This is Part 3 of an ongoing series.
A few years ago, a clique of influential journalists went to extraordinary lengths to cover up the problem of illegal short selling. In the face of indisputable data and evidence, the journalists insisted, over and over, that “naked” short selling (hedge funds manipulating stock prices by flooding the market with phantom stock) rarely occurred. And they said short sellers (who profit from falling stock prices) don’t set out to destroy public companies.
Moreover, if a person were to criticize illegal short selling, the reporters would smear that person’s reputation with a savagery that was almost without parallel in contemporary journalism.
At the time, these journalists were working at major news organizations like The Wall Street Journal, The New York Times, and CNBC, but most shared a common history: they had been founding editors or top employees of TheStreet.com, a financial news website. The few who had not worked for TheStreet.com were close colleagues of TheStreet.com’s owner, Jim Cramer, who is best known as the eccentric host of CNBC’s “Mad Money” program.
Having studied more than 1,000 stories by these journalists, I can assure the reader that nearly every one of them was sourced from a tight network of hedge fund managers, and that a great many of the stories were false or misleading. Moreover, most of the people in this network (including Jim Cramer himself) are tied in important ways to two famous criminals from the 1980s – Ivan Boesky and “junk bond king” Michael Milken.
And though I realize that is hard for some people to absorb this, I will continue to provide evidence that a surprising number of the “prominent investors” in this network have had dealings with associates of organized crime – the Mafia.
* * * * * * * *
Last spring, we published “The Story of Deep Capture,” which sought to explain the origins of the Deep Capture website (mission: “to bypass the ‘captured’ institutions mediating our nation’s discourse”) by way of exposing the machinations of the Cramer clique of journalists and their short selling sources.
One day after we published our story, Cramer had some kind of awakening. Whereas he had previously sought to whitewash short seller crimes, he now suddenly repeated our assertion that illegal short selling was a big problem – the same problem that precipitated the great stock market crash of 1929.
A few months later, abusive short selling was implicated by U.S. Senators, CEOs of major banks, the U.S. Chamber of Commerce, respected academics, prominent law firms, current and past chairmen of the Securities and Exchange Commission, and then-Treasury Secretary Hank Paulson in the near total collapse of our financial system.
Nowadays, Cramer is even more adamant. He says he knows a lot of short sellers. He says that short sellers are destroying public companies. He says they crushed the markets and they’re going to crush America too.
These short sellers, Cramer hollers, are downright “diabolical.”
* * * * * * * *
If you have not done so, please read Deep Capture reporter Patrick Byrne’s primer on naked short selling. Please read “The Story of Deep Capture.”
Think about what Cramer has said.
And then have a look at the following email.
= = = = =Begin Message= = = = =
Message # : 727
Message Sent: 02/22/2006 08:57:48
From: AHELLER3@bloomberg.net|ANDY HELLER|EXIS CAPITAL MANAGEM
To: JONKALIKOW@bloomberg.net|JONATHAN KALIKOW|STANFIELD CAPITAL
Subject: CNBC – FAIRFAX
Reply:
He did this one time before, and the stock went down 3 on the open, then closed up 1. the way to get this thing down is to get them where they eat, like the credit analysts and holders. we’re taking this baby down for the count. ads and I are going to toronto in 2 weeks for a group lunch. J
= = = = =End Message= = = = =
* * * * * * * *
That email was authored by a top employee of Exis Capital, which is an offshoot of SAC Capital — said by some to be the most powerful hedge fund on Wall Street. We can’t be certain who, aside from the email’s author and “ads” (Adam D. Sender, head of Exis), attended that “group lunch.” But from other emails we know that a particular “group” of hedge fund managers did, indeed, intend to take “this baby down for the count.”
The “baby” was Fairfax Financial, a major, publicly listed insurance and financial firm.
The above email (acquired through discovery in Fairfax’s lawsuit against some members of the “group”) makes reference in the first line to journalist Herb Greenberg, who bashed Fairfax on CNBC, apparently causing the stock to go “down 3 on the open.” Other emails in our collection (we’ll publish a couple more of them) suggest that Herb’s reporting involved nothing more than contacting the “group” to find out what he was supposed to say.
* * * * * * * *
Herb took Fairfax “down 3 at the open” in February 2006, right at the time that Herb, a founding editor of TheStreet.com, received a subpoena from the Securities and Exchange Commission. TheStreet.com also got a subpoena. So did Jim Cramer, the owner of TheStreet.com. Short seller David Rocker, a member of the “group” and then the largest outside shareholder of TheStreet.com, got a subpoena too.
At the time, the commission had opened a formal investigation into Gradient Analytics, a financial research firm that stood accused by multiple former employees of manufacturing false “independent” research reports in cahoots with short sellers (namely, the “group”) and letting the short sellers trade ahead of the reports’ publication.
The “group” – which also included “prominent investor” Jim Chanos of Kynikos Associates – had a similar scam going with “independent research” firm Morgan Keegan. Deep Capture reporter Judd Bagley broke that story more than a month ago. Bloomberg News, which seems to be the only major media outfit willing to write critically about these “prominent investors,” picked the story up last week.
The Wall Street Journal published a major, front-page article that exposed the dubious tactics that Jim Chanos and affiliated short sellers used to demolish public companies.
But that article was published more than twenty years ago — in 1985.
Since then, the Journal has not published a single negative story about Chanos and his friends. It has not published a single investigative story about abusive short selling.
When David Kansas, a founding editor of TheStreet.com, was running The Wall Street Journal “Money & Investing” section, that part of the paper served as little more than a mouthpiece for Rocker, Cohen, Chanos and affiliated “prominent investors.”
But last week, even The Wall Street Journal had to acknowledge that Chanos is now the target of an SEC investigation.
* * * * * * * *
When the SEC issued subpoenas in the Gradient investigation, one former Gradient employee provided a sworn affidavit stating that Herb Greenberg held his negative stories so that David Rocker could establish short positions that would make money when Herb’s stories caused stocks to do such things as go “down 3 at the open.”
At the time, Jon Markman, a founding editor of TheStreet.com and later managing editor of MSN Money was running a hedge fund out of Gradient’s back office. Former Gradient employees said that Markman was also trading ahead of Herb’s negative stories and Gradient’s false negative information. If true, this would likely be illegal.
But SEC officials say that the investigation in February 2006 was aimed at bigger prey than just Gradient and a few journalists. The commission was aware that some “prominent investors” were, in the words of our email author, taking companies “down for the count.” Good people at the SEC (the rank and file) hoped to put a stop to this.
But when the subpoenas were issued, Herb, Cramer and others in their media clique went berserk. They said journalists don’t have special relationships with short sellers. They said short sellers don’t destroy companies. Cramer famously vandalized his government subpoena – live on CNBC.
Under this “media” pressure, the SEC chairman announced that it would not enforce the subpoenas. Later, the SEC dropped its investigation altogether.
In an interview with Bloomberg News about the decision not to enforce the subpoenas, SEC attorney Kathleen Bisaccia said this: “To have the chairman publicly slap us in the face for doing our jobs – that really crushed the spirit of a lot of people for a long time.”
Indeed, former SEC officials say that this was a pivotal moment in SEC history. With morale sapped, the commission all but ceased to function.
Certainly, it did not stop the short sellers who would soon begin efforts to take some of Wall Street’s biggest financial institutions “down for the count.”
* * * * * * * *
Herb Greenberg, the journalist who took Fairfax “down 3 at the open,” and who was alleged to have allowed at least one short seller in the “group” to trade ahead of his stories, now runs an “independent” financial research firm that advertises itself as “bridging financial journalism and forensic analysis.”
We believe that Herb receives the bulk of his income from the above-mentioned “group” and affiliated “prominent investors.”
* * * * * * * *
From the above email it is evident that in addition to working with corrupt journalists, the “group” sought to destroy Fairfax Financial by getting “them where they eat.” That is, the hedge funds sought to “take this baby down for the count” by cutting off the company’s access to capital.
Sometimes “prominent investors” will merely dish dirt to a company’s lenders. Other times, the schemes are more complicated, with investors in their network actually financing the company. This gives them access to inside information and (in the case of convertible debentures) to stock that can be lent to affiliated short sellers.
In other cases, “prominent investors” will buy the company’s debt, package it into “collateralized debt obligations” (financial weapons of mass destruction that were pioneered by Michael Milken’s team at Drexel Burnham Lambert), and then trade it in such a way as to make it seem as if the company is in trouble.
When the time is right, the “prominent investors” fob off the debt to some witless or compliant pension fund. Then they tell people that they’re no longer financing the company – the company’s been “cut off.”
Meanwhile, the company will be subjected to unbridled “naked” short selling – hedge funds illegally selling stock that they do not actually possess (phantom stock) to manipulate down the share price. (By way of example: when the above email was written, SEC data showed that millions of phantom Fairfax shares had been “failing to deliver” on a daily basis.
What usually happens is that legitimate lenders see the plummeting stock price. They see a supposed “financial partner” yanking credit. They see the negative media. They see the debt trading at disturbing prices. They have short sellers feeding them horrible news about the company.
The legitimate lenders know the news is false. They know the company is credit worthy. But the negativity itself becomes a liability. The falling stock price is a liability. The legitimate lenders get worried. They raise their cost of capital, or cut if off altogether.
And so the “baby” goes “down for the count.”
* * * * * * * *
Fairfax survived this onslaught. Other companies were not so lucky.
Last year, Bear Stearns, Lehman Brothers, and dozens of other companies all went bust in a similar pattern — waves of naked short selling slightly preceding false stories planted in the media and then, suddenly, a financial “partner” cutting off a source of capital.
That is, short sellers got these companies “where they eat.”
Did the short sellers “cause” these companies to collapse? If a sniper shoots at a man who is swimming in a dangerous ocean current, and the man drowns, we cannot say for sure that the sniper “caused” the man’s death. But we can say that shooting at struggling swimmers is a crime.
Which short sellers committed the crimes? Only the SEC and the FBI can tell us for sure.
But we know which “group” attacked Fairfax Financial. We know that this same “group” and affiliated “prominent investors” attacked the big financial companies that collapsed last year. And we know that the people in this “group” are not passive investors.
Rather, when they attack a “baby,” they seek to take it “down for the count.”
Given that the collapse of the financial companies caused an economic catastrophe that will wipe out the jobs and savings accounts of millions of Americans, it seems that the “group” and affiliated “prominent investors” warrant further attention.
* * * * * * * *
One “prominent investor” is Adam Sender, proprietor of Exis Capital, the hedge fund that employs the author of the above email. As you will recall, Exis is an offshoot of SAC Capital, which is managed by Steve Cohen – described by BusinessWeek magazine as “the most powerful trader on the Street.”
As I noted in my previous piece, a former Mafia soldier turned private investigator offered to have one of Sender’s business partners buried in the Nevada desert. Sender claims to have declined this offer, but an FBI recording (hear it again here) suggests that Sender paid more than $200,000 to that former Mafia soldier and that Sender intended to “fix” his business partner and somehow bring about a “doomsday.”
Sender also hired a thug named Spyro Contogouris to harass and threaten executives of Fairfax Financial – part of the “group” effort to take that “baby down for the count.” In upcoming stories, I will publish some of Spyro’s shocking emails. In one, he told an FBI agent that somebody was threatening his life. He claimed that it was lawyers working for Fairfax Financial.
But that claim seems somewhat absurd. Fairfax Financial is a Canadian insurance company run by a mild-mannered immigrant from India named Prem Watsa, who is known as “the Warren Buffett of Canada.”
Given that Spyro wrote his email shortly before he was arrested by the FBI agent, and given that this FBI agent was investigating the “group,” it is possible that Spyro either made up the story to solicit sympathy, or the “group” was threatening Spyro’s life to prevent him from testifying.
Either way, it says something about the state of the American media that this intrigue, involving a major financial firm and some of the nation’s most “prominent investors,” is not front page news.
* * * * * * * *
The recipient of the email promising to take Fairfax “down for the count” was Jonathan Kalikow of Stanfield Capital, a hedge fund specialized in the trading of collateralized debt obligations.
Jonathan is a member of the mighty Kalikow family. The patriarch of this family is “prominent investor” Peter Kalikow, who was one of the largest financial backers of the stock manipulation firm run by Ivan Boesky, the famous criminal from the 1980s.
But Peter Kalikow is perhaps best known as the former owner of The New York Post.
When Kalikow owned the Post, the newspaper’s fleet of delivery trucks was handed over to members of New York’s five organized crime families. With Bonanno Mafia soldier Richard “Shellack-head” Cantarella presiding over the delivery bay, guns and drugs were loaded into the Post’s newspaper trucks and transported throughout the city.
Indeed, the New York Post became one of La Cosa Nostra’s principal smuggling operations.
* * * * * * * *
The other members of the “group” — David Rocker, Steve Cohen of SAC Capital, Jim Chanos of Kynikos Associates, and Dan Loeb of Third Point – have been discussed at length on this website. In upcoming installments, I will tell you more about them and others in their network.
They are all “prominent investors.”
To be continued…
* * * * * * * *
Mark Mitchell is a reporter for DeepCapture.com. He previously worked as an editorial page writer for The Wall Street Journal in Europe, a business correspondent for Time magazine in Asia, and as an assistant managing editor responsible for the Columbia Journalism Review’s online critique of business journalism. He holds an MBA from the Kellogg Graduate School of Management at Northwestern University. Email: mitch0033@gmail.com
If this article concerns you, and you wish to help, then:
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Nice work..
Mark, you keep outdoing yourself! I thought the last part was a marvel. Now this!Keep ‘em coming!
Watch the rats scurry for the sheltering pen of their captured gaggle of journalists and media. “Bwaaaa….deceive, inveigle, obfuscate.” “Squawwwwk, squawwwwk…”
Thanks again….. and cover your back.
GOD BLESS YOU MARK MITCHELL!
—– Original Message —–
From: marv eatinger
To: Kara.scannell@wsj.com
Cc: webmaster@fairness.com ; lee@leeterry.com
Sent: Tuesday, February 17, 2009 6:24 PM
Subject: THE TIP OF THE ICE BERG!!!
Dear Wall Street Journal:
This email is to make sure that you received my below email dated “Tuesday, February 17, 2009 5:08 PM”.
Marv Eatinger
http://WWW.DEEPCAPTURE.COM
Email Exposes Short Seller Plot to Destroy a Public Company | Deep Capture Says:
February 17th, 2009 at 4:11 pm
[...] Read Part 2 [...]
The Wall Street Journal published a major, front-page article that exposed the dubious tactics that Jim Chanos and affiliated short sellers used to demolish public companies.
