Deep Capture Forums

Sparky wrote:

With all due respect CURTISRP, the implication that there are "50,000" CMKX shareholders is getting old, very old. 

Doesn't it bug any other CMKM Diamonds, Inc shareholders, besides Sparky, that the management of a company that has been revoked from trading for over three years can't seem to provide its shareholders with an "EXACT" number of shareholders?

Let's be Faulking real here!!

Even back at the revocation hearings the shareholder base was repeatedly described as being between 40,000 and 60,000. 

Let's stop right there for a minute; for after all, there is a 50% disparity between 40k and 60k!  Specifically, 60k is 50% bigger than 40k.

Now let's carry this a step further.  Since the infamous revocation, countless shareholders with whom Sparky has communicated directly have split their holdings several ways.  In Sparky's case, for example, he has distributed - post cert pull - CMKX shares to 13 brand new shareholders - people who never owned a single share pre-revocation. 

Similarly, Sparky knows of many shareholders who have set up Dynasty Trusts, which also resulted in the splitting of shares.

And as if all the post-revocation splits aren't more than enough reason to suspect that CMKX shareholders are being deliberately kept in the dark on this "size-of-the-shareholder-base" issue; what about the hiring of Dr Suzanne Trimbath for the purposes of conducting a shareholder audit?  Did she shed no more light on this should-be-simple issue?  And if so, why in the Faulk is the company's CEO when writing to the President of this once-great country still using this tired old 50k shareholders number?

And lastly, send a CMKX cert over to the company's "new" transfer agent right now and just watch how long it takes to get a CMKX cert cancelled, split, and reissued.  Try over a week! And supposedly this is because they are "very busy" and because they are fulfilling requests on a "first come first serve basis."  Busy doing what?!

Something smells very, very fishy here folks; and it's not a dead fish.

In Sparky's statistically-based opinion, there are WELL over 100,000 CMKX shareholders, perhaps even double that; and those in the know know it too!

All IMHO, of course ~

Sparky

Nice sparky . . .  I follow you on RB . . .Love your postings man!  It's a pleasure to see you here.

Message #4509
From: skiptracy
Date: August 25, 2010 07:37:47 PM

good bye janice shell
Spread it:


By: kilroy_cclxv 
25 Aug 2010, 06:51 PM EDT
Rating:   Msg. 956092 of 956102
Jump to msg. #     
Interesting post today in Deep Capture's Forums by Bull Finch:


Some of the same predators are there, as were at Mira Mar and CMKX!

Matty “bend down" Brown the boyish 26-year-old founder of an Aliso Viejo-based stock board Investorshub, an Orange County stockbroker and a stock promoter are among seven people indicted in an alleged felony fraud, that could win the group an extensive prison sentence.

The Securities and Exchange Commission simultaneously filed a lawsuit in federal court in Delaware against six of the seven criminal defendants plus two others. The lawsuit alleged the men cleared $6.2 million by allegedly manipulating the price of several penny stocks.

Since that news the internet has come to life with various allegations against InvestorsHub

Firstly their are a number of allegations that credit card numbers and personal information have been sold by Investorshub and that the company uses fairly invasive spyware to obtain personal information READ HERE

Then there is a Mr Davis who filed suit against Investorshub alleging crimes under the RICO Act Investors Hub & Its owners Charged in a 18:1962 Racketeering (RICO) Act Complaint.

Around blog sites all over the internet there are allegations of arrogance, stuidity and narcissism, many complain of a wide variety of treatment they believe was aimed at Ivestorshub furthering their criminal ambitions, i.e. the false manipulation of stock prices. Many others are asking how long will it take before the beans are really spilled and the felony indictments are served on Investorshub staff and Moderators (instrumental in the criminal manipulation).


(Some was Spellcheck corrected.)

Could it be that Janice Shell's days are numbered? ROFLMAO! I often said that I believed she would see the inside of The Graybar Hotel before Urban. It might just come true yet. At least we can hope. Bull Finch, I loved that post! LOL! 

BMFL<OD

next week(s) is here

Senior Member
Group: Members Posts: 150 Joined: 16-September 10 Posted Today, 11:05 PM

Don't kill me I just did some research for people


Prosperity Package Info - per Nesara
Quote

More Prosperity Package Info from a reader - MUST READ
This is from a reader's comments
===================================

I've been waiting for over fifteen years for the prosperity programs to pay. As far back as I can remember, (when Dove was doing daily updates), these programs consisted of 'onshore' and 'offshore' funds.

The 'trigger' packets that Casper talks about are part of the 'onshore' funds. According to Dove, these 'onshore' packets contained fine money, penalty money and interest that the bankers were ordered to pay to us for the illegal use of our funds. Since these delays have been on going since the late 1990s, the amount the bankers owe has substantially grown. At one time I believe Casper said that these packets also contained some expense money that would be used to get us to our assigned bank in case some traveling was required.

These 'trigger' packs, when delivered, would immediately cause the announcement of NESARA resulting in the mass arrests, the end of the Federal Reserve, the beginning of the Treasury banks and other good things. A few days later after we were under NESARA law and the Treasury bank system, we would report to our assigned 'safe' banks and complete the paperwork necessary to active our accounts.

The 'offshore' funds were the larger amounts of money that we would use for gifting to other people and to change the world for the better through humanitarian projects. I don't recall the time frame, but within a short period of time, the 'offshore' funds would be made available for delivery. Again, all this money paid to the prosperity program members would be Treasury money and not Federal Reserve money.

As far as I know, this is still the way it's set to happen. If it wasn't, I don't think that there would be this much opposition to getting the 'trigger' packs delivered.





http://www.godlikepr...ssage920772/pg1

Look at neseranews.com as well

Apparently, a ton of stuff is supposed to be interlinked.

The money owed to people from being screwed by the FED and investments
Some big trust fund for CMKX or whatever penny stock that is supposed to be in a lawsuit against the SEC for 3.7 trillion dollars
The revalue of a bunch of currencies
etc.

I have a headache...I hope this helps lol



Read more: http://dinarvets.com/forums/index.php?/topic/47943-prosperity-package-info/#ixzz19f3RY9f7

BMFL<OD

next week(s) is here

fourkids_9pets     Share   Monday, December 27, 2010 10:39:42 AM 
Re: None     Post #  of 822   

Will Wiki Leaks Expose Wall Street Counterfeiting of Stocks

Richard
narrator Stock Shock
www.SiriusNews.com

Will Wiki Leaks expose Wall Street Counterfeiting of Stocks by the big Banks.

The largest lawsuit in the history of the world worth $3.87 Trillion dollars was in Federal Court on December 6th, 2010 in Santa Ana California. Judge James V. Selna will make his final ruling. The case involves CMKX Diamonds shareholders vs the SEC commissioners past and present and involves Naked Short Selling of Stocks or simply put Wall Street Banks and other criminals were Counterfeiting Stocks. Here is the link to the web site that clearly explains the facts of the case. ( www.CMKXsting.com ) More cases will move forward in regards to the Wall Street Counterfeiting including the news that came out December 16th, 2010 in regards to Goldman Sachs and Bank of America connected to Overstock’s lawsuit on Counterfeiting its stock. Could this be what Wiki Leaks is about to expose with these Bankers, Hedge Funds and Big Banks? Julian Assange is now out of jail and about to take aim at the Banks. Will the American people and the world finally learn the real truth about Wall Street Counterfeiting of Stocks that the movie Stock Shock – The Short Selling of the American Dream revealed back in June of 2009, yet the news media has covered up that story on Naked Short Selling. ( Counterfeiting Stocks )

Article by Rueters Dec 16th, 2010 below

* Overstock says RICO charges apply in case
* Original lawsuit from 2007 alleges naked short selling (Adds Goldman, Bank of America comment)

Dec 16 (Reuters) – Overstock.com Inc (OSTK.O) plans to amend a lawsuit it filed in early 2007 to include racketeering claims against Goldman Sachs and Merrill Lynch, the online retailer said on Thursday.

The original lawsuit, filed in the California superior court in San Francisco, alleged that Goldman Sachs Group Inc (GS.N) and Bank of America’s Merrill Lynch unit (BAC.N) engaged in a “massive, illegal stock market manipulation scheme† that involved so-called naked short-selling.

In naked short selling, short sales are executed but never delivered, thereby causing the company’s share price to fall. †Merrill, Goldman and certain of their market maker clients agreed to and created a scheme to effect the naked short selling in Overstock securities that is the subject of this action, in order to perpetuate short selling and drive down the price of Overstock, to their mutual profit,† alleges the motion, which was filed on Wednesday. A Goldman Sachs spokesman said the bank opposes the motion, but did not elaborate. Bank of America declined comment.

Overstock claims the brokerages’ actions are illegal under New Jersey’s Racketeer Influenced and Corrupt Organizations Act (RICO) and such claims can be decided by non-New Jersey courts. Overstock also said in a filing that it had settled with some unnamed defendants for $4.44 million in the case. (Reporting by Alexandria Sage. Additional reporting by Joe Rauch in Charlotte, N.C. Editing by Robert MacMillan)

So we have the Wiki Leaks that soon will hopefully reveal the real reason for the Financial meltdown on Wall Street in 2008. The Wall Street Banks were Counterfeiting Shares. They were selling and buying shares they never delivered. All hell is going to break out when this Wiki Leaks story finally gets told. The News Media should also be held responsible for covering up the Naked Short Selling scandal. The Counterfeiting of Stocks on Wall Street will be proven to be the main reason for the financial collapse and not the mortgage fraud story that the same news media has been trying to tell the world. The news media executives need to also go to jail for their cover up of this huge Wall Street Counterfeiting story. Thank you CMKM Diamonds, Overstock, Taser, Sandra Mohr, the director of Stock Shock and of course Julian Assange for bringing out the TRUTH, the news media has ignored all this time. Stay tuned for the Wiki Leaks and also investigate these Counterfeiting Lawsuits ( CMKM, Overstock, Taser ) and others as we slowly learn the real truth.

Richard
narrator Stock Shock
www.SiriusNews.com

http://siriusnews.com/blog/2010/12/17/will-wiki-leaks-expose-wall-street-counterfeiting-of-stocks/

---
post courtesy of basserdan

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=57982758

--
4kids
all jmo
10/5/07 -- there are no coincidences here ...
oh and like many other longs .. not selling at this level --

BMFL<OE

next week(s) is here

Senior Member

Group: Members Posts: 129 Joined: 07-December 10 LocationPhoenix Posted Today, 04:20 PM

Just passing along information.... You be the judge

Global Settlements: World leaders weighing in on Fed Reserve, making certain the payments (global settlements) are made.


China is calling the note on the U.S. and will foreclose on the corporation of the U.S., if they are not paid by 9p.m. PST last night. They will impose a lien against the U.S. Gov't. officials are working around the clock this weekend to be completed by close of business. RV should be on the shirttails of payments being made.


Sarkozy & Hu met in Paris and are both pushing to save the world from the control of the Fed Reserve leaders, i.e. U.S., Rothchilds, etc. Everything will happen at once. They will all be paid in treasury notes, and the outcome of Sarkozy & Hu meeting was that the Chinese will foreclose on U.S. Corporation gov't. this morning.


We should be able to cash out RV tuesday or wednesday, but they have also touched on Feb. 3rd as a cash in date. 180 nations are revaluing their currency on Feb 1, but Iraq is not one listed. Speculation was that IQD was not listed to keep us all from making a run on the banks and dealers to purchase more.


We've been hearing of banks getting excessive amounts of cash--Okie presented the question could it be the treasury notes that will replace the fed notes? Only 5th 3rd bank is prepared to carry the new notes. BOA/Wells Fargo are still trying to get over the hurdles of being ready as of yesterday afternoon.


There are 750 high-profile, high-level ppl all over the world, ranging from the U.N., banking, gov't, etc. -- power struggles going on right now. The world's media has been bought and paid for by the richest ppl in the world, explaining why we have not heard anything about all of this.


