there is a nexus between brokerage houses and some SEC officials involved in compliance.they seemed to leak sensitive info about companies to hedge funds and shorts. they may be friends or relatives..
only a full justice dept investigation of SEC officials will reveal the agenda of these SEC officials and monetary gain they get from shorts and hedge funds.
Here's the exchange, first few communications via email, then concluding by letter from Scottrade...
Me: BCIT is now trading again after the SEC suspension. When will Scottrade allow it to trade again? Please explain why Scottrade is not currently allowing trading, while many other brokerages are. Thank you.
Scottrade: Thank you for your e-mail.
We understand the dilemma that not trading BCIT may be causing. However, this security cannot be settled properly here at Scottrade until DTC has said otherwise. This stock has been "chilled" at DTC, meaning settlement is not possible. It is our hope that DTC will be in contact with us shortly as to when we can begin trading this again. Once again, we apologize for the inconvenience.
Me: A few questions for you... yesterday, I received a letter dated September 12, 2005, on Scottrade stationary, from XXXX. In it, he stated the following:
"The SEC notified Scottrade prior to August 30, 2005 of the trading suspension on BCIT. We acted accordingly to the SEC suspension and notification. The SEC has temporarily suspended trading of BCIT due to the possibility of counterfeit certificates on the stock. Scottrade was not aware of the issue prior to August 30, 2005. Scottrade will allow trading on BCIT when we have the proper notification that trading will resume, but we can make no guarantee as to when trading will resume on BCIT. We apologize for your displeasure with this situation. Scottrade will be happy to transfer the shares or your account to a brokerage firm of your choice at no cost. Simply fill out that brokerage firms transfer paperwork and we will process the transfer when notified by that firm."
How can Scottrade transfer my shares of BCIT to another brokerage firm if you do not have the proper certificates to back them up? Or do you have valid "March Indy" certificates to back up my shares in my account? Also, why was Scottrade informed by the SEC prior to the suspension--is this common practice, and legal? How could Scottrade not have "been aware" about the counterfeit certificates prior to August 30 , when the DTC had issued a memo http://www.dtc.org/impNtc/ope/ope_8418.pdf a couple of weeks earlier?
Regarding your email... why and how are shares being traded on the open market (both yesterday and today), if the DTC has "chilled" the stock? What market makers are trading the stock?
Scottrade (letter dated 9/19/05): This letter is in response to your recent email inquiry regarding the suspension of trading on Bancorp International Group, symbol BCIT. I have read your email and am answering the inquiries.
Scottrade cannot transfer the shares of BCIT electronically to another brokerage at this time. The DTC still has a chill on the stock and we are not able to make delivery to another brokerage firm. I apologize for any confusion. I simply meant to state that if you were unhappy with the way Scottrade handled the situation that we would be happy to transfer your account free of charge to another brokerage firm that you feel may be able to serve you better. Scottrade is not in possession of certificates, the stocks are held in street name at the DTC. Though the DTC had issued the memo referenced in your email, it only presented the fact that some physical certificates may be counterfeit, however the memo did not specifically state there would be a subsequent trading suspension or that Scottrade should stop trading on the security at that time. The memo simply warns to take precautions when accepting physical certificates.
We do not know which market makers or brokerage firms may be trading the security in the open market. Since the stock is in fact "chilled" at the DTC, if Scottrade attempted to trade the security at this time the result would be a broker fail to deliver. This would lead to an eventual buy-in of the failed to deliver security. This means any trades that would occur, would eventually be removed/cancelled since no delivery or settlement can occur.
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