But that article was published more than twenty years ago — in 1985.
Since then, the Journal has not published a single negative story about Chanos and his friends. It has not published a single investigative story about abusive short selling.
When David Kansas, a founding editor of TheStreet.com, was running The Wall Street Journal “Money & Investing” section, that part of the paper served as little more than a mouthpiece for Rocker, Cohen, Chanos and affiliated “prominent investors.”
But last week, even The Wall Street Journal had to acknowledge that Chanos is now the target of an SEC investigation.
=========================
—– Original Message —–
From: marv eatinger
To: davisj@sec.gov ; oig@sec.gov ; fraud@gao.gov
Cc: Kara.scannell@wsj.com ; lee@leeterry.com
Sent: Tuesday, February 17, 2009 5:08 PM
Subject: THE TIP OF THE ICE BERG CONCERNING UNREGULATED DEMOCRATIC CAPITALISM!!!
Marv Eatinger Says:
February 16th, 2009 at 7:04 am
NAKED SHORT SELLING & COVERING BY DALECO RESOURCES CORP – SYMBOLS “DLOV” & “DLVO”. SEE FEB 15, 2009 POST BY MARV EATINGER:
—– Original Message —–
From: marv eatinger
To: sgoldstein@dtcc.com
Cc: nsccaa@dtcc.com ; newseditors@wsj.com
Sent: Thursday, July 17, 2008 7:15 PM
Subject: NAKED SHORT SELLING AS AIDED & ABETTED BY THE DTCC?????
STUART Z. GOLDSTEIN:
DTCC: FROM FEB. 28, 2000 TO AUG. 1, 2000 DALECO RESOURCES CORP OR DALECO RESOURCES INC. TRADED ACTUAL SHARE VOLUME OF APPROXIMATELY 70,000 COMMON SHARES WHILE DELISTED TO THE PINK SHEETS FROM THE OTCBB MARKET. IN 1996 & 1997 DALECO RESOURCES CORP OR DALECO RESOURCES INC. HAD APPROXIMATELY 7,000,000 COMMON SHARES SOLD “NAKED SHORT”. THESE “NAKED SHORT” SALES WERE COVERED BY THE ACTUAL TRADING OF APPROXIMATELY 70,000 COMMON SHARES PLUS TWO EXTERNALLY ADDED ZEROS 3 YEARS LATER FROM FEB. 28, 2000 TO AUGUST 1, 2000!!! DID THE DTCC AID DALECO IN THIS SCAM OF THE REGULATORY SYSTEM FOR PUBLIC EQUITIES?
Marv Eatinger
> FROM HISTORICAL VOLUME FOR DALECO RESOURCES CORP– (AS OF SEPT. 27, 2006 AT 4:29 PM CST THE BELOW HISTORICAL
VOLUME DATA FOR DALECO RESOURCES CORP HAS NOT
CHANGED ON http://WWW.MONEYCENTRAL.COM)
> SYMBOL DLOV ON http://WWW.MONEYCENTRAL.COM
>
>——————————————————–VOLUME
> 3/14/2000 0.1563 0.1563 0.1563 0.1563 230,000
> 3/13/2000 0.7500 0.7500 0.7500 0.7500 200,000
> 3/10/2000 0.1250 0.1250 0.1250 0.1250 0
> 3/9/2000 0.1250 0.1250 0.1250 0.1250 30,000
> 3/8/2000 0.7500 0.1250 0.1250 0.1250 2,620,000
> 3/7/2000 0.5000 0.1250 0.1250 0.1250 230,000
>
> ========================
—– Original Message —–
From: “Ron Franz”
To:
Sent: Tuesday, April 04, 2006 10:13 AM
Subject: Re: [CSI Website Query: daily volume figures multiplied by 100 - symbol DLOV]
>I had them remove the extra digits.
> Yahoo should have it corrected by this afternoon.
> Please let me know if you do not see the corrections.
> Thank You,
>
>
> marv@mitec.net wrote:
>> Regarding:
>> Data Error Report
>>
>>
>> Message:
>> On March 7, 2000 the following web sites showed volume for the day for DLOV – Daleco Resources CP of 2,300 shares: FinancialWeb.com and Quicken.com.
>>
>> On March 8, 2000 the following web sites showed volume for the day for DLOV – Daleco Resources CP of 26,200 shares: FinancialWeb.com, Quicken.com and MSN Money Central.com.
>>
>> On March 13, 2000 Barchart.com showed DLOV – Daleco Resources Corp volume for the day as 2,000 shares.
>>
>> Daleco Resources Corp was deleted from the OTCBB to the Pink Sheets on February 22, 2000 to be effective on February 28, 2000. Yahoo Finance & MoneyCentral web sites are presently the only web sites that I can find that show Historical Volume figures for the time period of March 1, 2000 to August 1, 2000 when Daleco Resources Corp was listed only on the Pink Sheets.
>>
>> Yahoo Finance Historical Volume figures for the above mentioned dates is shown as follows:
>> March 7, 2000——————–230,000 shares
>>
>> March 8, 2000——————2,620,000 shares
>>
>> March 13, 2000——————200,000 shares
>>
>> Apparently from the period starting March 1, 2000 to August 1, 2000, all trades that took place in Daleco’s stock had two zeros added to the daily trading volume!
>>
>>
>> From:
>> marv@mitec.net
> FROM HISTORICAL VOLUME ON http://WWW.YAHOO.COM FOR– (AS OF SEPT. 27, 2006 AT 4:35 PM CST THE BELOW HISTORICAL
VOLUME DATA FOR DALECO RESOURCES CORP HAS NOT CHANGED
ON http://WWW.YAHOO.COM SINCE TWO ZEROS WERE REMOVED FROM THIS
HISTORICAL TRADING VOLUME ON APRIL 4, 2006 – SEE RON@CSIDATA.COM
ABOVE EMAIL DATED APRIL 4, 2006 AT 10:13 EST)
> DALECO RESOURCES CORP SYMBOL DLOV
>
>———————————— VOLUME
> 14-Mar-000.160.160.160.16 2,300
> 0.13
> 13-Mar-000.750.750.750.75 2,000
> 0.63
> 10-Mar-000.120.120.120.12 0
> 0.10
> 9-Mar-000.120.120.120.12 300
> 0.10
> 8-Mar-000.120.750.120.12 26,200
> 0.10
> 7-Mar-000.120.500.120.12 2,300
Jim DeCosta Says:
February 16th, 2009 at 10:11 am
What CVP results in is 2 “opportunistic” clearing firms “pairing off”. CF “A” owes CF “B” $10 billion worth of deliveries on corporations “X”, “Y” and “Z” that it failed on. “B” owes “A” $10 billion worth of failed deliveries on corporations “G”, “H” and “I”. “A” and “B” agree with each other (in an ex-clearing arrangement) to just “collateralize” these debts on a daily marked to market basis and neither have to deliver the missing shares to each other. As the various share prices change money needs to be shunted back and forth. The share price of all 6 corporations has to tank by definition because all of these FTDs result in readily sellable “securities entitlements”.
As the share prices predictably tank the funds of those that purchased the yet to be delivered shares flow to those refusing to deliver that which they sold because all they were asked to is to collateralize the monetary amount of the failed delivery obligation. As the share prices tank so too do the collateralization requirements.
The net-net of it is that CF “A” says to CF “B” you can sell my clients bogus shares and refuse to deliver them in order to steal their money if I can do the same to your clients.
This is how ex-clearing works but the same thing occurs at the DTCC. The NSCC says to its abusive NSCC clearing firm participants that we’re “powerless” to buy in your delivery failures. In ex-clearing the 2 clearing firms basically say to each other let’s agree to pretend to be “powerless” to buy-in each other’s delivery failures.
Marv Eatinger Says:
February 15th, 2009 at 8:04 am
The Madoff scheme is a tragedy, but it is only the tip of the ice berg. Daleco Resources Corporation goes straight to the bowels of the regulatory system for publicly traded equities. Daleco represents how professionals who hold themselves out as legitimate and law abiding use proprietary information gained from being employed by the SEC and take that information to a private practice and use it to line their own pockets and circumvent SEC scrutiny of public corporation fraud! The regulatory system for publicly traded equities needs a total reworking!
Marv Eatinger ( I have posted details of Daleco’s fraudulent business plan on http://www.ragingbull.com symbol DLOV message board posts by “virgule” and http://www.yahoo.com finance message board for symbol “DLOV.OB” posts by “m_68114″ )
IF YOU REMEMBER FROM MY POSTS AND SUBMISSION OF AN 86 ITEM COMPLAINT PACKAGE WITH THE LOS ANGELES BRANCH OF THE SEC IN AUGUST OF 1989:
1. THE ILLEGAL POOLING OF INTERESTS AMALGAMATION BETWEEN UNITED WESTLAND & REEF RESOURCES IN CANADA IN NOVEMBER OF 1981.
2. THE MERGER IN NEVADA ON OCT. 1, 1983 OF WESTLANDS RESOURCES CORPORATION (NEVADA) & REEF RESOURCES CORPORATION (NEVADA) THAT IS RECORDED BY THE SECRETARY OF STATE OF NEVADA AS A MERGER THAT WAS OFFICIAL AS OF JAN. 25, 1984. [ THE INTERNAL REVENUE SERVICE NEVER KNEW THAT THE MERGER WAS EFFECTIVE ON OCT. 1, 1983. OCT. 1, 1983 WAS DALECO RESOURCES CORP (UNITED WESTLAND RESOURCES LTD.) START OF ITS 1984 FISCAL YEAR!!! ]
3. THE FRAUDULENT ACCOUNTING CONSPIRACY THAT TOOK PLACE BETWEEN UNITED WESTLAND (NOW DALECO) & COOPERS & LYBRAND ACCOUNTING FIRM AS DALECO’S AUDITORS. ALL MADE POSSIBLE BY THE FRAUDULENT ACTS COMMITTED IN ITEMS 1 & 2 ABOVE.
3a. THE MANIPULATION OF DALECO’S SEC FILINGS (20-F, 10-K, 10-Q ETC.) FOR 1983, 1984, 1985, 1986, & 1988 BY SHEA & GOULD LAW FIRM AND ITS MANAGING PARTNER MARIO V. MIRABELLI IN ORDER TO CIRCUMVENT SEC SCRUTINY AS TO DALECO’S FRAUDULENT BEGINNINGS (FILINGS WERE MANIPULATED INTO BRANCHES 1,3, 4 & 5 OF THE DIVISION OF CORPORATE FINANCE).
4. ON NOV. 11, 1992 DALECO RESOURCES CORPORATION FILED A PRELIMINARY PROSPECTUS WITH THE SEC FOR THE ISSUE OF 3,000,000 COMMON SHARES. THE UNDERWRITERS FOR THIS ISSUE WERE TO BE MEYERS, POLLOCK, ROBBINS INC. THE SEC APPARENTLY NEVER APPROVED THIS ISSUE.
New York County District Attorney’s Office
Manhattan District Attorney Robert M. Morgenthau announced that MICHAEL PLOSHNICK, the president of MEYERS POLLOCK ROBBINS INC., has pleaded guilty today to …
manhattanda.org/whatsnew/press/2000-10-04.shtml – 11k – Cached – Similar pages
5. NOVEMBER OF 1995 DALECO RESOURCES CORPORATION BARRON’S – MARKET WEEK ADVERTISEMENT (NOV. 27, 1995 – MW15) THAT ON NOV. 17, 1995 DALECO ACQUIRED SUSTAINABLE FOREST INDUSTRIES, INC. – TELEPHONE NO. 516-357-9759 HEMPSTEAD, LONG ISLAND. I CALLED THIS NUMBER AND GOT A RECEPTIONIST WHO TOLD ME THAT THIS WAS THE OFFICE OF A CLEANING COMPANY THAT DID CLEANING FOR 5 DIFFERENT COMPANIES. 6 MONTHS LATER I CALLED THE SAME TELEPHONE NUMBER AND THE RECEPTIONIST TOLD ME THAT THIS WAS THE OFFICE FOR A FIRM THAT SOLD EMERGING COMPANY STOCKS (MY OPINION – A BOILER ROOM OPERATION).
6. ON MARCH 17, 1996 DALECO RESOURCES CORPORATION ENTERS INTO A CONSULTING AGREEMENT WITH DEVEN RESOURCES, INC.
7. ON MARCH 19, 1996 DALECO RESOURCES CORPORATION ENTERS INTO A CONSULTING AGREEMENT WITH AVONWOOD CAPITAL CORPORATION.
8. ON OCTOBER 1, 1996 DALECO RESOURCES CORPORATION BECOMES A DOMESTIC UNITED STATES COMPANY INCORPORATED IN DELAWARE AND EFFECTIVE OCT. 1, 1996 MERGES WITH DEVEN RESOURCES, INC.
9. DECEMBER 1996 THROUGH JANUARY 1997 REGULATION “S” SHARES THAT DALECO SUPPOSEDLY SOLD TO “FOREIGN INVESTORS” ARE BEING SOLD BACK INTO THE NASDAQ MARKET BY THOSE SUPPOSED “FOREIGN INVESTORS”. (9,000,000 PLUS REG “S” SHARES)
10. SOMETIME IN 1996 OR 1997 DALECO HAS AT LEAST 5,000,000 COMMON SHARES BEING SOLD “NAKED SHORT”.
11. EFFECTIVE FEBRUARY 17, 1998 DALECO RECORDS WITH THE SECRETARY OF STATE OF DELAWARE A 1 FOR 10 REVERSE COMMON STOCK SPLIT.
12. EFFECTIVE FEBRUARY 24, 1998 DALECO RECORDS IN ALL FUTURE SEC FILINGS A 1 FOR 10 REVERSE COMMON STOCK SPLIT.
13. ON FEBRUARY 24, 1998 DALECO’S NEW CUSIP NO. BECOMES 23437P208. HOWEVER, DALECO IN ALL FUTURE SEC FILINGS NEVER USES THIS NEW CUSIP NO. BUT USES THE OBSOLETE CUSIP NO. OF 23437P109. THIS MAKES IT POSSIBLE FOR DALECO TO CIRCUMVENT SEC SCRUTINY AS TO THE FEB. 24, 1998 1 FOR 10 REVERSE SPLIT.
14. IN EFFECT THE ABOVE (ITEM 11. & 12.) TWO 1 FOR 10 REVERSE SPLITS WOULD APPEAR AS A 1 FOR 100 REVERSE SPLIT OF THE ORIGINAL COMMON SHARES ON HISTORIC RECORDS IN CERTAIN REGULATORY AGENCIES. SEE COVERING OF “NAKED SHORT SALES” WITH THE ADDITION OF TWO ZEROS IN ITEM 15. BELOW!
