro cap investors and look forward to working closely with you on its solution.

Dr. Jim DeCosta

Hmmmm, I wonder what else he knows?


Here is the link to the full letter:
http://www.sec.gov/rules/proposed/s72303/decosta122203.htm