Put the pieces together and it makes sense. Revaluation will only occur after settlements go out. Feds wanted to revalue first, but China was afraid they would not get paid back after revaluation, so do not look at China as the bad guys even though you can trust no gov't. 100%. China, Russia, France, and England want privatization of what's going on in banking out. It's called mashination, meaning a scenario crated to destroy the world's economy and creating a one world currency that will replace our currencies sooner than we thought. Okie is right in asking where is the money? and if there is a collapse, a one-world currency will come out of it. It solidifies the need for the Fed Reserve remaining in power. Maybe M taking over CBI was a precursor to a world event. The currency we possess is the driver to the currency of GCC, and we are being played for dupes, and we missed the bigger picture of them working their way to a one-world currency. If they destroy all of them and one only will support them. They came up with the word rebooting for it, as what currency could stand alone if they collapse all the others?


There may be a case in which they pretend to sell us on an idea to get us to another place of one world currency. The world currency crisis is contrived so we will all throw up our hands and give up our sovereignty as nations. The CMKX, global settlements, prosperity packages, could all be a huge smokescreen, but it remains that a list of 180 currencies are listed on the IMF as changing their rates on Feb 1st.


Okie said in conjunction is forgiveness of debts...everything will zero out and start over.


Fannie Mae and Freddie Mac is receiving over a 3 yr period a buy back of all those bad loans and being backed by the U.S. govt.


CMKX alone is the biggest ever Ponzi scheme for one country, coming in at 3.877 trillion. The plans were to slam it down through a crisis they created. Part of the contrived plan of a created scenario - everybody crashes, and the end will be a single currency faster than we thought, in an effort to save themselves the IQD is part of the 20-30 other currencies all ending up as one.


It will start with the IQD, then the GCC, but will be faster than we thought. The change will be like it was in 1971 when Nixon took us off the gold standard and nobody noticed.


Like in a poker game when the house takes a piece of every pot, the U.S. and the world have anted out. Eventually the 'house' winds up with all the money and spread it out amongst the Feds and Rothschilds, etc.


We must get back to the place of securing our currencies with 'real' assets, i.e. oil, gas, gold, minerals, etc., as the fiat currency game has been proven not to work. The powers that be have come up with a new smokescreen, which is to reboot the whole world.


We need to understand that each agency of the Federal gov't is a corporation, i.e. the courts, school districts, FBI, etc. Example: your county government doesn't have to pay taxes, and literally owns 80% of all the real estate/businesses in the U.S. That's what you'll see in one of these CAFR reports. CAFR reports on every one of them, just google CAFR and you will find the information on your particular state or county.


The Fed Reserve has been collecting taxes to pay off debt for 97 years, and own all the debt in the U.S. In other words, the Fed Reserve is the largest creditor in the U.S., followed by China, and they have been transferring wealth from the little guys to the big guys by buying up the real estates, businesses, etc.


We will see the R/V of the IQD, but our window will be short. **this portion is an addendum by Beth (soulwarriorone)...IMHO and the opinion of many others, we will be entering the 7 years of plenty, to be followed by 7 years of lack, so we must use our newly found wealth



Read more: http://dinarvets.com/forums/index.php?/topic/52406-rv-in-3-to-4-days-possible/#ixzz1CSnol0UL

BMFL<OE

next week(s) is here

good to see some old friendly faces from the boards.  still have my CMKX cert in the safety deposit box, waiting...

does anyone here have contact with mona (mona lisa smiles)?  if so, please ask her to contact me, id like to say hello.  mona, if youre reading this, please email me.

im still at myfirstnamelastname at gmail dot com.  hope to hear from you.

Apparently, we can not speak about NSS on CMKM, it has a D List order from the government, read news of the world

According to Dow Jones Newswires said the Texan Johnny Earl Satterwhite shares of public companies such as Microsoft, Exxon Mobil, City National Bank and others to have a value of over 8 trillion dollars. As evidence led Satterwhite and current official records of the U.S. Securities and Exchange Commission for the control of the securities trade, the United States Securities and Exchange Commission (SEC), who seem to have now disappeared, however.

Steven Jones of Dow Jones Newswires, where documents have been submitted before the disappearance, confirmed the statements of Satterwhite. Jones tells among other things, that the papers showed that Satterwhite owners to be of almost a trillion Microsoft shares seems. This is according to Jones, however, completely impossible, since this number to about 1,500 times higher than the shares of company founder Bill Gates and also there were not nearly as many Microsoft shares.

With other companies like Exxon Mobil and City National Bancshares seems to have mistakenly Satterwhite more shares than actually exist. "The flood of Satterwhite filings, amounting now to 69, emphasizes the open character of the SEC registration process. The Agency of thousands of documents obtained daily and allows businesses and individuals, electronic filing through its EDGAR system to speed up the process," said Steven Jones.

The 51-year-old Satterwhite stated that he had made submissions to the approval documents for a group of individuals who do not want to be identified. He also said that the SEC officials never provided the lawfulness of his documents in question.

The described test procedures of the SEC has been lax in the past been exploited already. Thus, according to Dow Jones Newswires, for example, in 2005 a Canadian company called "Apollo Publication Corp. 'attempts to fund with a 3.6 billion dollar offering their project called" Imperial of Earth ", based on one language, one culture and one currency was aligned. The company claimed, among other high-profile with a former Canadian prime minister, several former U.S. presidents and "Al Greenspan," to be occupied. But later it became known that Apollo had misled investors Publication.

Even a small company called CMKM Diamonds fraudulent in 2005 had caused a stir when she claimed to own rights to diamond mining. She sold several billions of worthless CMKM shares on the stock exchange, possibly with the help of some SEC insider. At the very least have to become aware of the bogus transactions set of trading in the shares of CMKM and tried the aggrieved shareholders to sue the SEC, 10 SEC executives to 3.87 billion dollars in damages.

In any case it will be interesting how the Satterwhite case will develop further, as at his first filing with the SEC a month ago, 2 June 2011 took place.

Naked Short Selling of America and the World. Will Rupert Murdoch and the News Media continue to cover it up

Florida OFR presentation dated April 22nd, 2011 COALITION COMPLAINT AGAINST THE FBI/SEC/DOJ

This complaint is for all shareholders and covers all views, it has been passed by many shareholders before going in and all have agreed to file it for themslves with the Las Vegas FBI and other authorities as a show of unity. Enough is enough, it is time to demand the authorities get investigated for their role in this fraud and its cover up, or just pay us!

July 17, 2011

Assistant Special Agent in Charge – William C. Woerner
1787 West Lake Mead Boulevard
Las Vegas, NV 89106-2135
Phone: (702) 385-1281
Fax: (702) 584-5460
E-mail: Lasvegas@ic.fbi.gov

Dear Sir,

My name is Dave Nelson and I represent the CMKX Shareholders for Justice, a group of shareholders who demand an independent investigation into the many Authorities involved in the CMKM Diamonds Inc (CMKX) fraud case. We have entered evidence which clearly shows that the SEC and other authorities aided and abetted corrupt insiders of CMKX currently indicted by the DOJ and covered up the fraud committed by countless Wall Street firms, and/or this was a DOJ sting operation, in which case the Authorities are illegally withholding the victims’ restitution collected in that operation so perpetrators could avoid criminal prosecution. In either case the facts call for an independent investigation into the Authorities role in this fraud and its cover up, a fraud which has directly cost the shareholder of CMKX hundreds of millions of dollars. Authorities involved include: the SEC/DOJ/FBI/IRS/RCMP. We demand accountability!

We have shown that fraud and manipulation is the modus operandi of the SEC in particular and other Authorities hereby mentioned in evidence submitted to the Las Vegas FBI and many other regulatory agencies. A brief history of corruption of the aforementioned authorities in the form of a pdf file was delivered to Jerald Burkin of the FBI and to various Authorities in Canada who have taken no action. This evidence outlines the timeline of the largest fraud in history, the counterfeiting of the stock market, which occurred prior to 1996 when FBI Special Agent Robert Wright launched Operation Vulgar Betrayal, through Operation Uptick in 1999-2000, and continues unabated to the present. Former Special Agent Wright said, in essence, that the U.S. Department of Justice had been captured by Al Qaeda’s most important financiers, and given the crimes he talked about continue until today it is clear the agencies involved are still captured. The proceeds of these crimes went to organized crime families, to terrorists, and the major Wall Street brokers who aided them. This evidence was entered to Burkin in early 2009, along with the evidence in the CMKX case in particular which followed the same pattern of the SEC aiding massive counterfeiting:

http://cmkx.info/CMKM-BRIEF-HISTORY-OF-SEC-CORRUPTION-2010-06-08.pdf

Additional evidence implicating the Authorities in directly aiding the corrupt insiders of CMKX and others who defrauded shareholders is included in a letter by Mark Faulk, CEO of CMKX. He outlines the fraud that was allowed to occur by the SEC and other Authorities; all of whom stood by silently as the fraud happened after they had subpoenaed the records that were used in the indictments:

http://www.cmkmdiamondsinc.com/letter-m_index.html.

In the CMKM Diamonds Inc. case, specific evidence was given to Mr. Burkin which clearly showed the SEC, FBI, DOJ, and IRS were complicit in the crimes which took place and the cover up of the fraud by all of the Wall Street firms involved, a mirror image of Operation Uptick and Operation Vulgar Betrayal. Here is a list of the crimes alleged to have been committed by the SEC, FBI, DOJ, and IRS, further known as The Authorities in the CMKM Diamonds Inc. case. This list either shows the Authorities allowed this crime to take place and aided and abetted the fraud committed against CMKX shareholders, or they allowed this fraud to take place to run a sting operation as outlined in Al Hodges bivens case and have harmed all victims by withholding illegally their restitution for over five years. There clearly there needs to be an independent investigation into these points:

1. The Authorities investigation (into CMKX) was well under way by May 2004, before hundreds of billions of shares were sold to investors in a publicly traded company and the money laundered. Corporate insiders were aided and abetted in their crimes by high-powered attorneys, accountants, transfer agents, major banking institutions, brokerage houses, and clearing firms. It occurred right under the noses of the SEC and NASD (now FINRA); both agencies ignoring dozens of blatant warning signs, allowing the scam to go on for years. The Coalition asks for an investigation into why the Authorities just allowed these crimes to happen and the money laundered over years when it was their duty to stop these crimes when they detected them in 2004, costing the company and its shareholders hundreds of millions of dollars.

2. The Coalition alleges and has provided evidence that Leslie Hakala conspired with ex-SEC attorney D. Roger Glenn (who wrote opinion letters allowing over 300 billion shares of stock to be dumped into the market) to facilitate the sale of hundreds of billions of shares of CMKX stock, all proceeds from those sales were apparently stolen right under the nose of The Authorities while they watched. D. Roger Glenn escape and indictment by the DOJ for his role in this fraud. PR person for CMKX, Andrew Hill, has publicly stated Leslie Hakala was fully aware of what was happening inside CMKX and had been in contact with D. Roger Glenn in 2004. Furthermore, the FBI never questioned Andrew Hill, even though he had pertinent, incriminating first-hand information in this case. The Coalition asks for Andrew Hill to be deposed and Leslie Hakala and other SEC enforcement attorneys investigated for their role in this fraud and its cover up.

3. When Leslie Hakala met with CMKX management and shareholders lawyer Bill Frizzell on May 11th 2005, she was fully aware of the fraud inside CMKX at this time. Bill Frizzell presented her with indisputable evidence of massive counterfeiting of CMKX stock, a fact that later proved to be true as 622 billion unregistered shares were sold in CMKX stock out of 703 issued and outstanding shares in total. Mr. Frizzell had direct evidence of hundreds of billions of unregistered share sales by brokers such as Etrade, Ameritrade, TD Waterhouse, and others. None of those brokers were ever indicted and no civil action has ever taken place despite the indisputable evidence of their crimes. Not only did Leslie Hakala not stop these crimes from happening, and saving shareholders hundreds of millions of dollars, but she allowed the fraud to continue. These corrupt brokers were allowed to sell hundreds of billions of additional counterfeit shares, steal the illegal proceeds, and then have their crimes completely covered up. Hakala allowed corrupt management to launder their proceeds from their crimes for years. The Coalition asks for an immediate investigation into the evidence presented at that meeting and to the SEC actions and inactions after that meeting.

4. Co-conspirators John Edward Dohnau, Michael Williams, and Rendal Williams, plus a cast of numerous other associates have not been charged for their part in this massive fraud. Why?

