Replies to post #308931 on CMKM Diamonds Inc (fka CMKX)

[Investorman]

And we were correct. You were wrong. Although some Xers are still Krazy.

[dia duit]

theres no such thing as naked shorting, there all crazy.Its just people angry there stock didn't go up. sound familiar?

Yes. It is the mantra of those who want to advance a false interpretation of bashers and others view on the topic. We have stated for years that naked shorting does exists, but not in certain stocks where the CEO's are feeding their shareholders propaganda about the stocks lack of performance because they are under attack by naked short sellers. They use the naked short excuse as a scapegoat to cover up their own violations.

Here is a perfect example of such a case. JAG Media/JagNotes was one of the original naked short screamers/schemers. They enlisted the help of O'Quinn/Christensen in a failed attempt to sue brokerage firms over naked short violations. The O'Quinn gang even used Gary Valinoti as a consultant on the subject of naked shorting. ROFL

Jag and crew also heavily promoted the issue by using Gayle Essary's site FinancialWire. FinancialWire was used to promote "StockGate" where many false claims of naked shorting certain penny stocks on the Berlin-Bremen Stock Exchange started. After an extensive investigation the regulators report found these claims of naked shorting were without merit.

There were TWO separate investigations into the naked shorting claims of JGMHA. Both came to the same conclusions. This is the latest report that should finally close the matter.

Here are some excerpts from the report:

http://www.sec.gov/news/studies/2009/oig-487.pdf

investigation found that the Enforcement staffs investigation into JagNotes.com securities trading was prompted by a referral from the National Association of Securities Dealers Regulation ("NASDR") that predated the complaints by 1~~\(7) land Valinoti concerning naked short selling and thus, did not find evidence substantiatin the complaint.

I. .The Enforcement staff's Investigation of Valinoti's trading. In July 1999, the NASDR referred suspicious activity in JagNotes.com stock to the SEC for investigation of possible insider trading. September 8, 2005 Action Memorandum for HO-7392 (9/8/05 Action Memo), attached hereto as Exhibit l, at ii.

The referral was based on suspicious trading volumes in JagNotes.com stock prior to JagNotes.com's announcement of a reverse merger.

The SEC staff subpoenaed Valinoti for further testimony concerning these
unregistered shares of stock.l(b)(7)(C) ITr. at 32-33. On January 13,2004, Valinoti
invoked his Fifth Amendment privilege against self-incrimination in response to all
questions from the staff about the unregistered shares. Id.· See also 9/8/05 Action Memo

The staff concluded that Valinoti had violated Section 5 of the Securities Act of 19334 by selling or transferring 248,000 shares of JagNotes.com stock that he had purchased in an unregistered private transaction. 9/8/05 Action Memo at 5. The staff informed Valinoti. that it intended to recommend that the Commission file a civil action against Valinoti in connection with these violations. Id. at ii. Settlement negotiations between the SEC staff and Valinoti began in March 2004. [d. at 1. On September 8, 2005, the staff circulated an action memorandum to the Commission recommending that the Commission file a civil action against Valinoti and accept Valinoti's offer to settle the action by consenting to the entry of a permanent injunction from future violations of Section 5. Id. at i. As part of this settlement offer, Valinoti agreed to disgorge illicit gains of $2,937,040 and pay judgment interest of $1,399,977.

Valinoti agreed to satisfy $571,707 of this obligation by paying $50,000 in cash disgorgement, cancelling his 3,514,229 shares ofJAG Media stock, and cancelling his options to buy one million shares ofJAG Media stock. 9/8/05 Action Memo at 1-2.

Complaints Concerning Naked Short Selling

In November 2003, (b)(7) created a website called InvestigateTheSEC.com to air his concerns· regarding what he viewed as the SEC's failure to address naked shortselling.

discussed his concerns about naked short selling, with a small percentage of these e-mails discussing his concerns·about naked short selling of JagNotes:com stock.l(b)(7)(C) ITr. . at 14; (b)(7) Tr. at 53. These e-mails also included allegations that the SEC Commissioners were conspiring with Wall Street to protect naked short sellers.

I testified that he believed that the SEC staff initiated an investigation of Valinotl cause Valinoti and~had publicly complained about naked short selling. ~r. at 24, 40-44. On June 20, 2002, almost three years after the Enforcement staff opened the JagNotes.com investigation, JAG Media and Valinoti filed a lawsuit against over 150 brokerage firms allegiDg~ among other thing, a conspiracy to short sell JAG Media stock. See excerpt from Fonn 10-K filed by JAG Media on November 13,2002, attached here to as Exhibit 7. This lawsuit was also filed after the Enforcement staff had taken Valinoti's testimony and learned that Valinoti had received and transferred approximately 250,000 unregistered shares of JagNotes.com stock. I(b)(7)(C) ITr. at 2631.
1~~)(7) l also testified that Valinoti had complained about naked short seliing in articles in Forbes and the New York Post. (b)(7)(C) f. at40.

I did not testify with certain as to when his e-mail complaints began. but he testified that it was
between 2000 and 2003. (b)(7)( r. at 52-54. Consequently, the 010 found that any complaints sent by (b)(7) in this time period would have occurred after the SEC's investigation of JagNotes.com securities trading had begun in 1999.


Conelusion

The OIG investigation did not find evidence substantiating the claim that the complaints by Valinoti concerning naked short selling led to, or influenced, the SEC staff's JagNotes.com investigation. In fact, we found evidence that the investigation was opened because of a referral by the NASDR. Moreover, we found that the NASDR referral and the opening of the JagNotes.com investigation in 1999 predatedl(b)(7)(C) land Valinoti's earliest complaints about naked short selling.

Furthermore, the OIG investigation found no evidence to support the allegation thatl(b)(7)(C) I attempted to have (b)(7)(C) disbarred. -The records of the Board of Professional Responsibility of the Supreme Court 0~(b)(7)(C) I evidence in fact that l(b)(7)(C) Ilicense was for reasons unrelated to the JagNotes~com. investigation long before (b)(7)(C) contacted the Board in connection with 1_(b)_(7_)(C_) __ testimony.

Consequently, the OIG is closing this matter. A copy of this report is being provided for informational purposes to the Deputy Chief of Staff to the Chairman and the Director of Enforcement.

[dia duit]

One more thing. theres no such thing as naked shorting, there all crazy.Its just people angry there stock didn't go up

Here's another myth penny stock gurus like to exploit. Annette Nazareth never said, "there is no such thing as naked shorting".

Here is a quote by Annette Nazareth from June 2004;

The rule proposal would bar stock transfer agents from handling shares that carry any limitations on transfer. Control over stock certificates is one of the ways that small companies have combated illegal naked short sellers. Burns quoted Nazareth as saying that these companies' "self-help" efforts "aren't helping U.S. markets overall." Nazareth was quoted as saying restrictions on stocks are "a significant step backwards" in the "move from paper stock certificates to automated computerized trading."

Nazareth said that abusive "naked" short selling has been a problem "in some cases," but that is "best dealt with by a pending SEC proposal," presumably Regulation SHO.

[Pedro2004]

I can't wait to see what the monkeys say when they learn there's no trust.