Sulphco, Inc.(fka SLPHQ)

[refuseee]

Ot on naked shorting from another board


Dear Mr. Fitzgerald - Thank you for your response. I do have a couple more questions.. My original inquiry was what had happened as a result of the Oregon DFCS news release dated 04/28/2003 stating that the brokerages will also pay $450 million over five years for stock research
beyond that provided by their own analysts and $80 million for a nationwide investor-education program. The time is almost up on that requirement and I would like to know what they have done if anything. I would think that your organization as a representative of Oregon, a recipient of funds from that suit, would also like to have an accounting of that.
My second concern is one that also effects me directly as a Oregonian. I will make this specific. A major portion of my retirement investment is in a company that is unarguably very well managed so it isn't some "penny stock". That company has been on the Reg SHO list for over ONE YEAR. Which means that the SEC and DTCC agree that it is being naked shorted which is ILLEGAL. The name of that company is Novastar, a REIT, stock symbol NFI. My concern is the issue of FTD/NSS as outed by the NASAA forum which you advised me that you had read. Again, I emphasize that I am not concerned by legal "Short Selling". My concern is ILLEGAL Naked Short Selling (FTD), the topic of the forum and why it was held. You must know that the outcome of that forum is not arguable. The SEC representative , Mr. Brigagliano attempted to minimize the issue by stating that it was only 1% of the dollar value per day. When pressed about that number the actual dollar amount was agreed to be right at 6 BILLION DOLLARS A DAY. And that was only that portion reported by the DTCC. Ex-clearing volume (that which occurs outside the reporting system of the DTCC) was estimated by Robert Shapiro and other panel members to be perhaps FIVE TIMES that amount. PER DAY. Mr. Fitzgerald, these are unarguable numbers presented by recognized industry experts in a public forum. Both the SEC and DTCC are fighting tooth and nail to deny that this is a problem and the public must "trust us". The DTCC will not release any information concerning the level of the FTD's. The research into this issue by industry experts shows that this IS a major issue. The level of withholding of information necessary to keep this fraud active is massive . I demand nothing more than upholding of the law. The law states that stock transactions must be completed in T+3 days. Some of these stock transactions for NFI, on the REG SHO list, have not closed in more than ONE YEAR.
Your organization as a member of NASAA has a charter to protect the investor. I would venture that the Oregon DFCS is not fulfilling its charter in that you know that the illegal activity is going on, you know that the SEC knows and is doing nothing (as proven by the NASAA forum) and you are doing nothing to cause a Congressional Inquiry that would cause the enforcement of laws you know are being violated. The facts indicate the issue has gotten too big for the SEC to correct without a complete market meltdown and that is why they are fighting tooth and nail to suppress the extent of the fraud. The SEC says "prove it" and at the same time withholds the very information that would allow that without question. That is exactly why the Refco proceedings are closed.
Mr. Fitzgerald - You as an enforcement officer in the Oregon Department of Finance and Corporate Securities are chartered to protect the public investor against fraud. I have just pointed out to you a major instance of fraud, namely the Failure To Deliver of stock certificates in a timely manner mandated by law, in a private company that I am invested in. The name of that company is Novastar , stock symbol NFI. I would suggest that you ask the DTCC to provide you with the level of FTD's for NFI for the last year. I would venture that they would tell you to pound sand. I am asking no more than for you to see for yourself the level of illegal activity I am concerned about and to do something about it.
Respectfully - Capt. XXXXXXXX