5. The phone records from NevWest, which show that they contacted the SEC each time Edwards came in with CMKX certs to sell, many of which were clearly forged and fraudulent, some even “signed† by an individual who had been deceased for months. Instead of taking action to halt the obvious fraud against innocent shareholders, the SEC and NASD (FINRA) ignored the evidence and dozens of other red flags, allowing the scheme to continue unabated, costing unsuspecting buyers of CMKX stock hundreds of millions of dollars. The Coalition wants access to those phone records and an investigation into why the SEC allowed those certs to be sold after they had already subpoenaed the fraud records used in the indictments and SEC civil action.

6. Clearing firm Computer Clearing Services (now owned by Penson Worldwide, Inc.) helped John Edwards trade over 250 billion shares of CMKX stock totaling over $53 million. Clearing firms and brokers weren’t the only ones who ignored red flags that should have triggered the filing of Suspicious Activity Reports. Several Nevada banks, most prominently Silver State Bank and Wells Fargo Bank, allowed CMKM Diamonds and related fraudulent companies to run hundreds of millions of dollars through dozens of accounts. Penson is mentioned in the article, which documents the counterfeiting of the stock market by Wall Street, organized crime and terrorists; a crime which all Authorities were fully aware of before the year 2000 and did nothing to stop although trillions of counterfeit shares were sold into the market and trillions of dollars stolen from the general public: http://www.marketrap.com/article/view_ar….shor t-selling. The Coalition asks for an investigation into Penson Worldwide’s history of covering up the crimes of Wall Street, organized crime, and terrorist naked short sales, and those of John Edwards in particular.

7. The Authorities subpoenaed the Silver State Bank regarding suspicious activities on September 5th 2004 (the Silver State Bank had no action taken against it for its role in this fraud) BEFORE hundreds of billions of shares were sold in CMKX stock. The evidence gathered from that subpoena showed 64 million dollars went through the Silver State Bank. Among the transactions executed by Silver State Bank after those subpoenas include:

• Wire transfers totaling hundreds of thousands of dollars were executed with only the notation “transferring to Personal Acct. per cust. Transfer via phone†.

• Checks from various accounts set up as shell companies and controlled by Casavant and Edwards written out only to “CASH†…including one for $350,000.

• Multi-million dollar wire transfers between Edwards and Casavant run through dozens of accounts they controlled there.

• Millions of dollars written out of company accounts to Casavant, his wife Carolyn, and several family members; often on temporary checks.

The Coalition asks for an investigation into why the Silver State Bank continued to allow money laundering into the millions of dollars when the Authorities had already subpoenaed the fraud records used in the indictments and civil actions. We also ask for an investigation into why the DOJ and SEC allowed these crimes to continue unabated when they already had the evidence of the crimes.

8. The Authorities allowed Robert Maheu, Urban Casavant, and other management to continue to promote the sale of CMKX stock through various means, including a drag racing team, after they were fully aware of the fraud inside CMKM Diamonds Inc. Robert Maheu, Roger Glenn and Don Stoecklein were not indicted for his role in this fraud although six hundred billion shares were sold while they ran CMKX. The Coalition wants an investigation into why these individuals were not indicted; why the DOJ and SEC continued to allow them to promote this fraud after they had subpoenaed the fraud records; and why they allowed these masterminds the time to launder their proceeds from their crimes.

9. In letters to other brokers in mid-2005, shareholders lawyer Bill Frizzell not only identified the brokers who sold over 300 billion shares of CMKX stock, but those brokers continued to sell unregistered shares for months while The Authorities watched. The money from the sale of hundreds of billions of shares (approximately 190 million dollars) was stolen by these brokers, with none of those known brokers being indicted, and none of that money recovered. Why were these brokers not indicted, and why were their crimes covered up? Why did the Authorities continue to allow them to sell unregistered securities in CMKX stock when the fraud was clearly detected?

10. In Bill Frizzell’s letter to TD Waterhouse in Canada, he explains that none of the shares sold by them were even on the NOBO list, meaning they were sold unregistered. TD Waterhouse continued to sell unregistered shares of CMKX stock for months, as did all other Canadian brokers. In his letters, Mr. Frizzell also stated that the SEC was watching this very closely. Mr. Frizzell stated in his deposition to the SEC that none of the Canadian brokers had shares on the NOBO list, indicating all shares sold in Canada were sold unregistered. There has been no action against any Canadian brokers from The Authorities and since all illegal shares sold by Canadian brokers were grandfathered, they would not have to cover their fraud. The Coalition asks that there be a public inquiry (by an outside agency) into the grandfathering of trillions of counterfeit shares by Wall Street, organized crime, and by terrorists. The crimes could have been stopped well over a decade ago, but were allowed to happen, and then the fraud covered up. Why?

11. According to Bill Frizzell, Andrew Petillion (Branch Chief of Enforcement at the Pacific Regional Office for the SEC) issued this warning with regards to his evidence of the naked short in CMKX stock:

“By the way, if this is an orchestrated short squeeze against the brokerage houses to make the stock price go up, we will come after those who are responsible. We would not look kindly on a cert pull because it would cause market manipulation.â€

The Authorities allowed CMKX stock to be manipulated down, but would not allow the natural correction for this: a short squeeze. This mirrors what the SEC said to David Patch regarding the Grandfather Clause: it was supposed to stop runs in stocks which had been manipulated by Wall Street firms, which in-turn counterfeited trillions of shares of stock in hundreds if not thousands of publicly traded companies. An example of this is Eagle Tech Communications. Authorities knew Eagle Tech was the victim of counterfeiting by Wall Street firms and crime families, but grandfathered those counterfeit shares so they would never have to be covered, while protecting the criminal firms at the same time. The Coalition wants to know why the DOJ and SEC allowed Wall Street firms to create the Grandfather Clause (with the help of the SEC) as this allowed felonies to be covered up; felonies committed by terrorists and organized crime families.

12. The Authorities and alleged corrupt Judge, Brenda Murray (see the modus operandi of Brenda Murray in evidence presented regarding the Gary Aguirre cover up), would not allow evidence of massive naked shorting in CMKX stock in the administrative hearing (October 5, 2005) that eventually ended up in the revocation of CMKX stock. Financial expert Jim DeCosta analyzed the naked short in CMKX stock and found it to be 14-1. No evidence of any other broker’s fraud or the fraud already detected by The Authorities was entered into the hearing, and billions of shares of CMKX stock traded afterwards; all monies stolen from shareholders. The Coalition asks for an investigation into the cover up of the largest naked short in history by Judge Brenda Murray and the SEC enforcement attorneys. The Coalition asks for an investigation into why the Authorities allowed this crime to continue when clearly they were aware of it, and why did they allow all of the money to be stolen from the victims in this case when they could have stopped it in 2004?

13. In Civil Action No. 2:08-cv-0437, 4-7-08, United States District Court for the District of Nevada, Leslie Hakala alleges that “To divert attention from their own dumping of CMK shares, Casavant persuaded CMKM’s investors that the reported high trading volume in CMKM stock reflected extensive “naked short selling† rather than ordinary stock dilution.â€
Leslie Hakala was fully aware that there was massive naked shorting in CMKX stock by Wall Street firms (evidence entered to the FBI in this case), and that she concealed the fact that there were other perpetrators besides the insiders of CMKM Diamonds Inc. This is a mirror image of the victims of Operation Uptick. From March 2003 through May 2005 John Edwards sold almost 260 billion shares of the purportedly 622 billion registered/unrestricted CMKM shares. That leaves approximately 362 billion purportedly registered/unrestricted CMKM shares that Leslie Hakala fails to account for in said civil action. The Authorities try and make it look like all shares and money stolen was by the corrupt insiders. The Coalition asks for an investigation into Leslie Hakala’s actions which appear to be nothing short of criminal and follow the modus operandi of covering up the crimes of Wall Street firms.

14. In its Grand Jury Superseding Indictment 2-09-CR-00132-RLH-RJJ, 5-27-09, United States District Court, District of Nevada, the Grand Jury charges that:
“…To create the appearance of an active and established market for CMKM stock, and to disguise the fact that the conspirators were virtually the only sellers of CMKM stock…â€
DONALD STOECKLEIN DEPOSITION, 1-24-06
In said deposition, Donald Stoecklein testifies that naked short expert Jim Decosta, with 25 years of experience, told both Bill Frizzell and him that a 14 to 1 short position exists in CMKM stock.

That means that for every one legitimate share that exists, 14 naked short shares exist, which in turn means that numerous naked short sellers exist. In said deposition, Donald Stoecklein testifies that they obtained a NOBO list and the number of CMKM shares on that NOBO list exceeded the number of CMKM shares on the list of 1st Global Stock Transfer, which in turn means that naked short sellers exist. The Coalition demands that Jim DeCosta’s report be made public along with the cert pull deposition which shows the Authorities made false statements in this case to cover up the crimes of many Wall Street brokers by making it look like corrupt insiders were the only sellers of unregistered shares of CMKX stock.

15. On 6-24-09, the Securities and Exchange Commission filed Motion for Summary Judgment Against Defendant John Edwards (#991), Motion for Summary Judgment Against Defendant Daryl Anderson (#102), and Motion for Summary Judgment Against Defendants Kathleen and Anthony Tomasso pursuant to Civil Action No. 08- CV 0437, 4-7-08, United States District Court for the District of Nevada. In said Motion for Summary Judgment, the Securities and Exchange Commission alleges, “CMKM provided investors with phony maps and fabricated videos of alleged mineral claims in North and South America.â€

The following was left out of the Administrative hearing. The following are excerpts from Regional Triaxial Aeromagnetic Survey Assessment Work Report by N. Ralph Newson, William Jarvis on the Fort a la Corne Diamond Project:

“Drilling results and additional ground magnetic and gravity surveys have shown the best known kimberlite bodies to be bedded, and to have a very different shape from most known kimberlite bodies. In most of the well-known diamond mines in Africa, for example, and in those in the NWT in Canada, the upper portions of the kimberlite bodies have been eroded, leaving only the feeder pipe, which has a “carrot† shape, getting smaller in diameter with depth. However, in the Fort à la Corne swarm, the tops of the kimberlitic volcanic edifices are COMPLETELY PRESERVED [emphasis added by author], and they are shaped more or less like a soup bowl, with two larger horizontal dimensions, and one smaller vertical dimension. Several of these have an inferred geological resource (based on a few holes and on geophysical modeling) in excess of 100 million tonnes, one has nearly a billion tons, and one group of five which are close together, or perhaps coalescing, contain about 2 billion tons of kimberlite. There are thus HUGE VOLUMES OF KIMBERLINE WITHIN A FEW HUNDRED METRES OF THE SURFACE.† [Emphasis added by author].

The Coalition asks for an independent investigation into all claims held by CMKX past and present, including the warehouse full of core samples currently held in a warehouse in Saskatchewan, not mentioned in the hearing, under the control of Emerson Koch, Urban Casavant’s partner. We ask for an investigation into all land lost during the era where the DOJ and SEC allowed the masterminds in CMKX management to commit fraud against the shareholders or when the DOJ sting operation was on.

16. If this was purely a fraud, then the DOJ/FBI should have already extradited Urban Casavant since the evidence they used against him was from late 2004. It is unacceptable that the Authorities allowed Urban to sell hundreds of billions of shares after they knew he was committing fraud, it is unacceptable the Authorities gave him time to launder that money, and it is unacceptable they have not arrested the largest penny stock swindler ever. He is free to do what he wants and spend the money he stole from shareholders while we lost everything and our company was destroyed. The Coalition demands to know why Urban Casavant has not been arrested for his crimes.

17. The SEC revoked CMKM Diamonds Inc on October 28th 2005, knowing that would prevent the perpetrators from ever having to cover their naked short positions in CMKX stock and in turn ensuring that the shareholders would never recover the damages they suffered. Thousands of victims in other companies of the exact same crime also received no compensation from this massive naked shorting fraud. This tactic was used in concert with the perpetrators who counterfeited the stock market into the trillions to cover-up the fraud and allow the criminals to escape from having to cover their counterfeit shares. The perpetrators in concert with the SEC and DTCC grandfathered trillions of dollars in felony counterfeit stock sales to hide the largest crime in history. The Coalition asks for a full investigation into the Grandfather Clause and the hundreds to thousands of companies who were victims of the illegal clause and in particular all firms who had their shares Grandfathered that sold illegal CMKX stock.

