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Replies to post #10622 on Saleen Automotive, Inc. (fka SLNN)
The system was created to conceal naked shorts or failure to delivers which become a derivative. Bernie Madoff was the Vice Chairman of finra, he made the rule which allowed naked shorting with the sec, the Madoff Excemption. His firm was on the board of the DTCC where the stock borrow program facilitated the counterfeiting of the stock market.
The failures to deliver were so massive the federal reserve had to make sure the rules of covering these naked shorts weren't followed or it would have melted the markets. Instead of making Bernie Madoff and the other firms who participated in scheme cover these shares the sec "grandfathered" the fails to cover up the fraud:
The SEC themselves have admitted in a Securities Industry and Financial Markets Association (SIFMA) meeting the true size and scope of the fraud committed, a fraud they facilitated and covered-up, and continue to cover up to this day. Significantly, the above comments relate directly to the Over the Counter (OTC) market alone. In a speech delivered by SEC Commissioner Paul S. Atkins, before the 34th Annual SIFMA Operations Conference, he states: www.sec.gov/news/speech/2007/spch043007psa.htm
“I can't leave the topic of "fails" without touching on one more highly important issue currently facing the Commission. This goes back to the meaning of "fail" as a noun. The SEC has recently been involved in a very proactive (some might even say prudential) exercise with respect to the issue of fails in the OTC derivatives markets. In response to reports of widespread documentation problems in those markets, the SEC has joined forces with other regulators, most notably the Federal Reserve Board and Britain's FSA, to encourage OTC market participants to clean up years of incomplete and inaccurate trade documentation. The need to act was clear. From all reports, the backlog of unconfirmed trades, which essentially are fails, and the widespread and unchecked use of novations in the credit derivatives markets had crippled risk management efforts and set the stage for a massive meltdown in certain default scenarios. Given the multi-trillion dollar aggregate notional amounts of the contracts involved, it was easy to see that the OTC derivatives dealers and their counterparties had created an operational problem similar in scope to the late 1960's back-office crisis on Wall Street.”
Now fast forward to the 700 hundred billion dollar bailout by the federal reserve where they printed 16 trillion dollars to cover these same firms toxic, ie counterfeit, sales of stocks, bonds, cdo's, etc. There were so many counterfeit financial instruments sold by Wall Street the fed had to keep buying this garbage till just a couple months ago or the whole market would have melted, just like they said in their 2007 meeting.
