Deep Capture Forums

Could receiving preferred dividends cause the naked shortman to cover.

I think the company said that the preferred dividends will pay 3% interest, maybe that is their plan to get the shortman.

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 alledging crimes under the RICO Act Investors Hub & Its owners Charged in a 18:1962 Racketeering (RICO) Act Complaint.

Around blog sites all ove rthe internet there are allegations of arrogance, stuidity and narcissism, many complain of a wide variety of treatment they beleive was aimed at Ivestorshub furthering their criminal ambitions, ie 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 (instumental in the criminal manipulation).

 

Posted by Shayne Heffernan on May 23rd, 2009 and filed under Equities, Markets. You can follow any responses to this entry through the RSS 2.0. You can leave a response by filling following comment form or trackback to this entry from your site
3 Responses for “Investorshub Charges Spark New Allegations on the Web��
MarketInsider says:
August 26, 2009 at 7:55 pmGood report in exposing apparently grievous violations of trust by individuals looking to profit in any way necessary..Thanks for that !

Looks like ‘INVESTORS HUB’
investors/bloggers should always consider taking anything reported on that site, with a grain of skepticism..1

Log in to Reply Shayne Heffernan says:
January 28, 2010 at 3:17 pmMina Mar Group Wins Slander Lawsuit Against the Investors Hub

TORONTO, Jan. 22 /PRNewswire-FirstCall/ – Mina Mar Group Inc.  and Mina Mar Marketing Group inform the public that the courts ruled in the favour of Mina Mar Group in slander lawsuit against Investors Hub.

Mr. Justice Belobaba, Ontario Superior Court Of Justice awarded judgment in favor of Mina Mar Group, and awarded $75,000 in general damages, $10,000 in punitive damages and $20,000 for the trial costs to the company.

This was never about the money but rather principle. These stock bashers should not be allowed to destroy other peoples reputations and businesses with slanderous and malicious posts on the Internet

Mina Mar Group wishes to quote some key declarations of the court:

“4… THIS COURT ORDERS that all negative, defamatory and libellous
postings, made by Posters and members of Investors Hub.Com Inc web site are
untrue and are and were made without any foundation nor basis for any of their
content

5… THE COURT ORDERS THAT the Defendants, Robert Zumbrunnen, Matt Brown
and InvestorsHub.com Inc. apologize and publicly retract the libelous
statements made against the Plaintiffs and that they shall send their signed
retraction to the Plaintiffs and publish the same on the web site,
InvestorsHub.com

6. THIS COURT ORDERS that Robert Zumbrunnen, Matt Brown and
InvestorsHub.com Inc. provide the names and addresses of the following of its
members and posters:
Stratey, itlogic, Jim Bishop, Janice Shell, Universal Trader, Rtso,

Mina Mar Group recently introduced the “Get the Facts Right��  statement to our clients, which we remind all of our clients’ shareholders to review before taking any advice from a stock board chat room. Most advisors have hidden agendas and prey on the unsuspecting.

Get the Facts Right. The issuer works hard to continue to keep our shareholders informed, and news is updated frequently via Press Releases, Pink Sheet filings, and updates to our websites. Other websites not sponsored, or recognized by the Company may provide misleading or disinformation to investors in order to manipulate trading patterns for a given stock. Always look for original content from trusted sources, rather than relying on ‘excerpts’ or discussion boards that may not give you the whole story. The Securities and Exchange Commission requires financial institutions or brokerage firms to provide their clients with documentation, describing the risks of investing in penny stocks.

Vigorous enforcement of the court order including motions for contempt of court for any non compliance will commence shortly in Florida.

ABOUT Mina Mar Group:

Mina Mar Group (MMG) is a corporate consultancy firm that specializes in small cap or OTC market business services, including public markets in Frankfurt, Germany, and UK. Our focus is on growth companies or emerging markets such as those in South America, Eastern Europe, and Mainland China. We provide our clients with comprehensive advisory, and consulting services regarding mergers and acquisitions, including reverse mergers of private companies into publicly traded entities, and special purpose companies (SPC) offshore. MMG also offers a full suite of related ancillary services subsequent to the successful completion of a reverse merger, including private placements, PIPE offerings and Pink Sheets Adequate Disclosure documentation, various SEC regulatory filings and a broad range of other corporate governance matters. We license our brand name and back office as a white label solution which allows professionals in the industry to tap into the MMG back office to deliver high quality solutions on a private label basis. We also operate a small shareholders’ advocacy division which seeks out publicly traded companies in distress or where the minority shareholders’ positions are in peril, and assists as a guardian with interim and or turn-around management. Through its wholly owned subsidiary, Mina Mar marketing Group MMMG we offer publicly traded companies services such as investor Relations, and investor awareness.

The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. The owner, publisher, editor and their associates are not responsible for errors and omissions. They may from time to time have a position in the securities mentioned herein and may increase or decrease such positions without notice. Any opinions expressed are subject to change without notice. MMG encourages readers and investors to supplement the information in these reports with independent research and other professional advice. All information on featured companies is provided by the companies profiled, or is available from public sources and MMG makes no representations, warranties or guarantees as to the accuracy or completeness of the disclosure by the profiled companies or the information contained herein. MMG and its affiliates are not registered investment advisors or broker-dealers. MMG has been advised that the investments in companies profiled are considered to be high risk and use of the information provided is at the investor’s sole risk. MMG also advises that the purchase of such high risk securities may result in the loss of some or all of the investment. Investors should not rely solely on the information presented. Rather, investors should use the information provided by the profiled companies as a starting point for doing additional independent research on the profiled companies in order to allow the investor to form his or her own opinion regarding investing in the profiled companies. Factual statements made by the profiled companies are made as of the date stated and are subject to change without notice. Investing in micro-cap securities is highly speculative and carries an extremely high degree of risk. It is possible that an investor’s entire investment may be lost or impaired due to the speculative nature of the companies profiled. MMG makes no recommendation that the securities of the companies profiled should be purchased, sold or held by individuals or entities that learn of the profiled companies through MMG. MMG owners may or may not hold positions in the companies that are profiled. The information contained herein contains forward-looking information within the meaning of Section 27A of the Securities Act of 1993 and Section 21E of the Securities Exchange Act of 1934 including statements regarding expected continual growth of the company and the value of its securities. In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 it is hereby noted that statements contained herein that look forward in time which include everything other than historical information, involve risk and uncertainties that may affect the company’s actual results of operation. Factors that could cause actual results to differ include the size and growth of the market for the company’s products, the company’s ability to fund its capital requirements in the near term and in the long term, pricing pressures, unforeseen and/or unexpected circumstances in happenings, pricing pressures, etc. Investing in securities is speculative and carries risk. Past performance does not guarantee future results.

BMFL

next week(s) is here

Last edited by Bull Finch (2010-08-25 13:33:53)

DTCC has played there usual part in this, hiding the tracks!


Naked Short Selling now dominates the OTC markets, having been blamed by most for monument collapses during the financial crisis, the SEC attempted to, but failed to control the process.

Naked Short Sellers focus in companies they feel are “destroyable† normally this is a company that uses their market to raise capital, the case of many Pink Sheet and OTC businesses, so it is no surprize to see that naked shorting is at an all time high.

The Naked Short Sellers move in removing any chance of small companies gaining access to any form of reasonable funding by selling the stock short, effectively increasing the float, and using the basic rules of supply and demand changing the very nature of the companys market and market price.

Many of the positive runs forward of small companies in the last 6 months have been destroyed by short sellers, when in the past the small companies could have taken advantage of improved market valuation, raised funds and moved their business models to the next level.

The chances of a small company now making it out of the woods on to a main board are limited at best.

Naked short selling was clearly the end of great companies like Lehnam’s, Bear Stearns.

If you have any doubts you should take a look at sites like:

And I am not alone in this opinion

For more than two years, playing the blame game has become a popular pastime among Wall Street pundits. Who bears the most responsibility for the market crash? Was it the politicians, who egged on lenders and investment bankers to take foolish risks in the name of policy goals like widespread home ownership? Or was it the bankers’ greed that triggered the near cataclysm?

One argument that the bankers themselves, along with many in the regulatory community, can readily accept is that ruthless and unscrupulous short-sellers must take a big share of the blame for the collapse of both Bear Stearns and Lehman Brothers.

Mention the names of certain hedge funds or noted short-sellers in front of former senior figures at either firm, and watch their demeanor transform instantly from calm and well-spoken to vituperative. “They brought us down,† one senior player at Lehman Brothers told StreetWise only months after the investment bank was forced to file for bankruptcy court protection.

With Lehman’s bankruptcy court proceedings still underway, it came as little surprise to find the investment bank’s estate alleging in filings last week that Och-Ziff Capital Management was part of a plan to spin false rumors about Lehman in the months and weeks leading up to its collapse.

The subtext: If it weren’t for these deliberate malicious efforts by short-sellers to spread rumors, the investment bank would have stood a better chance of survival. (Among other targets of the wrath of the late Lehman and its estate is JPMorgan Chase. The Lehman side alleges the bank denied Lehman access to liquidity at crucial stage for reasons that went beyond the commercial requirements, a claim that JPMorgan Chase denies.)

Short-sellers aren’t a popular breed on Wall Street. When times are good, they are the naysayers, the people who look for the worm in the apple. And unlike regulators, who (when they are doing their job properly) are performing the same task in hopes of making the markets function more efficiently or tackling malfeasance, short-sellers just want to make money from the stupidity or misfortune of others. Celebrating (or envying) others’ success is part of the American way. Profiting from another’s misery, however, is seen as slightly less than respectable.

The unpalatable truth is that short-sellers serve a vital function in the financial markets, just as vultures do in removing carrion. No short-seller deliberately decides to bet against a powerful financial firm by shorting its stock for the fun of it.

A firm that decides to establish a short position usually does so in the wake of significant research—research that can often be more intensive than that conducted by long-only investors. After all, the latter stand only to use the sum they have invested while the rules of short selling mean that if the hedge fund shorting a stock gets their thesis wrong, it could end up in a short squeeze with losses many times the size of that original bet.

