Replies to post #7710 on Hall of Fame Beverages, Inc (HFBG)

[Thehelm]

Unfortunately some MM's get away with it for years and the problem is huge. Here is the figure for NYSE stocks alone:

How big is the delivery failure problem? Try $67+ billion as of Q1, 2007, for just NYSE member firms - and that is at today's mark to market value, not the price at which the sales were made - likely 5-10X or more higher. See the totals for yourself in the Securities Industry Association's own summary of NYSE member firm financial performance, and contrast that to the DTCC/SEC's $6 billion fairy tale. Lines 69 and 103.

I have a feeling that if this continues w/ HFBV, JB and the crew will be busting some heads. I hope so anyway.

Pretty simple. It is all driven by Wall Street not wanting to have to give back commissions when shares are un-delivered. So a flood of fake “Share Entitlements” – counterfeit shares – are traded in the system as real, and as long as all the brokers treat the fakes as though they are real, everyone on the industry side of the fence wins big – more trades, more commissions, more shares with which to drive down prices for the large, super-important customers of Wall Street – the hedge funds. That is what is known as creating “liquidity” by creating fake shares. It is pervasive, and the SEC and DTCC refuse to tell anyone exactly how big the problem is, or to divulge the size of the problem by company.
Everyone on Wall Street – the financial press, the brokers, the DTCC/NSCC/DTC, the research firms, the banks – all have a ton to lose by this being understood by Main Street America.

flooding the market with sales transactions that they know will create a flood of fake “Securities Entitlements” on delivery day, the fraudsters use the system to facilitate their stock manipulations – they know that buying brokers will not bust the trade, even if they don’t deliver the shares, thus they are secure in their scheme – the system will cover for them. And it does. Buy-ins are unheard of in actual practice, thus a manipulator has no dis-incentive to using this type of manipulation technique.spx