15. FEBRUARY 28, 2000 THROUGH AUGUST 1, 2000 WHILE DALECO IS DELISTED TO THE “PINK SHEETS” AND USING TWO ACTIVE SYMBOLS OF “DLOV & DLVO”, DALECO STAGES ACTUAL TRADES FOR ITS COMMON STOCK AND ADDS TWO ZEROS TO THESE DAILY TRADES IN ORDER TO COVER 1/100 OF THE VOLUME OF COMMON SHARES THAT WERE SOLD “NAKED SHORT” IN 1996 AND/OR 1997.
16. ALL OF THE ABOVE VIOLATIONS HAVE MADE IT IMPOSSIBLE FOR DALECO RESOURCES CORPORATION TO FILE REPORTS WITH THE SEC THAT ARE FREE OF MISLEADING & DECEPTIVE STATEMENTS!
Rule 10b-5: Employment of Manipulative and Deceptive Practices”:
It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,
(a) To employ any device, scheme, or artifice to defraud,
(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person,
in connection with the purchase or sale of any security.
Bernard Madoff, the Mafia, and the Friends of Michael Milken [DEEP CAPTURE]
February 3rd, 2009 by Mark Mitchell
Strange Occurrences, and a Story about Naked Short Selling [MORE DEEP CAPTURE]
January 27th, 2009 by Mark Mitchell
I can remember watching Cramer throw the subpoena with red “BULL” scrawled across the top. Then he threw it. At that time, they repeated it at 11, I think, and I watched it again to be sure I actually saw him throw it.
The Deepcapture team, before it was Deepcapture, climbed all over that. Just too bad it took everybody so long to listen. But they’re listening now.
We’ve got a small window. Hopefully, people wake up. Unfortunately, PBS thought it wise to give Chanos a forum. Someday, they’ll learn.
I can’t begin to tell you how happy this makes me. Great job once again. I only wish that snake Greenberg would come on CNBC and get grilled by Patrick. I also wish that the snakes at CNBC would have the guts to respond to this article. Their lack of response speaks volumes for their guilt as this is their way to defend their shit reputation.
Nice work; my compliments Mark.
Excellent stuff MM
The Sith must be feeling some heat by now _No?
It would be real nice if sommeone would send these articles to our bought and paid for congress and senators and other “deRegulators” so that on the day of reckoning the term “Plausible Deniabily” cannot and will not be used!! Outstanding stuff Mark. Thanks again.
P.S. Now we know why no one came forward like Markopolous and Aguirre..they were probably scared for their lives and the lives of their families (if they did not accept payment that is).at least that is the excuse that they will use!!
http://thesanitycheck.com/Portals/0/cramersubpoena2.jpg
You need JUICE to write this on a government subpoena on national TV.
No wonder he’s trying to play nice now.
http://thesanitycheck.com/Portals/0/cramersubpoena1.jpg
Wall of ignored letters.
http://thesanitycheck.com/NCANSWallOfLetters/tabid/78/Default.aspx
Herb and Cramer and Bobo three years ago.
http://www.thesanitycheck.com/Default.aspx?EntryID=115&tabid=101
History lesson….
http://books.google.com/books?id=ieMCAAAAMBAJ&pg=PA14&dq=milken+the+patsy
Herb Greenberg 2006
http://thesanitycheck.com/Blogs/BlogArchive/tabid/101/EntryID/187/Default.aspx
Herb Greenberg models prison uniform, 2006:
http://thesanitycheck.com/Blogs/BlogArchive/tabid/101/EntryID/120/Default.aspx
Slowly, we inch forward. Today, I introduced your articles to an executive of the Janus Funds. Naturally, he was familiar with the harm that naked shorting caused to his market. He was just another lost and wandering soul. However, after I talked to him, he now knows of DeepCapture’s work and seemed truely interested. Hopefully, he will be telling others.
http://www.portfolio.com/views/columns/wall-street/2009/02/11/Analysis-of-Private-Equity-Business
The above link begins by touting “buyout king” Leon Black and others like him who “aren’t going out of business.” Apparently this is because they have what is known as a “business plan” that consists of buying companies and then stripping assets from them in the form of fees, fees and more fees.
“[P]rivate equity firms generally don’t make their money by choosing good investments. They make it on an amazing Technicolor array of fees: management fees, deal completion fees, consulting fees, performance fees, special events fees, fees of every kind and stripe.”
http://www.portfolio.com/views/columns/wall-street/2009/02/11/Analysis-of-Private-Equity-Business
The above link begins by touting “buyout king” Leon Black and others like him who “aren’t going out of business.” Apparently this is because they have what is known as a “business plan” that consists of buying companies and then stripping assets from them in the form of fees, fees and more fees.
“[P]rivate equity firms generally don’t make their money by choosing good investments. They make it on an amazing Technicolor array of fees: management fees, deal completion fees, consulting fees, performance fees, special events fees, fees of every kind and stripe.”
Hmmm…. Why didn’t someone honest think of that?
Excellent story Mark. It just keeps getting better. This is why the crooks roam free and we have to bail out their bad deeds…
Investment Manager Stanford Was Big-Time Campaign Contributor
Published by Lindsay Renick Mayer on February 17, 2009 3:26 PM http://www.opensecrets.org/news/2009/02/investment-manager-stanford-wa.html
Money manager Robert Allen Stanford now has two things in common with embattled investment manager Bernard Madoff: both have come under scrutiny for allegedly defrauding their investors, and both have given significant funds to politicians. The Securities and Exchange Commission today accused Stanford, chief of Stanford Financial Group, of “fraud in the sale of about $8 billion of high-yielding certificates of deposit held in the firm’s bank in Antigua,” according to the New York Times.
Between its PAC and its employees, Stanford Financial Group has given $2.4 million to federal candidates (including both candidate committees and leadership PACs), parties and committees since 1989, with 65 percent of that going to Democrats. Stanford and his wife, Susan, have given $931,100 out of their own pockets, with 78 percent going to Democrats. The top recipients of cash in the current Congress include Sen. Bill Nelson (D-Fla.), who received $45,900; Rep. Pete Sessions (R-Texas), who collected $41,375; and Sen. John McCain (R-Ariz.), who brought in $28,150. (For a full list of recipients, see below.) The company gave the most during the 2002 election cycle, when Congress was debating the Financial Services Antifraud Network Act, a bill that would have created a computer network linking the databases of state and federal banking, securities and insurance regulators to curb financial fraud. Lobbying reports indicate that Stanford Financial Group lobbied on the bill, which the House passed but the Senate did not. Nelson was vice chair of the Democratic Senatorial Campaign Committee during the ’02 cycle, when the DSCC collected more than $800,000 from the company.
Stanford Financial Group has spent a total of $4.8 million on lobbying efforts since 1999, primarily on issues related to money laundering, financial services and banking. Last year the firm’s lobbying spiked by more than 300 percent, totaling $2.2 million, by far the most it has ever reported spending. In addition to sending its own in-house lobbyists to Capitol Hill, the company also hired lobbying shop Ben Barnes Group last year to represent its interests.
These members of the 111th Congress have received contributions from the PAC and/or employees of the Stanford Financial Group since 1989 (includes contributions to both candidate committees and leadership PACs):
Name
Total
Sen. Bill Nelson (D-Fla)
$45,900
Rep. Pete Sessions (R-Texas)
$41,375
Sen. John McCain (R-Ariz)
$28,150
Sen. Christopher J. Dodd (D-Conn)
$27,500
Sen. John Cornyn (R-Texas)
$19,700
Sen. Charles E. Schumer (D-NY)
$17,000
Rep. Charlie A. Gonzalez (D-Texas)
$15,500
Rep. Gregory W. Meeks (D-NY)
$15,100
Rep. Pete Olson (R-Texas)
$14,500
Sen. Richard C. Shelby (R-Ala)
$14,000
Rep. Charles B. Rangel (D-NY)
$11,800
Sen. Roger Wicker (R-Miss)
$8,800
Sen. Harry Reid (D-Nev)
$8,500
Sen. Kay Bailey Hutchison (R-Texas)
$7,300
Sen. Jack Reed (D-RI)
$7,000
Sen. Hillary Clinton (D-NY)
$6,900
Sen. Orrin G. Hatch (R-Utah)
$6,100
Sen. Patty Murray (D-Wash)
$6,000
Del. Donna Christian-Green (D-VI)
$5,000
Sen. Jay Rockefeller (D-WVa)
$5,000
Rep. Donald M. Payne (D-NJ)
$5,000
Rep. John Boehner (R-Ohio)
$5,000
Rep. Dan Maffei (D-NY)
$4,550
Rep. Michael Arcuri (D-NY)
$4,000
Sen. Byron L. Dorgan (D-ND)
$4,000
Rep. Richard E. Neal (D-Mass)
$4,000
Sen. Tim Johnson (D-SD)
$3,500
Sen. Dick Durbin (D-Ill)
$3,500
Rep. Kendrick B. Meek (D-Fla)
$3,500
Rep. Eric Cantor (R-Va)
$3,000
Sen. Lamar Alexander (R-Tenn)
$3,000
Rep. Melvin L. Watt (D-NC)
$3,000
Rep. James E. Clyburn (D-SC)
$3,000
Rep. Eric Massa (D-NY)
$2,550
Rep. Michael E. McMahon (D-NY)
$2,550
Rep. Vernon Buchanan (R-Fla)
$2,500
Rep. John Lewis (D-Ga)
$2,500
Sen. Mark Warner (D-Va)
$2,500
Rep. Robert Wexler (D-Fla)
$2,500
Rep. Bennie G. Thompson (D-Miss)
$2,500
Sen. Mitch McConnell (R-Ky)
$2,500
Rep. Stephen Ira Cohen (D-Tenn)
$2,500
Rep. John Tanner (D-Tenn)
$2,500
Sen. Susan Collins (R-Maine)
$2,500
Rep. Paul E. Kanjorski (D-Pa)
$2,500
Rep. Dave Camp (R-Mich)
$2,500
Rep. Adam H. Putnam (R-Fla)
$2,500
Sen. Mary L. Landrieu (D-La)
$2,500
Rep. Walter Clifford Minnick (D-Idaho)
$2,300
Rep. John A. Boccieri (D-Ohio)
$2,300
Rep. Deborah Halvorson (D-Ill)
$2,300
Rep. Randy Neugebauer (R-Texas)
$2,000
Rep. Joe Barton (R-Texas)
$2,000
Rep. Kevin Brady (R-Texas)
$2,000
Rep. Patrick J. Tiberi (R-Ohio)
$2,000
Rep. Spencer Bachus (R-Ala)
$2,000
Rep. Lamar Smith (R-Texas)
$2,000
Sen. Robert Menendez (D-NJ)
$2,000
Rep. Ileana Ros-Lehtinen (R-Fla)
$2,000
Rep. Pete King (R-NY)
$1,500
Rep. Sam Johnson (R-Texas)
$1,500
Rep. Charles W. Boustany Jr (R-La)
$1,500
Rep. David Scott (D-Ga)
$1,500
Sen. Sheldon Whitehouse (D-RI)
$1,500
Sen. Tom Carper (D-Del)
$1,000
Rep. Michael McCaul (R-Texas)
$1,000
Rep. Bill Cassidy (R-La)
$1,000
Rep. Shelley Moore Capito (R-WVa)
$1,000
Rep. Dan Lungren (R-Calif)
$1,000
Sen. Pat Roberts (R-Kan)
$1,000
Sen. Maria Cantwell (D-Wash)
$1,000
Rep. Lloyd Doggett (D-Texas)
$1,000
Sen. Mike Crapo (R-Idaho)
$1,000
Sen. Frank R. Lautenberg (D-NJ)
$1,000
Sen. John Kerry (D-Mass)
$1,000
Rep. Barney Frank (D-Mass)
$1,000
Rep. Marsha Blackburn (R-Tenn)
$1,000
Rep. Jack Kingston (R-Ga)
$1,000
Sen. Max Baucus (D-Mont)
$1,000
Sen. John Thune (R-SD)
$500
Rep. Ruben Hinojosa (D-Texas)
$500
Sen. James M. Inhofe (R-Okla)
$500
Rep. Robert E Latta (R-Ohio)
$500
Sen. David Vitter (R-La)
$500
Rep. Jean Schmidt (R-Ohio)
$500
Rep. Gregg Harper (R-Miss)
$250
Sen. Tom Udall (D-NM)
$250
Hey guys. “Digg” the article so it will get maximum exposure:
http://www.marketrap.com/article/view_article/9156/email-exposes-short-seller-plot-to-destroy-public-company-fairfax-financial
That article from the WSJ in 1985 was excellent. Read it, see how their playbook hasn’t changed much, other than gaining expanded access to market makers to sell incredible amounts of non-existent shares.
As for the email between stanfield and the lollipop guild, well i would looove to have a peek(hint hint new SEC) at at stanfield’s CDO trading logs for spetember and october of 2008.
I’m amazed that these guys feel that if these guys make a bet that goes the wrong way against them, they will attempt to do anything to derail the company to make their bet payoff. Interpreted it means that these guys are no better than a monkey with darts at picking stocks. the ONLY reason that they have any success or “prominence” is that they cheat. We know it and we have the proof. And some of those hedge funds can’t even pull of decent returns with their cheating advantage, so they take to fleecing their own investors. Perhaps we should take it to where they feed… any endowments, pensions, or other image conscious investors should be made aware of certain hedge funds unscrupulous ties to market manipulation, criminals, illegal activities, mafia, and madoff.
Great Job Mark. Keep those e-Mails coming. I trust the Federal Authorities are also on this hot trail.
Perry, the Digg is up, now lets gets the votes out on it.
Thank you Mark! Please keep the truth rolling out!………………….
=====================
WALL STREET INSIDERS SECRETLY CONVERT THE MARKET FOR BUYING LONG SHARES OF STOCK INTO A FUTURES DERIVATIVE MARKET!!!!!!!!!
=========================
Dr. Jim DeCosta,
The bottom line is that the US Stock Market has been completely corrupted at its core – in its Clearance and Settlement System run by the DTCC.
When we buy any stock in the U.S. Stock market, it is very likely that we receive an IOU instead of Real Stock Shares. And we are NOT allowed to know this thanks to the Wall Street Criminals.
The simple truth is that Wall Street makes more money if they sell us phantom shares of stock, counterfeit shares of stock. Instead of paying for REAL Shares of stock to then sell to us, they simple counterfeit some shares and pocket 99% of the cash money we hand over to them for long shares. And then they use our cash money to drive down the price of the stock we just bought with more counterfeit shares.