Not only do the “shorts† force the true believers to question their assumptions about a firm’s health and stability, they provide additional liquidity to the markets. “Without the hedge funds that short just aggressively as they will go long, it would be a lot harder or more expensive for other market participants to do what they want to do in the markets,† argues one veteran trader.

In the aftermath of the financial crisis, even former Bear Stearns CEO Jimmy Cayne had to admit to the Financial Crisis Inquiry Commission that his firm had substantial financial issues that would have led to its near collapse in the long term. His comments to the commissioners, in response to questions, seemed to confirm that to the extent that short-sellers had any impact on the investment bank’s demise, it was only in determining its timing. Naked short selling—the practice of selling stock that the short-seller doesn’t own and hasn’t borrowed to sell—may have pushed the bank over the edge, but it walked all the way to the cliff under its own steam.

The debate over whether and how to rein in short selling has lost no momentum in the years that have elapsed since the collapse of Bear and Lehman. But the real problem isn’t short selling, whether naked or fully-dressed in pinstriped suits.

Rather, it’s market manipulation. When Lehman’s estate tries to understand what hedge funds like Steve Cohen’s SAC Capital, Greenlight, or Och-Ziff were up to, that’s what they are really griping about. It’s not the fact of the short sale, but the rumormongering. And banning particular kinds of transactions—even the extremely risky practice of naked shorting—won’t fix that problem.

That didn’t stop the German government from trying, of course. Last May, it imposed an overnight ban on naked shorting of bonds, stocks of German companies, and credit default swaps on bonds issued by European Union governments in the midst of the efforts to bail out Greece and somehow stop the Euro from melting down. This month, the International Monetary Fund issued a report card on that ban. Rather than making the markets function better, the IMF concluded, “market efficiency and quality in fact deteriorated substantially.† Nor did it help put a floor underneath asset prices.

Meanwhile, Shang Fulin, head of the China Securities Regulatory Commission, sent a signal to the North American and European markets that if they were going to crack down on short selling, China may be willing to step into any void that is left.

Shang told a financial group in Shanghai last June that the country plans to expand margin trading, short selling, and the use of financial derivatives—a reminder to regulators elsewhere that attempts to rein in speculation are likely to be fruitless without some kind of global agreement.

Restrictions on short selling elsewhere may simply drive a significant amount of trading onto Asian markets, if that is the only place that hedge fund managers can execute their strategies.

Short-sellers—even those who are “naked short-sellers†— may be vultures, but vultures are useful creatures, even in the financial markets. In volatile and sideways-moving markets, investors in funds that are able to sell short have another way to make money. “That’s part of what being nimble is all about,† says one hedge fund trader, who admits that he occasionally shorts stocks he doesn’t own. “Yes, it’s a lot riskier, but that just means I have to have a lot more confidence in my judgment and my research. And if I get it wrong, I pay a much heavier price.â€

The problem isn’t with short selling, per se, but with abusive behavior by some of those short-sellers. The solution, therefore, isn’t to ban short selling, but to better monitor the Wall Street rumor mill, watching for strange moves in asset prices and seeing whether they can be linked to particular short-sellers, strategies, or rumors.

It’s the people, not the trading strategy, that are the real problem. It’s always going to be harder to police what a handful of reckless short-sellers are saying and doing than it is to slap a ban on short selling itself. But it’s the right way to protect the integrity and the efficiency of our financial markets.

Read more: /2010/08/20/wall-street-banks-can-revive-partnership-culture-by-making-top-bankers-
Forbes.comTwo years ago the Securities and Exchange Commission, in the middle of dealing with the worst financial crisis since the Great Depression, slapped a temporary moratorium on short selling in shares of 799 financial companies (well, some of them weren’t so financial, but whatever.) At the same time in Sept. 2008, it opened an investigation into the trading habits of hedge funds, particularly their short selling activities, much to the chagrin of the fund industry.

Nothing has ever come of those investigations, however, and a lawyer for Och Ziff Capital Management said in bankruptcy court Wednesday that it’s because there was nothing to see, after all.  The probe “has gone nowhere because there is nothing,† said Kenneth Bressler, the attorney from Blank Rome who is representing the $26 billion hedge fund Och Ziff in a spat with Lehman’s bankruptcy representatives.

The SEC looked into most major hedge funds and their trading in shares of Lehman, Morgan Stanley, Goldman Sachs, American International Group, and Merrill Lynch, the lawyer said during the hearing. Contacted Thursday, a representative for Bressler said he wouldn’t comment beyond what was said in court.

Since the crisis days, the SEC has been busy slapping fines on Wall Street for misleading disclosures (Citigroup, $75 million, which a judge isn’t too keen on, and Goldman, $550 million) and cracking down on insider trading, but it hasn’t come up with an example to be made of nefarious short selling in bank stocks. It’s  most recent cases involving short selling were brought against two small Los Angeles investment advisory firms in January and another two traders in Florida in May, all four for short selling before a secondary offering.

You’ll recall that back in the worst of the crisis, and even now, the chief executives of major Wall Street firms were crying foul about short-sellers targeting vulnerable financial stocks to make a profit. Lehman’s fallen chief executive, Richard Fuld, blamed short seller for driving Lehman into the ground. Conspiracy theories abounded in the weeks after the March 2008 collapse of Bear Stearns that hedge funds had colluded to drive its stock down.

Vikram Pandit, the chief executive of Citigroup, told a special Congressional panel this March that traders benefit when fear overtakes a market. “That’s the tool that short-sellers need to make money.â€

Still, no smoking gun…yet. In February the SEC voted in new rules restricting short selling activity in stocks that have fallen 10% already.

Lehman’s bankruptcy representatives are tussling with Och Ziff over a document subpoena Lehman sent the fund to get records of its trading. Lehman accuses the fund in court papers of having either received or spread damaging rumors and it wants the bankruptcy court to tell Och Ziff to comply. Och Ziff is resisting the subpoena, saying it is too vague and the document production could cost an onerous $3 million. The judge on Wednesday didn’t make a ruling.

Och Ziff is the only firm to resist Lehman, the fallen Wall Street bank claims. Six subpoenas were sent out. Reuters last week identified some of the other recipients as Greenlight Capital (which famously went negative on Lehman in the fall 2007 and spring 2008), SAC Capital, Citadel Investment Group and Goldman.
Is there an answer?Unless the SEC works with the DTCC and brokers to stop this, then no there is no answer, and given the amount of money involved in total expect those invested in short selling to continue to do so.At Heffernan Inc we have come to realize that it is not a game that can be won on the OTC, in fact they only way around the issue that we could see was to plan a 100% shift to a foreign exchange where there is no naked shorting and was outside the reach of the market makers active in the practice.As the company, BZTG as it is now, Changes to Heffernan Inc we will seek to remove all stock to a new foreign exchange making for a full and complete covering of the short sold stock, it will be interesting to see how that turns out, we think we are on a big winner!Shayne Heffernan

BMFL

next week(s) is here

Posted by: bvickers    Date: Saturday, August 28, 2010 7:02:24 PM 
In reply to: None  Post # of 157263     

NAKED SHORT SELLING DOMINATES THE MARKETS

http://www.livetradingnews.com/naked-sho....rkets-19684.htm

Last Update: August 23, 2010 09:43 ET

NAKED SHORT SELLING DOMINATES THE MARKETS

Naked Short Selling now dominates the OTC markets, having been blamed by most for monument collapses during the financial crisis, the SEC attempted to, but failed to control the process.

Naked Short Sellers focus in companies they feel are “destroyable† normally this is a company that uses their market to raise capital, the case of many Pink Sheet and OTC businesses, so it is no surprize to see that naked shorting is at an all time high.

The Naked Short Sellers move in removing any chance of small companies gaining access to any form of reasonable funding by selling the stock short, effectively increasing the float, and using the basic rules of supply and demand changing the very nature of the companys market and market price.

Many of the positive runs forward of small companies in the last 6 months have been destroyed by short sellers, when in the past the small companies could have taken advantage of improved market valuation, raised funds and moved their business models to the next level.

The chances of a small company now making it out of the woods on to a main board are limited at best.

Naked short selling was clearly the end of great companies like Lehnam’s, Bear Stearns.

If you have any doubts you should take a look at sites like:

http://failstodeliver.com/

And I am not alone in this opinion

Portfolio.com say

For more than two years, playing the blame game has become a popular pastime among Wall Street pundits. Who bears the most responsibility for the market crash? Was it the politicians, who egged on lenders and investment bankers to take foolish risks in the name of policy goals like widespread home ownership? Or was it the bankers’ greed that triggered the near cataclysm?

One argument that the bankers themselves, along with many in the regulatory community, can readily accept is that ruthless and unscrupulous short-sellers must take a big share of the blame for the collapse of both Bear Stearns and Lehman Brothers.

Mention the names of certain hedge funds or noted short-sellers in front of former senior figures at either firm, and watch their demeanor transform instantly from calm and well-spoken to vituperative. “They brought us down,† one senior player at Lehman Brothers told StreetWise only months after the investment bank was forced to file for bankruptcy court protection.

With Lehman’s bankruptcy court proceedings still underway, it came as little surprise to find the investment bank’s estate alleging in filings last week that Och-Ziff Capital Management was part of a plan to spin false rumors about Lehman in the months and weeks leading up to its collapse.

The subtext: If it weren’t for these deliberate malicious efforts by short-sellers to spread rumors, the investment bank would have stood a better chance of survival. (Among other targets of the wrath of the late Lehman and its estate is JPMorgan Chase. The Lehman side alleges the bank denied Lehman access to liquidity at crucial stage for reasons that went beyond the commercial requirements, a claim that JPMorgan Chase denies.)

Short-sellers aren’t a popular breed on Wall Street. When times are good, they are the naysayers, the people who look for the worm in the apple. And unlike regulators, who (when they are doing their job properly) are performing the same task in hopes of making the markets function more efficiently or tackling malfeasance, short-sellers just want to make money from the stupidity or misfortune of others. Celebrating (or envying) others’ success is part of the American way. Profiting from another’s misery, however, is seen as slightly less than respectable.

The unpalatable truth is that short-sellers serve a vital function in the financial markets, just as vultures do in removing carrion. No short-seller deliberately decides to bet against a powerful financial firm by shorting its stock for the fun of it.