The evidence above is just the tip of the iceberg on the damage caused to the victims in this case by the Authorities. If this was just purely a fraud there is more than enough evidence to call for an independent investigation into the Authorities’ role in this fraud and its cover-up. If this was a sting operation, then there is clear, insurmountable evidence that crimes are still happening, preventing the restitution for all bona fide CMKX shareholders from being released. The Victims have been and continue to be harmed- either way.

Here is evidence entered to SA Burkin, the DOJ Victims’ Rights official in Nevada, and to Gayle Jacobs of the Las Vegas FBI, which indicates the Authorities allowed this fraud to continue as they were using CMKX as a vehicle in a DOJ sting operation run in concert with Robert Maheu. This operation resulted in perpetrators secretly paying into a fund for the victims in this case to avoid criminal prosecution. I asked Debra Waite of the Victims Rights office to investigate the evidence below, and she refused, but referred me to the Las Vegas FBI where I already had asked Jerald Burkin to investigate this evidence and corroborate Al Hodges allegations. This evidence clearly affects the indictments Jerald Burkin is working on in the CMKX case and it is his duty to investigate this evidence. He refused. The Coalition demand that an independent investigation into the Nevada DOJ/FBI’s handling of this case. Also, the shareholders request that an immediate investigation take place into Al Hodges June 17th letter to a representative of China where he claims President Obama is committing extortion which is preventing the release of our restitution and all other allegations put forth by Mr. Hodges. This letter is included in this complaint and on its own merit should be the basis of an immediate criminal investigation.

Below are the second set of questions and requests that the Coalition feels needs to be answered legally by the FBI and SEC.

1. Why is the DOJ/FBI in Nevada refusing to corroborate Al Hodges allegations and investigate his evidence which clearly contradicts the Nevada DOJ and FBI, fully-knowing that pertinent information would affect the indictments in this case? It is the legal duty of the FBI in this case to investigate this information as it comes from a credible source who is directly involved in this matter.

2. Why has the FBI refused to investigate the allegations that extortion is taking place which prevents the release of the restitution illegally held from victims in this case? Why have they not questioned Al Hodges and Michael Cottrell regarding this matter when they can corroborate the allegations put forth? The FBI apparently is doing nothing to stop the crimes currently being committed, further harming the victims in this matter.

3. Mr. Hodges says he has an eye witness to the fact that the restitution should have been released over five years ago. It is the legal duty of the DOJ/FBI to depose Al Hodges’ witness to the facts as it has dramatic impact on their current indictments in this case, if necessary he should be subpoenaed.

4. The DOJ/SEC subpoenaed the fraud records used in the indictments and civil actions in 2004, then allowed the fraud to continue for well over a year. Was the DOJ/SEC allowed to use CMKX and its shareholders as a vehicle in a sting operation and hide that fact from them? I talked to officials at the SEC, but didn’t mention CMKX; those officials said that it is the SEC’s legal duty to stop the fraud when detected, to halt the stock. In CMKX’s case, they not only didn’t stop the fraud they allowed it to continue unabated costing shareholders hundreds of millions of dollars in loses.

5. Was it the legal duty of the DOJ/SEC to include the fraud records they had subpoenaed in the SEC file given to company officials and lawyers in June 2005? Those records ended up being the basis for most of the actions by the DOJ and SEC against Urban Casavant and John Edwards. I personally spoke to John Martin of the Owner’s Group (which hired Bill Frizzell to represent the shareholders) and according to Martin they were fully aware of the Silver State Bank fraud records, as were all shareholders as it was on the internet in Feb. 2005. The fact that the management and shareholders’ lawyer had access to these confidential records and then worked with Urban Casavant proves this was either a sting operation, or they aided this fraud and its cover up. The Coalition demands to know exactly what confidential banking records management and Bill Frizzell were privy to and when to prove if this was a sting operation.

6. Mr. Hodges claims in his bivens case that the DOJ/SEC told CMKX officials that the release of funds was imminent on many occasions, but this was not true. Is it legal to have secret negotiations to take place regarding our restitution, and is it legal for the DOJ/SEC to lie to company officials about the release of their money? Does that not violate the rights of the victims and should the DOJ/FBI be required by law to investigate the facts surrounding these negotiations? Exactly who were these officials?

7. Reece Hamilton, plaintiff in Mr. Hodges bivens case, claimed that Mr. Hodges trustee received the codes from the authorities to release our restitution on or about DEC 30/31 2009, and that the taxes were taken out at that time. This was later confirmed by Mr. Hodges, and the tax issue confirmed in a complaint to AG of New York Andrew Cuomo, which is in the evidence package. Did giving our trustee the codes and having them not work violate our victim’s rights, and should it be the duty of the DOJ/FBI to investigate the officials who gave those codes and why they didn’t work? Who exactly gave the codes to our trustee?

8. Mr. Hodges filed a complaint with the AG of New York stating taxes were taken out of the settlement funds, which has now violated several banking laws, why is there no investigation into these crimes?

9. Mr. Hodges, in an update to his plaintiffs, said that he hears that the DOJ signed off on the distribution of our money, and says that his trustee is in constructive control of that money. He said he has three independent eye witnesses who have seen the packages coming to all shareholders with their restitution in it. It is the legal duty of the DOJ/FBI to investigate these eye witnesses who have seen these packages as they contain the restitution for the victims in this case?

10. Plaintiff Robert Hollenegg contacted the London FBI, and has contacted the Las Vegas FBI to give his statement of the facts as he knows them. He will corroborate public statements he made including the fact he was on the phone with Al Hodges when the funds were transferred to our trustee; funds which have still not been distributed to the victims in this case. Gayle Jacobs of the Las Vegas asked for Mr. Hollenegg’s contact information but did not contact him as of yet. Why has Robert Hollenegg not been interviewed and the facts in question, substantiated?

11. Mr. Hodges claims to have first-hand knowledge that the fund containing the restitution for all CMKX bona fide shareholders was not released BECAUSE it was attached to the World Global Settlements. It is the legal duty of the DOJ/FBI to investigate CMKX being attached to the World Global Settlements and to confirm or deny Al Hodges direct knowledge of this? Mr. Hodges supposedly has direct knowledge that Senators were briefed on the situation and the pending release of the World Global Settlements, which includes the restitution of funds for all bona fide CMKX shareholders. Hodges can corroborate this fact made public by plaintiffs in his bivens case. It is the FBI’s duty to corroborate with Al Hodges the public comments made by the plaintiffs in his case; public comments which were updates directly from Mr. Hodges and entered into the FBI?

12. Mr. Hodges has an eye witness to the deals made by the DOJ and Robert Maheu in Las Vegas; he claims these deals were videotaped. The Coalition wants these tapes made public immediately if our restitution is not released.

13. Work was done to identify the brokers, who counterfeited CMKX stock that includes Jim DeCosta’s report; Susanne Trimbath’s report; and the Cert Pull work product in possession of the SEC; all of which were hidden from the public. Is this not clear evidence of a cover up of the crimes committed by Wall Street brokers? The Coalition wants all those records made public immediately and those experts deposed, or our restitution released. These records will show which brokers stole 190 million dollars from CMKX shareholders, and will allow us to take legal actions against them if Mr. Hodges is lying and there were no deals made in secret by the DOJ and Robert Maheu.

14. The Coalition asks for a complete list of what documents were given to CMKX management in the SEC file, and exactly what confidential banking records CMKX management and Bill Frizzell were privy to and when. This will immediately prove whether this was a sting operation, or whether these individuals aided Urban Casavant to commit fraud.

15. Several letters were written and made public by Al Hodges to different world leaders that allege crimes were or are being committed by high ranking officials in the United States, including the board of the Federal Reserve. These crimes affect the release of our restitution and the Coalition would like an immediate investigation into these allegations. A list of names and contact information from all letters is available to corroborate their authenticity.

16. In file no. S7-19-07, Bud Burrell, consultant in the John O’Quinn multi trillion dollar lawsuit against Wall Street brokers for naked shorting, states the following regarding CMKX: “No fewer than three federal criminal confidential informants were involved in the deal before the stock ever started trading†. The Coalition would like this investigated and Bud Burrell deposed as he has information regarding the sting operation that took place. He can also comment on the size of the overall fraud that was covered up over the past decade and the Authorities role in that cover up.

If the above isn’t proof enough that a thorough immediate investigation be conducted of the DOJ, the SEC and the FBI, then perhaps what is written below will convince you from deepcapture.com. This is one of the Authorities own admitting the truth over a decade ago, the Authorities were and are completely captured. This is evidenced by the fact the crimes talked about below continue unabated to today:

“In 1996, FBI Special Agent Robert Wright launched Operation Vulgar Betrayal, the FBI’s first major effort to crack down on what would later be termed the “SAAR Network† of financial entities with links to Hamas, Al Qaeda, and other jihadi outfits. Among Agent Wright’s principal targets were the billionaire hedge fund manager Yasin al Qadi (who, as I say, was Osama bin Laden’s favorite financier) and his U.S.-based bagman, Yaqub Mirza. But Wright (who referred to Yasin al Qadi as “Al Qaeda’s banker†) was removed from the investigation in 1999. Operation Vulgar Betrayal was shut down in 2000. According to Wright, his team’s efforts were foiled by U.S. politicians and FBI higher-ups who were unnerved by the fact that he was investigating powerful people who had considerable influence in both Washington and Saudi Arabia (ostensibly a key U.S. ally). Former Special Agent Wright said, in essence, that the U.S. Department of Justice had been captured by Al Qaeda’s most important financiers. The capture apparently extends to the SEC, which has shown no signs of investigating the trading of people like the billionaires who comprise Al Qaeda’s Golden Chain and who funded the SAAR Network. (In fact, in the view of Deep Capture, the capture of the SEC by criminal financial operators is essentially total, unlike the DOJ.)
When Agent Wright blew the whistle on the political interference with his FBI investigation, he literally broke down in tears as he publicly apologized for the FBI’s failure to complete its mission.â€

In conclusion, the Coalition demands our restitution be released immediately, or a thorough independent investigation into the evidence entered in this complaint. We demand an outside agency investigate on our behalf as we have clearly shown that the Authorities are not capable of being unbiased as Former Special Agent Wright said, in essence, that the U.S. Department of Justice had been captured, he should have included the SEC.

Counterfeiting Stocks on Wall street

Counterfeiting Stock

Illegal naked shorting and stock manipulation are two of Wall Street’s deep, dark secrets. These practices have been around for decades and have resulted in trillions of dollars being fleeced from the American public by Wall Street. In the process, many emerging companies have been put out of business. This report will explain the magnitude of this problem, how it happens, why it has been covered up and how short sellers attack a company. It will also show how all of the participants; the short hedge funds, the prime brokers and the Depository Trust Clearing Corp. (DTCC) — make unconscionable profits while the fleecing of the small American investor continues unabated.

Why is This Important? This problem affects the investing public. Whether invested directly in the stock market or in mutual funds, IRAs, retirement or pension plans that hold stock — it touches the majority of Americans.

The participants in this fraud, which, when fully exposed, will make Enron look like child’s play, have been very successful in maintaining a veil of secrecy and impenetrability. Congress and the SEC have unknowingly (?) helped keep the closet door closed. The public rarely knows when its pocket is being picked as unexplained drops in stock price get chalked up to “market forces�  when they are often market manipulations.

The stocks most frequently targeted are those of emerging companies who went to the stock market to raise start–up capital. Small business brings the vast majority of innovative new ideas and products to market and creates the majority of new jobs in the United States. Over 1000 of these emerging companies have been put into bankruptcy or had their stock driven to pennies by predatory short sellers.

It is important to understand that selling a stock short is not an investment in American enterprise. A short seller makes money when the stock price goes down and that money comes solely from investors who have purchased the company’s stock. A successful short manipulation takes money from investment in American enterprise and diverts it to feed Wall Street’s insatiable greed — the company that was attacked is worse off and the investing public has lost money. Frequently this profit is diverted to off–shore tax havens and no taxes are paid. This national disgrace is a parasite on the greatest capital market in the world.