When we look at our monthly brokerage accounts all we are allowed to see is that we hold a long position is xyz. We are NOT allowed by the DTCC system to know whether our account has REAL shares of stock in it or counterfeit shares.
So it looks like the Wall Street Counterfeit Machine, the DTCC Clearance and Settlement system, has secretly converted the stock market for buying long shares of stock into effectively a FUTURES DERIVATIVE MARKET where REAL shares are NOT traded.
And we the American buying public were NOT told about this. And every month when we look at our brokerage account summary we are potentially being lied to! The corrupted DTCC system demands that we be given a FALSE monthly illusion that we have a long position with REAL shares of stock in company xyz, even when we do not have Real Shares, but only IOUs!
This DOES nauseate me!
Is the MADOFF Exemption the root cause of this corruptions?
Or does it go back further?
Let’s see some info on the FBI investigation of David Einhorn, for manipulating CDS.
Likewise why not investigate how he destroyed LEH?
When will the gov’t stop the greatest crime of the millennium?
Great work.
Or is the GOV”T the problem here….?
Some times a Hatchet job fails.
From Jim Sinclair:http://jsmineset.com/
Royal Gold Will Have It’s Day
Posted: Feb 18 2009 By: Jim Sinclair Post Edited: February 18, 2009 at 12:25 am
Filed under: General Editorial
Dear CIGAs,
Remember when Barrons did the hatchet job on Royal Gold?
Now here is a Royal Gold article that you will find interesting. In my opinion, technically RGLD has at least an $80 number on it.
FOCUS: Gold Royalty Companies Outshine Gold Miners, Bullion
DOW JONES NEWSWIRES
By Matthew Walls
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)–Companies that buy royalties from miners of precious metals are proving attractive to investors who are bullish on gold but find stock in mining companies too risky and bullion too staid.
Two of the biggest royalty companies, Canada-listed Franco-Nevada Corporation (FNV.T) and Utah-based Royal Gold Inc. (RGL.T), have returned 31% and 58% respectively over the last year, easily outdistancing bullion and greatly outperforming mining equities, according to Morningstar.
Record-high prices for gold, silver and platinum helped as investors turn to traditional safe havens to ride out a very uncertain outlook for the global economy. But so has the business model of the companies: Buying royalties gives them full exposure to precious metal prices without exposure to miners’ operating risks and costs, which until recently have hurt miners.
Some analysts believe the miners – which were sold off heavily in last year’s turmoil – should outperform royalty companies in 2009. The collapse in oil prices, stagnant wage costs and price declines in other inputs should lower miners’ operating costs and fatten their margins. A U.S. index for gold miners, the New York Stock Exchange’s Arca Gold Miners Index, appears to back this up. The index is up 87.93% in the past three months.
But royalty companies, despite a more conservative business model, have rallied nearly as much, with Canada-based Silver Wheaton Corp. (SLW) up 133.12% in the same period.
One attraction right now may be their extremely high margins – around 80% – versus 30% to 50% for miners. Royal Gold, a company with a market capitalization of $1.6 billion, has just 14 employees. In today’s tight credit environment, these high cash flows allow them to buy new royalty purchases with little debt.
“There’s a big premium for any liquidity in the market now,” said Franco-Nevada Chief Executive David Harquail. “There’s many more companies looking to create new royalties.”
Royal Gold CEO Tony Jensen said he’s seeing the most opportunities since he took the helm over 10 years ago. Jensen is looking for royalty deals “anywhere north of $50 million.”
Companies like Royal Gold scoop up royalties by either buying existing ones or creating them. One way is to buy a royalty from individuals or a portfolio of royalties from other miners. Finders of mineral deposits, for example, will sometimes get royalties from mining companies when they sell their discoveries. That potentially puts the royalties up for grabs if they decide to cash out.
New Entrants Limited
A royalty typically has a claim on anywhere between 2% and 5% of a deposit’s gross revenue, but sometimes can be as high as 16%. Worldwide, about 3,500 royalties exist, according to a report by Canadian Imperial Bank of Commerce. Gold royalties cover about 427 million troy ounces, equivalent to about 7.5% of the world’s known deposits. Franco-Nevada, for instance, has more than 200 mining royalties: 24 on producing mines and 178 on development and exploration projects.
Most of the biggest precious metal royalties are already owned by Franco-Nevada and Royal Gold, a protective barrier that limits new entrants and competition for new royalties, CIBC said.
David Haughton, an analyst at BMO Capital Markets in Toronto, rates Franco-Nevada among his top five picks for mining equities and says their returns are bigger than a gold exchange-traded fund.
Gold ETFs deliver a return on price gains, but a royalty company does that and will benefit from any increase in production at a gold mine or an expansion of the deposit, Haughton said. “With ETFs, you buy an ounce and that’s it. Royalty companies have limited exposure to operators and exponential upside potential.”
New entrants have appeared in the past five years but in total they still number fewer than a dozen, making it a small investment field. Not all royalties are created equal, though. Some royalty companies, such as Canada-based International Royalty Corporation (ROY), are much more highly involved in base metals, and suffered in the collapse of their prices in the second half of 2008. Franco-Nevada, by contrast, is likely to get 67% of its earnings from gold in 2009, according to BMO’s Haughton.
Production cuts and mine shutdowns are also a risk for royalty companies. For example, Xstrata PLC’s (XTA.LN) decision to close its Falcondo nickel mine in the Dominican Republic in response to low prices robbed Franco-Nevada of one of its royalty streams. While a royalty reduces exposure to a mine’s operating risks, the royalty company still needs a mine to perform well.
One drawback for the royalty companies that have performed well over the past year is that their valuations look a bit rich, particularly when viewed against the valuations of the mining companies. Franco-Nevada is trading at a price/earnings forward ratio of 58.48, and Royal Gold at 42.92, according to Morningstar.
James Whithall, a portfolio manager at U.K.-based precious metal investment group Baker Steel, which manages $450 million, said gold miners, especially the mid-tier ones, are trading at 10 times earnings, when historically they trade between 20 and 40 times earnings.
-By Matthew Walls, Dow Jones Newswires; +44 (0)20 7842 9412; matthew.walls@dowjones.com
Copyright (c) 2009 Dow Jones & Company, Inc.
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I keep seeing Linda Thomsen’s name appearing in the articles about Stanford’s fraud. I thought she resigned?
http://online.wsj.com/article/SB123489015427300943.html#
http://www.marketrap.com/article/view_article/9156/email-exposes-short-seller-plot-to-destroy-public-company-fairfax-financial
Istandup, you actually always receive an IOU or chit in your account.
The way it is supposed to work:
As the beneficial owner, your brokerage literally owes you a share. The clearing firm owes your brokerage a share. The DTC owes the clearing firm a share. And the mysterious Cede & Co., a nominee (not an alter ego or sub. of the DTC) owes the DTC a share. This daisy chain is supported by an actual share owned by Cede & Co. as recorded on the company’s shareholder list. The shares are registered to Cede & Co.
The chits are the only thing that trades as the real shares are immobolized in the DTC. The DTC literally has a vault full of share certificates registered to Cede & Co.
The way it actually works is that often, the chits aren’t backed by anything. The problem is how do you determine which chits are backed by real shares. Imagine that only 50% of the chits are backed by real shares. Since less than 50% usually vote their shares or request a certificate, they can usually deliver a real share to the people that demand one.
They’ve confused their role as custodian of someone else’s asset with a banking role where they only fractionally back their obligations to the investors who trust them.
The reason this is important is that this custody role is more fundamental than any illegal trading strategy. It is a breech of trust and possible criminal fraud to represent you are holding someone’s asset for safekeeping when you know that isn’t true.
Was this the other scam Markopolous was going to reveal? Sanford ?
Anyone?
ron doc,
It is possible it could be Markopolous under an assumed name I suppose. The name out there as the whistleblower is:
A whistleblower named Alex Dalmady claims that Stanford International Bank, a large offshore operation run by Texas billionaire Sir Allen Stanford, is an $8 billion fraud, with suspiciously steady year-on-year returns, a la Bernie Madoff
http://seekingalpha.com/article/120836-alex-dalmady-the-msm-and-stanford
Alex Dalmady, the MSM, and Stanford 2 comments
by: Felix Salmon February 17, 2009
Alex Dalmady, the analyst who broke the Stanford story, has a blog now, and he’s not afraid to use it: his latest blog entry has appeared with the headline “The WALL STREET JOURNAL can kiss my ass!”: (Update: Dalmady’s entire blog has now disappeared; he emails to say that he thinks he was hacked. I have a copy of it; if he lets me, I’ll republish it here.)
They were among the last to call…
What did I expect from THE JOURNAL? I really expected the cavalry. Validation. They have analysts and auditors and people who can pick this up quickly…
Their first article was a total lame-out… I called them out on it. Lame! They called… no, no, no we’re on it. We want to interview you personally, too…
Then they don’t want to see me (I was trying to schedule my day). Then they do…
But here’s the catch: no one can know, no one can tell, I can’t say anything about what we talk about…to anyone…
This is EXACTLY why guys like Markopolos and myself don’t go to guys like you with tips. Lesson learned.
This, ladies and gentlemen, is how the journalistic sausage is made. It’s a hyper-competitive world, which is good in some respects, but very bad in others — the Stanford case being a prime example. When Dalmady broke the story, Matt Goldstein of Business Week and Alison Fitzgerald of Bloomberg were already quite far advanced in their own investigations of Stanford. As a result, the WSJ and the NYT were reluctant to report the story, and were pretty late to the game. The FT had it even worse, being hobbled by lawyers worrying about the UK’s draconian libel laws.
Since then, the Stanford story really hasn’t gained traction in the way that one might have expected. Zachary Roth of TPMMucraker, for instance, first found the story in the NYT, and put up a blog entry on Friday morning. Later that day, he realised the story was a bit older than that, and put out an update giving BusinessWeek credit for “breaking” the story on Wednesday. But even as he continues to follow the story today, there’s no indication that, I, for one, was reporting it on Tuesday morning — and there’s certainly no mention of Dalmady. Isn’t the whole point of the blogosphere that it’s meant to be able to glom onto stories without the intermediation of the MSM?
More generally, essentially no media source has had the guts to do what Dalmady expected of them — which is to take a critical look at Stanford’s financials, as he did, and try to work out whether they indicate the presence of fraud. Instead, most of the Stanford reporting has been about regulatory investigations — including the SEC investigation which has been dragging on for at least three years now. There are a few subplots involving the incentives offered to people selling CDs, and of course in England there’s the whole cricket angle as well, but in general the media has been extremely wary of coming out and doing any accusing themselves: they prefer to let the accusations lie hidden, implicit, behind “straight reporting” of SEC, Finra, and (according to the WSJ) FBI investigations.
Part of the reason for this is that the stakes are extremely high. As a blogger, I have relatively little equity in being right, and in fact I’m the first to admit that I’m regularly wrong on matters big and small. I would never expect anybody to take a blog entry of mine as the gospel truth: I call things as they seem at the time, and as new information comes to light I’ll change my opinion accordingly. But a newspaper can’t do that: it can’t, without covering its face in egg, say something like “well, Stanford looked like it was a fraud, but now, in the light of new information, we can see that it wasn’t fraudulent after all”. So editors are ultracautious about any such story.
I do expect that eventually one major media outlet — I have no idea which — will manage to get enough ducks in a row that it will feel able to come out and make some serious accusations directly against Stanford, rather than just reporting on the investigations of others. But to date, most of the MSM hasn’t even reported accurately on what Dalmady is saying. Here’s the WSJ, for instance:
“The first thing that grabs your eye is the business model,” says Alex Dalmady, an analyst who unveiled concerns about Stanford International Bank in the magazine VenEconomy Monthly but isn’t involved in the investigation. “Taking deposits and playing the stock market — this is way too risky”.
Not only does this imply that Dalmady merely “unveiled” previously-existing “concerns”, as opposed to directly investigating the bank’s financials and raising them himself. It also waters down what those concerns are: Dalmady thinks that Stanford’s running a Ponzi scheme, not just that its investments are “risky”. And Reuters was even more circumspect, to the point at which the true meaning, if it was there at all, disappeared entirely:
After reviewing Stanford’s financial statements, Dalmady concluded that it used borrowed money, or leverage, to pump up investment returns.
On his blog at BusinessWeek, Goldstein hints at some of what’s been going on:
Too often in the news business, there’s a tendency not to give credit to others covering a story well. I guess it’s just the competitive nature of the business that can make that a hard thing to do. And it’s especially difficult when chasing a fast, unfolding story such as the one involving the investigation of Stanford Financial.
Goldstein then praises a few of the other reporters and bloggers who have been following this story — although he neglects to link to any of them. And although it seems that the WSJ was willing to report in some detail on Dalmady’s story, it was only willing to do so if it could somehow get the “exclusive”.
But that’s not how a story like this one works — especially not when you come to it late. It was the blogs who brought Dalmady’s analysis to the attention of the MSM: the story was first published by Veneconomia magazine in Venezuela; was then picked up by Venepiramides (in Spanish) on Friday, February 6; then by The Devil’s Excrement the following Monday, Inca Kola on Tuesday, and finally me later that morning. To read all the coverage, however, you’d think that no news had been broken before the BusinessWeek story appeared on Wednesday, February 11.
It’s understandable, then, where Dalmady’s animosity towards the WSJ is coming from. First the WSJ, the rest of the MSM, and even parts of the blogosphere basically pretend that the blogs never had this story first — and then the WSJ asks the very same blogs to bend over backwards to cooperate with them. This is not a tactic with a high chance of success.
As always great investigative journalism as you put the pieces of the puzzel together. Any who have been congizant of this behavior going back long ago are very aware of the stunt Cramer pulled but more importantly HOW he got away with it. Today the give brownie points to John Mack but fail to identify what Gary Aguirre revealed. For the last year Oreilly who works for Fox News that is owned by News Corp has been doing a personal or STRATEGIC against GE and presents a negative article written by Barrons but my oh my fails to identify that Barrons and the WSJ previously owned by Dow Jones and now owned by NEWS CORP..and wait a minute. How is HE getting aware with such. And why isn’t ANYONE identifying or calling or reporting him and those who are behind the strategy and use him as part of their tactic as they did with HG and others. MY MY. Here’s the point. No one who is aware is surprised. Patrick wasn’t surprised. Neither is Bobo. Unless there is ACTION.. Unless there is ENFORCEMENT of the LAWS/ PERP WALKS etc etc. The crap continues and those who drove the equities lower get to exploit as they would in a triage i.e who lives and who dies. More importantly WHO does the LAZARUS. MS is a good ex.