A firm that decides to establish a short position usually does so in the wake of significant research—research that can often be more intensive than that conducted by long-only investors. After all, the latter stand only to use the sum they have invested while the rules of short selling mean that if the hedge fund shorting a stock gets their thesis wrong, it could end up in a short squeeze with losses many times the size of that original bet.

Not only do the “shorts† force the true believers to question their assumptions about a firm’s health and stability, they provide additional liquidity to the markets. “Without the hedge funds that short just aggressively as they will go long, it would be a lot harder or more expensive for other market participants to do what they want to do in the markets,† argues one veteran trader.

In the aftermath of the financial crisis, even former Bear Stearns CEO Jimmy Cayne had to admit to the Financial Crisis Inquiry Commission that his firm had substantial financial issues that would have led to its near collapse in the long term. His comments to the commissioners, in response to questions, seemed to confirm that to the extent that short-sellers had any impact on the investment bank’s demise, it was only in determining its timing. Naked short selling—the practice of selling stock that the short-seller doesn’t own and hasn’t borrowed to sell—may have pushed the bank over the edge, but it walked all the way to the cliff under its own steam.

The debate over whether and how to rein in short selling has lost no momentum in the years that have elapsed since the collapse of Bear and Lehman. But the real problem isn’t short selling, whether naked or fully-dressed in pinstriped suits.

Rather, it’s market manipulation. When Lehman’s estate tries to understand what hedge funds like Steve Cohen’s SAC Capital, Greenlight, or Och-Ziff were up to, that’s what they are really griping about. It’s not the fact of the short sale, but the rumormongering. And banning particular kinds of transactions—even the extremely risky practice of naked shorting—won’t fix that problem.

That didn’t stop the German government from trying, of course. Last May, it imposed an overnight ban on naked shorting of bonds, stocks of German companies, and credit default swaps on bonds issued by European Union governments in the midst of the efforts to bail out Greece and somehow stop the Euro from melting down. This month, the International Monetary Fund issued a report card on that ban. Rather than making the markets function better, the IMF concluded, “market efficiency and quality in fact deteriorated substantially.† Nor did it help put a floor underneath asset prices.

Meanwhile, Shang Fulin, head of the China Securities Regulatory Commission, sent a signal to the North American and European markets that if they were going to crack down on short selling, China may be willing to step into any void that is left.

Shang told a financial group in Shanghai last June that the country plans to expand margin trading, short selling, and the use of financial derivatives—a reminder to regulators elsewhere that attempts to rein in speculation are likely to be fruitless without some kind of global agreement.

Restrictions on short selling elsewhere may simply drive a significant amount of trading onto Asian markets, if that is the only place that hedge fund managers can execute their strategies.

Short-sellers—even those who are “naked short-sellers†— may be vultures, but vultures are useful creatures, even in the financial markets. In volatile and sideways-moving markets, investors in funds that are able to sell short have another way to make money. “That’s part of what being nimble is all about,† says one hedge fund trader, who admits that he occasionally shorts stocks he doesn’t own. “Yes, it’s a lot riskier, but that just means I have to have a lot more confidence in my judgment and my research. And if I get it wrong, I pay a much heavier price.†

The problem isn’t with short selling, per se, but with abusive behavior by some of those short-sellers. The solution, therefore, isn’t to ban short selling, but to better monitor the Wall Street rumor mill, watching for strange moves in asset prices and seeing whether they can be linked to particular short-sellers, strategies, or rumors.

It’s the people, not the trading strategy, that are the real problem. It’s always going to be harder to police what a handful of reckless short-sellers are saying and doing than it is to slap a ban on short selling itself. But it’s the right way to protect the integrity and the efficiency of our financial markets.

Read more: http://www.portfolio.com/industry-news/b....s#ixzz0xR3X37UX

Forbes.com

Two years ago the Securities and Exchange Commission, in the middle of dealing with the worst financial crisis since the Great Depression, slapped a temporary moratorium on short selling in shares of 799 financial companies (well, some of them weren’t so financial, but whatever.) At the same time in Sept. 2008, it opened an investigation into the trading habits of hedge funds, particularly their short selling activities, much to the chagrin of the fund industry.

Nothing has ever come of those investigations, however, and a lawyer for Och Ziff Capital Management said in bankruptcy court Wednesday that it’s because there was nothing to see, after all. The probe “has gone nowhere because there is nothing,† said Kenneth Bressler, the attorney from Blank Rome who is representing the $26 billion hedge fund Och Ziff in a spat with Lehman’s bankruptcy representatives.

The SEC looked into most major hedge funds and their trading in shares of Lehman, Morgan Stanley, Goldman Sachs, American International Group, and Merrill Lynch, the lawyer said during the hearing. Contacted Thursday, a representative for Bressler said he wouldn’t comment beyond what was said in court.

Since the crisis days, the SEC has been busy slapping fines on Wall Street for misleading disclosures (Citigroup, $75 million, which a judge isn’t too keen on, and Goldman, $550 million) and cracking down on insider trading, but it hasn’t come up with an example to be made of nefarious short selling in bank stocks. It’s most recent cases involving short selling were brought against two small Los Angeles investment advisory firms in January and another two traders in Florida in May, all four for short selling before a secondary offering.

You’ll recall that back in the worst of the crisis, and even now, the chief executives of major Wall Street firms were crying foul about short-sellers targeting vulnerable financial stocks to make a profit. Lehman’s fallen chief executive, Richard Fuld, blamed short seller for driving Lehman into the ground. Conspiracy theories abounded in the weeks after the March 2008 collapse of Bear Stearns that hedge funds had colluded to drive its stock down.

Vikram Pandit, the chief executive of Citigroup, told a special Congressional panel this March that traders benefit when fear overtakes a market. “That’s the tool that short-sellers need to make money.†

Still, no smoking gun…yet. In February the SEC voted in new rules restricting short selling activity in stocks that have fallen 10% already.

Lehman’s bankruptcy representatives are tussling with Och Ziff over a document subpoena Lehman sent the fund to get records of its trading. Lehman accuses the fund in court papers of having either received or spread damaging rumors and it wants the bankruptcy court to tell Och Ziff to comply. Och Ziff is resisting the subpoena, saying it is too vague and the document production could cost an onerous $3 million. The judge on Wednesday didn’t make a ruling.

Och Ziff is the only firm to resist Lehman, the fallen Wall Street bank claims. Six subpoenas were sent out. Reuters last week identified some of the other recipients as Greenlight Capital (which famously went negative on Lehman in the fall 2007 and spring 2008), SAC Capital, Citadel Investment Group and Goldman.

Is there an answer?

Unless the SEC works with the DTCC and brokers to stop this, then no there is no answer, and given the amount of money involved in total expect those invested in short selling to continue to do so.

At Heffernan Inc we have come to realize that it is not a game that can be won on the OTC, in fact they only way around the issue that we could see was to plan a 100% shift to a foreign exchange where there is no naked shorting and was outside the reach of the market makers active in the practice.

As the company, BZTG as it is now, Changes to Heffernan Inc we will seek to remove all stock to a new foreign exchange making for a full and complete covering of the short sold stock, it will be interesting to see how that turns out, we think we are on a big winner!

Shayne Heffernan www.livetradingnews.com

bmfl

next week(s) is here

FFGO~????

Tuesday, August 10th, 2010

NASDAQ

by Roger Schultz
A new, stock clearing house will open in the U.S. in March that will right many of the wrongs perpetrated by the market makers, brokers, and hedge funds conducting business on the NASDAQ and OTC markets. The NASDAQ OMX has been approved to start the clearing of stocks next month. Currently, 92% of all stocks in the U.S. markets are cleared by the DTC, which is an arm of the Federal Reserve.

The problem for the market makers, brokers, and hedge funds, is all of their NSS (naked short selling) will have to be covered when companies jump to the No Nonsense NASDAQ OMX from the DTC, that for years looked the other way when this practice occurred.

A naked short sell is perpetrated when a buy order is placed by an individual for a stock and a market maker pulls those stocks out of thin air and puts the imaginary stocks into the individuals broker account. This practice has bankrupted countless marginal companies in the last 8 years. Many, if not most market makers are owned by the large banks and brokers on Wall street.

This practice of naked short selling artificially deluded the outstanding shares, making each share worth less causing a death spiral. At this point the brokers and hedge funds sell short, betting that the stock would further decline, which was a no brainer of course.

Almost all of these affected companies did not survive, at least in their original form. However, the companies that did survive this savage market manipulation will soon leave the DTC and join the new clearing house of the NASDAQ OMX. I know of one CEO that spent over 750K of his own money to save his shell OTC company from this type of manipulation and will most likely have a very healthy profit for his troubles.

When this transpires in March, ALL OF THOSE AIR SHARES MUST BE COVERED by the brokers or market makers AND all those hedge fund short sells MUST BE COVERED AS WELL.???

How it eventually affects Pinkies is anyone's guess for now......~NASCOW

BMFL<OD

next week(s) is here

Bull Finch     Share   Friday, August 20, 2010 8:49:25 PM 
Re: Generic post# 1632     Post #  of 1713   

So posts about Patrick Byrne and Mark Faulk

are not allowed, is that because they speak the truth about NSS.
At one time our Founding Fathers were not allowed to speak in public because of the British King.

Tell me, why can't we speak of these two men. Is there something to hide.

BMFL

next week(s) is here

  janice shell     Share   Friday, August 20, 2010 9:03:28 PM 
Re: Bull Finch post# 1635     Post #  of 1713   

That's because this board is not about penny stocks.

And Faulk is long gone. He finally realized that Urbie Casavant was a crook.

  Bull Finch     Share   Friday, August 20, 2010 9:23:00 PM 
Re: janice shell post# 1636     Post #  of 1713   

Then what about Patrick Byrne?

Why can't we speak of him, is HE-WHO-MUST-NOT-BE-NAMED on this board, have something to say that others are afraid to hear. What could he have to say that is so terrifying, that we are not allowed to speak of him.

BMFL

next week(s) is here
  janice shell     Share   Friday, August 20, 2010 9:23:37 PM 
Re: Bull Finch post# 1637     Post #  of 1713   

It's Deep Crapture that's objectionable. It's all about penny stocks.

