Any at all? Maybe a new approach to taxes, to oversight, to attaching contracts to bailout money bags, to …. anything? Anything at all?

We need a pictorial illustration of this COUNTERFEIT MACHINE you just described to educate Congress and the public!!!

Do you have the ability to this or have someone that can do this for you?

This illustration should entitled:

WALL STREET’S COUNTERFEIT MACHINE

You can see the bogus nature of these “long positions” generated by the NSCC’s SBP. Now you have to keep in mind that after the buying broker “B” receives the electronic transmission of the shares donated to the SBP by “L” he is allowed by NSCC policies to place the same parcel of shares used to “cure” the FTD to place them right back into the same lending pool from whence they just came as if they never left in the first place. It’s a self-replenishing counterfeiting machine.

Not only can a certain parcel of shares generate these bogus “long positions” but any particular parcel of shares can generate dozens of them if they keep getting selected time after time to “cure” different delivery failures. But wait it gets even worse. Theoretically only shares held in margin accounts wherein the owner has signed a margin agreement to allow the “hypothecation” (loaning) of their shares but the NSCC refuses to monitor for the types of shares that are being “donated” into their SBP despite the huge financial temptation to cheat and put any old shares into these lending pools whether they be qualified retirement plan shares of type 1 cash account shares. Instead the NSCC puts all of their participants on the “honor system” in this regard. Once again this theoretical “first line of defense” against ANSS frauds says pass me the blindfold so that I can monitor my participant’s “business conduct”.

To top off all of this the SEC that had to approve of the SBP before it went into effect to this day refuses to make the NSCC change despite what it has morphed into over the years. When we’ve asked the NSCC to get rid of its corrupt counterfeiting nature they have four comments. Firstly, they can’t change it because the system is “automated”. Secondly, they say that they can’t change it because they have no “discretion” in the matter (even though they designed it and administer it). Thirdly, they remind us that the SEC signed off on it a couple of decades ago. Fourthly, they say that if anything were wrong with it then the SEC would make us shut it down and they haven’t told us to so we won’t. Hopefully the first job on Mary Schapiro’s task list is to get rid of that and many other counterfeiting programs. Keep in mind that for every single bogus “long position” they park in their “C” sub accounts since they procreate readily sellable “securities entitlements” that’s that many more “securities” they can buy and sell and earn commissions and fees off of.

It gets a little more complex than that and the more complex it gets the easier it is to obfuscate the fraud. Let’s say a failure to deliver of 1 million shares of “Acme” occurs at the NSCC. The NSCC reaches into the “Automated Stock Borrow Program” (SBP) “lending pool” of securities and they grab 1 million shares of “Acme” and electronically transfer it to the “participants share account” of the buying party broker “B”. The FTD is “cured”.

They then debit the 1 million shares from the “participant shares account” of the loaner broker “L” that “donated” the shares into the lending pool at the SBP. They then credit broker L’s cash account with the cash value of the 1 million shares. He makes out nice because he just converted an electronic book entry gathering dust into cash that counts towards his net capital reserves and earns interest. Now you can see why everybody wants to donate their client’s shares into the SBP.

So “L” loses 1 million shares in his share account but gains the cash equivalent in his cash account. OK, so far so good. Since “L” can theoretically at any time can call back in that loan from the selling firm the NSCC deems it proper to credit “L” with a “long position” in a special NSCC “C” sub account. Thus a “long” position is created out of thin air and a “long” position at the NSCC now becomes equivalent to a mere “right to demand loaned shares back”. The “long position” awarded to the buying firm “B” represented real shares with a paper certificate in existence in a DTC vault. So all “long positions” are not alike at the NSCC.

The loaning broker “L” will never voluntarily call in that loan because he’d rather have the cash equivalent of those shares to make interest off of. So now a “long position” at the NSCC becomes “the right to demand back loaned shares which will never get voluntarily exercised” or maybe it represents a real share of Acme. We’re not allowed to learn which it is on any particular investor’s month end statement. Both will be represented on Acme’s shareholders’ monthly brokerage statements as “securities held long”, however. You can sense the bogus nature of “C” sub account “long positions” as an Acme shareholder would never in their wildest dreams that they paid full retail value for one of these.

If Acme used to have 100 million shares at the NSCC being held in “street name” they now have 101 million there but an investor or a corporation can never learn what is held in the “C” sub accounts pertaining to Acme so when asked they’ll say that there are 100 million shares held in “street name”. Apparently it’s none of our business because it’s a debt between 2 parties that deserves secrecy and it might reveal some “proprietary trading methodologies” of a hedge fund or market maker.

Above and beyond these shenanigans and of much greater importance is what goes on in “ex-clearing arrangements”. That term “arrangements” even sounds crooked. The NSCC does not know nor do they want to know about the massive amounts of FTDs housed there. It’s “none of their business” they say yet as an SRO or self-regulatory organization they are mandated to monitor the “business conduct of its participants” wherever it is being “conducted”. The SEC tells us that the SROs are the first line of defense against abusive naked short selling frauds. Yeah right, hand me my blindfold so I can stand guard on behalf of the investing public.

When you take into account all of the hiding places for FTDs on Wall Street you can see why the SEC admitted that the number of FTDs and the “securities entitlements’ they have procreated is too large to address with buy-ins lest there be issues with “market volatility”. That’s Latin for “short squeezes”. Yet to this day the DTCC insists that 99% of all trades “settle” on time and that the majority of the other 1% “settle” within 5 days. Yeah, that’s why BCIT has 4.7 million real “shares” outstanding and 350 million “securities entitlements” poisoning their share structure.

http://www.newsmeat.com/fec/bystate_detail.php?last=Madoff&first=Bernard

Now look at Charles Shumer’s statements today regarding the hearing on the Madoff Case: I guess he forgot all about those contributions Madoff made to him? The question is, what did Madoff get in return?