It’s nice to be educated re how something has occurred but I lean PRO ACTIVE and favor how about preventing and avoiding what we are experiencing versus the crisis management and take one for the gipper. SOMEONE out their has the skills and talent and contacts. It’s time to be PATRIOTIC and do their thing. Mark/Judd/Bobo/Patrick etc are doign their part but now we need the modern day Elliot Ness..NO not a ES for he was a joke but the REAL DEAL.
Davidn,
You stated:
“Istandup, you actually always receive an IOU or chit in your account.
The way it is supposed to work:
As the beneficial owner, your brokerage literally owes you a share. The clearing firm owes your brokerage a share. The DTC owes the clearing firm a share. And the mysterious Cede & Co., a nominee (not an alter ego or sub. of the DTC) owes the DTC a share. This daisy chain is supported by an actual share owned by Cede & Co. as recorded on the company’s shareholder list. The shares are registered to Cede & Co.”
But is it not true that at the end of the chain of IOUs is suppose to be a REAL share of stock?
So the DTC is at the end of the chain of IOUs which should have a REAL share of stock?
I suspect that the common man or woman on the street who has a 401K would become very confused (I am) if I tried to explain the whole chain of IOUs from beginning to end.
So how would you suggest one explain this chain in simple terms to describe when one has a REAL share of stock at the end of the chain OR a Counterfeit Share (phantom share)?
It seems Sir Allen Stanford did have exposure and indeed incur losses via the Madoff scheme which he had earlier denied. Now he is on the run.
http://www.timesonline.co.uk/tol/news/world/us_and_americas/article5759709.ece
Read SEC charges against Stanford
http://www.timesonline.co.uk/multimedia/archive/00489/Stanfordcomplaint20_489209a.pdf
FINRA Blows this one….Our fine regulatory agencies who refuse to regulate dropped the ball….AGAIN !! Way to go Mary Schapiro. It has become obvious when fox has been guarding the hen house…
PREVIOUS INVESTIGATIONS
This is not the first time Sir Allen has faced regulatory scrutiny. In 2007, Finra fined Stanford Group $20,000 for failing to adequately state the risks involved in the CD investments and to disclose that an affiliation between the broker-dealer and the bank could pose a conflict of interest. Stanford consented to the sanctions without admitting or denying wrongdoing, according to a file on the Finra web site.
Mr King of the FSRC said he was aware of the fine. “To us, a $20,000 fine after five or seven years [of not having any issues] is not a major problem.”
And last year, two then-employees of the Group, Mark Tidwell and Charles Rawl, filed an employment-discrimination suit in Texas state court alleging Stanford Financial was engaging in “various unethical and illegal business practices, including overstating the asset value of individuals in a manner designed to mislead potential investors and purging electronic data from its computers in response to an investigation by the Securities & Exchange Commission,” according to court documents.
Then, in July, the SEC issued subpoenas to Mr Rawl and Mr Tidwell requiring them to produce, among other things, “all documents and communications evidencing, memorializing, or relating to complaints by SGC customers relating to SGC and/or any SGC affiliate, including SIB.”
Lawyers representing Mr Tidwell and Mr Rawls declined to comment.
http://ftalphaville.ft.com/blog/2009/02/17/52560/sir-allens-antigua-or-the-curious-case-of-stanford-international-bank/
Leroy King, head of Antigua’s Financial Services Regulatory Commission (FSRC
You may get a Pulitzer.
I think you are on your way.
I pray for your safety.
You have guts.
Istandup, it is confusing by nature. That’s why they get away with it. Imagine the trade is not within America, then there’s another step.
The chain is:
investor<-brokerage<-clearing<-depository<-DTC<-Cede & Co.
The chain can break at any point. The arrow is supposed to represent the direction of the share IOU.
The inflation of IOU’s can happen at any step along the way. It could be the broker, clearing house, depository, etc. The problem doesn’t have to be at the level of the DTC.
The other complication is there is internal netting as at each one of these steps, there are positive (long) and negative (short) positions that cancel out or net.
In terms of explaining it to people, I just say “Experts have proven some shares are counterfeit and these phantom shares trade like real shares, pushing down the value of your investments.” Most people don’t care that much about the details of how it works and are quick to believe that Wallstreet would rip them off if they could.
To further answer your question, there is always a real share certificate at the end of the chain, registered to Cede & Co. and kept in the DTC vaults, but it is often for less shares than what are owed to all the upstream claim holders.
The real scary part is at each point, the investor is not considered the customer. The DTC assumes the beneficial owner is the clearing participant and they feel they have no obligation to anyone upstream of that.
Bear Stearns was in a case where it was the clearing participant and it knew the brokerage was ripping of the investors by creating IOU’s, but they did nothing to keep the business flowing. The court ruled that the clearing organization has NO obligation to the investor because from their point of view, the brokerage is the beneficial owner of the shares.
Henry is a big part of establishing new case law that says the clearing houses are not responsible for massive fraud committed by brokerages they clear from, even if they make money hand over fist from it.
http://www.sidley.com/lawyers/bio.asp?ID=M497722507
“The amount involved runs up to hundreds of millions of dollars, says one trader, who also claims that the clearinghouses tend to help the hedge funds that short stocks and don’t always follow up on rule violations because these funds provide a rich source of business. ”
“.. this case isn’t quickly resolved, it could balloon into another major scandal on Wall Street, considering that several big clearing firms are owned by some of the Street’s largest investment banks.”
“Even if one accepts that the complaint sufficiently alleges that Bear Stearns did this with knowledge that these brokers were manipulating the securities at issue, the complaint does not establish Bear Stearns primary liability under § 10(b).”
“These firms are paid to clear trades, not to watch customers. Clearing firms will charge more or consider leaving the business if they are asked to police sales practices and that will end up hurting the average customer,” says Sidley Austin Brown & Wood lawyer Henry Minnerop, who has represented most of Wall Street’s clearing firms over the years.
Our buddy at Sidley Austin wrote a magazine article that started:
“The security exchange regulations and case law that apply to clearing firms are clear and consistent. The SEC has approved the rules of principal of the New York Stock Exchange, the American Stock Exchange and the National Association of Securities Dealers, the self-regulating bodies in charge of clearing agreements. The body of cases involving clearing arrangements constitutes a mature set of precedents. Most decisions recognize that clearing brokers are not accountable for the actions of their introducing firms.”
UBS agree’s to name names, and turn over its client list. Question is, will we ever see all the tax dodgers named in the public domain and prosecuted for Tax evasion?
NOTICE THE LAST LINE.
“UBS will pay $780 million in fines, penalties, interest and restitution for conspiring to create sham accounts to hide the assets of United States clients from the U.S. government.”
Banking giant UBS to pay $780 million in tax case
By DEVLIN BARRETT, Associated Press Writer Devlin Barrett, Associated Press Writer – 16 mins ago
WASHINGTON – Swiss-based banking giant UBS has agreed to pay $780 million to settle allegations it conspired to defraud the U.S. government of taxes owed by big clients.
As part of the deal struck in federal court in Fort Lauderdale, Fla., UBS has made the unprecedented step of agreeing to immediately turn over to the U.S. government account information for their U.S. customers of the bank’s cross-border business.
That means federal authorities have struck a big crack in Switzerland’s vaunted bank secrecy laws.
UBS will pay $780 million in fines, penalties, interest and restitution for conspiring to create sham accounts to hide the assets of United States clients from the U.S. government.
Anonymous asks “Question is, will we ever see all the tax dodgers named in the public domain and prosecuted for Tax evasion?
I think the answer is only if they are not connected will they face procecution.
The big question when this is over is will the regulatuors and pol’s keep their heads after all the crooks have lost thiers?
Answer: only if they have not been beat to death by the mobs first.
Mark, when The New York Post permitted and encouraged the Italian Mafia to take over the distribution of the paper, there were several murders. This should have been mentioned.
Good work on this.
Thank you.
Ed Manfredonia
ed,
I agree.
http://www.independent.co.uk/news/world/europe/american-mobsters-ordered-murder-of-italian-prosecutor-says-mafia-turncoat-591585.html
American mobsters ordered murder of Italian prosecutor, says Mafia turncoat
By Peter Popham in Rome
Wednesday, 19 March 2003
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A mafia supergrass has given the first authoritative account of relations between the Cosa Nostra, in which he was formerly number two, and its cousins in America – as seen from Sicily.
A mafia supergrass has given the first authoritative account of relations between the Cosa Nostra, in which he was formerly number two, and its cousins in America – as seen from Sicily.
Antonino Giuffre, who was the right-hand man to the fugitive chief of the Cosa Nostra Bernardo Provenzano until he turned state’s evidence last year, said the American branch ordered the murder of Giovanni Falcone, the anti-Mafia prosecutor killed by a huge bomb in 1992 after rounding up and putting on trial hundreds of Sicilian gangsters.
He also claimed that American mobsters in need of moral improvement were routinely sent to a sort of Mafia finishing school in western Sicily.
In verbal testimony to the FBI, made public in Palermo on Monday, Mr Giuffre said Mr Falcone had flown to the United States and, with the American prosecutor Rudolph Giuliani, later Mayor of New York, “had delivered a hard blow to the international Mafia”. He said: “By the rules of Cosa Nostra, if a Sicilian prosecutor goes to America and damages the Italian American Mafia … the Mafia boss of the region [the prosecutor] came from must intervene.”
Mr Giuffre said his former boss Toto Riina had explained this rule to him. Riina was arrested in 1993 and convicted of masterminding the murders of Mr Falcone and, two months later, his colleague Paolo Borsellino. He is still in jail.
“Toto Riina told me that he bore responsibility towards the Americans and for that reason sought to neutralise the attacks on the [Mafia] boss in the United States,” Mr Giuffre said. “The American Mafia were determined to have revenge for these attacks on them by the prosecutor, without any scruple of conscience.
“I think the American economy, or part of it, is hand in glove with the Mafia … If the bosses suffer attacks, the Mafia does everything it can to make [those who have attacked them] pay, and to recover what they have lost.”
The murders of the two prosecutors, who had done much to cripple the Sicilian Mafia, made headlines around the world. Despite the conviction of Riina, there is a nagging sense that the authorities have yet to get to the bottom of the Falcone-Borsellino murders – and some doubt whether they have the will to do so.
Last year, a Sicilian judge dismissed the allegation made by other Mafia supergrasses that Silvio Berlusconi, Italy’s Prime Minister, and Marcello Dell’Utri, his long-time Sicilian crony, were implicated in the murders. It took him 14 months to make up his mind. Even then, he ordered an investigation into links between Mr Berlusconi’s company Fininvest and the Cosa Nostra to be reopened.
Mr Giuffre also put flesh on allegations that Italian American mobsters had been paying regular visits to Sicily to learn the dos and don’ts of the Cosa Nostra. A report by the FBI has claimed that members of the Bonanno clan, one of the five Mafia “families” of New York, were sent to Castellammare in the far west of Sicily for toughening up. The clan was led by Joe Bananas, who died in his bed in Tucson, Arizona, last May, aged 97.
Confirming the report, Mr Giuffre said: “[Castellammare] is the right choice. That’s where you find the hard base of the Mafia, attached to courage and respect, and the kids who come there from the US learn that even their bosses talk too much … It’s a good laboratory of preparation.”
FINRA=Financial Investigators Negotiating for Rich Americans
Finra’s Stanford Probe Raises Questions on Oversight (Update1)
By Jesse Westbrook and Ian Katz
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ag7hBPLa0VlU#
Feb. 18 (Bloomberg) — U.S. brokerage regulators fined R. Allen Stanford’s firm more than a year ago for misleading investors while selling certificates of deposit, raising new questions about watchdogs already under scrutiny for missing Bernard Madoff’s alleged $50 billion Ponzi scheme.
Stanford Group Co. was fined $10,000 by the Financial Industry Regulatory Authority in November 2007 for distributing marketing material that “failed to present fair and balanced treatment” of the risks associated with CDs. The U.S. Securities and Exchange Commission yesterday filed a civil lawsuit calling the sales by the Houston-based firm a “massive, ongoing fraud.”
“From what we know, the problem that led to the fine was a red flag,” said Robert Hillman, a securities law professor at the University of California, Davis. “If you have a red flag of this nature, then you have to do something more than simply levy a fine and close the file.”
The SEC accused Stanford of touting “improbable, if not impossible” returns for more than a decade on CDs issued by an affiliated bank in Antigua. The case follows congressional scrutiny of the SEC and Finra, which is funded by the brokerage industry, for missing Madoff’s alleged scheme.
Finra spokeswoman Nancy Condon had no comment.
SEC Case
The SEC’s case stems from an investigation opened in October 2006 after a routine inspection of Stanford Group, the New York Times reported today, citing Stephen Korotash, an associate enforcement director in the SEC’s Fort Worth, Texas, office. The SEC “stood down” on its inquiry at the request of another federal agency that he declined to identify, the newspaper said. It resumed the investigation in December 2008.
He referred questions from Bloomberg News to the SEC’s press office.
Agency spokesman John Nester said inquiries like the Stanford case involve a number of jurisdictional issues such as whether products being sold are securities and investigators’ ability to access overseas records.
“We always cooperate with criminal authorities who have different techniques and tools at their disposal,” he said. “And we are careful to make sure that civil investigations are conducted in a way so that they do not impede potential criminal actions.”
‘Reinvigorate’ Enforcement
SEC Chairman Mary Schapiro last month said she would “reinvigorate” the agency’s enforcement unit after it failed for more than a decade to detect that Madoff was paying off old investors with money raised from new ones. Schapiro was chief executive officer of Finra when the private regulator fined Stanford’s firm in 2007.
Stanford Group had registered with the SEC as an investment adviser, making it subject to routine inspections. Finra had authority to examine Stanford because it was also registered as a brokerage firm.
Clients of Stanford Group were told their funds would be placed mainly in easily sellable financial instruments, monitored by more than 20 analysts and audited by Antiguan regulators, according to the SEC.
Instead, the “vast majority” of the portfolio was managed by Stanford himself and James Davis, the chief financial officer of the Antiguan subsidiary, the SEC said. A “substantial” portion of the portfolio may have been invested in assets such as private equity and real estate, according to the agency.
Whereabouts Unknown
The whereabouts of Stanford, 58, are unknown by U.S. regulators, according to Rose Romero, director of the SEC’s Fort Worth office. Investigators are trying to account for the $8 billion in investor funds.
In its 2007 claim, Finra said Stanford Group failed to tell clients it had a potential conflict of interest because an affiliated bank based in Antigua was issuing the CDs. The same bank, Stanford International Bank Ltd., was named in the SEC’s lawsuit.