  Deep Capture     Share   Saturday, August 21, 2010 12:37:06 PM 
Re: janice shell post# 1638     Post #  of 1713   

Ahem...deepcapture.com is about manipulation of major exchange traded stocks. Any references to penny stocks are purely ancillary. I'd like to see you find a example to the contrary.

  basserdan     Share   Saturday, August 21, 2010 1:04:36 PM 
Re: janice shell post# 1638     Post #  of 1713   

<<<It's Deep Crapture that's objectionable. It's all about penny stocks.>>>

No it's not, Janet.... not by a long shot, as this partial list of the titles at the Deep Capture site will attest:


Moral Hazard at the SEC
28 July 2010 by Judd Bagley

When attempting to understand much of what happens at the Securities and Exchange Commission, I believe moral hazard is nearly as important a factor as the much more frequently-discussed matter of regulatory capture.

Read the full story
Posted in Featured Stories, Our Captured Federal Regulator the SEC, The Deep Capture CampaignComments (28)


Notes on David Einhorn: The Predator in a Cute T-Shirt
10 June 2010 by Mark Mitchell

David Einhorn would have you believe that he is brave crusader against corporate malfeasance. The truth is, he's a fraud who did serious damage to the markets.

Read the full story
Posted in Featured Stories, The Mitchell ReportComments (131)


Europe Comes to Terms With Market Manipulation; the SEC and the American Media Bury Heads in the Sand
21 May 2010 by Mark Mitchell

The markets go haywire, Germany responds sensibly, and the American establishment refuses to contemplate the reality of criminal manipulation.

Read the full story
Posted in Featured Stories, The Mitchell ReportComments (120)


On Wall Street, membership has its privileges
13 May 2010 by Judd Bagley

When these two banks enabled manipulative short selling, they were silently transferring wealth from the masses into the accounts of the privileged few.

Read the full story
Posted in Featured StoriesComments (57)


Goldman’s gold has lost its luster
06 May 2010 by Judd Bagley

Goldman may be flush with cash, but with pressure mounting on politicians to reject any of it in the form of campaign contributions, suddenly that cash doesn’t spend nearly as well as it used to.

Read the full story
Posted in Featured Stories, Our Captured Federal Regulator the SEC, The Deep Capture CampaignComments (62)


The SEC and its culture of regulatory capture
29 April 2010 by Judd Bagley

But dig a little deeper and you’ll find the Stanford case is the bigger outrage by far, not so much for the scam itself, but for the shocking behavior of the regulators tasked with preventing it. Where Madoff was enabled by SEC bureaucratic incompetence, Stanford was empowered by overt SEC indifference.

Read the full story
Posted in Featured Stories, Our Captured Federal Regulator the SEC, The Deep Capture CampaignComments (82)


Podcast: Rexxfield repairs online reputations
23 April 2010 by Judd Bagley

Rexxfield founder Michael Roberts specializes in repairing online reputations.

Read the full story
Posted in AntiSocialMedia with Judd Bagley, Deep Capture Podcast, Featured StoriesComments (35)


Goldman Sachs, John Paulson, and the Hedge Funds that Pumped and Dumped Our Economy
20 April 2010 by Mark Mitchell

The Goldman CDO scandal and other evidence suggests that the U.S. economy was set up for a fall by market manipulating hedge funds.

Read the full story
Posted in Featured Stories, The Mitchell ReportComments (78)


Two must-read books for any market reformer
16 April 2010 by Judd Bagley

Regular readers of this blog come from remarkably diverse backgrounds, but seem united by at least one shared experience: the act of having examined some aspect of our capital markets only to conclude that much of what the world has accepted as fundamental simply does not make sense.

Read the full story
Posted in Featured StoriesComments (41)


Manipulating Gold and Silver: A Criminal Naked Short Position that Could Wreck the Economy
02 April 2010 by Mark Mitchell

Naked short selling of gold and silver -- a threat to the stability of the financial system and evidence that our markets are rigged

Read the full story
Posted in Featured Stories, The Mitchell ReportComments (170)

All can be found at:
http://www.deepcapture.com/

  janice shell     Share   Saturday, August 21, 2010 3:18:01 PM 
Re: Deep Capture post# 1639     Post #  of 1713   

I could show you the "example" of a defamatory page about me that is obviously sanctioned by the site

  janice shell     Share   Saturday, August 21, 2010 3:20:18 PM 
Re: basserdan post# 1640     Post #  of 1713   

Naked short selling of gold and silver -- a threat to the stability of the financial system and evidence that our markets are rigged

Is he talking about the futures markets?? I mean, that's what futures trading is about.

  basserdan     Share   Saturday, August 21, 2010 4:00:34 PM 
Re: janice shell post# 1642     Post #  of 1713   

<<<Is he talking about the futures markets?? I mean, that's what futures trading is about.>>>

In that instance, yes he is..... but Deep Capture is definitely not limited to writing about the capture of the futures market regulators of the CFTC, janice, by any means.

Kindly allow me to furnish you the access to answer your question:

http://www.deepcapture.com/manipulating-gold-and-silver-a-criminal-naked-short-position-that-could-wreck-the-economy/

Enjoy the weekend.

  Deep Capture     Share   Saturday, August 21, 2010 4:56:27 PM 
Re: janice shell post# 1641     Post #  of 1713   

There's a lot of content on DeepCapture.com, but you're not mentioned in any post...not once (see for yourself: www.deepcapture.com/?s=janice+shell). So, unless you go by a different name, that's strike two, Ms. Shell (refer to post#1639 to see strike one).

I get the impression you regard yourself as a bit of a player in this silly world of stock message boards, and that may or may not be the case, but one thing I'm sure of is that you've never made it on to our radar.

  janice shell     Share   Saturday, August 21, 2010 4:58:09 PM 
Re: Deep Capture post# 1645     Post #  of 1713   

Must be something wrong with your search engine.

http://www.deepcapture.com/forums/viewtopic.php?id=65

Now that you know about it, I'd appreciate your removing it.

  Deep Capture     Share   Saturday, August 21, 2010 5:14:42 PM 
Re: janice shell post# 1646     Post #  of 1713   

As I suspect you understand, you're referring to the Deep Capture forums, the content of which we neither endorse nor control (outside of requiring that it meet certain standards of decency and not be overtly libelous...which requires that it be untrue).

If you feel something on that thread -- which I have not taken the time to read -- defames you, I encourage you to take one or more of the following steps:
1- Sue the poster for defamation
2- Show me exactly what concerns you, and if you can demonstrate that it's false and damages you and not merely the poster's clearly-stated opinion, I will gladly remove it.

As I understand it, being a new member here I only get to post three times per day, this post being my third. So I won't be able to interact with you here until tomorrow, and frankly I have no intention of spending any more of my weekend on this site. So, please email me your specific concerns at: jbagley@deepcapture.com.

Thanks.

  Bull Finch     Share   Sunday, August 22, 2010 3:09:37 PM 
Re: puppydotcom post# 1651     Post #  of 1713   

I agree there should be zero tolerance

for NAKED SHORTING, and those days are SHORTLY approaching!

BMFL

next week(s) is here

Last edited by Bull Finch (2010-09-28 11:28:56)

basserdan     Share   Wednesday, September 15, 2010 11:34:25 AM 
Re: None     Post #  of 1714   


Naked Short-Sales, OTC Derivatives Face EU Limits

By Ben Moshinsky
September 15, 2010, 10:22 AM EDT

(Updates with comments from hedge-fund group in 15th paragraph.)

Sept. 15 (Bloomberg) -- Naked short-sales of shares and government bonds would be limited and some over-the-counter derivatives trades forced through clearinghouses under European Commission proposals to safeguard financial markets.

Frequent traders of some OTC derivatives in Europe will be forced to use central clearinghouses to close sales, while naked short-sellers would be required to submit proof they can access the underlying security to settle a trade designed to profit from falling prices, under two separate initiatives announced in Brussels today.

“In distressed markets, short selling can amplify price falls, leading to disorderly markets and systemic risks,† Michel Barnier, the European Union’s financial services commissioner, said in an e-mailed statement.

The rules on short-selling would bring the EU closer to the stance taken by Germany, where Chancellor Angela Merkel banned some naked short-selling in May. Merkel and French President Nicolas Sarkozy argued that some bets against stocks and government bonds should be curbed as the Greek debt crisis made markets more volatile.

The EU bill on derivatives clearing is part of a package of laws to strengthen regulation following the worst financial crisis since the Great Depression. The plan is aimed at limiting losses in the event of a default by a major counterparty.

‘Wild West’

“No financial market can afford to remain a Wild West territory,† Barnier said. “OTC derivatives have a big impact on the real economy, from mortgages to food prices.†

The commission, the executive arm of the 27-nation EU, announced the proposals for discussion by the European Parliament and member states. U.S. and European regulators are pushing for tighter oversight of the $605 trillion over-the- counter derivatives market.

To encourage traders to use central counterparties, OTC derivatives not cleared centrally will face increased capital charges, to be outlined in a revision of the EU’s rules on bank reserves at the end of the year.

The capital rules will implement agreements made by the central bankers and regulators of the Basel Committee on Banking Supervision announced on Sept. 12.

Banks are “concerned about requirements for potentially higher levels of collateral and capital,† the European Banking Federation, a Brussels-based trade group, said in an e-mailed statement.

‘Crucial Points’

“These measures are crucial points in the strict regulatory agenda banks are facing and must be carefully weighed, both individually and as a whole,† Guido Ravoet, secretary general EBF, said in the statement.

The proposed law on short-selling would require traders to notify authorities of any short position exceeding 0.2 percent of issued capital, and tell the market of positions exceeding 0.5 percent.

“We have a concern about public disclosure at low thresholds,† Kevin McNulty, chief executive of the International Securities Lending Association, said in a telephone interview. “At that level, it artificially reduces short-selling.†

The rules would also give regulators emergency powers to require more disclosure or temporarily ban short-sales of equities and credit-default swaps on bonds.