10:27 a.m. | Elephant in the room: Senator Charles E. Schumer calls the fraud “a punch in the gut” to the financial system and castigates the S.E.C. for its failure to uncover the scheme. He likens the actions to a giant elephant standing in a small room next to the S.E.C. for decades and “not only did they not see the elephant, they didn’t even smell the peanuts on his breath,” Mr. Schumer says.

http://dealbook.blogs.nytimes.com/2009/01/27/live-blogging-the-senates-madoff-hearing/?ref=business

R101

R101

SEC Lacks Resources to Chase Tips, ‘Pursue Smoke,’ Thomsen Says

By Jesse Westbrook and David Scheer
http://www.bloomberg.com/apps/news?pid=20601087&sid=aFMSfS1k5IZs&refer=home#

Jan. 27 (Bloomberg) — A top U.S. securities regulator, facing congressional ire for failing to detect Bernard Madoff’s alleged $50 billion Ponzi scheme, said federal investigators lack resources to pursue all leads.

“We use virtually all our resources to pursue fires,” the Securities and Exchange Commission’s enforcement chief, Linda Thomsen, said in draft testimony obtained by Bloomberg for a Senate Banking Committee hearing today. “Additional resources would give us the capacity to pursue smoke before it becomes a fire.”

U.S. lawmakers will publicly grill securities watchdogs today for the first time since Madoff’s Dec. 11 arrest. The proceeding may shed light on the SEC’s fate, as lawmakers debate whether its investigators are overtaxed or ineffectual. Days after the arrest, then-SEC Chairman Christopher Cox faulted the agency’s staff for failing to act on “credible and specific allegations” about Madoff for at least a decade.

“I don’t know whether there will ever be enough resources until the SEC begins to act smarter,” said Peter Wallison, a former Treasury Department general counsel who is now a senior fellow at the Washington-based American Enterprise Institute. The group advocates limited financial regulation.

“There can’t be an excuse that they didn’t have enough people to look into something as precise as the allegations that were made against Madoff,” he said. “We hear this from the SEC every time they fail.”

SEC spokesman John Nester declined to comment on the draft remarks by the regulator’s staff. The testimony was subject to revision. Thomsen, 54, declined to comment on the draft.

Witnesses

Other witnesses include Lori Richards, who heads the SEC’s office inspecting brokerages and investment advisers, and Stephen Luparello, interim chief executive officer of the Financial Industry Regulatory Authority, an industry self-regulator that examined the Madoff brokerage business. Cox stepped down Jan. 20 and the Senate has confirmed his replacement, Mary Schapiro.

In her draft testimony, Thomsen said SEC investigators receive hundreds of thousands of tips every year, and the enforcement division’s 1,000 employees use “triage” to pursue the most promising leads. The staff opened an investigation of Madoff’s investment-advisory business in 2006 and closed the probe two years later without filing a claim.

In his statement last month, Cox said Madoff kept several sets of books and provided misinformation to regulators. The money-management business was audited by Friehling & Horowitz, a three-person firm in New City, New York.

Suggesting an Overhaul

To better detect misconduct, the U.S. should consider overhauling “balkanized” oversight of brokerages and investment advisers, Thomsen said. It should also consider forcing investment advisers to assign custody of customer assets to third parties, and requiring that auditing firms are large enough to oversee money-management clients.

The SEC’s inspections unit never examined Madoff’s money- management business after it registered with the regulator in September 2006. It did inspect his brokerage operations in 1999, 2004 and 2005.

Senate Banking Committee members Charles Schumer, a New York Democrat, and Richard Shelby, a Alabama Republican, want to provide $110 million in federal money to boost the investigative staffs at the SEC, Federal Bureau of Investigation and Justice Department. Legislation proposed by the lawmakers Jan. 22 would allow the SEC to hire 100 new employees in its enforcement division.

Congress

Congress already doubled the SEC budget this decade by approving the Sarbanes-Oxley Act in 2002. The law, a response to accounting scandals at Enron Corp. and WorldCom Inc., allowed the SEC to hire more enforcement attorneys, examiners and accountants. The SEC currently has an annual budget of about $900 million and about 3,500 full-time employees.

On Jan. 5, as the House subcommittee overseeing capital markets heard from one of Madoff’s alleged victims, panel members including Texas Republican Ron Paul said the SEC’s performance shows it should be scaled back or eliminated.

Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, and Shelby, the panel’s top Republican, have asked the SEC for all complaints it received about Madoff, reports on its investigations and internal agency e-mails that mentioned his firm. The lawmakers are also scrutinizing Finra.

To contact the reporter on this story: Jesse Westbrook in Washington at jwestbrook1@bloomberg.net; David Scheer in New York at dscheer@bloomberg.net.
Last Updated: January 27, 2009 00:00 EST

Dr. Jim DeCosta,

In the case of BCIT, it seems to be that there are two sets of books.

One set of books is kept by the corporation BCIT and the other by DTCC.

BCIT’s books show how many shares have been officially and legally issued, and DTCC’s books can show us how many shares of BCIT have been sold.

When it comes to brokerage statements that us common people receive monthly, there seems to be something similar once again to the existence of two sets of books.

Our brokerage statements say we hold stocks xyz long, yet it is very possible that the DTCC has a second set of books that show xyz shares are merely an electronic marker, a “securities entitlements” that has NOT been delivered, and does NOT exist in the corporation’s books of legally issued shares.

Because the DTCC hides its second set of books showing how many shares of stock for each corporation have been SOLD, corporations are being lied to and we the common people are being lied to.

The whole system is corrupted, and the SEC has become the protector of the this corrupt system.