A Glossary of Illogical Terms — The securities industry has its own jargon, laws and practices that may require explaining. Most of these concepts are the creation of the industry, and, while they are promoted as practices that ensure an orderly market, they are also exploited as manipulative tools. This glossary is limited to naked short abuse, or counterfeiting stock as it is more correctly referred to.

Broker Dealer or Prime Broker — The big stockbrokers who clear their own transactions, which is to say they move transacted shares between their customers directly, or with the DTC. Small brokers will clear through a clearing house — also known as a broker’s broker.

Hedge Funds — Hedge funds are really unregulated investment pools for rich investors. They have grown exponentially in the past decade and now number over 10,000 and manage over one trillion dollars. They don’t register with the SEC, are virtually unregulated and frequently foreign domiciled, yet they are allowed to be market makers with access to all of the naked shorting loopholes. Frequently they operate secretively and collusively. The prime brokers cater to the hedge funds and allegedly receive eight to ten billion dollars annually in fees and charges relating to stock lend to the short hedge funds.

Market Maker — A broker, broker dealer or hedge fund who makes a market in a stock. In order to be a market maker, they must always have shares available to buy and sell. Market makers get certain sweeping exemptions from SEC rules involving naked shorting.

Short Seller — An individual, hedge fund, broker or institution who sells stock short. The group of short sellers is referred to as “the shorts.�

The Securities and Exchange Commission — The SEC is the federal enforcement agency that oversees the securities markets. The top–level management is a five–person Board of Governors who are Presidential appointees. Three of the governors are usually from the securities industry, including the chairman. The SEC adopted Regulation SHO in January 2005 in an attempt to curb naked short abuse.

Depository Trust Clearing Corp — Usually known as the DTCC, this privately held company is owned by the prime brokers and it clears, transacts and holds most stock in this country. It has four subsidiaries, which include the DTC and the NCSS. The operation of this company is described in detail later.

Short Sale — Selling a stock short is a way to make a profit while the stock price declines. For example: If investor S wishes to sell short, he borrows a share from the account of investor L. Investor S immediately sells that share on the open market, so investor S now has the cash from the sale in his account, and investor L has an IOU for the share from investor S. When the stock price drops, investor S takes some of the money from his account and buys a share, called “covering� , which he returns to investor L’s account. Investor S books a profit and investor L has his share back. This relatively simple process is perfectly legal – so far. The investor lending the share most likely doesn’t even know the share left his account, since it is all electronic and occurs at the prime broker or DTC level. If shares are in a margin account, they may be loaned to a short without the consent or knowledge of the account owner. If the shares are in a cash account, IRA account or are restricted shares they are not supposed to be borrowed unless there is express consent by the account owner.

Disclosed Short — When the share has been borrowed or a suitable share has been located that can be borrowed, it is a disclosed short. Shorts are either naked or disclosed, but, in reality, some disclosed shorts are really naked shorts as a result of fraudulent stock borrowing.

Naked Short — This is an invention of the securities industry that is a license to create counterfeit shares. In the context of this document, a share created that has the effect of increasing the number of shares that are in the market place beyond the number issued by the company, is considered counterfeit. This is not a legal conclusion, since some shares we consider counterfeit are legal based upon today’s rules. The alleged justification for naked shorting is to insure an orderly and smooth market, but all too often it is used to create a virtually unlimited supply of counterfeit shares, which leads to widespread stock manipulation – the lynchpin of this massive fraud.

Returning to our example, everything is the same except the part about borrowing the share from someone else’s account: There is no borrowed share — instead a new one is created by either the broker dealer or the DTC. Without a borrowed share behind the short sale, a naked short is really a counterfeit share.

Fails–to–Deliver — The process of creating shares via naked shorting creates an obvious imbalance in the market as the sell side is artificially increased with naked short shares or more accurately, counterfeit shares. Time limits are imposed that dictate how long the sold share can be naked. For a stock market investor or trader, that time limit is three days. According to SEC rules, if the broker dealer has not located a share to borrow, they are supposed to take cash in the short account and purchase a share in the open market. This is called a “buy–in,�  and it is supposed to maintain the total number of shares in the market place equal to the number of shares the company has issued.

Market makers have special exemptions from the rules: they are allowed to carry a naked short for up to twenty–one trading days before they have to borrow a share. When the share is not borrowed in the allotted time and a buy–in does not occur, and they rarely do, the naked short becomes a fail–to–deliver (of the borrowed share).

Options — The stock market also has separate, but related markets that sell options to purchase shares (a “call� ) and options to sell shares (a “put� ). This report is only going to deal with calls; they are an integral part of short manipulations. A call works as follows: Assume investor L has a share in his account that is worth $25. He may sell an option to purchase that share to a third party. That option will be at a specific price, say $30, and expires at a specific future date. Investor L will get some cash from selling this option. If at the expiration date, the market value of the stock is below $30 (the “strike price� ), the option expires as worthless and investor L keeps the option payment. This is called “out of the money.�  If the market value of the stock is above the strike price, then the buyer of the option “calls�  the stock. Assume the stock has risen to $40. The option buyer tenders $30 to investor L and demands delivery of the share, which he may keep or immediately sell for a $10 profit.

Naked call — The same as above except that investor L, who sells the call, has no shares in his account. In other words, he is selling an option on something he does not own. The SEC allows this. SEC rules also allow the seller of a naked short to treat the purchase of a naked call as a borrowed share, thereby keeping their naked short off the SEC’s fails–to–deliver list.

How The System Transacts Stocks — This explanation has been greatly simplified in the interest of brevity.

Customers — These can be individuals, institutions, hedge funds and prime broker’s house accounts.
Prime Brokers — They both transact and clear stocks for their customers. Examples of prime brokers include Goldman Sachs; Merrill Lynch; Citigroup; Morgan Stanley; Bear Stearns, etc.
The DTCC — This is the holding company that owns four companies that clear and keep track of all stock transactions. This is where brokerage accounts are actually lodged. The DTC division clears over a billion shares daily. The DTCC is owned by the prime brokers, and, as a closely held private enterprise, it is impenetrable. It actively and aggressively fights all efforts to obtain information regarding naked shorting, with or without a subpoena.

Stocks clear as follows:
If customer A–1 purchases ten shares of XYZ Corp and Customer A–2 sells ten shares, then the shares are transferred electronically, all within prime broker A. Record of the transaction is sent to the DTC. Likewise, if Investor A–1 shorts ten shares of XYZ Corp and Investor A–2 has ten shares in a margin account, prime broker A borrows the shares from account A–2 and for a fee lends them to A–1.
If Customer A–1 sells shares to Customer B–2, in order to get the shares to B–2 and the money to A–1, the transaction gets completed in the DTC. The same occurs for shares that are borrowed on a short sale between prime brokers.

As a practical matter, what happens is prime broker A, at the end of the day, totals all of his shares of XYZ owned and all of the XYZ shares bought and sold, and clears the difference through the DTC. In theory, at the end of each day when all of the prime brokers have put their net positions in XYZ stock through the system, they should all cancel out and the number of shares in the DTC should equal the number of shares that XYZ has sold into the market. This almost never happens, because of the DTC stock borrow program which is discussed later.

Who are the Participants in the Fraud? The participants subscribe to the theory that it is much easier to make money tearing companies down than making money building them up, and they fall into two general categories: 1) They participate in the process of producing the counterfeit shares that are the currency of the fraud and/or 2) they actively short and tear companies down.
The counterfeiting of shares is done by participating prime brokers or the DTC, which is owned by the prime brokers. A number of lawsuits that involve naked shorting have named about ten of the prime brokers as defendants, including Goldman Sachs, Bear Stearns, Citigroup, Merrill Lynch; UBS; Morgan Stanley and others. The DTCC has also been named in a number of lawsuits that allege stock counterfeiting.

The identity of the shorts is somewhat elusive as the shorts obscure their true identity by hiding behind the prime brokers and/or hiding behind layers of offshore domiciled shell corporations. Frequently the money is laundered through banks in a number of tax haven countries before it finally reaches its ultimate beneficiary in New York, New Jersey, San Francisco, etc. Some of the hedge fund managers who are notorious shorters, such as David Rocker and Marc Cohodes, are very public about their shorting, although they frequently utilize offshore holding companies to avoid taxes and scrutiny.

Most of the prime brokers have multiple offshore subsidiaries or captive companies that actively participate in shorting. The prime brokers also front the shorting of some pretty notorious investors. According to court documents or sworn testimony, if one follows one of the short money trails at Solomon, Smith Barney, it leads to an account owned by the Gambino crime family in New York. A similar exercise with other prime brokers, who cannot be named at this time, leads to the Russian mafia, the Cali drug cartel, other New York crime families and the Hell’s Angels.

One short hedge fund that was particularly destructive was a shell company domiciled in Bermuda. Subpoenas revealed the Bermuda company was wholly owned by another shell company that was domiciled in another tax haven country. This process was five layers deep, and at the end of the subterfuge was a very well known American insurance company that cannot be disclosed because of court–ordered sealing of testimony.

Most of the large securities firms, insurance companies and multi–national companies have layers of offshore captives that avoid taxes, engage in activities that the company would not want to be publicly associated with, like stock manipulation; avoid U.S. regulatory and legal scrutiny; and become the closet for deals gone sour, like Enron.

The Creation of Counterfeit Shares — There are a variety of names that the securities industry has dreamed up that are euphemisms for counterfeit shares. Don’t be fooled : Unless the short seller has actually borrowed a real share from the account of a long investor, the short sale is counterfeit. It doesn’t matter what you call it and it may become non–counterfeit if a share is later borrowed, but until then, there are more shares in the system than the company has sold.

The magnitude of the counterfeiting is hundreds of millions of shares every day, and it may be in the billions. The real answer is locked within the prime brokers and the DTC. Incidentally, counterfeiting of securities is as illegal as counterfeiting currency, but because it is all done electronically, has other identifiers and industry rules and practices, i.e. naked shorts, fails–to–deliver, SHO exempt, etc. the industry and the regulators pretend it isn’t counterfeiting. Also, because of the regulations that govern the securities, certain counterfeiting falls within the letter of the rules. The rules, by design, are fraught with loopholes and decidedly short on allowing companies and investors access to information about manipulations of their stock.
The creation of counterfeit shares falls into three general categories. Each category has a plethora of devices that are used to create counterfeit shares.

Fails–to–Deliver — If a short seller cannot borrow a share and deliver that share to the person who purchased the (short) share within the three days allowed for settlement of the trade, it becomes a fail–to–deliver and hence a counterfeit share; however the share is transacted by the exchanges and the DTC as if it were real. Regulation SHO, implemented in January 2005 by the SEC, was supposed to end wholesale fails–to–deliver, but all it really did was cause the industry to exploit other loopholes, of which there are plenty (see 2 and 3 below).

Since forced buy–ins rarely occur, the other consequences of having a fail–to–deliver are inconsequential, so it is frequently ignored. Enough fails–to–deliver in a given stock will get that stock on the SHO list, (the SEC’s list of stocks that have excessive fails–to–deliver) – which should (but rarely does) see increased enforcement. Penalties amount to a slap on the wrist, so large fails–to–deliver positions for victim companies have remained for months and years.
A major loophole that was intentionally left in Reg SHO was the grandfathering in of all pre–SHO naked shorting. This rule is akin to telling bank robbers, “If you make it to the front door of the bank before the cops arrive, the theft is okay.�

Only the DTC knows for certain how many short shares are perpetual fails–to–deliver, but it is most likely in the billions. In 1998, REFCO, a large short hedge fund, filed bankruptcy and was unable to meet margin calls on their naked short shares. Under this scenario, the broker dealers are the next line of financial responsibility. The number of shares that allegedly should have been bought in was 400,000,000, but that probably never happened. The DTC — owned by the broker dealers — just buried 400,000,000 counterfeit shares in their system, where they allegedly remain — grandfathered into “legitimacy�  by the SEC. Because they are grandfathered into “legitimacy� , the SEC, DTC and prime brokers pretend they are no longer fails–to–deliver, even though the victim companies have permanently suffered a 400 million share dilution in their stock.
Three months prior to SHO, the aggregate fails–to–deliver on the NASDAQ and the NYSE averaged about 150 million shares a day. Three months after SHO it dropped by about 20 million, as counterfeit shares found new hiding places (see 2 and 3 below). It is noteworthy that aggregate fails–to–deliver are the only indices of counterfeit shares that the DTC and the prime brokers report to the SEC. The bulk of the counterfeiting remains undisclosed, so don’t be deceived when the SEC and the industry minimize the fails–to–deliver information. It is akin to the lookout on the Titanic reporting an ice cube ahead.
Ex–clearing counterfeiting — The second tier of counterfeiting occurs at the broker dealer level. This is called ex–clearing. Multiple tricks are utilized for the purpose of disguising naked shorts that are fails–to–deliver as disclosed shorts, which means that a share has been borrowed. They also make naked shorts “invisible�  to the system so they don’t become fails–to–deliver, which is the only thing the SEC tracks.