“We do hope however that new powers to ban short selling are never used,† Andrew Baker, chief executive of the Alternative Investment Managers Association, said in an e-mailed statement. “Such bans have never worked.†

‘Therapeutic Effect’

“These proposals will have a very therapeutic effect,† said Michael Greenberger, a professor at the University of Maryland School of Law, said in a telephone interview earlier this week. “The problems speculators pose in markets far outweigh concerns about liquidity and financial costs.†

In the U.S., regulators and Congress rejected a proposed ban on naked swaps last year, with House Financial Services Committee Chairman Barney Frank saying “there was concern that a broad grant to ban abusive swaps would be unsettling,† and U.S. Treasury Secretary Timothy F. Geithner saying he doesn’t think such a measure would have merit.

‘Nefarious Practice’

The EU proposals were criticized by some groups for failing to require an outright ban on naked short-selling.

The commission “failed to grasp the nettle† to “ban this nefarious practice,† Pascal Canfin, a French Green party member of the European Parliament, said in an e-mailed statement.

Short sellers borrow assets and sell them, betting the price will fall, buying them later and pocketing the difference. In naked short-selling, traders never borrow the assets, so betting is unlimited.

Credit-default swaps are derivatives that pay the buyer face value if a borrower -- a country or a company -- defaults. In exchange, the swap seller gets the underlying securities or the cash equivalent. Traders in naked credit-default swaps buy insurance on bonds they don’t own.

The rules on OTC derivatives would force traders to record contracts with a central data bank known as a trade repository, and hand powers to European regulators to decide what type of derivatives must be cleared by a central counterparty.

A derivative is a contract between two parties linked to the future value or status of the underlying asset to which it refers, including the development of interest rates or price of commodities such as oil or wheat. An OTC derivative is one privately negotiated between two parties, rather than being traded on an exchange.

Clearinghouses operate as central counterparties for every buy and sell order executed by their members, who post collateral, reducing the risk that a trader defaults on a deal.

--With assistance from Abigail Moses in London. Editors: Peter Chapman, Christopher Scinta

To contact the reporters on this story: Ben Moshinsky in Brussels at bmoshinsky@bloomberg.net;

http://www.businessweek.com/news/2010-09-15/naked-short-sales-otc-derivatives-face-eu-limits.html

BMFL<OD

next week(s) is here

Cellar Boxing Naked Short Selling

--------------------------------------------------------------------------------

This article is kind of long, but very informative and well worth the time to read. I have seen this posted around the net by several different authors, so not sure who gets the credit.


badpuppy     Share   Tuesday, September 28, 2010 12:07:21 PM 
Re: BikerBob post# 162418     Post #  of 162422   

-Please see this link to see what is happening with this and other Pink stocks by unscrupulous MM's.

http://www.mystockbuddy.com/forum/answer_center/401-cellar_boxing_naked_short_selling.html

-I like(or not) the part where the MM's can borrow your shares held in a street account all the while they are driving the you share price down. Quite unethical but that is where we are today...

Naked shorting into $0.0001, or, **Cellar Boxing**
There’s a form of the securities fraud known as naked short selling that is becoming very popular and lucrative to the Market Makers that practice it. It is known as “Cellar boxing† and it has to do with the fact that the NASD and the SEC had to arbitrarily set a minimum level at which a stock can trade. This level was set at $.0001 or one-one hundredth of a penny. This level is appropriately referred to as “the cellar†. This $.0001 level can be used as a "backstop" for all kinds of market maker and naked short selling manipulations.

“Cellar boxing† has been one of the security frauds du jour since 1999 when the market went to a “decimalization† basis. In the pre-decimalization days the minimum market spread for most stocks was set at 1/8th of a dollar and the market makers were guaranteed a healthy “spread†. Since decimalization came into effect, those one-eighth of a dollar spreads now are often only a penny as you can see in Microsoft’s quote throughout the day. Where did the unscrupulous MMs go to make up for all of this lost income? They headed "south" to the OTCBB and Pink Sheets where the protective effects from naked short selling like Rule 10-a, and NASD Rules 3350, 3360, and 3370 are nonexistent.

The unique aspect of needing an arbitrary “cellar† level is that the lowest possible incremental gain above this cellar level represents a 100% spread available to MMs making a market in these securities. When compared to the typical spread in Microsoft of perhaps four-tenths of 1%, this is pretty tempting territory. In fact, when the market is no bid to $.0001 offer there is theoretically an infinite spread.

In order to participate in “cellar boxing†, the MMs first need to pummel the price per share down to these levels. The lower they can force the share price, the larger are the percentage spreads to feed off of. This is easily done via garden variety naked short selling. In fact if the MM is large enough and has enough visibility of buy and sell orders as well as order flow, he can simultaneously be acting as the conduit for the sale of nonexistent shares through Canadian co-conspiring broker/dealers and their associates with his right hand at the same time that his left hand is naked short selling into every buy order that appears through its own proprietary accounts. The key here is to be a dominant enough of a MM to have visibility of these buy orders. This is referred to as "broker/dealer internalization" or naked short selling via "desking" which refers to the market makers trading desk. While the right hand is busy flooding the victim company's market with "counterfeit" shares that can be sold at any instant in time the left hand is nullifying any upward pressure in share price by neutralizing the demand for the securities. The net effect becomes no demonstrable demand for shares and a huge oversupply of shares which induces a downward spiral in share price.

In fact, until the "beefed up" version of Rule 3370 (Affirmative determination in writing of "borrowability" by settlement date) becomes effective, U.S. MMs have been "legally" processing naked short sale orders out of Canada and other offshore locations even though they and the clearing firms involved knew by history that these shares were in no way going to be delivered. The question that then begs to be asked is how "the system" can allow these obviously bogus sell orders to clear and settle. To find the answer to this one need look no further than to Addendum "C" to the Rules and Regulations of the NSCC subdivision of the DTCC. This gaping loophole allows the DTCC, which is basically the 11,000 b/ds and banks that we refer to as "Wall Street†, to borrow shares from those investors naive enough to hold these shares in "street name" at their brokerage firm. This amounts to about 95% of us. Theoretically, this “borrow† was designed to allow trades to clear and settle that involved LEGITIMATE 1 OR 2 DAY delays in delivery. This "borrow" is done unbeknownst to the investor that purchased the shares in question and amounts to probably the largest "conflict of interest" known to mankind. The question becomes would these investors knowingly loan, without compensation, their shares to those whose intent is to bankrupt their investment if they knew that the loan process was the key mechanism needed for the naked short sellers to effect their goal? Another question that arises is should the investor's b/d who just earned a commission and therefore owes its client a fiduciary duty of care, be acting as the intermediary in this loan process keeping in mind that this b/d is being paid the cash value of the shares being loaned as a means of collateralizing the loan, all unbeknownst to his client the purchaser.

An interesting phenomenon occurs at these "cellar" levels. Since NASD Rule 3370 allows MMs to legally naked short sell into markets characterized by a plethora of buy orders at a time when few sell orders are in existence, a MM can theoretically "legally" sit at the $.0001 level and sell nonexistent shares all day long because at no bid and $.0001 ask there is obviously a huge disparity between buy orders and sell orders. What tends to happen is that every time the share price tries to get off of the cellar floor and onto the first step of the stairway at $.0001 there is somebody there to step on the hands of the victim corporation's market.


Once a given micro cap corporation is “boxed in the cellar† it doesn’t have a whole lot of options to climb its way out of the cellar. One obvious option would be for it to reverse split its way out of the cellar but history has shown that these are counter-productive as the market capitalization typically gets hammered and the post split share price level starts heading back to its original pre-split level.

Another option would be to organize a sustained buying effort and muscle your way out of the cellar but typically there will, as if by magic, be a naked short sell order there to meet each and every buy order. Sometimes the shareholder base can muster up enough buying pressure to put the market at $.0001 bid and $.0002 offer for a limited amount of time. Later the market makers will typically pound the $.0001 bids with a blitzkrieg of selling to wipe out all of the bids and the market goes back to no bid and $.0001 offer. When the weak-kneed shareholders see this a few times they usually make up their mind to sell their shares the next time that a $.0001 bid appears and to get the heck out of Dodge. This phenomenon is referred to as “shaking the tree† for weak-kneed investors and it is very effective.
__________________
All advice from me is guaranteed to be worth at least what you paid for it, or double your money back. All persons dealing with matters of personal finance are advised to gather information from blogs, books, radio and TV, consult with professionals, discuss the matter with anybody who will listen, and then make their own decision.

At times the market will go to $.0001 bid and $.0003 offer. This sets up a juicy 200% spread for the MMs and tends to dissuade any buyers from reaching up to the "lofty" level of $.0003. If a $.0002 bid should appear from a MM not "playing ball" with the unscrupulous MMs, it will be hit so quickly that Level 2 will never reveal the existence of the bid. The $.0001 bid at $.0003 offer market sets up a "stalemate" wherein market makers can leisurely enjoy the huge spreads while the victim company slowly dilutes itself to death by paying the monthly bills with "real" shares sold at incredibly low levels. Since all of these development-stage corporations have to pay their monthly bills, time becomes on the side of the naked short sellers.

At times it almost seems that the unscrupulous market makers are not actively trying to kill the victim corporation but instead want to milk the situation for as long of a period of time as possible and let the corporation die a slow death by dilution. The reality is that it is extremely easy to strip away 99% of a victim company’s share price or market cap and to keep the victim corporation “boxed“ in the cellar, but it really is difficult to kill a corporation especially after management and the shareholder base have figured out the game that is being played at their expense.

As the weeks and months go by the market makers make a fortune with these huge percentage spreads but the net aggregate naked short positions become astronomical from all of this activity. This leads to some apprehension amongst the co-conspiring MMs. The predicament they find themselves in is that they can’t even stop naked short selling into every buy order that appears because if they do the share price will gap and this will put tremendous pressures on net capital reserves for the MMs and margin maintenance requirements for the co-conspiring hedge funds and others operating out of the more than 13,000 naked short selling margin accounts set up in Canada. And of course covering the naked short position is out of the question since they can’t even stop the day-to-day naked short selling in the first place and you can't be covering at the same time you continue to naked short sell.

