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NSS ~ Counterfeiting Stock ~ MM Games Played
Moderator: fourkids_9pets



AlanC     Share   Monday, September 05, 2011 11:21:51 PM 
Re: Paula post# 7061     Post #  of 7062   



Re: Banks falling
« Reply #6 Today at 3:50pm »


--------------------------------------------------------------------------------
O.co aka Overstock.com vs. Goldman Sachs: A True David & Goliath Story
http://www.overstock.com/50257/static.html

For six years Overstock.com has waged a war to expose Wall Street mischief. We did not go looking for a fight, but our company was attacked, and we learned we were not alone: the same manipulation-for-profit tools that Wall Street had deployed against us had also been deployed against many American companies, harming job creation, innovation, and economic growth. We knew that if left unchecked and unexposed, Wall Street's games could ultimately damage U.S. capital markets.

So in 2005 and 2007 we filed two lawsuits. The first case was against a hedge fund (Rocker Partners) and hatchet-job-for-hire research team (Gradient Analytics), both with ties to Jim Cramer. The second case was against a group of eleven Wall Street prime brokers, culminating in Goldman Sachs. The hedge fund in question (Rocker Partners) hired famed lawyer David Boies, and the prime brokers showed up with an army of the most prestigious law firms in America. Our lawyers were Dore Griffinger, Ellen Cirangle, Jonathan Sommer and Catherine Jackson of Stein & Lubin, a small but excellent San Francisco law firm.

We won the hedge fund case against Gradient and Rocker, extracting an apology, a retraction and over $5 million in cash (it felt good to beat David Boies' firm). In our prime broker case, one of the Wall Street banks (Lehman Brothers) has gone under (two, Bear Stearns and Merrill Lynch were sold at fire sale prices), and another seven paid us millions to let them out.

That leads us to the main event this coming December, when Overstock.com will square off against Goldman Sachs and Merrill Lynch (and Merrill's parent, Bank of America) in a San Francisco courtroom. Recently, in the prosecution of this case, we uncovered evidence of collusive action between Goldman Sachs, Merrill Lynch and other Wall Street bad guys, in a scheme designed to fool regulators and profit illegally at the expense of Overstock.com. As a result of this discovery, in December 2010, we added a Racketeer Influenced and Corrupt Organization (RICO) Act claim and requested treble damages under this RICO claim. We firmly believe the conduct of Goldman Sachs and Merrill Lynch were "racketeering" and "corrupt." We are moving forward: trial is scheduled to commence this year, on December 5, 2011. At trial we will hold Goldman Sachs and Merrill Lynch accountable and expose a slew of illegal Wall Street practices to the public.

BMFL<OD

next week(s) is here

TomSawyer     Share   Thursday, September 15, 2011 2:58:44 PM 
Re: None     Post #  of 183665   

Call from FINRA regarding missing FFGO short data. Sorry this summary is a little lengthy..

HISTORY:
As you know I have been trying to reach out to OTC and FINRA to try and find out why OTC and FINRA are not making Short Interest data between Aug. 2010 and current available. This is visible (or not visible) here:
http://www.otcmarkets.com/stock/FFGO/short-sales.

FIRST CONTACT:
The first response from OTC manager said that FINRA was responsible for providing this data and he was at a loss why it hasn’t been provided, since other pinks show (at the very least) “o† short interest. As did FFGO before Aug. 2010. To me, this was red-flag #1. Why would OTC be at a loss for missing data? I then proceeded to contact FINRA. Instead of writing Customer Service, I wrote directly to Senior Leadership and received an email shortly after that they would look into it.

YESTERDAY’S FINRA CALL
Yesterday afternoon (Pacific Time) I received a call back from a FINRA Director regarding the missing short interest data (note: the questions I asked are in blue below). Right away I noticed red-flag #2, in my email to FINRA I had specifically asked (in bold letters even) that they respond via email and not by phone. They phoned. IMO, this is to avoid documentation. But that is just a guess on my part.

The call began with the FINRA Director explaining the following (which you might have heard before): There are many ways that MMs (market makers) process trades. Sometimes MMs will do the following for “risk management† purposes.. they will receive a long buy order. So to avoid risk, they first process a short order (for only a few seconds or minutes), then follow through with the original the long order. The risk management is for when they are trading shares with other MMs. The volume for the long order gets reported, but the short volume is not reported to avoid double the volume for the day. “Short volume† is different than “short interest† according to FINRA. “Short volume† is not reported (as on the OTC site), but “short interest† is reported (the REG Sho short % interest that we all see). According to FINRA, it’s because of this type of MM trading activity that short volume does not get reported – to avoid doubling the day’s volume (as requested not to report by the SEC).