Stanford Group Chief Compliance Officer Bernerd Young said in a letter to Finra that the company had revised its marketing material. He also said Finra and the SEC “conducted numerous examinations” of Stanford Group and its “solicitation” of Stanford International’s CDs.
‘Slap on Wrist’
“It goes to how deep” Finra looked, said Adam Pritchard, a former SEC lawyer who’s now a professor at the University of Michigan Law School in Ann Arbor. “That $10,000 fine would be the archetypical slap on the wrist.”
Probes of marketing material are often triggered by tips from consumers and competitors and are limited in scope, said Brian Rubin, a partner at Sutherland Asbill & Brennan LLP in Washington who was deputy chief counsel at NASD, a Finra predecessor. Examiners focus on the veracity of literature and don’t broaden reviews unless they suspect further wrongdoing, he said.
“There’s no reason that Finra would have dug deeper” unless there were indications of misrepresentation related to returns or evidence of the fraud alleged by the SEC, Rubin said. “The fine is relatively low, which suggests that they were looking at a limited number of pieces” of literature.
Stanford Group clients have wrested at least $687,288 from the firm since 2003 in arbitration settlements related to transactions involving stocks, mutual funds and government securities, according to Finra records. Finra itself has fined Stanford Group at least $70,000.
To contact the reporter on this story: Jesse Westbrook in Washington at jwestbrook1@bloomberg.net; Ian Katz in Washington at ikatz2@bloomberg.net
Pretty interesting how that Bloomberg article by Jesse Westbrook manages to mention FINRA, the SEC, and that Mary Shapiro is chairman of the SEC, but fails to point out that she just moved to the SEC after running FINRA during the period in question.
Dr. Jim De Costa- your comment on this please…from another board
“If a company has authorized 100mm shares to sell, and there are shareholders owning 150mm, this puts a permanent overhead supply on prices for as new comes out to support a rising price, there are more shareholders out there than are known trading in their IOUs for cash. Without a BUYIN to make the stock “right” again, news will NEVER make the price rise in proportion to the authorized float….
We need legal and proper TRADE SETTLEMENT”
Is this an accurate assessment of the situation???
If all else fails, you can buy your special interest to suit your needs.
Stanford and Firm Spent $7.2 Million on Lawmakers (correct)
By Jonathan D. Salant and Alison Fitzgerald
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aODSsM0vL4kc#
(Corrects to add that tax legislation introduced by Rangel in 2007 would benefit Virgin Islanders who established residency there in 2004 or before, in 10th paragraph.)
Feb. 18 (Bloomberg) — R. Allen Stanford and his Houston-based Stanford Group Co. spent $7.2 million since 1999 on campaign donations and lobbying as lawmakers tackled such issues as financial fraud and Virgin Islands tax breaks.
Then-House Majority Leader Tom DeLay, a Texas Republican, used Stanford’s private jet at least 16 times from 2003 through 2006, financial disclosures show. Senator John McCain of Arizona, the 2008 Republican presidential nominee, was the third-largest recipient of campaign donations from Stanford, his employees and the company’s political action committee.
Stanford and his employees have given $2.4 million in campaign contributions since 1999, according to the Center for Responsive Politics, a Washington group that studies political spending. He made $801,000 in personal donations, including $4,600 to President Barack Obama’s campaign. The company set up its political action committee last March.
“The campaign cash buys a cordial relationship,” said Sheila Krumholz, the research group’s executive director. “Considering that 99 percent of Americans don’t even give $200, the fact that this guy has given nearly $1 million makes him a big player. It’s an open secret that big players can wield money to influence policy.”
Some of the recipients of Stanford’s largesse are returning his campaign cash after the Securities and Exchange Commission accused the billionaire of running a “massive, ongoing fraud.”
Donating to Charity
Senator Bill Nelson, a Florida Democrat, received $45,900 from Stanford and his employees, more than any other current lawmaker, according to the Center for Responsive Politics. Nelson said in a statement that he would donate the money to charity.
Representative Pete Sessions, a Texas Republican, got $41,375. Spokeswoman Emily Davis said Sessions didn’t know Stanford personally.
Stanford and his employees gave $28,150 to McCain and $27,500 to Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat.
McCain spokeswoman Brooke Buchanan said his campaign is donating all of the contributions to charity. A Dodd spokesman, Bryan DeAngelis, said the lawmaker was doing the same. DeLay’s attorney, Dick DeGuerin, said he couldn’t immediately reach the former congressman for comment.
Stanford, who moved to the Virgin Islands in 2006, donated $3,300 to House Ways & Means Committee Chairman Charles Rangel, a New York Democrat in 2008, and $10,800 over five years. In 2007, Rangel sponsored legislation setting a three-year limit on Internal Revenue Service audits of Virgin Islanders. That bill would benefit Virgin Islanders who established residency in 2004 or before.
Rangel spokesman Emile Milne said the lawmaker would donate the $10,800 he received from Stanford to charity.
Gifts to Democrats
In 2002, while Congress was considering legislation requiring state and federal financial regulators to share data in an attempt to crack down on fraud, Stanford and his company gave $801,800 to the Democratic Senatorial Campaign Committee and $500,000 to the Democratic Congressional Campaign Committee. Stanford lobbied on the legislation, which passed the House and failed to make it through the Senate, federal records show.
Overall, the Stanford Group spent $4.8 million to lobby on financial and banking measures, including efforts to crack down on investors trying to avoid U.S. taxes by setting up residences in the U.S. Virgin Islands.
Stanford’s lobbying team has included former Senators Dennis DeConcini, an Arizona Democrat, and Steve Symms, an Idaho Republican, and the firm of former House Majority Leader Dick Armey, a Texas Republican, according to congressional lobbying disclosures.
He has sponsored Caribbean trips for federal lawmakers to talk about economic development through a nonprofit group called the Inter-American Economic Council, according to congressional disclosures and the organization’s Web site.
Montego Bay Trip
In a 2006 trip, four Democratic members of the House Caribbean Caucus flew in Stanford jets to Jamaica’s Montego Bay to stay in a Ritz-Carlton hotel for meetings with Jamaican leaders, the disclosures showed.
Sessions took one such trip. So did former Representative Robert Ney, an Ohio Republican who was sentenced in January 2007 to 2 1/2 years in prison after pleading guilty to conspiracy and making false statements and admitting he took gifts from former lobbyist Jack Abramoff in exchange for official actions.
Ney praised Stanford in the Sept. 15, 2005, Congressional Record: “I join with the residents of the entire 18th congressional district of Ohio in honoring and congratulating Allen R. Stanford for his outstanding achievements.”
To contact the reporters on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net; Alison Fitzgerald in Washington at Afitzgerald2@bloomberg.net.
Last Updated: February 18, 2009 23:33 EST
Clearthinker,
That statement is accurate. Theoretically the NSCC would never allow that to happen. UCC Article 8-104 expressly forbids this “overissuance” you described. When you add the number of “securities entitlements” resulting from unaddressed FTDs in the share structure of a corporation to the # of shares “outstanding” then by law it is not allowed to exceed the number of shares “authorized’ by a corporation’s Articles of Incorporation.
Thus by law the NSCC is obligated to tally the # of securities entitlements it and its participants have created and regularly do the math to make sure that an “overissuance” hasn’t occurred. Remember it is the SRO theoretically acting as the “first line of defense” against market abuses. This tally would include securities entitlements held in ex-clearing arrangements, at trading desks, in the NSCC “C” sub accounts, offshore, etc. They can’t follow the law in this regards. It would reveal the existence of the enormity of this corrupt “industry within an industry” that they sponsor.
Here’s a link to a paper I just filed with the SEC explaining this: http://www.sec.gov/comments/s7-30-08/s73008-75.pdf
Clearthinker, 150mm shares with 100mm issued and outstanding does not automatically create 50mm fails. A legal short sale of 10mm shares will create 110mm shareholder by default. The extra 10mm acting as ‘overhead’ but they are perfectly legal. Remember in all this, people buy on margin and people sell on margin.
Clearthinker, Patchie makes a good point. In legal short selling there are 2 natural market deterrents to abuses. Firstly, there are a finite amount of legally borrowable shares. They usually come from institutions or margin accounts. Secondly, as more legally borrowable shares are borrowed then the amount remaining lessens and their “rental rate” goes up. This deters more short selling in that the “risk/reward” analysis changes.
In abusive naked short selling the sky’s the limit. There are tons of abuses going on in the “legal short selling’ arena. The NSCC’s “Automated Stock Borrow Program” or “SBP” allows the same parcel of shares to be rented out in an infinite amount of directions simultaneously. We also see prime brokers not doing any borrowing and then charging their hedge fund clients for borrows.
Here’s the exec. summary of that paper linked to above for those without the time to read the whole 22 page paper.
“Clearance and settlement systems like that of the DTCC which utilize “central counterparties” and the legal concept of “novation” are extremely susceptible to abuse. At one moment the seller of securities owes an investor half way around the world the delivery of the securities he sold to him. Two seconds later after “novation” takes place the seller, an NSCC “participant”/co-owner of the NSCC, owes delivery to the NSCC management which are its employees. Two seconds after that the NSCC management (the employees) informs the seller of securities (one of its bosses) that it is a “powerless” creditor of that debt and that it can’t force its boss to deliver that which he sold (in NSCC-speak it allegedly can’t force the boss “to complete the trade”) but that his boss should at least collateralize the monetary amount of the delivery obligation on a daily marked to market basis to lend the whole process a sense of legitimacy. A day or two after that the presence of all of the readily sellable “securities entitlements” resulting from all of these “we can’t force you to delivers” causes the share price to plummet which lowers the collateralization requirements which in turn unconscionably allows the funds of the victimized investor to flow to those refusing to deliver that which they sold. Now that is one well-designed “fraud on the market”.”
Countries need to pay for imports and exports and they pay for these with three main fungible stores of value:
- gold, oil, Euros, Dollars
For example, a poor country like Somalia could pay for a grain shipment with oil, which is more like a currency than any other export.
The banksters who control both Euros and Dollars see gold and oil as competition to fiat currencies printed out of thin air and they are massively shorting them both.
Check out this site which is fighting the counterfeiting of gold by privately owned central banks around the west.
http://www.gata.org/
Why would the central banks outlaw counterfeiting when they do it themselves?
http://www.atimes.com/atimes/Global_Economy/KB20Dj02.html
With bad news only getting worse, investment markets are turning into quagmires. The Dow Jones Average is testing new lows, and the commodities markets
show few signs of life. In such times, the price of gold should fall along with the prices of other assets and commodities. But, the reverse has occurred. In the past two months, gold has staged a remarkable rally. This is despite the activity of price-depressants such as official gold sales by the International Monetary Fun and official “approval” for massive naked short positions to be opened by new “bullion” banks.
In regards to that UCC Article 8 cited above what the NSCC subdivision of the DTCC does is referred to as “illegal cherry picking” of the law. The law says that it’s OK to credit an investor’s account with an ultra-short termed “securities entitlement” as an “accounting measure” if an FTD occurs.
Then UCC-8-104 says but if you’re going to be handing our readily sellable “securities entitlements” when FTDs occur you sure as heck better do the math to make sure that the combined amount of shares “outstanding” plus the number of “securities entitlements” you granted don’t exceed the # of shares “authorized”. Otherwise this would clearly violate state laws. The NSCC basically crosses fingers and prays that the SEC Enforcement Division and the congressional oversight committees hasn’t read the full text of UCC-8.
What’s also a bit odd is that when you file a case against abusive naked short sellers through a state the NSCC will come back with the defense that federal law preempts state law. But wait a minute, UCC Article 8 that gave you the right to credit accounts with mere “securities entitlements” is basically a form of state law. More cherry picking!
Clearthinker, one thing I’d like to see more focus on is CUSTODY as opposed to SETTLEMENT.
Settlement is all about trading, which is complicated. Custody is more static. It’s about them stealing an asset you gave to them for safekeeping.
What I am talking about is that if you deposit a big certificate into your retirement cash account for a thinly traded stock, your brokerage will almost certainly start selling every share the next day, hitting the bid hard, as they believe you put it in to sell and that you will push the price down. When you finally sell at a lower price, they might either cover their position from your sales or more likely, naked short aggressively to compete with you to lower the price you ultimately get for your sale and cover as cheaply as possible.
Bigger brokerages have computer models that will automatically sell against trades in thinly traded stocks to the investor’s detriment.
Think about what has happened. You trusted them to be custodians of your property and they immediately breached your trust. It was never their asset and they were only supposed to keep it for safekeeping, but they used it for their own financial gain at your expense.
I think a lawsuit against a brokerage for breach of trust in this case would not only be successful, I think it could be shown to be criminal fraud, because at the end of the month, they send you a statement implying your shares still exist.
A question for the experts here: I’m getting kind of lost in the weeds as to where the Reg SHO threshold list fits into all of this. I think what I’m hearing is that through a variety of mechanisms the crooked agents use the MM exception to naked short continually, but they churn trades in such a manner than most of it never appears as FTD’s beyond T+7 or whatever the requirement is to get them on the list. Is that correct?
I’m long several equities that have been on the list in the past but are not since last October, and yet the daily trading activity sure looks like naked shorting to me, so I’m very eager to understand this better.
I thought it was TOO GOOD TO BE TRUE !!! UBS has some very POWERFUL people leaning on them…..obviously!! How many Politically connected and Hedges do ya think are involved?
http://www.examiner.com/a-1859980~US_files_new_lawsuit_in_UBS_bank_secrets_case.html
US files new lawsuit in UBS bank secrets case
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Feb 19, 2009 1:26 PM (1 hr 30 mins ago) AP
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WASHINGTON (Map, News) – Federal authorities have filed a lawsuit against Swiss-based bank UBS AG seeking the identities of tens of thousands of U.S. customers.
The suit filed in Miami Thursday seeks to force the firm to turn over information on as many as 52,000 U.S. customers who hid their accounts from the U.S. government in violation of tax laws.
The company said it will fight in court to keep the names private, arguing Swiss bank secrecy laws shield those customers.
The lawsuit comes a day after the Justice Department struck a deal with UBS to get access to some of its customers who used Swiss bank secrecy law to hide billions of dollars in assets.
This story continues below
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According to the government’s lawsuit, the accounts in question held about $14.8 billion in assets in the past decade.
As part of its deal with prosecutors Wednesday, the bank agreed to pay $780 million in fines and penalties.
After the settlement of the criminal case was announced, the bank’s chairman, Peter Kurer, said in a statement the firm accepted “full responsibility” for helping its U.S. clients hide assets from the IRS.