Some of the tricks are as follows:

Stock sales are either a long sale or a short sale. When a stock is transacted the broker checks the appropriate box. By mismarking the trading ticket –checking the long box when it is actually a short sale the short never shows up, unless they get caught, which doesn’t happen often. The position usually gets reconciled when the short covers.

Settlement of stock transactions is supposed to occur within three days, at which time a naked short should become a fail–to–deliver, however the SEC routinely and automatically grants a number of extensions before the naked short gets reported as a fail–to–deliver. Most of the short hedge funds and broker dealers have multiple entities, many offshore, so they sell large naked short positions from entity to entity. Position rolls, as they are called, are frequently done broker to broker, or hedge fund to hedge fund, in block trades that never appear on an exchange. Each movement resets the time clock for the naked position becoming a fail–to–deliver and is a means of quickly getting a company off of the SHO threshold list.
The prime brokers may do a buy–in of a naked short position. If they tell the short hedge fund that we are going to buy–in at 3:59 EST on Friday, the hedge fund naked shorts into their own buy–in (or has a co–conspirator do it) and rolls their position, hence circumventing Reg SHO.
Most of the large broker dealers operate internationally, so when regulators come in (they almost always “call ahead� ) or compliance people come in (ditto), large naked positions are moved out of the country and returned at a later date.

The stock lend is enormously profitable for the broker dealers who charge the short sellers large fees for the “borrowed�  shares, whether they are real or counterfeit. When shares are loaned to a short, they are supposed to remain with the short until he covers his position by purchasing real shares. The broker dealers do one–day lends, which enables the short to identify to the SEC the account that shares were borrowed from. As soon as the report is sent in, the shares are returned to the broker dealer to be loaned to the next short. This allows eight to ten shorts to borrow the same shares, resetting the SHO–fail–to–deliver clock each time, which makes all of the counterfeit shares look like legitimate shares. The broker dealers charge each short for the stock lend.

Margin account buyers, because of loopholes in the rules, inadvertently aid the shorts. If short A sells a naked short he has three days to deliver a borrowed share. If the counterfeit share is purchased in a margin account, it is immediately put into the stock lend and, for a fee, is available as a borrowed share to the short who counterfeited it in the first place. This process is perpetually fluid with multiple parties, but it serves to create more counterfeit shares and is an example of how a counterfeit share gets “laundered�  into a legitimate borrowed share.

Margin account agreements give the broker dealers the right to lend those shares without notifying the account owner. Shares held in cash accounts, IRA accounts and any restricted shares are not supposed to be loaned without express consent from the account owner. Broker dealers have been known to change cash accounts to margin accounts without telling the owner, take shares from IRA accounts, take shares from cash accounts and lend restricted shares. One of the prime brokers recently took a million shares from cash accounts of the company’s founding investors without telling the owners or the stockbroker who represented ownership. The shares were put into the stock lend, which got the company off the SHO threshold list, and opened the door for more manipulative shorting.

This is a sample of tactics used. For a company that is under attack, the counterfeit shares that exist at this ex–clearing tier can be ten or twenty times the number of fails–to–deliver, which is the only category tracked and policed by the SEC.

Continuous Net Settlement — The third tier of counterfeiting occurs at the DTC level. The Depository Trust and Clearing Corporation (DTCC) is a holding company owned by the major broker dealers, and has four subsidiaries. The subsidiaries that are of interest are the Depository Trust Company (DTC) and the National Securities Clearing Corporation (NSCC). The DTC has an account for each broker dealer, which is further broken down to each customer of that broker dealer. These accounts are electronic entries. Ninety seven percent of the actual stock certificates are in the vault at the DTC with the DTC nominee’s name on them. The NSCC processes transactions, provides the broker dealers with a central clearing source, and operates the stock borrow program.

When a broker dealer processes the sale of a short share, the broker dealer has three days to deliver a borrowed share to the purchaser and the purchaser has three days to deliver the money. In the old days, if the buyer did not receive his shares by settlement day, three days after the trade, he took his money back and undid the transaction. When the stock borrow program and electronic transfers were put in place in 1981, this all changed. At that point the NSCC guaranteed the performance of the buyers and sellers and would settle the transaction even though the seller was now a fail–to–deliver on the shares he sold. The buyer has a counterfeit share in his account, but the NSCC transacts it as if it were real.

At the end of each day, if a broker dealer has sold more shares of a given stock than he has in his account with the DTC, he borrows shares from the NSCC, who borrows them from the broker dealers who have a surplus of shares. So far it sounds like the whole system is in balance, and for any given stock the net number of shares in the DTC is equal to the number of shares issued by the company.
The short seller who has sold naked – he had no borrowed shares – can cure his fail–to–deliver position and avoid the required forced buy–in by borrowing the share through the NSCC stock borrow program.
Here is the hocus pocus that creates millions of counterfeit shares.

When a broker dealer has a net surplus of shares of any given company in his account with the DTC, only the net amount is deducted from his surplus position and put in the stock borrow program. However the broker dealer does not take a like number of shares from his customer’s individual accounts. The net surplus position is loaned to a second broker dealer to cover his net deficit position.

Let’s say a customer at the second broker dealer purchased shares from a naked short seller — counterfeit shares. His broker dealer “delivers�  those shares to his account from the shares borrowed from the DTC. The lending broker dealer did not take the shares from any specific customers’ account, but the borrowing broker dealer put the borrowed shares in specific customer’s accounts. Now the customer at the second prime broker has “real�  shares in his account. The problem is it’s the same “real�  shares that are in the customer’s account at the first prime broker.

The customer account at the second prime broker now has a “real�  share, which the prime broker can lend to a short who makes a short sale and delivers that share to a third party. Now there are three investors with the same counterfeit shares in their accounts.

Because the DTC stock borrow program, and the debits and credits that go back and forth between the broker dealers, only deals with the net difference, it never gets reconciled to the actual number of shares issued by the company. As long as the broker dealers don’t repay the total stock borrowed and only settle their net differences, they can “grow�  a company’s issued stock.

This process is called Continuous Net Settlement (CNS) and it hides billions of counterfeit shares that never make it to the Reg. SHO radar screen, as the shares “borrowed�  from the DTC are treated as a legitimate borrowed shares.

For companies that are under attack, the counterfeit shares that are created by the CNS program are thought to be ten or twenty times the disclosed fails–to–deliver, and the true CNS totals are only obtained by successfully serving the DTC with a subpoena. The SEC doesn’t even get this information. The actual process is more complex and arcane than this, but the end result is accurately depicted.
Ex–clearing and CNS counterfeiting are used to create an enormous reserve of counterfeit shares. The industry refers to these as “strategic fails–to–deliver.�  Most people would refer to these as a stockpile of counterfeit shares that can be used for market manipulation. One emerging company for which we have been able to get or make reasonable estimates of the total short interest, the disclosed short interest, the available stock lend and the fails–to–deliver, has fifty “buried�  counterfeit shares for every fail–to–deliver share, which is the only thing that the SEC tracks, consequently the SEC has not acted on shareholder complaints that the stock is being manipulated.

The Anatomy of a Short Attack — Abusive shorting are not random acts of a renegade hedge funds, but rather a coordinated business plan that is carried out by a collusive consortium of hedge funds and prime brokers, with help from their friends at the DTC and major clearinghouses. Potential target companies are identified, analyzed and prioritized. The attack is planned to its most minute detail.

The plan consists of taking a large short position, then crushing the stock price, and, if possible, putting the company into bankruptcy. Bankrupting the company is a short homerun because they never have to buy real shares to cover and they don’t pay taxes on the ill-gotten gain.
When it is time to drive the stock price down, a blitzkrieg is unleashed against the company by a cabal of short hedge funds and prime brokers. The playbook is very similar from attack to attack, and the participating prime brokers and lead shorts are fairly consistent as well.

Typical tactics include the following:

Flooding the offer side of the board — Ultimately the price of a stock is found at the balance point where supply (offer) and demand (bid) for the shares find equilibrium. This equation happens every day for every stock traded. On days when more people want to buy than want to sell, the price goes up, and, conversely, when shares offered for sale exceed the demand, the price goes down.

The shorts manipulate the laws of supply and demand by flooding the offer side with counterfeit shares. They will do what has been called a short down ladder. It works as follows: Short A will sell a counterfeit share at $10. Short B will purchase that counterfeit share covering a previously open position. Short B will then offer a short (counterfeit) share at $9. Short A will hit that offer, or short B will come down and hit Short A’s $9 bid. Short A buys the share for $9, covering his open $10 short and booking a $1 profit. By repeating this process the shorts can put the stock price in a downward spiral. If there happens to be significant long buying, then the shorts draw from their reserve of “strategic fails-to-deliver�  and flood the market with an avalanche of counterfeit shares that overwhelm the buy side demand. Attack days routinely see eighty percent or more of the shares offered for sale as counterfeit. Company news days are frequently attack days since the news will “mask�  the extraordinary high volume. It doesn’t matter whether it is good news or bad news.
Flooding the market with shares requires foot soldiers to swamp the market with counterfeit shares. An off-shore hedge fund devised a remarkably effective incentive program to motivate the traders at certain broker dealers. Each trader was given a debit card to a bank account that only he could access. The trader’s performance was tallied, and, based upon the number of shares moved and the other “success�  parameters, the hedge fund would wire money into the bank account daily. At the end of each day, the traders went to an ATM and drew out their bribe. Instant gratification.

Global Links Corporation is an example of how wholesale counterfeiting of shares will decimate a company’s stock price. Global Links is a company that provides computer services to the real estate industry. By early 2005, their stock price had dropped to a fraction of a cent. At that point, an investor, Robert Simpson, purchased 100%+ of Global Links’ 1,158,064 issued and outstanding shares. He immediately took delivery of his shares and filed the appropriate forms with the SEC, disclosing he owned all of the company’s stock. His total investment was $5205. The share price was $.00434. The day after he acquired all of the company’s shares, the volume on the over-the-counter market was 37 million shares. The following day saw 22 million shares change hands — all without Simpson trading a single share. It is possible that the SEC has been conducting a secret investigation, but that would be difficult without the company’s involvement. It is more likely the SEC has not done anything about this fraud.

Massive counterfeiting can drive the stock price down in a matter of hours on extremely high volume. This is called “crashing�  the stock and a successful “crash�  is a one-day drop of twenty-percent or a thirty-five percent drop in a week. In order to make the crash “stick�  or make it more effective, it is done concurrently with all or most of the following:

Media assault — The shorts, in order to realize their profit, must ultimately purchase real shares at a price much cheaper than what they shorted at. These real shares come from the investing public who panics and sells into the manipulation. Panic is induced with assistance from the financial media.
The shorts have “friendly�  reporters with the Dow Jones News Agency, the Wall Street Journal, Barrons, the New York Times, Gannett Publications (USA Today and the Arizona Republic), CNBC and others. The common thread: A number of the “friendly�  reporters worked for The Street.com, an Internet advisory service that hedge-fund managers David Rocker and Jim Cramer owned. This alumni association supported the short attack by producing slanted, libelous, innuendo laden stories that disparaged the company, as it was being crashed.

One of the more outrageous stories was a front-page story in USA Today during a short crash of TASER’s stock price in June 2005. The story was almost a full page and the reporter concluded that TASER’s electrical jolt was the same as an electric chair — proof positive that TASERs did indeed kill innocent people. To reach that conclusion the reporter over estimated the TASER’s amperage by a factor of one million times. This “mistake�  was made despite a detailed technical briefing by TASER to seven USA Today editors two weeks prior to the story. The explanation “Due to a mathematical error�  appeared three days later — after the damage was done to the stock price.

