OT: "As Mad as Hell"
CirTran's Iehab Hawatmeh Commends and Joins Blasting of 'Naked Shorting' by Overstock.com President
Business Wire - December 01, 2005 08:15
SALT LAKE CITY, Dec 01, 2005 (BUSINESS WIRE) -- Iehab J. Hawatmeh, founder and president of CirTran Corp. (OTCBB: CIRT), an international full-service contract manufacturer of IT, consumer and consumer electronics products, today commended and joined with the president of Overstock.com (NASDAQ: OSTK) in his public condemnation of "naked shorting."
"I am delighted to stand shoulder-to-shoulder here in Salt Lake or any place else with Overstock.com President Patrick Byrne in this very important matter," Hawatmeh said, commenting on Byrne's statement yesterday at a public forum on "naked short selling" conducted by the North American Securities Administrators Association (NASAA).
In his statement, Byrne called naked short selling "a growing problem within the securities markets. The Depository Trust & Clearing Corp. admits that 'failures to deliver' are as high as $6 billion per day. This is an incredible number," Byrne said.
'As Mad as Hell ...'
Hawatmeh concurred and underscored Byrne's anger and frustration with the practice.
"In 1976, the late Peter Finch, as anchorman Howard Beale, won an Academy Award for his performance in 'Network' in which he made his famous 'I'm as mad as hell and I'm not going to take it any more' speech," Hawatmeh said.
"I'd like to think that Mr. Byrne and I are 21st century versions of Howard Beale, and we too are 'as mad as hell' ... about naked short selling," Hawatmeh said. "It isn't fair, it isn't legal, and it's hurting honest, hard-working investors at the expense of scoundrels."
An Illegal Practice
Naked short selling, or naked shorting, is an illegal practice of selling shares that have not been affirmatively determined to exist. Ordinarily, traders must borrow a stock, or determine that it can be borrowed, before they sell it short. However, some investors and hedge funds have taken advantage of loopholes in the rules to sell shares without making any attempt to borrow the stock.
The Securities and Exchange Commission addressed this practice two years ago, on Oct. 29, 2003, by implementing a new rule to ban naked shorting in order to protect thinly traded stocks that are vulnerable to aggressive short selling which would cause the stock price to fall.