What typically happens in these situations is that the victim company has to massively dilute its share structure from the constant paying of the monthly burn rate with money received from the selling of “real† shares at artificially low levels. Then the goal of the naked short sellers is to point out to the investors, usually via paid “Internet bashers†, that with the, let’s say, 50 billion shares currently issued and outstanding, that this lousy company is not worth the $5 million market cap it is trading at, especially if it is just a shell company whose primary business plan was wiped out by the naked short sellers’ tortuous interference earlier on.

The truth of the matter is that the single biggest asset of these victim companies often becomes the astronomically large aggregate naked short position that has accumulated throughout the initial “bear raid† and also during the “cellar boxing† phase. The goal of the victim company now becomes to avoid the 3 main goals of the naked short sellers, namely: bankruptcy, a reverse split, or the forced signing of a death spiral convertible debenture out of desperation. As long as the victim company can continue to pay the monthly burn rate, then the game plan becomes to make some of the strategic moves that hundreds of victim companies have been forced into doing which includes name changes, CUSIP # changes, cancel/reissue procedures, dividend distributions, amending of by-laws and Articles of Corporation, etc. Nevada domiciled companies usually cancel all of their shares in the system, both real and fake, and force shareholders and their b/ds to PROVE the ownership of the old “real† shares before they get a new “real† share. Many also file their civil suits at this time also. This indirect forcing of hundreds of U.S. micro cap corporations to go through all of these extraneous hoops and hurdles as a means to survive, whether it be due to regulatory apathy or lack of resources, is probably one of the biggest black eyes the U.S. financial systems have ever sustained. In a perfect world it would be the regulators that periodically audit the “C† and “D† sub-accounts at the DTCC, the proprietary accounts of the MMs, clearing firms, and Canadian b/ds, and force the buy-in of counterfeit shares, many of which are hiding behind altered CUSIP #s, that are detected above the Rule 11830 guidelines for allowable “failed deliveries† of one half of 1% of the shares issued. U.S. micro cap corporations should not have to periodically “purge† their share structure of counterfeit electronic book entries but if the regulators will not do it then management has a fiduciary duty to do it.

A lot of management teams become overwhelmed with grief and guilt in regards to the huge increase in the number of shares issued and outstanding that have accumulated during their “watch†. The truth however is that as long as management made the proper corporate governance moves throughout this ordeal then a huge number of resultant shares issued and outstanding is unavoidable and often indicative of an astronomically high naked short position and is nothing to be ashamed of. These massive naked short positions need to be looked upon as huge assets that need to be developed. Hopefully the regulators will come to grips with the reality of naked short selling and tactics like "Cellar boxing" and quickly address this fraud that has decimated thousands of U.S. micro cap corporations and the tens of millions of U.S. investors therein.
__________________
All advice from me is guaranteed to be worth at least what you paid for it, or double your money back. All persons dealing with matters of personal finance are advised to gather information from blogs, books, radio and TV, consult with professionals, discuss the matter with anybody who will listen, and then make their own decision.
__________________

BMFL<OD

next week(s) is here

AlanC     Share   Wednesday, October 13, 2010 8:31:52 AM 
Re: Rocket Man post# 163906     Post #  of 163913   

Morning FFGO longs! Credit to Lugemeister for this information:


Tuesday, April 28, 2009
0diggsdigg
*****WHAT IS NAKED SHORT SELLING?*****
by Eric deCarbonnel


What is Naked Short Selling?

Naked short selling (naked shorting) refers to the practice of selling a stock short without first either Borrowing the shares or Making an "affirmative determination" that the shares can be borrowed.

In the United States, the Securities and Exchange Commission issued "Regulation SHO" in an effort to curb abusive naked shorting. Many other countries and trading markets have developed similar regulations.


The Problem
Short selling is a bet that a stock price will decline. A short seller borrows stock and then sells it, hoping to buy back the same amount of stock later, at a lower price, for return to the lender. Short selling is legal.

Naked short selling involves selling stock without first borrowing (or sometimes even locating) the stock [naked short selling = selling imaginary stocks (with the assumption of borrowing stock later to make it real)]. If a naked short seller does not borrow the stock he sold, he will be unable to deliver that stock to the buyer to close the transaction. This is called a “failure to deliver† (FTD) [When a brokerage “fails to deliver†, the imaginary stock ends up staying imaginary, possibly for years]. Naked short selling is generally illegal, though market makers are allowed to temporarily naked short for the sake of bona fide market making. FTDs are always illegal when delivery failure exceeds 13 days.

Exchanges do not disclose whether short sales are naked and supply no information on FTDs. Even worse, in transactions where shares are not delivered, brokerages issue stock IOUs called “share entitlements [This is a nightmare waiting to happen].† Retail customers’ account statements do not distinguish between real shares and share entitlements. [brokerages are adding counterparty risks to their clients stock purchases without their knowledge. This is fraud.]

FTDs create phantom shares that circulate in the system as real shares. Just as counterfeit currency dilutes and destroys value, phantom shares deflate share prices by flooding the market with false supply.

Some short sellers use naked shorting and oversupply of phantom shares to manipulate stock prices downward. Because regulations are loose and enforcement lax, they are unafraid of failing to deliver.

Customers holding phantom shares can, and often do, re-sell those phantom shares as if they were real. Subsequent purchasers do not receive real shares; instead they receive only share entitlements. Phantom shares sold by naked short sellers are thus laundered in the market by subsequent transactions in which share entitlements come to resemble (but cannot become) real shares of stock.


FTDs threaten market integrity in at least three ways

The corporate voting system is undermined by chronic over-voting. The circulation of FTDs leads to more ownership than there are shares to own. As a result, brokers and transfer agents routinely mail out and receive back more proxy votes than there are shares to vote. [As actual data is unavailable, this massive over-voting is the best evidence/proof that naked short selling problem.]

Companies and shareholder value are destroyed

Market integrity is threatened. Large brokerage firms and hedge funds often use leverage to build naked short positions, a strategy that poses systemic risk to financial markets.

What little is publicly known about FTDs is available as a result of Regulation SHO, implemented by the SEC in January, 2005, in order to curb abusive naked short selling and reduce FTDs. Regulation SHO requires exchanges (e.g., NYSE and NASDAQ) to publish daily a list of firms with FTDs above a calculated threshold. That list is known as the Regulation SHO Threshold List.

Since Regulation SHO was enacted two years ago, 4,512 companies have appeared on the Threshold List. According to a recent Office of Economic Analysis report, 6,223 securities have graduated from the Threshold List, meaning thousands of companies have been on the Threshold List more than once. Curiously, Regulation SHO only reports victim companies; there is no disclosure of either the amount of FTDs or of the institutions who fail to deliver. The size of past (but not current) FTDs can only be obtained through petition to the SEC’s Freedom of Information Act (FOIA) office.

Neither the SEC nor the exchanges will disclose the names of the institutions failing to deliver, even through FOIA petition, as “fails statistics of individual firms…is proprietary information and may reflect firms’ trading strategies.† [These “trading strategies† involve blatant fraud. Therefore releasing “fails statistics of individual firms† would obvious affect these “trading strategies†

Regulation SHO “grandfathered† FTDs older than January 2005 and new FTDs prior to an issuer’s appearance on the Threshold List, thus pardoning sales for which money was paid but no stock delivered. [Since FTDs older than January 2005 have been “grandfathered†, they are excluded from all the data disclosed by Depository Trust and Clearing Corporation (DTCC)]

While publicly downplaying the issue, the SEC has quietly admitted to adopting the grandfather clause because of concern about “creating volatility where there were large pre-existing open positions.† [As with gold (and other commodities), brokerages have over the years slowly build up a massive short position in the US stock market. Making them unwind these short positions would cause the US financial system to collapse.]

Scholars have shown that many FTDs are strategic—that is, used to manipulate prices.

Large U.S. brokerages collectively own and operate the Depository Trust and Clearing Corporation (DTCC). The DTCC operates with little SEC oversight and consistently denies the existence of a systemic problem while simultaneously fighting public disclosure of even minimal FTD data.

What little data the DTCC does disclose is misleading. For example, the DTCC claims failed trades sum to $6 billion daily, or 1.5% of the dollar volume.

The true magnitude of FTDs is obscured by Continuous Net Settlement (CNS), which nets failures against shares held by brokers. The DTCC asserts that CNS has “eliminated the need to settle 96% of total obligations.† If the DTCC processes $400 billion in trades daily as claimed, then $384 billion are netted out and only $16 billion require delivery. Thus, the $6 billion in FTDs that exist on any given day is 37.5% of the trades that require delivery—twenty-five times the 1.5% reported by the DTCC.

The statistics above ignore “ex-clearing†—that is, trades cleared directly by brokers bypassing the DTCC. Some scholars believe that “fails occurring through ex-clearing may elude the [reporting] requirements of Regulation SHO.† FTDs in ex-clearing may be four times as great as quantities discussed above. The DTCC’s Stock Borrow Program (SBP) adds additional mystery to the situation.


My reaction: Regulators have allowed US brokerages to turned the stock market into a Ponzi scheme.

1) Brokerages are allowed to sell imaginary stocks to investors, with the assumption of replacing them with real shares later.

2) When brokerages “fail to deliver† and replace imaginary shares with real ones, these brokerages issue stock IOUs called "share entitlements.†

3) Exchanges do not disclose whether short sales are naked and supply no information on FTDs.

4) Retail customers' account statements do not distinguish between real shares and share entitlements.

5) Share entitlements created by FTDs circulate in the system as real shares, flooding the market with false supply. Companies and shareholder value are destroyed.

6) Large US brokerages collectively own and operate the Depository Trust and Clearing Corporation (DTCC). The DTCC is the primary vehicle for enabling naked short selling.

7) What little information available about FTDs comes from the DTCC, and these discloses are misleading:

A) FTDs older than January 2005 have been "grandfathered" and are excluded from DTCC disclosures.
B) Continuous Net Settlement (CNS), which nets failures against shares held by brokers and obscures the true magnitude of FTDs.
C) DTCC statistics ignore "ex-clearing† data (trades cleared directly by brokers bypassing the DTCC).
D) The DTCC's Stock Borrow Program (SBP), which allows brokers to borrow nonexistent shares, reducing FTDs.