Jim Cramer, in a video-taped interview with The Street.com, best described the media function:
When (shorting) … The hedge fund mode is to not do anything remotely truthful, because the truth is so against your view, (so the hedge funds) create a new ‘truth’ that is development of the fiction… you hit the brokerage houses with a series of orders (a short down ladder that pushes the price down), then we go to the press. You have a vicious cycle down — it’s a pretty good game.
This interview, which is more like a confession, was never supposed to get on the air, however, it somehow ended up on YouTube. Cramer and The Street.com have made repeated efforts, with some success, to get it taken off of YouTube.

Analyst Reports — Some alleged independent analysts were actually paid by the shorts to write slanted negative ratings reports. The reports, which were represented as being independent, were ghost written by the shorts and disseminated to coincide with a short attack. There is congressional testimony in the matter of Gradiant Analytic and Rocker Partners that expands upon this. These libelous reports would then become a story in the aforementioned “friendly�  media. All were designed to panic small investors into selling their stock into the manipulation.

Planting moles in target companies — The shorts plant “moles�  inside target companies. The moles can be as high as directors or as low as janitors. They steal confidential information, which is fed to the shorts who may feed it to the friendly media. The information may not be true, may be out of context, or the stolen documents may be altered. Things that are supposed to be confidential, like SEC preliminary inquiries, end up as front-page news with the short-friendly media.

Frivolous SEC investigations — The shorts “leak�  tips to the SEC about “corporate malfeasance�  by the target company. The SEC, which can take months processing Freedom of Information Act requests, swoops in as the supposed “confidential inquiry�  is leaked to the short media.
The plethora of corporate rules means the SEC may ultimately find minor transgressions or there may be no findings. Occasionally they do uncover an Enron, but the initial leak can be counted on to drive the stock price down by twenty-five percent. The announcement of no or little findings comes months later, but by then the damage that has been done to the stock price is irreversible. The San Francisco office of the SEC appears to be particularly close to the short community.

Class Action lawsuits — Based upon leaked stories of SEC investigations or other media exposes, a handful of law firms immediately file class-action shareholder suits. Milberg Weiss, before they were disbanded as a result of a Justice Department investigation, could be counted on to file a class-action suit against a company that was under short attack. Allegations of accounting improprieties that were made in the complaint would be reported as being the truth by the short friendly media, again causing panic among small investors.
Interfering with target company’s customers, financings, etc. — If the shorts became aware of clients, customers or financings that the target company was working on, they would call and tell lies or otherwise attempt to persuade the customer to abandon the transaction. Allegedly the shorts have gone so far as to bribe public officials to dissuade them from using a company’s product.

Pulling margin from long customers — The clearinghouses and broker dealers who finance margin accounts will suddenly pull all long margin availability, citing very transparent reasons for the abrupt change in lending policy. This causes a flood of margin selling, which further drives the stock price down and gets the shorts the cheap long shares that they need to cover.

Paid bashers — The shorts will hire paid bashers who “invade�  the message boards of the company. The bashers disguise themselves as legitimate investors and try to persuade or panic small investors into selling into the manipulation.

This is not every dirty trick that the shorts use when they are crashing the stock. Almost every victim company experiences most or all of these tactics.

How Pervasive Is This? — At any given point in time more than 100 emerging companies are under attack as described above. This is not to be confused with the day-to-day shorting that occurs in virtually every stock, which is purportedly about thirty percent of the daily volume.
The success rate for short attacks is over ninety percent – a success being defined as putting the company into bankruptcy or driving the stock price to pennies. It is estimated that 1000 small companies have been put out of business by the shorts. Admittedly, not every small company deserves to succeed, but they do deserve a level playing field.

The secrecy that surrounds the shorts, the prime brokers, the DTC and the regulatory agencies makes it impossible to accurately estimate how much money has been stolen from the investing public by these predators, but the total is measured in billions of dollars. The problem is also international in scope.

Who Profits from this Illicit Activity? — The short answer is everyone who participates. Specifically:
The shorts — They win over ninety percent of the time. Their return on investment is enormous because they don’t put any capital up when they sell short — they get cash from the sale delivered to their account. As long as the stock price remains under their short sale price, it is all profit on no investment.

The prime brokers — The shorts need the prime brokers to aid in counterfeiting shares, which is the cornerstone of the fraud. Not only do the prime brokers get sales commissions and interest on margin accounts, they charge the shorts “interest�  on borrowed shares. This can be as high as five percent per week. The prime brokers allegedly make eight to ten billion dollars a year from their short stock lend program. The prime brokers also actively short the victim companies, making large trading profits.

The DTC — A significant amount of the counterfeiting occurs at the DTC level. They charge the shorts “interest�  on borrowed shares, whether it is a legitimate stock borrow or counterfeit shares, as is the case in a vast majority of shares of a company under attack. The amount of profit that the DTC receives is unknown because it is a private company owned by the prime brokers

The Cover Up — The securities industry, certain “respected�  members of corporate America who like the profits from illegal shorting, certain criminal elements and our federal government do not want the public to become aware of this problem.

The reason for the cover up is money.
Everyone, including our elected officials, gets lots of money. Consequently there is an active campaign to keep a lid on information. The denial about these illegal practices comes from the industry, the DTC, the SEC and certain members of Congress. They are always delivered in blanket generalities. If indeed there is no problem, as they claim, then why don’t they show us the evidence instead of actively and aggressively fighting or deflecting every attempt at obtaining information that is easily accessible for them and impossible for companies and investors? Accusers are counter attacked as being sour-grapes losers, lunatics or opportunistic lawyers trying to unjustly enrich themselves. Death threats are not an unheard of occurrence, although it doesn’t appear that anyone has been “whacked�  so far.

The securities industry counters with a campaign of misinformation. For example, they proudly pointed out that only one percent of the dollar volume of listed shares are fails-to-deliver. What they don’t mention:
that the fails-to-deliver are concentrated in companies being attacked for companies under attack, for every disclosed fail-to-deliver there maybe ten to forty times that number of undisclosed counterfeit shares
companies under attack have seen their stock price depressed to a small fraction of the price of an average share, therefore the fails-to-deliver as a percentage of number of shares is considerably higher than as a percentage of dollar volume the examples cited are limited to listed companies, but much of the abuse occurs in the over the counter market, regional exchanges and on unregulated foreign exchanges that allow naked shorting of American companies, who are not even aware they are traded on the foreign exchanges.

Why does this continue to happen? It is no accident that the most pervasive financial fraud in the history of this country continues unabated. The securities industry advances its agenda on multiple fronts:
The truth about counterfeiting remains locked away with the perpetrators of the fraud. The prime brokers, hedge funds, the SEC and the DTC are shrouded in secrecy. They actively and aggressively resist requests for the truth, be it with a subpoena or otherwise. Congressional subpoenas are treated with almost as much disdain as civil subpoenas.

The body of securities law at the federal level is so stacked in favour of the industry that it is almost impossible to successfully sue for securities fraud in federal court.

For example, in a normal fraud case, a complaint can be filed based upon “information and belief�  that a fraud has been committed. The court then allows the plaintiff to subpoena evidence and depose witnesses, including the defendants. From this discovery, the plaintiff then attempts to prove his case. Federal securities fraud cases can’t be filed based upon “information and belief� ; you must have evidence first in order to not have the complaint immediately dismissed for failure to state a cause of action. This information is not available from the defendants (see above) without subpoenas, but you can’t issue a subpoena because the case gets dismissed before discovery is opened.

This is only one example of the terrible inequities that exist in federal securities law. The SEC is supposed to protect the investing public from Wall Street predators. While the vast majority of SEC staffers are underpaid, overworked, honest civil servants, the top echelons of the SEC frequently end up in high-paying Wall Street jobs. The five-person Board of Governors, who oversee the SEC, is dominated by the industry. The governors are presidential appointees and the industry usually fills three slots, frequently including the chairmanship. For those rare occasions when the SEC prosecutes an industry insider, the cases almost never go to a judgment or a criminal conviction. The securities company settles for a fine and no finding of guilt. The fine, which may seem like a large sum, is insignificant in the context of an industry that earned 35 billion dollars in 2006. Fines, settlements and legal expenses are just a cost of doing business for Wall Street.

The root cause of the impossibly skewed federal laws and the ineffectiveness of the SEC and other regulatory bodies rests squarely with our elected officials. The securities industry contributes heavily to both parties at the presidential and congressional levels. As long as the public is passive about securities reform, our elected officials are happy to take the money, which at the federal level was 65 million dollars in 2006.
The Democrats swept into power with a promise of ethics reform. Their majority in congress allowed Christopher Dodd (D-CT) to ascend to the chairmanship of the Senate Banking Committee, which regulates the securities industry. His largest single contributor ($175,400) in the first quarter of 2007 was (employees of) SAC Capital, a very aggressive short hedge fund. Are we surprised that Dodd has opposed additional regulation of hedge funds. They are virtually unregulated.

Some states have their own securities laws and their own enforcement arm. Certain states including Connecticut, Illinois, Utah, Louisiana and others, have begun active enforcement of their own laws. The state laws are not nearly as pro industry as federal laws and plaintiffs are having success.
To thwart this, the industry with the support of the SEC, is attempting to have the federal court system and federal agencies, be the sole venue for securities matters. The SEC is working hand in hand with the industry to advance this theory of federal preemption, which would put all securities matters under federal law, all litigation in federal courts, and all enforcement with the SEC.

The following are recent examples of how the SEC is advancing the industry agenda:
The San Francisco office of the SEC issued subpoenas to various short friendly media outlets after congressional hearings about David Rocker and Gradient Analytic. This investigation into the media involvement with the shorts was ended by the chairman of the SEC, Christopher Cox, who withdrew the subpoenas, apparently concluding that the First Amendment right to free speech protected participants in an alleged stock manipulation. Jim Cramer ripped up his subpoena on his television show, thumbing his nose at the SEC.

In early 2007, the SEC completely exonerated Gradient, citing Gradient’s First Amendment rights. The Nevada Supreme court heard a case captioned Nanopierce vs. DTCC. Nanopierce is an emerging company that was attacked by the shorts and subjected to massive counterfeiting of their stock by the DTCC. This state court case is close to opening discovery against the DTCC, so the industry is attempting to kill the lawsuit by arguing it should be in federal court — where it will be DOA. The SEC showed up as a friend of the defendant DTCC, and filed a brief in support of the DTCC efforts to remove the case to the federal court system. Both houses of the Utah legislature passed a bill that required daily disclosure of fails-to-deliver, including identifying specific companies and the specific broker dealer positions in that company. The bill also outlawed naked shorting of companies domiciled in Utah. The industry threatened litigation based upon federal preemption and backed the state down. The bill was not signed into law.

A bill was introduced to the Arizona legislature that required disclosure similar to the Utah bill, but without the illegal naked shorting provision. This is the same information that the DTC confidentially provides to the SEC. Certain prime broker’s lobbying effort allegedly managed to get the bill killed in committee. The industries efforts to curtail state authority, is an effort to draw all securities matters under the federal umbrella, where small investors don’t have a chance of obtaining justice.

In February 2007 the SEC determined that the hedge fund industry did not require any additional regulation — they are virtually unregulated. This may be the height of arrogance.

Sources — Information used was obtained from public records; the SEC; the Leslie Boni Report to the SEC on shorting; evidence and testimony in court proceedings; conversations with attorneys who are involved in securities litigation; former SEC employees; conversations with management of victim companies; and first hand experience as investors in companies that have suffered short attacks. This web site is sponsored by Citizens for Securities Reform.

What to Do? — Many of our elected officials at the federal and state level do not understand most of what is contained in this paper. They must come to understand this fraud, and, more importantly, understand that their constituents are angry.
Pass this information to everyone you know — put it in the public conscience. Then the citizenry needs to engage in a massive letter-writing campaign. Feel free to attach this report. Make sure your elected officials, at the federal level and state level know how you feel. Ultimately, votes in the home district will trump money from the outside.