But that does not mean the bank is about to fork over information on thousands of accounts.
“This shows the big fight is yet to come,” said George Clarke, a tax attorney based in Washington who is not involved in the UBS case.
A federal judge will now decide whether the U.S. courts can force a bank to violate Swiss bank secrecy laws and provide the account information.
According to U.S. officials, an acquisition in 2000 of a U.S. company brought UBS a host of new American clients. The bank then set about to evade new reporting requirements for those clients. To do so, UBS executives helped U.S. taxpayers open new accounts in the names of sham entities.
Prosecutors contend that UBS executives used encrypted software and other counter-surveillance techniques to prevent anyone from detecting that they were actively marketing such Swiss bank secrecy – and tax evasion – to American taxpayers.
The clients, in turn, filed false tax returns that omitted the income they earned in their Swiss accounts, according to the court papers.
Copyright 2008 The Associated Press. All rights reserved. This material ma
Redwood,
The threshold lists have been a major league disappointment with all of the loopholes it contains. First of all, Reg SHO only pertains to FTDs held in a “registered clearing agency” like the DTCC. When Reg SHO became effective there was a mass exodus of FTDs from the DTCC to ex-clearing.
Secondly, it’s ultra easy to “cross” a naked short position from yourself to a co-conspirator shortly before any mandated buy-in gets triggered. The FTD stays alive it merely goes from one party to a different one which restarts the “clock”. The mechanism used is an illegal “wash sale” wherein the FTDs are “parked” elsewhere.
Thirdly, the phraseology applies to FTDs held at an one clearing firm. I got a kick out of a research piece done shortly after Reg SHO became effective that mentioned that all of a sudden hedge funds seem to be utilizing all kinds of clearing firms instead of just 1 or 2 like in the past.
Time and time again we see victimized corporations popping off of the lists at the same time that their share price is in free fall. Wouldn’t the share price be expected to go up if all of this covering were theoretically occurring?
As to the majority of abuses occurring now via “ex-clearing arrangements” both the DTCC and the SEC chime in as if on cue that “these contractual arrangements occurring amongst NSCC participants have to do with contract law and we only regulate matters associated with securities law”. The trouble is that these “arrangements” are being enterred into in order to circumvent securities laws specifically 15 c6-1 of the ’34 Act forbidding the intentional postponement of settlement date.
The threshold lists might even prove to be counter productive in that they identify the corporations under attack which invites crooks to “pile on” with massive amounts of their own FTDs to finally crush the corporation targeted for destruction.
Here’s a very rough draft of a summary piece I’m working on that might be protective. Try to picture a gigantic circle of people scratching each other’s back with the investor off to the side.
THE “NEEDS” AND THE “HAVES” OF THE 11 MAIN GROUPS OF PLAYERS IN ABUSIVE NAKED SHORT SELLING (ANSS) FRAUDS
1) CONGRESSIONAL OVERSIGHT COMMITTEE MEMBERS
HAVE: The power to regulate or not regulate hedge funds and clamp down or not clamp down on ANSS frauds.
NEED: Donations to help them get re-elected and any “perks” that accompany the amount of power they have to wield.
2) HEDGE FUNDS
HAVE: Unlimited monetary resources. They and the “banksters” are the biggest political donors. The ability to collateralize even astronomically high naked short positions.
NEED: To remain unregulated and keep the corrupt status quo intact. They also need access to the market maker exemption from making pre-borrows and “locates” before making admittedly naked short sales.
3) THE SEC COMMISSIONERS AND STAFF
HAVE: The power to clamp down on these abuses if they wanted to.
NEED: To not appear to “rock the boat” or disrupt the status quo so that they can exit through the “revolving door” to much higher paying jobs with hedge funds and the “banksters”.
4) MARKETMAKERS
HAVE: Access to the incredibly powerful and universally abused market making exemption from not having to make a pre-borrow or “locate” before making admittedly naked short sales.
NEED: A piece of the $11.2 billion that hedge funds spend annually on commissions and fees paid to those willing to break the greatest amounts of laws on behalf of the financial interests of the hedge fund manager. They also need to have purchasing brokers aim buy orders at them.
5) PRIME BROKERS
HAVE: The back offices to loan shares, settle trades and loan money to hedge funds. They have the money needed to donate to the congressional oversight committee members.
NEED: Order flow and interest earnings from loaned funds and loaned shares.
6) PURCHASING BROKERAGE FIRMS
HAVE: Naïve clients with buy orders and the capacity to aim buy orders at abusive naked short sellers.
NEED: The interest earnings of their client’s money in the time period between “settlement date” and the date that delivery finally occurs.
7) NSCC PARTICIPANTS IN GENERAL
HAVE: Access to the NSCC management’s pretending to be “powerless” to buy-in FTDs.
NEED: To have as many FTDs and therefore “securities entitlements” in the system as possible to earn money by buying, selling and renting them.
HAVE: Plenty of money to “juice” any facilitator in need of being “juiced”.
NEED: To access the money of investors WITHOUT having to deliver that which they sell. Access to the market maker exemption.
9) CLEARING FIRMS
HAVE: The ability to facilitate ANSS frauds and then utilize the legal precedent that clearing firms won’t be held liable for the fraudulent behavior of “introducing” or “correspondent” brokerage firms. They have direct access as NSCC “participants” to their bosses’ (NSCC management) willing to pretend to be “powerless” to do buy-ins of even archaic FTDs.
NEED: Order flow and a piece of the $11.2 billion that hedge funds spend annually on commissions and fees.
10) WALL STREET LOBBYISTS
HAVE: Plenty of money to aim at politicians and the ability to lobby and pay for the needs of NSCC participants without these participants showing their faces directly.
NEED: To be paid and produce results.
11) INVESTORS
HAVE: The money to invest which is the target of all of the above.
NEED: To get educated as to the nature of these frauds. They also need unconflicted SROs and regulators to provide investor protection and market integrity due to their lower level of financial sophistication than all of the above.
UBS/Gramm vs. Obama/IRS.
Now the demand is for 52000 accounts. That would be all of the Paine Webber accounts that UBS bought in 2000. The Swiss are fighting… Remember the bull market?
Paine Webber Clients are the most suspect. Those who moved to US brokerages and paid taxes aren’t in any fix.. but those who have credit cards that can’t be traced… hmmm. These tax evaders are going to be caught.
UBS is nothing but a history of banking improprieties… like stealing from the heirs of Hitler’s victims.
You are so correct Dr DeCosta,
“Although Madoff did not run a hedge fund, Cardona sees a bigger problem in that “no regulatory agency really oversees the hedge fund industry,” which numbers around 8,000 hedge funds with $1.87 tn in assets under management. The hedge fund industry has gone so far as to sue the SEC to stop its oversight.”
http://emac.blogs.foxbusiness.com/2009/02/19/where-is-robert-allen-stanford/
mhelburn;
Guess where our new SEC Enforcement Director is coming from ?
“Robert Khuzami Named SEC Director of Enforcement
FOR IMMEDIATE RELEASE
2009-31
Washington, D.C., Feb. 19, 2009 — Securities and Exchange Commission Chairman Mary L. Schapiro announced today that former federal prosecutor Robert Khuzami has been named Director of the Division of Enforcement.
Previously, Mr. Khuzami served as a federal prosecutor for 11 years with the United States Attorney’s Office for the Southern District of New York. As Chief of that Office’s Securities and Commodities Fraud Task Force for three years, Mr. Khuzami prosecuted numerous complex securities and white-collar criminal matters, including those involving insider trading, Ponzi schemes, accounting and financial statement fraud, organized crime infiltration of the securities markets, and IPO and investment adviser fraud. Mr. Khuzami most recently served as General Counsel for the Americas at Deutsche Bank AG.”
Icing on the cake since Schapiro (FINRA) who ? missed or perhaps looked the other way? on 15 + years of (Madoff and Stanford) corruption.
US authorities ‘had been investigating Allen Stanford for 15 years’
From The Times
February 19, 2009
David Byers, Suzy Jagger in New York, and James Bone in Antigua
http://www.timesonline.co.uk/tol/news/world/us_and_americas/article5765481.ece
Spot on, Dr. Jim DeCosta.
We need a ‘Million Investor (emphasis on ‘investor’) March’ to get the gov’t to clean up their act.
Or am I hopelessly naive?
Jim,
We pay taxes for those who do not have to and shelter their money in Swiss Bank accounts. You can bet your ASS these include CEO’s, POLITICIANS, HEDGE FUND CEO etc. Just look at the BIG CONTRIBUTORS for both parties for past 15 years and there you will find some of those 55,000 account holders of Swiss Accounts.
Lenofus
You are right, the window is small and we need to be quick in educating key people in the corruption of our economy. I am e-mailing every economics, business, and law prof in the universities in my state. The longevity of the Fed, DTCC etc has hinged on secrecy.
As Henry Ford said:
It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.
So sick of these useless/pernicious SEC types.
We need a ‘Million Investor (emphasis ‘Investor’ March’ on Washington.
Followed by a revolution if they don’t protect the INVESTOR.
We may never know which of our ESTEEMED representatives have their graft money salted away with UBS.
But we certainly should…
Likewise, which of our gov’t officials are shorting recipients of TARP funds…
Phil Gramm is the chief lobbyist for UBS. He deregulated and took his chips from UBS. Now UBS has all those Paine Webber accounts… somewhere… shouldn’t be that hard to find.
So let me get this staight.. “The Hedge Fund Industry can sue the SEC” but we as a group of investors who have lost almost everything can’t? What am I missing here? Please explain it to me like I’m a five year old!!
By the way, te reason why Madoff is not in jail yet is.. When he speaks we will find out the names and addresses of all of the guilty parties on Wall Street, Washington and our “best that money can buy” Regulators. And that is a fact Jack!!!
Anybody know who are the biggest donors to the politicians that fought the hardest to keep hedge funds unregulated.
suggestion,
probably the Madoff’s and Stanfords of the world….trust me, more Ponzi’s to come.
Not to mention all the untraceable over sea’s money that makes it’s way into the pockets of our dear Politicians. Lets not forget other countries have a Huge interest in our markets as well….
- they can spread the fail over more than one clearing brokerage. It has to be above the threshold at any one clearing brokerage before it triggers SHO
- they can take the fail outside of a registered clearing brokerage, such as to one outside the US (Germany, Canada come to mind)
- they can keep covering with no fails every 13 days to kite the trade
- they can use x clearing arrangements
- a contract to buy is considered a long position. If you sell me your shares, but agree to purchase them back in a month, we’re both long. You are long because you bought them and I am long because I have a contract to buy shares which is a long position.
- etc., other loopholes, but you get the point
NASD had a rule that was working. If the other side doesn’t deliver from you on a company, you aren’t allowed to do another trade with them on that company until they deliver.
Guess what, the SEC banned the rule and replaced it with SHO.
Mary Schapiro, unbelievable Finra,
http://www.huffingtonpost.com/dan-solin/mary-schapiro-will-protec_b_155093.html
Mark, this is another well-written and well-researched article. Keep up the fantastic work!
Click here to see a visualization of TARP…
http://www.jsmineset.com/wp-content/uploads/2009/02/tarp-bailout-visualization.pdf
I have often said all Hedge Funds are ponzi schemes. This was the # 1 reason why. And Please note this was done way before Madoff. How come no one is looking in to Griffin’s funds?? I know, I know to much juice. But where there is smoke….
Citadel suspends redemptions from two hedge funds
http://www.reuters.com/article/hedgeFundsNews/idUSLNE4BE01M20081215
If DeepCapture wasn’t hitting close to the truth, they would have been sued for slander now.
I have studied NAKED SHORTING For the last Decade. It appauls me to think our system continues to allow this. What about the roughly 150 pink sheet and OTC companies that had a lawsuit in the early 2000′s against NSS only to be thrown out of court and made once again to look like the bad guy.
Another point, notice when great news comes out on a company only to have the share price plumet while the average “idiot” investor thinks he has to buy on rumor and sell on news! What in the HELL is wrong with this picture!
I will say I love all the Hedge Funds that are now being brought out into the light! Amazing to know that groups like Bin Laden has shorted our American stocks to get money to kill us with!
All of these Politicians should be jailed that were bought off period! There is a nice little Prison in San Francisco called the ROCK. Start shipping them there!
http://atheonews.blogspot.com/2009/02/whos-behind-madoff.html
WMR has also learned that the kid glove treatment given by federal authorities to Madoff, including allowing him to remain in his Upper East Side luxury town home, is because Madoff’s Ponzi scheme was part of a much larger operation, one involving top officials of both the George W. Bush and Barack Obama administrations, as well as the notorious Russian-Israeli Mafia.
Bank of NY bought Pershing, which according to another poster here was founded by William Donaldson, last chairman of the SEC.
One of the investors in Madoff’s scam was, according to the published list of Madoff “victims,” was the Bank of New York (BONY) and a contrivance called the “Alternate Investment Service.” BONY was the subject of a previous detailed WMR report on the activities of the Russian-Israeli mob:
Dr. Jim DeCosta,
I love the last 9 pages (pgs 13-22) entitled:
THE ANATOMY OF A TRILLION DOLLAR HEIST
The new one your are working now – very rough draft of a summary piece above – looks fantastic!
Is there any way we individual investors can force a buy-in on the stocks we own in our brokerage account?
By asking for some type of certificate?
Kevin, whatever you are smoking STOP!!President Obama is NOT responsible for ANY of this CRAP!!! He has been in office for exactly 20 days, this problem has been decades in the making. Come on man be sensible for a change.Stop the Politcal rhetoric and blame those truly responsible!!Jeesh!!! “It is better to remain quiet and be thought of as a fool, than open your mouth and prove it!!”
please excuse 86. My new post didn’t copy…here it is…..Banks nickel and dime unexployment debit cards…
http://www.msnbc.msn.com/id/29286993/
Why did Merrill Lynch pay out $4 billion in bonuses to employees on the eve of its merger with Bank of America in January?
To take the income Merrill Lynch produced from Abusive Naked Shorting out of the company’s bank account before the public demands their stolen money back?
http://www.walletpop.com/blog/2009/01/30/merrill-lynch-pay-it-back-baby/
Sean, this isn’t political. I think the quote references bureaucrats that worked for both administrations “involving top officials of both the George W. Bush and Barack Obama administrations”.
The way I see things, Wallstreet controls both parties, despite the best intentions of any one politician.
The classic was the corrupt Richard Shelby (he was caught) who fought us tooth and nail. He served time as a democrat and time as a republican.
http://www.faulkingtruth.com/Articles/LettersToEditor/1037.html
Sean…why are you having so much trouble understanding the puppet show? How much do you have to lose before admitting the problem?