8) Widespread, chronic over-voting offers the most telling evidence of the “stock IOUs† floating around the financial system.


Conclusion: While I am disgusted that brokerages use naked short selling to manipulate the stock market, it is not what worries me about naked short selling. The two issues I have with naked short selling are:

1) “Share entitlements† creates a counterparty risk that investors are completely oblivious to. For example, lets an investor named Jon is worried about the dollar collapse, and, to protect himself he buys $500,000 of gold mining stocks through JPMorgan. Jon relaxes, thinking his investment in gold stocks will protect him from a currency collapses. However, when the dollar does collapse, JPMorgan goes under, and Jon finds out he actually owns 500,000 of “share entitlements† to gold mining stocks, not the stocks themselves. This makes him a general creditor in JPMorgan’s bankruptcy. Months later, after much litigation, Jon is able to recover $100,000 of his initially investment. Unfortunately for Jon, the dollar has already lost so much money that this 100,000 won’t even buy a pack of gum.

While this is an extreme example, it illustrates how naked short selling has added counterparty risks to owning stocks.

2) Brokerages are selling billions, if not trillions, of imaginary assets. These imaginary stocks sales (and associated fees) are responsible for a large portion of the financial “profits† used to justify huge banker bonuses. The proceeds from these imaginary stocks sales also help pay these huge bonuses or any other purpose these institutions see fit. This is simply ridiculous: the sale of imaginary assets can't be the basis of a viable financial system.

Brokerages are supposed to be middle men for their clients. When investors turn over cash for the purchase of a stock, brokerages are supposed to use this money to secure the actual share. Instead of doing so, brokerages are putting “stock IOUs† into their clients account instead. This is even worse than the deposit reclassification scheme banks use with their client’s checking account.


Final note: See why I like physical gold now? In a financial system overflowing with “imaginary shares† and “stock IOUs†, owning any asset via a brokerage firm, even a regular stock share, has counterparty risks.

BMFL<OD

next week(s) is here

Bike     Share   Friday, October 15, 2010 9:40:58 AM 
Re: None     Post #  of 164104   

FFGO ,, thanks 4kids!!


SHORT & DISTORT

another interesting read

The Short And Distort: Stock Manipulation In A Bear Market
by Rick Wayman (Contact Author | Biography)
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Filed Under: Recession, Short Selling, Stocks
A less-publicized and more-sinister version of short selling can take place on Wall Street. It's called "short and distort" (S&D).

Nothing is inherently wrong with short selling, which is permissible under the regulations of the Securities and Exchange Commission (SEC). However, the S&D type of short seller uses misinformation and a bear market to manipulate stocks. S&D is as illegal as the pump and dump, but is mainly used in a bear market. It is important for investors to be aware of the dangers and to know how to protect themselves.

Shorters' Actions Can Promote a Healthy Market
Short selling is the practice of selling borrowed stock in the hope that the stock price will soon fall, allowing the short seller to buy it back for a profit. The SEC has made it a legal activity for several good reasons. First, it provides the markets with more information. Shorters (traders who practice selling short for a living) often complete extensive and legitimate due diligence to discover facts and flaws that support their suspicion that the target company is overvalued. Because most shorters are scrupulous and ethical, their actions are conducive to the health of the market. Finally, short selling also provides investors who own the stock (with "long" positions) with the ability to generate extra income by lending their shares to the shorts. (For background reading, see the Short Selling tutorial.)

S&D Traders Manipulate Stock Prices With Smear Campaigns
On the other hand, S&D traders manipulate stock prices in a bear market by taking short positions and then using a smear campaign to drive down the price of the targeted stock. This is the inverse version of the "pump and dump" tactic, whereby crooks buy stock (take a long position) and issue false information that causes the target stock's price to increase.

Generally, it is easier to manipulate stocks to go down in a bear market and up in a bull market. The pump and dump is better known than the S&D because of the long bull market and the media. For example, the stock market had been in a general uptrend in the early to mid 1980s, which provided ample fodder for "pumpers". Movies like "Wall Street" (1987) and "The Boiler Room"(2000) helped educate investors about the risk of this type of stock manipulation. (To read more about stock market movies, see Financial Careers According To Hollywood.)

The S&D shysters try to profit by stimulating fear, but this only works if they have credibility. As such, when working online they will often use screen names and email addresses that imply that they are associated with the SEC or the Financial Industry Regulatory Authority (FINRA) (formerly the National Association of Securities Dealers), or that they can regularly spot worthless stocks. Their goal is to convince investors that every proponent of the stock has ties to the company and that the SEC is watching and will halt the stock. S&Ds also intimate that they are looking out for investors' interests.

S&D players clutter message boards, so optimistic information cannot easily be found. "Get out before it all comes crashing down" and "Investors who wish to enter a class action lawsuit can contact…" are typical posts, as are their projections of $0 stock prices and 100% losses. If their strategy is suspected by "longs", they attack the person who has caught them. In other words, the market manipulator will do everything in his or her power to keep buyers out of the stock and keep the price heading south.

The Net Effect
When the short and distort maneuver succeeds, investors who initially bought stock at higher prices sell at low prices because of their mistaken belief that the stock is worthless, caused by an effective distortion campaign. At the same time, the S&Ds cover at low prices and lock in their gains.

Right after prominent bankruptcies such as Enron in 2001 or Nortel in 2009, investors could be more susceptible to this type of manipulation than during prosperous periods such as the 1990s in the U.S. During downturns, the first appearance of impropriety could cause investors to run for the hills much easier. As a result, many innocent, legitimate and growing companies could get burned, and investors along with them. (To learn about how you can profit when everyone else is heading for cover, read Profit From Panic Selling.)

How to Identify and Prevent S&D
Do not believe everything you read - verify the facts.
Do your own due diligence and discuss it with your broker.
Hypothecate your stock - take it out of its street name to prevent the short sellers from borrowing and selling it. (Learn more about doing your own due diligence in our related article, Due Diligence In 10 Easy Steps)

The best way to protect yourself is to do your own research. Many stocks with great potential are ignored by Wall Street. By doing your own homework you should feel much more secure in your decisions. And, even if the S&Ds attack your stock, you will be better able to detect their distortions and be less likely to fall prey to them by selling the stock at a loss.

How To Identify Good Research
Ask yourself these questions to spot the key characteristics of a good research report:

1. Is There a Disclaimer?
The SEC requires that everyone providing investment information or advice fully disclose the nature of the relationship between the information provider (the research analyst) and the company that is the subject of the report. If there is no disclaimer, investors should disregard the report. (For related reading on disclosures, see Disclosures: The Good, The Bad, And The Ugly.)

2. What Is the Nature of the Relationship?
Investors can get good information from pieces published by investor relations firms, brokerage houses and independent research companies. Using all of these sources will provide information and perspectives that can help you make better investing decisions. However, you need to evaluate their conclusions in light of the compensation (if any) that the information provider received for the report.

Can a Wall Street analyst who is even partially compensated by trading generated by the report be more objective than a fee-based research firm that is paid a flat monthly rate with no "performance" bonus? The answer to this question is left for each investor to decide, but both reports are available to use for evaluating a potential investment. The nature of the compensation will provide information to help you evaluate a report's objectivity.

3. Is the Author Identified and Contact Information Provided?
Generally speaking, if the author's name and contact information are on the report, it is a good sign because it shows that the author is proud of the report, and provides investors with a way to contact the author for additional information.

Research reports from legitimate brokerage firms post the author's name and contact information near the top of the front page. If the author's name is not given, investors should be very skeptical of the report's contents.

4. What Are the Author's Credentials?
Letters after a name do not necessarily mean that the author of the report is a better analyst, but they do indicate that the analyst has undertaken additional studies to expand his or her knowledge of finance and investing. (For more insight, see The Alphabet Soup Of Financial Certifications.)

5. How Does the Report Read?
If the report contains grandiose words and exclamation points, beware. This not to say that good analysts are boring, but good reports don't read like the National Enquirer. A reputable analyst would never use exaggerations like "sure things" or "rockets", and would never suggest that you mortgage your home to buy a stock.

Objective research reports provide reasoned arguments to buy or sell a stock. Key factors such as management expertise, competitive advantages and cash flows are cited as evidence to support the recommendation. (For more insight, read Research Report Red Flags.)

6. Is There an Earnings Model and Target Price With Reasonable Assumptions?
The bottom line for any recommendation is the earnings model and target price. The assumptions upon which the earnings model is based should be clearly stated so the reader can evaluate whether the assumptions are reasonable. The target price should be based on valuation metrics - such as the price-to-earnings (P/E) or price-to-book (P/B) ratio - that are also based on reasonable assumptions. If a report lacks these details, it is generally safe to assume that the report lacks a sound basis, and should be ignored.(For more details about analyzing ratios, see the Financial Ratio Tutorial.)

7. Is There Ongoing Research Coverage?
A commitment to providing ongoing research coverage (at least one report per quarter for at least one year) indicates that there is a solid belief in the company's fundamental strengths. It takes a lot of resources to provide this type of coverage, so a firm providing ongoing coverage is a sign that it legitimately believes in the long-term potential of a stock.

This contrasts with one-time reports that are used to manipulate stocks. In these cases, supposed research firms will suddenly issue "reports" on stocks they have never reported on before. Generally, these reports can be identified as an attempt at stock manipulation because they will not contain the attributes of a legitimate research report (discussed above).

The Bottom Line
Unscrupulous short and distort tactics can leave investors holding the bag. Fortunately, high-quality stock reports are relatively easy to spot, and needn't be confused with stock manipulators' dramatic claims. Keep your cool when analyzing a stock, and avoid getting caught up in online hype. By analyzing potential investments carefully and objectively, you can protect yourself from falling prey to S&D players - and make better stock picks overall.

--
4kids
all jmo

BMFL<OD

next week(s) is here

fourkids_9pets     Share   Thursday, October 21, 2010 9:06:18 AM 
Re: janice shell post# 440     Post #  of 453   

why is their wells notice going to finally be disclosed?