United States Attorney General for each State needs to Investigate these Federal Court Charges against SEC

I am writing you today as a citizen of the United States and ask you to investigate fraud and property theft in regards to my purchase and ownership of stock in a company named CMKM Diamonds, Inc., (CMKX). For over 7 years, I have been misled and lied to by every government and financial agency that I have asked for help and information.

The information presented to me is about 5-6 years ago, our company and stock was used as a vehicle by U.S. government agencies, including the CIA, FBI, SEC, DOJ and the Department of Homeland Security, under the auspices of Mr. Robert Maheu, to conduct an operation in the stock market to entrap those entities which were using our equities trading system for illegal purposes, including gathering funds for terrorism.

In exchange for using our company this way, unbeknownst to any shareholder, Mr. Maheu reached an agreement with these same government agencies that monies and damages that he collected from these criminals were to be distributed to CMKX Diamonds, Inc. shareholders. Mr. Maheu agreed to allow the SEC to maintain control of these funds, which were to be released in 2006. As of this letter, 4 years later, we shareholders sit with nothing. I am writing you today to ask you to launch an investigation as to why our funds are still being held..Our funds have supposedlynow been tied into a fund called the World Global Settlements, which is being controlled by the U.S Government.

Attorney A. Clifton Hodges of Pasadena, CA, 626-564-9797, has filed the largest lawsuit ever in U.S.federal court, a 3.87 trillion dollar Bivens action regarding this matter. He has stated clearly in this court that the shareholder funds are being held at the Depository Trust and Clearing Corporation (DTCC).

I would like you to investigate the following: 1) fraud-based upon the fact that my investment was used by the government, without my knowledge, to conduct this operation and I was damaged by that action. 2) The theft of personal property-the monies and funds that were collected on my behalf as a shareholder have not been distributed to me and are being illegally held by the U.S. government and other entities.

The right to have these answers is governed by the consumer laws of this state. I look forward to you contacting me and helping me reach a conclusion in this matter.

Sincerely,
Richard – SiriusNews
AKA – the REF

The CMKX Shareholders Coalition for Justice (Coalition) respectfully submits to the court that the Coalition seeks relief from filing an administrative claim with the Securities and Exchange Commission (SEC) in the case: CMKX Shareholders Coalition for Justice, Plaintiff and The US Securities and Exchange Commission, Defendant. The Coalition has submitted evidence that shows that the SEC has covered up its ineptness and corruptness in the aforementioned case in particular. Furthermore, the Coalition has submitted evidence that shows that the SEC has covered up its ineptness and corruptness in the financial markets in general. During numerous congressional hearings, the members of congress who have questioned various higher-ups of the SEC, have not only proven that employees of the SEC have incessantly failed to perform their sworn/fiduciary duties which are to oversee the securities markets, to enforce the federal securities laws, and to protect investors, they have actually become perpetrators against the very investors whom by law they are mandated to protect.

Furthermore, the Coalition requests that the court immediately take jurisdiction of said case. Unfortunately, the ineptness and corruptness of the SEC continues unabated. Even the United
States Senate has become unwilling to put up with the ineptness and corruptness of the SEC any longer, and therefore has introduced SB605, a bill that would require the SEC to reinstate
the uptick rule and effectively regulate abusive short selling activities -- In other words, said bill would force the SEC to perform its sworn/fiduciary duties that, by law, it is already mandated to perform. By refusing to enforce the Securities Act of 1933 and the Securities Echange Act of 1934, the SEC has aided and abetted the crime of counterfeiting of the stock market. The SEC purposely allows RULE17A to be contravened daily by those they collude with on Wall Street. The SEC allows billions of shares to be counterfeited daily. Therefore time is of the essence. To put an end to this worldwide fraud, the Coalition demands that the SEC perform its sworn/fiduciary duties and begin to immediately enforce RULE17A as it is mandated to do.

The SEC purposely makes rules, clauses, and exemptions that directly contravenes its constitutional mandate to protect investors, an example of which is the market maker exemption, or the Madoff exemption, which allows mass counterfeiting of the stock market. The SEC purposely created that exemption and the Grandfather Clause to protect the naked shorters and to conceal their illegal naked short sales. These actions by the SEC prove they are not capable of being unbiased. By its corruptness, the SEC facilitates pandemic counterfeiting of the stock market.

The Coalition presents clear evidence the SEC not only broke its constitutional mandate to protect investors, but also engaged in criminal cover-ups in different cases involving counterfeiting of the stock market inn general and CMKM in particular. These cases clearly show the SEC is incapable of being unbiased, as they are protecting their own culpability. The evidence will show that Judge Brenda Murray was directly involved in the cover- ups of both CMKM and Gary Aguirre, who was investigating market wide corruption. The Coalition presents the following examples that clearly show the SEC is incapable of being unbiased, and in fact has been involved in worldwide criminal cover-ups that warrant a Special Prosecutor or International Tribunal to investigate:

Here Rep. Ackerman (D-N.Y.) is referring to the SEC when investigating the cover-up of the Bernie Madoff case, “Your contribution to this proceeding is zero. We thought the enemy was Mr. Madoff. I think it’s you.â€

Senator Charles Grassley (R-Iowa), who spearheaded the investigation (into the Gary Aguirre cover-up) with Specter, said, “[i]t looked like the lawyers for the wrongdoers wrote the decision.† In January 2007, the Senate released a preliminary report. Marcy Gordon of AP News summarized it: “an official review raises serious questions about the Securities and Exchange Commission’s handling of an insider- trading investigation and the possibility of a cover-up amid allegations of political interference….After taking testimony and reviewing thousands of documents, many of them provided by the SEC, the judiciary panel’s preliminary findings show ‘extraordinarily lax enforcement by the SEC and … may even indicate a cover-up by the SEC,’ [Senator Arlen]

Specter said. The SEC’s handling of the matter, including a review of the attorney’s allegations by the agency’s inspector general, has all of the earmarks of the obstruction of justice’, he said.† The Senate’s report stated the following conclusions (emphases in the original): “Staff Attorney Gary Aguirre said that his supervisor warned him that it would be difficult to obtain approval for a subpoena of John Mack due to his ‘very powerful political connections.’ Aguirre’s claim is corroborated by internal SEC emails, including one from his supervisor, Robert Hanson. Hanson also told Aguirre that Mack’s counsel would have ‘juice,’ meaning they could directly contact the Director or an Associate Director of Enforcement. “SEC management delayed Mack’s testimony for over a year, until days after the statute of limitations expired. After Aguirre complained about his supervisor’s reference to Mack’s ‘political clout,’ SEC management offered conflicting and shifting explanations. “The SEC fired Gary Aguirre after he reported his supervisor’s comments about Mack’s ‘political connections,’ despite positive performance reviews and a merit pay raise.

“After being contacted by a friend in early September 2005, Associate Director Paul Berger authorized the friend to mention his interest in a job with Debevoise & Plimpton. Although that
was the same firm that contacted the SEC for information about John Mack’s exposure in the Pequot investigation, Berger did not immediately recuse himself from the Pequot probe. Berger ultimately left the SEC to join Debevoise & Plimpton. When initially questioned, Berger’s answers concerning his employment search were less than forthcoming.

“The SEC’s Office of Inspector General failed to conduct a serious, credible investigation of Aguirre’s claims.â€
http://www.deepcapture.com/wall-street-captures-the-sec/

From Investigatethesec.com, the Judge that is referred to in these comments is the same Judge Brenda Murray who colluded to keep vital information out of the CMKM Administrative Hearing,
which directly damaged all shareholders. This evidence would have proved the SEC colluded with the previous CMKM management that masterminded the pump and dump scam. It would have also disclosed the names of the other brokers that counterfeited CMKM stock, the names of which are still being was covered up. The following is from investigatethesec.com: "Then the agency’s cover-your-@$$ team went into action. An administrative law judge, one Brenda Murray, was assigned to second-guess Kotz’s report (Inspector General of the SEC). Just a few weeks later, her 15-page paper exonerated the two officials who Kotz said should be disciplined. Kotz was shocked and said so publicly.â€

"Now we get to the heart of the agency’s double-dealing. As Senator Specter stated, Brenda Murray “was described in press accounts as an administrative law judge, and it was not until
further inquiry that the SEC admitted she was not acting in a judicial capacity in issuing her decision.† In short, the agency picked a loyal staffer who happened to have the title
“administrative law judge† and had her exonerate the officials who had been sharply criticized by the Senate committees and by the inspector general. But she was not acting as a judge at all
— just a soldier taking orders.

"Murray’s quickie report “was completely irregular in every detail,† says Aguirre. “It was outside the jurisdiction of an administrative law judge. The SEC pulled a scam.â€

"In the same report in which she cleared Aguirre’s nemeses, Brenda Murray vindicated an agency official who closed an investigation into the derivatives dealings of Wall Street’s
Bear Stearns in 2007. Early the next year, the Wall Street firm was rescued from bankruptcy when it was forced into J.P. Morgan, backed by $29 billion of federal money. Bear’s derivatives
gambling was to blame. The agency missed it and then exonerated itself. And the agency is going to look into whether it did its job properly in the Madoff case? Come now."

http://www.investigatethesec.com/drupal-5.5/?q=node/567

The following are examples from the Bernie Madoff cover-up. The SEC is currently being sued by Madoff Victims by Howard Elisofon for their negligence in this case:

Referring to the SEC in the Madoff case, Rep. Ackerman (D-N.Y.) “Your contribution to this proceeding is zero. We thought the enemy was Mr. Madoff. I think it’s you.† From whistle blower Harry Markopolos

“FINRA is definitely in bed with the industry.† Asked later by Rep. Kanjorski about those comments as well as which one Markopolos thought was better, “a corrupt regulator or an
incompetent one,† Markopolos answered, “I’d give the SEC an A+ for incompetence and FINRA an A+ for corruption.

The current head of the SEC, Mary Shapiro, was head of FINRA, and who Harry Markopolos said was in bed with the industry. She was also a dear friend of Bernie Madoff. According to Bernie Madoff: Madoff also told Kotz that SEC Chairwoman Mary Schapiro was a “dear friend,† although she “probably thinks, ‘I wish I never knew this guy.’â€

http://www.sec.gov/news/studies/2009/oig-509/exhibit-0104.pdf


One last example, from literally hundreds the Coalition could use, is the Global links cover up by the SEC. It is linked directly to CMKM as at least one of the perpetrators in this case was a perpetrator in CMKM’s case. The connection is also evident in the fact that it is the SEC’s modus operandi to go after the victim company, as they did in CMKM’s case, EagleTech’s case, and in the cases of thousands of other victim companies who got their companies de-registered by the SEC. David Patch’s Freedom of Information Act data is in the sanity check link below:

According to Mark Faulk, CEO of CMKM Diamonds at the time:

“Now, Dave Patch has received, through the Freedom of Information Act, SEC records confirming that over ten million counterfeit shares of Global Links stock were dumped into the market immediately after the company did a reverse split and reduced the total share count to just over one million real bshares. The brokers sold millions upon millions of fake shares, and the SEC covered it up.

“The SEC knew, they were fully aware of the Global Links situation, and they covered it up. In fact, while they allowed brokers to sell millions upon millions of counterfeit shares,they were busy investigating Global links-trying to discredit the company itselfâ€

http://www.faulkingtruth.com/Articles/Commentary/1064.html

Per Bob O’Brien: “The SEC ignored Bennett's instruction to Donaldson to look into Global Links and figure out what was going on. We could just pretend that it wasn't being discussed for many months afterthat Senate Banking Committee hearing…Demand a special prosecutor, now. Enough is enough. "The evidence is clear on this one, and presidents have seen impeachment headlines over far less. If the SEC is violating its mandate to act in the public interest and protect investors to this degree, it deserves to be dismantled, and the Justice Department brought in to put the cuffs on those responsible.â€

http://www.thesanitycheck.com/Portals/0/Patch.pdf

In conclusion, the Coalition respectfully requests that the court grant it relief in filing an administrative claim to the SEC and further requests that the court immediately take
jurisdiction of said case to ensure that future damages are mitigated. Moreover, the Coalition respectfully requests that the court take emergency action to prevent future losses by
individual investors who are the unwitting victims of worldwide illegal naked short selling.