Bush I & II, Clinton-I & likely II as well as Obama are all on the end of strings pulled by the same hands. Carter was also one of the gang only he messed up so bad because his jumping around tangled the strings up. Reagan was a surprise but filling his crew with puppets took care of that flub up.
Here from Stockhouse, a suspected tool for shorts in some quarters, is a story by a Stockhouse ‘reporter’, if you stretch the word, Lee (never met a short he didn’t like) Webb, who quotes Sam Antar with a cut for OSTK and Patrick…But also gives out the Deep Capture story. Was that a opps?
You see what you think and for sure let ole Leroy boy know what you think!
http://www.stockwatch.com/swnet/newsit/newsit_newsit.aspx?bid=Z-U:OSTK-1576435&symbol=OSTK&news_region=U
The trustee in charge of untangling the mess brought on by the Bernard Madoff scandal told investors Friday there was no indication the disgraced financier bought securities for his clients.
“We have no evidence to indicate securities were purchased for customer accounts,” said Irving Picard, the court-appointed trustee overseeing the liquidation of Madoff’s assets.
http://www.cnbc.com/id/29299885
Madoff=wicked Haman. May he hang like Haman after he talks!
CNBC needs to be investigated..PERIOD. Check this out..
“And right on cue, GE plummetted to below $10.00/share over the past few days making this extremely risky bet quite profitable. Smart regulators would be looking into the trading history of those placing this bet to see if the investors engaged in a scheme to manipulate the price for profit.”
Read the rest of this article. I think these guys will cut of their nose to spite their own face and make money. This corruption is so Blatant its not even funny!! Yet it still continues without ceasing.
http://www.investigatethesec.com/drupal-5.5/?q=node/602
A SUGGESTED “STIMULUS PLAN” FOR THE U.S. FINANCIAL SYSTEM
BACKGROUND INFORMATION
It is now crystal clear that our clearance and settlement system has been hijacked by the financial interests of the DTCC “participants”/owners that administer our clearance and settlement system. The modus operandi is actually not that difficult to get your arms around. When the seller of securities absolutely refuses to deliver that which she or he sold a “failure to deliver” (FTD) occurs.
Because the authors of UCC Article 8 knew that the DTCC had 15 separate responsibilities/mandates to quickly address FTDs meant to intentionally drive down the share price of corporations (share price manipulation) it deemed it safe to allow the accounting measures used to denote FTDs on the books of the “participants”/owners of the DTCC which are known as “securities entitlements” to be readily sellable as if they were real shares which they certainly are not. In essence they were designed to be mere accounting measures representing “IOUs” to denote the existence of an FTD in the day or two time period in between “settlement date” and the date that delivery is finally made in the case of “legitimate”/unintentional delivery delays. But what happens if that time period lapses and the seller of shares still hasn’t made delivery of that which it sold?
Clever opportunistic hedge funds and DTCC “participants” noticed that DTCC management was willing to shirk all 15 of those responsibilities/mandates in order to accommodate the financial interests of its abusive bosses and their hedge fund “guests” wishing to secretly reroute the investment funds of less financially sophisticated investors into their own wallets.
In reality when the seller of securities absolutely refuses to deliver that which it sold then there is only one “cure”. That is to force the delivery of the missing shares by “buying-in” the missing shares out of the open market and sending them to the purchaser of the missing shares and sending the bill to the party refusing to make delivery. It’s that easy and more importantly it is the ONLY cure.
The problem is that the power to execute these “buy-ins” is concentrated on the shoulders of the management teams of the DTCC and its NSCC subdivision that happen to be the employees of those committing these thefts. This is referred to as a conflict of interest. As these readily sellable “securities entitlements” invisibly accumulate in the share structures of U.S. corporations unfortunate enough to be targeted for one of these abusive naked short selling attacks or “bear raids” then their share price gets artificially manipulated lower.
THE MECHANICS
The mechanics of this crime wave are not too difficult to grasp and the design of the fraud is actually quite impressive. With the refusal to execute “buy-ins” by the NSCC management these “securities entitlements” accumulate in the share structures of corporations and predictably pressure the share price downwards. Why? Because being readily sellable they add directly to the “supply” of readily sellable legitimate shares plus the “supply” of readily sellable of readily sellable but mere “securities entitlements”.
Although Congress mandated that our clearance and settlement system be founded upon “delivery versus payment” or “DVP” over the years NSCC management has illegally converted this foundation to one of mere “collateralization versus payment” or “CVP”. They did this to accommodate the financial interests of their abusive participants. As the share price predictably drops from this “oversupply” then the collateralization requirements of the monetary value of the debt also drop which results in the investor’s money being shunted to those selling nonexistent shares and continually refusing to deliver that which they sold. This conversion to a CVP-based system provides the world wide incentive to SELECTIVELY attack and destroy U.S. corporations deemed by these criminals to be an easy prey. Most of the rest of the world’s clearance and settlement systems are properly based on DVP which affords development stage corporations domiciled there protection.
It has recently come to the attention of the investing public that the SEC mandated to provide “investor protection and market integrity” has been found, for one reason or another, to be sleeping on the job. This is not to disparage the efforts of the usually younger SEC staff members that have not been “captured” by the financial interests of those they are supposed to be regulating.
Thus to date these crimes have not been addressed and these readily sellable “securities entitlements” that have been allowed to accumulate in the share structures of certain U.S. corporations are ACTIVELY manipulating downwards the share prices of these corporations and the value of the investments made therein as we speak.
THE SOLUTION
The solution is a no-brainer as there is only one known “cure”. The first job of those chosen by the Obama administration to take over the duties of the SEC and current SROs (self-regulatory organizations) needs to be to finally provide the much overdue “cure” to these now archaic “securities entitlements” by forcibly buying them in so that the investors who don’t even realize that what they paid for never did get delivered can finally receive that which they paid for.
This is not a very complex issue and the lack of complexity of this only solution available reveals just to what degree our regulators have been “captured” in the past to accommodate the financial interests of even the criminal elements active in our markets. If there is even a debate as to the appropriateness of this only solution then it will only confirm that the new Obama administration is going to maintain the corrupt status quo. This will serve as a test as to whether our markets are safe to once again participate in. Investor confidence cannot become any more anemic than it currently is.
THE APPROPRIATENESS OF THIS ONLY SOLUTION IN LIGHT OF OUR CURRENT FINANCIAL MORASSE
Today’s financial problems include the lack of investor confidence, increasing unemployment rates, regulatory apathy, etc. A mandatory buy-in of an archaic FTDs is a very special animal. First of all they automatically zero in on the party pulling the trigger on these abusive naked short sales. Like a heat-seeking missile they selectively land in the lap of the securities fraudsters no matter where in the world they are operating from.
Secondly, there is no “collateral damage” because the clean players on Wall Street don’t get bought-in. Thirdly, they are “balanced” by nature. Those misbehaving to a slight degree are forced to deliver the small amount of securities they have previously refused to deliver. Those guilty of stealing massive amounts of money from unknowing investors will be forced to deliver massive amounts of securities. Buy-ins basically force these criminals to open up their wallets and to deploy the stolen funds back into the market in order to finally deliver that which they have previously refused to deliver. Again, this is not a complex issue.
The result will be the selective culling out of these criminals in a “balanced” manner. Unfortunately our current corrupt DTCC-administered clearance and settlement system’s policies have resulted in a form of natural selection promoting the “survival of the corruptest”. These special attributes of mandated buy-ins will provide yet a further test for this new group of regulators. Why? Because once again when the seller of securities absolutely refuses to deliver that which it sold then there is one and only one “cure” and that is a buy-in.
Note that the relatively defenseless development stage U.S. corporations are typically the targets for these attacks. Unfortunately they also represent the growth engine for employment opportunities in the U.S. which are currently greatly in need of the shot of adrenalin that mandated buy-ins would provide.
Keeping in mind that due to the CVP foundation illegally being incorporated into our DTCC-administered clearance and settlement system it is the U.S. corporations SELECTIVELY targeted for these worldwide attacks. This is regardless of these corporations’ importance to homeland security or to our overall financial infrastructure. In fact with the current state of the world the more important a corporation is to the U.S. the more likely it will be targeted for destruction by those not particularly enamored with the U.S. The result is the pitting of the greed of a relative handful of Wall Street criminals against the protection of U.S. citizens whether they be active investors or not.
Will this new group of regulators provide this one and only one cure or will they facilitate the maintenance of the corrupt status quo involving merely refusing to deliver that which they sell in order to predictably reroute the funds of unknowing investors into their own wallets? The very special nature of mandated buy-ins identifies the criminals, protects the innocent and acts in a “balanced” manner proportional to the level of criminal activity that has been engaged in.
In retrospect, in what other industry besides Wall Street could we even be engaging in this discussion of the appropriateness to provide the only “cure” available in the midst of trillions of dollars of thefts being committed associated with the sellers of goods merely refusing to deliver that which they sell? What more appropriate form of truly meaningful deterrence to committing these crimes could there be than that provided by the fear of untimely buy-ins? If it’s not too much “inconvenience” can we count on you new regulators to give us not only our financial system back but some protection from those wishing us harm?
Think of it this way: How incredibly cool would it be for Americans to naked short sale the companies supplying armaments to the Taliban or nuclear reactors to Iran in an effort to protect our country. Thanks to the insatiable greed of Wall Street “banksters” and their hedge fund “guests” we sure have some pretty lucky enemies!
From Investorsvillage OSTK Board
Re: Who croaks next?
Another lawmaker, Representative Pete Sessions, Republican of Texas, received $41,375 in such donations. He also went on two council trips, totaling more than $10,000 in expenses, according to Legistorm, a group that tracks lawmaker travel disclosure forms.
Mr. Sessions’s spokeswoman, Emily Davis, told Bloomberg News this week that Mr. Sessions did not know Mr. Stanford personally. But that account was called into question when the Web site Talking Points Memo published a photograph showing the two men talking during a trip to Antigua. (Ms. Davis declined to comment on Friday.)
http://www.theledger.com/article/20090221/ZNYT01/902213015?Title=Fraud-Case-Shakes-a-Billionaire-x2019-s-Caribbean-Realm
If the Senator could blatantly lie about something as small as this, what else could he be lying about? And we think that they will do something about naked shorting?? Think again!! Only jailtime and reparations will suffice!!! NOTHING LESS!!!
Sean,
Funny you still fail to see this is a both Political party thing. At least try to put those involved from both side as opposed to One sided…..
I’ll be glad to show the major recipient being Bill Nelson (DEM) and Sessions (Rep). side….
I realize it is hard to admit my side or your side is in the wrong, but by golly, they are.
“In recent days, some lawmakers have sought to distance themselves from Mr. Stanford. Among them is Senator Bill Nelson, Democrat of Florida, who received more money from Mr. Stanford and his employees than any other lawmaker: $45,900, according to the Center for Responsive Politics. Mr. Nelson’s office said he was donating the money to charity.
Another lawmaker, Representative Pete Sessions, Republican of Texas, received $41,375 in such donations. He also went on two council trips, totaling more than $10,000 in expenses, according to Legistorm, a group that tracks lawmaker travel disclosure forms.
Mr. Sessions’s spokeswoman, Emily Davis, told Bloomberg News this week that Mr. Sessions did not know Mr. Stanford personally. But that account was called into question when the Web site Talking Points Memo published a photograph showing the two men talking during a trip to Antigua. (Ms. Davis declined to comment on Friday.)”
You want stimulus?
Settle the trades – force buy ins – will put money in the pockets of every American stockholder who will be more than happy to “stimulate” the economy…
This isn’t hard – settle all the trades will transfer wealth back from the evil doers to the people who have been robbed….
Sean,
According to this. Obama was # 3. Imagine that.
http://blogs.wsj.com/washwire/2009/02/19/stanfords-political-investments-obama-mccain-dodd-ney-delay/
February 19, 2009, 2:46 pm
Stanford’s Political Investments: Obama, McCain, Dodd, Ney, DeLay…
Susan Davis reports on politics.
More than 100 members of Congress—past and present—as well as congressional campaign committees and the national parties benefited from political donations from the political action committee or employees of Stanford Financial Group since 2000, according to the Center for Responsive Politics.
The Securities and Exchange Commission charged the firm’s head, R. Allen Stanford, on Tuesday with orchestrating a $8 billion fraud. Tuesday’s Wall Street Journal reported on Stanford’s status as an “international cricket sponsor, Washington political donor and private banker to Latin America’s wealthy.” (For the full story, click HERE.)
President Barack Obama was the third-ranking recipient among lawmakers, with $31,750 collected from company employees during his presidential bid while $4,600 was from Stanford himself.
Obama’s presidential rival, Arizona GOP Sen. John McCain, was the fifth highest recipient with $28,150.
On the whole, Democrats benefited more from the Stanford largesse. Of the $2.4 million in donations tied to the firm since 2000, 65% was directed towards Democrats. Of the nearly $1 million donated by Standford and his wife, Susan, 78% was directed to Democrats.
(For more on Stanford’s influence in Washington, read this story in Wednesday’s Wall Street Journal.)
According to CRP’s report, the Democratic Senatorial Campaign Committee was the top recipient of Stanford funds with $965,500, although all House and Senate campaign operations benefited from donations. The Republican National Committee also received $161,000.
Among lawmakers, Florida Democratic Sen. Bill Nelson and Texas Republican Rep. Pete Sessions were the top two recipients, with $46,000 and $41,000 respectively.
Also cracking the top 10 are former GOP Rep. Bob Ney of Ohio and former House Majority Leader Tom DeLay of Texas, as well as Senate Banking Chairman Chris Dodd of Connecticut, New York Democratic Sen. Charles Schumer, and Texas Republican Sen. John Cornyn.
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Read more: Congress, Ethics, Political Parties
Sean,
( R )John McCain was 5th…..
President Barack Obama was the third-ranking recipient among lawmakers, with $31,750 collected from company employees during his presidential bid while $4,600 was from Stanford himself.
Obama’s presidential rival, Arizona GOP Sen. John McCain, was the fifth highest recipient with $28,150.
On the whole, Democrats benefited more from the Stanford largesse. Of the $2.4 million in donations tied to the firm since 2000, 65% was directed towards Democrats. Of the nearly $1 million donated by Standford and his wife, Susan, 78% was directed to Democrats.
(For more on Stanford’s influence in Washington, read this story in Wednesday’s Wall Street Journal.)
According to CRP’s report, the Democratic Senatorial Campaign Committee was the top recipient of Stanford funds with $965,500, although all House and Senate campaign operations benefited from donations. The Republican National Committee also received $161,000.