Replies to post #16813 on Telvue Corp. (fka TEVE)

[kaymeyer]

Your link DOES NOT support your contention that there are delivery issues with Telvue. In fact it is the opposite. Per Finra and Regsho this security is not a threshold regsho flag nor is it flagged under rule 4320. I've included a few links to support my position.
http://www.failstodeliver.com/datadump.aspx

http://www.nasdaqtrader.com/trader.aspx?id=regshothreshold

I'm a lawyer, not a stock broker, but this seems very elementary to me, although if necessary I'll see if I can catch a poster named Big bake who is an expert on this and he can explain much better than me.

[BigBake1]

First let us review what an FTD is, it is a FAILED trade transaction, either shares were not delivered or cash was not settled on T+3. All trade transactions that fail on T+3 (Trade Date plus 3 days) become an FTD, however there is no specific cause of such FTDs as they normally occur in all securities. One is only concerned in a continuous aggregate that does not settle, as most FTDs settle within a few days. The SEC cites the following common causes of such FTDs:

Many times the member will experience a problem that is either unanticipated or is out of its control, such as:
(1) delays in customer delivery of shares to the broker-dealer;
(2) an inability to borrow shares in time for settlement;
(3) delays in obtaining transfer of title;
(4) an inability to obtain transfer of title; and
(5) deliberate failure to produce stock at settlement which may result in a broker-dealer not receiving shares it had purchased to fulfill its deliver obligations.

In addition, market makers may maintain temporary short positions in CNS until such time as there is sufficient trading to flatten out their position.

Of course these are rarely ever presented in such “professional authority” concerning poor stock performance and discussions of Abusive NSS. Yet another thing missing from such self proclaimed knowledge of FTD data, the fact that in most OTC cases delivery can be up to 35 days on debt conversions expecting free trading status of such newly issued shares. See Exception in SEC Rule 203:

Pursuant to the suggestions of other commenters, we are including an additional exception from the uniform locate requirement of Rule 203(b)(1) for situations where a broker-dealer effects a sale on behalf of a customer that is deemed to own the security pursuant to Rule 200, although, through no fault of the customer or the broker-dealer, it is not reasonably expected that the security will be in the physical possession or control of the broker-dealer by settlement date, and is thus a "short" sale under the marking requirements of Rule 200(g) as adopted.70 Such circumstances could include the situation where a convertible security, option, or warrant has been tendered for conversion or exchange, but the underlying security is not reasonably expected to be received by settlement date.71 Rule 203(b)(2)(ii) as adopted provides that in all situations, delivery should be made on the sale as soon as all restrictions on delivery have been removed, and in any event no later than 35 days after trade date, at which time the broker-dealer that sold on behalf of the person must either borrow securities or close out the open position by purchasing securities of like kind and quantity.

There also trade rejections that end up short due to amateur traders who round trip purchases and sales of securities before they settle, of course that is never discussed either. But what really puts a fine point on it all is the fact that there is a failure to understand FTD reporting and Threshold data as presented, none of which even point to NSS or Abusive NSS and yet it is definitively posted as proof in some cases. I often ask if the SEC has to make statement on such data that there is nothing definitive about the cause for such data then how is it that non regulatory entities can make a case from it saying it is in fact Abusive NSS? The SEC statement is pretty clear:

Please note that fails-to-deliver can occur for a number of reasons on both long and short sales. Therefore, fails-to-deliver are not necessarily the result of short selling, and are not evidence of abusive short selling or “naked” short selling. For more information on short selling and fails-to-deliver, see http://www.sec.gov/spotlight/keyregshoissues.htm, http://www.sec.gov/divisions/marketreg/mrfaqregsho1204.htm, and http://www.sec.gov/rules/final/34-50103.htm.

How did one determine the FTDs are not “long’ position trades? How did one determine they are a result of short selling or abusive short selling or naked short selling? The SEC spells it out clearly, there is nothing to be certain about the data, however the presence of FTD is not enough, even on threshold doesn’t mean a naked short position exists. In fact the common cause of such large short positions revolve around debt conversions in the first place.

Market Makers do not buy for their principle account in the OTC, they make their money on each transaction as contracted by brokers in Riskless Principal transactions. They may also make money on Market Orders, but one of the largest money makers is simply selling newly issued shares for block positioners dumping their shares. Unfortunately the myth of MMs profiting by driving price is taken from exchange traded securities, where they do in fact buy and sell based on their own principal accounts. They also make a lot of money on “price improvement” on such listed securities.

Simple facts are the OTC is not a liquid enough environment for such shenanigans any longer, nor does it present an opportunity to hide such transaction due to regulatory over sight. FINRA gets a report for each and every transaction that occurs on the consolidated tape, such NON TAPE TRANSACTIONS are regulatory reports detailing the entire transaction. The non tape transaction report and the consolidated tape are a form of check and balance. This is no different than credit and debit transactions for accounting and in fact once a trade is confirmed it is in fact reported upline to the NSCC who does their own credit and debit function for each trade transaction.

The bottom line is that market makers do not buy this junk any longer, the OTC is not manipulated by MMs dumping non existent shares, it is simply manipulated by insiders, affiliates and debt holders. If one wants to see manipulation they need to experience the exchanges where it is performed daily and in many different forms where it is difficult to spot it or in some cases completely legal under regulatory rules.

Now as to actual FTD data on this turd security reported since the New Year:

 20140207	87970K207	TEVE	240	TELVUE CORP COM STK	13.01 
 20140210	87970K207	TEVE	128	TELVUE CORP COM STK	13.01 
 20140211	87970K207	TEVE	128	TELVUE CORP COM STK	13.01 
 20140212	87970K207	TEVE	68	TELVUE CORP COM STK	14.00 
 20140213	87970K207	TEVE	68	TELVUE CORP COM STK	13.01 
 20140221	87970K207	TEVE	110	TELVUE CORP COM STK	9.00 
 20140224	87970K207	TEVE	110	TELVUE CORP COM STK	9.00 
 20140225	87970K207	TEVE	110	TELVUE CORP COM STK	9.00 
 20140226	87970K207	TEVE	110	TELVUE CORP COM STK	14.00 
 20140227	87970K207	TEVE	110	TELVUE CORP COM STK	13.50 
 20140507	87970K207	TEVE	10	TELVUE CORP COM STK	9.25 
 20140508	87970K207	TEVE	10	TELVUE CORP COM STK	9.25 
 20140509	87970K207	TEVE	10	TELVUE CORP COM STK	9.25 
 20140512	87970K207	TEVE	10	TELVUE CORP COM STK	13.99 
 20140513	87970K207	TEVE	10	TELVUE CORP COM STK	9.25

Nothing to write home about here, in fact some of the February data is in fact Short Interest of 40 shares as per the Short Interest report. But there is nothing going on here, in fact there are 0 FTD as of the 14th of May, 2014. All trades have in fact been settled. So riddling "batman" really doesnt do anything in this case, the SEC provides the data and plenty of information concerning FTDs and this security is ridiculously illiquid, any non delivery is fully transparent and easy to spot.