--
that is the rumor out there anyway and *perhaps* why their stock
dropped like a rock last october .. how *odd* that wells notices
aren't required to be disclosed by the company/mgmt .. hmm
especially since we all know what .. er .. damage .. *rumors*
can do via today's technology :0

i just view the morons at the sec and dtcc
as in cahoots with the biggest pos on the OTC
that exists .. and as we head 3rd world with
one of the most corrupt entities on the planet
the SEC will finally have to take a good look
at themselves and a system so toxic .. unless
completely *revamped* there will never again
be *investor* confidence in their bs again *imo*

funny how *NITE* (who like other pc's of crap)
felt the *urge* to change out their ticker from
the well known *NITE* to KCG .. as if they could
fool anyone with that *event*

and now they too do what others do *whine 24/7*
as their *possible* illegal actions may finally
be held accountable :0

i've said to the sec .. how many 1000s of complaints
does it take to get more than a slap on the wrist for NITE?
as their MM is allowed to consistently block on the bid and
ask? edit>>> they don't make a market .. they manipulate it

needless to say .. the SEC silence is deafening but is that
really too surprising? nah .. anyone done a study as to where
exactly sec's employees head off to *work* after they've done
their bit at the sec?

hmmm

wouldn't it be interesting for the sec to er .. *comment*
on just how *collusive* knight's actions would be
with a 30 percent stake taken in a .. er .. SMB ..
oh i dunno say back in early 2007 .. right when NITE'S
MONOPOLY on the OTC .. was getting fully underway

the possibilities are mind boggling *if true* aren't they?

--
4kids
all jmo

janice shell     Share   Wednesday, October 20, 2010 3:35:09 PM 
Re: fourkids_9pets post# 439     Post #  of 453   

Knight Capital Urges Short-Selling Leniency for U.S. Stock Market Makers

By Nina Mehta - Sep 27, 2010 1:53 PM ET
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Regulators should consider giving market makers more latitude to sell stock short to ease the burden of increased obligations that may be imposed on those firms, according to an executive at Knight Capital Group Inc.

Market makers sometimes can’t sell stock in response to demand because some securities that aren’t actively traded are hard to borrow, Jamil Nazarali, global head of the electronic trading group at Knight Capital Group Inc., said at a Security Traders Association conference in Washington on Sept. 24.

“More latitude around being able to short stock† would offer market makers relief, Nazarali said. Brokers that make markets by providing bids and offers for investors to trade with should be allowed to maintain short sales for longer than the current period, he said. In a short sale, borrowed shares are sold with the aim of profiting by later buying back the stock at a lower price.

The U.S. Securities and Exchange Commission is considering new obligations and benefits for market makers to ensure that sufficient liquidity is available in times of volatility. SEC Chairman Mary Schapiro has said the agency may give market makers new benefits that will entice them to accept heftier commitments following the May 6 plunge that briefly erased $862 billion in U.S. equity value in less than 20 minutes.

“When an investor wants to buy certain stocks, market makers can’t always sell them short† to meet that need because they must provide the borrowed shares even in less actively traded stocks, Nazarali said. “In these thin names, that’s when you need a market maker the most.†

Motors Liquidation

For instance, last year Knight wanted to sell short Motors Liquidation Co., the firm formed to liquidate the assets of automaker General Motors Corp., which filed for bankruptcy protection in 2009. Knight couldn’t because that would have required closing out the positions by delivering shares prior to the start of trading on the sixth day after the transaction, which it couldn’t do, Nazarali said.

Motors Liquidation traded at around $1 during the middle of last year even though the equity shareholders would eventually be wiped out, Nazarali said. Because Knight and other market makers couldn’t short the shares, they weren’t able to push the price lower. The shares trade for 35 cents now.

Knight, Getco LLC and Virtu Financial LLC in July urged the SEC to adopt stricter quoting requirements for market makers than currently exist on most exchanges. New obligations should require market makers to quote at the national best bid or offer, which represents the highest price at which investors can sell shares and the lowest at which they can buy, a certain portion of the day, Nazarali said. The three firms also said market makers should submit orders at several price levels.

Investor Costs

High-frequency trading firms RGM Advisors LLC, Allston Trading LLC, Hudson River Trading LLC and Quantlab Financial LLC countered on Sept. 14 that these requirements would raise costs for investors such as mutual funds without preventing market plunges.

Market makers who meet certain quoting requirements now receive an exemption from the obligation to locate shares for stocks they want to sell short and more-lenient terms than other investors for when they must deliver shares for bearish trades.

William Neuberger, global co-head of electronic trading at Morgan Stanley in New York, said at the conference that altering the obligations and benefits for market makers won’t ensure that they stick around in difficult times to buy when investors flood them with sell orders.

“If something’s happening in the world, why should they buy stock at the wrong price when things are coming down, down, down?† he said. “Even doing that doesn’t mean there won’t be another crash. It’ll just be a slower crash. They’re going to take the fine, basically, and live.†

To contact the reporter on this story: Nina Mehta in New York at nmehta24@bloomberg.net.

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.

http://www.bloomberg.com/news/2010-09-27/knight-capital-urges-short-selling-leniency-for-u-s-stock-market-makers.html


AlanC     Share   Thursday, October 21, 2010 12:34:24 PM 
Re: janice shell post# 440     Post #  of 453   

Pot, kettle, black! That is hysterical!

fourkids_9pets     Share   Thursday, October 21, 2010 1:56:06 PM 
Re: AlanC post# 442     Post #  of 453   

isn't it tho' and i do so love to see who it is
who touts for wall street .. MMs' .. B/Ds' and
even the SEC 

nite is a whiny sob who has held the *monopoly*
on the OTC since early 2007 and the sec only has
themselves and the dtcc to blame for the mess they
have allowed to be *created* there .. as they now
try to *instill* .. er .. investor confidence in
a system so polluted and toxic and quite frankly
*corrupt*

good luck to them .. i don't believe it's a *realistic* goal
at this point in time .. perhaps when more *bs* is revealed
i give it at minimum another 12 to 18 months b4 that event
comes to pass

--
4kids
all jmo

janice shell     Share   Thursday, October 21, 2010 2:22:43 PM 
Re: fourkids_9pets post# 441     Post #  of 453   

i've said to the sec .. how many 1000s of complaints
does it take to get more than a slap on the wrist for NITE?

NITE is the penny plungers' favorite whipping boy, and I have absolutely no doubt that most of those complaints are submitted by the utterly uninformed.

And they've been fined heavily more than once, as have many other b/ds.

fourkids_9pets     Share   Thursday, October 21, 2010 2:25:44 PM 
Re: janice shell post# 444     Post #  of 453   

nite has held the *MONOPOLY* on the OTC
since may of 2007

they and their *feeder funds* deserve everything
that is coming their way over the coming months

oh and thanks for that article .. whiny and
squirming becomes them

--
4kids
all jmo

janice shell     Share   Thursday, October 21, 2010 2:30:12 PM 
Re: fourkids_9pets post# 445     Post #  of 453   

They had it before then. They were always the biggest MM in OTC stocks.

As for the article, they were obviously simply defending their interests. But I thought they made several good points.

fourkids_9pets     Share   Thursday, October 21, 2010 2:34:31 PM 
Re: janice shell post# 446     Post #  of 453   

semantics .. sbsh held the *monopoly*
back in 2006 b4 they wisely moved elsewhere
and handed off to nite in may of 2007 (OTC)

regardless the monopoly is nite's
for well over 3+ years now ~ and i
(and others) look forward to the day
of reckoning that is en route

one mess at a time

--
4kids
all jmo

janice shell     Share   Thursday, October 21, 2010 2:37:32 PM 
Re: fourkids_9pets post# 447     Post #  of 453   

No they didn't. NITE was always on top, usually followed by Herzog, until they were bought out by somebody...

fourkids_9pets     Share   Thursday, October 21, 2010 2:56:52 PM 
Re: janice shell post# 448     Post #  of 453   

really have a link?

i kept track of every piece of data out of
finra on a handful of co.s i *observed* (06/07)
and tellingly nite was never the primary mm
on these OTC co.s (ytd 2006) .. it wasn't until
MAY of 2007 .. that NITE became the PRIMARY MM
for pretty much all co.s on the OTC as proven
by finra's ytd data for 2007 (vs. 2006's data)

needless to say
that *monopoly* didn't change for 2008/2009 and
nite is on track *yet again* in 2010 ~ no one
even comes close .. including that british MM
that showed up this past july and now showing
the secondary MM to nite's primary on various
and sundry OTC stocks .. hmmm

oh and another question to get answered in due time
pertains to a 30 percent stake taken in a uk based
parent corp of a SMB .. which overlapped time lines (2007)

let's see if khuzami lives up to his reputation and *retail*
actually gets some answers *known* b4 another decade passes

--
4kids
all jmo

janice shell     Share   Thursday, October 21, 2010 3:04:22 PM 
Re: fourkids_9pets post# 449     Post #  of 453   

No. I do not keep exhaustive accounts of MM activity. Herzog was absorbed by whoever it was years ago. Probably around 2002.

fourkids_9pets     Share   Thursday, October 21, 2010 3:12:28 PM 
Re: janice shell post# 450     Post #  of 453   

again my point isn't that nite wasn't a MM in the OTC
for the last decade ... they were .. it's the timing
of when they took over and *created the monopoly*
re: stocks on the OTC .. it is the spring of 2007
that data as well as 1000s of complaints filed against them
by *retail* and other brokers for blocking on the ask
(or bid in some cases) is also *known* .. now what comes
to pass over the coming months as more dirty laundry
is aired is what i'm interested in learning .. i find it
ironic that 2 sources of l2 were talking class action
law suits against nite within one year of their *monopoly*

that was 2008

they are everyone's whipping boy for a reason

what comes to be known still awaits us all

always a pleasure

--
4kids
all jmo

janice shell     Share   Thursday, October 21, 2010 3:13:57 PM 
Re: fourkids_9pets post# 451     Post #  of 453   

For as long as I can remember, NITE has been the 800 pound gorilla in the OTC world.

fourkids_9pets     Share   Thursday, October 21, 2010 3:16:11 PM 
Re: janice shell post# 452     Post #  of 453   

but finra's data doesn't bear that out
until 2007

--
4kids
all jmo

BMFL<OD

next week(s) is here

Last edited by Bull Finch (2010-10-21 17:19:56)