My first question was “If nothing gets reported, then why not at the very least report “0† short volume after Aug. 2010?†. To me, this is when it got weird and the Director began to stumble and she sounded like she was having a tough time explaining this. She went on to say that this “type of trading activity happens all the time†. As soon as she said that, my next question hit.. “If this happens all the time, then why is there “0† short volume reported BEFORE Aug., 2010.. but not AFTERWARDS? If MMs traded that way before and after Aug. 2010, the reporting should not be different.†. The Director at this point seemed to be struggling again. She said she didn’t know and they would have to do a complete audit to find out why. This was Red flag #3 to me.

I then asked some tougher questions:

“So what your telling me is that short orders are in fact processed for FFGO. Even if it’s just for a few seconds, or minutes, they are in fact real short orders. So it’s safe to say short orders exist right, so there should be volume?† Her response was that they don’t count them because they exist for such a short time. I then said “Well if short orders are being processed even for short time, they do in fact exist right?†. She said “yes†.

I then asked the following: “There is a lot of speculation that FFGO has NSS going on. Going off what people say on a message board is not reliable. But since short volume is missing, and based on what you explained to me that MMs are processing long orders by using “risk management†.. it’s safe to say there is no NSS position at FFGO. Is that correct?†. At this point she ROYALLY was having a very difficult time answering the question. Red flag #4.

Through most of the call above, the Director stumbled a great deal. I got the feeling it was NOT because of her experience, but because of what she couldn't say. I found her to be very helpful and very knowledgeable. But again, I felt like she was stuck in a hard place being asked tough questions and yet not being able to honestly answer them.

So my mind had changed regarding NSS. I now believe there IS a NSS position here, however I’m still not clear on “how much†. Here’s why:

* OTC and FINRA can’t explain (or don’t want to) why short volume data is missing after Aug. 2010. That is very concerning in itself.
* FINRA admits short order volume is being processed, but not reported (nor acknowledged publicly because they are temporary).
* My call with the Director let me hear her voice patterns, and seemed to indicate that there is information they do not want to (or can’t) disclose. This is my opinion only.
* If there is no short volume reported, then why is FINRA not putting “0† volume on the OTC site.
* The “risk management† style of trading that FINRA allows the MMs to use is completely questionable in my opinion, and allows for corruption since there is no true reporting or public transparency for us retail investors.

I have just shot off an email to the Director, and asked her to recap what she told me over the phone via email. As of right now, there is still no clear explanation why this data is missing.

My next step is to go to the SEC to get resolution on this missing data. Depending on what happens there, if there is no resolution... I plan to go to the media afterwards. I have to follow the proper channels first to get resolution.

Best regards.

BMFL<OD

next week(s) is here

NSS ~ Counterfeiting Stock ~ MM Games Played   

Moderator: fourkids_9pets  Assistants: Paula, camper9, SevenTenEleven, ThePennyGuru, dehydratedman  Share   Followers: 224 
Created: 7/20/2010 5:52:25 PM 
 

fourkids_9pets     Share   Wednesday, September 21, 2011 10:44:36 AM 
Re: None     Post #  of 7156   

why bother .. the cons invited are *among* those fleecing
retail due to a total lack of transparency and accountability

nothing like the foxes guarding the hen house miss mary

==
SEC Announces Roundtable on Microcap Securities
FOR IMMEDIATE RELEASE
2011-186

Washington, D.C., Sept. 19, 2011 — The Securities and Exchange Commission today announced that it will host a public roundtable next month to discuss the unique regulatory issues surrounding the execution, clearance, and settlement of microcap securities.

The roundtable is being sponsored by the SEC’s Microcap Fraud Working Group, a joint initiative of the Division of Enforcement and Office of Compliance Inspections and Examinations. The Working Group is the Commission’s primary resource for issues relating to market participants and trading practices concerning securities primarily quoted on the OTC Bulletin Board (OTCBB) or OTC Quote (previously Pink Sheets).

The event will take place on October 17 from 1 p.m. to 5 p.m. at the SEC’s Washington D.C. headquarters. It will feature in-depth discussions of key regulatory issues including Anti-Money Laundering monitoring, compliance challenges, and potential changes to the regulatory framework. Panelists will include representatives from The Deposit Trust Company, broker-dealers, the Financial Industry Regulatory Authority and others.

The roundtable is part of an ongoing SEC effort to focus on the particular challenges facing issuers and regulated entities within the changing business and regulatory climates. The purpose of the roundtable is to enable Commission staff to gather ideas and request input for regulatory measures surrounding the execution, clearance and settlement of low-priced securities.

The event is open to the public with seating available on a first-come, first-served basis. The roundtable also will be webcast live on the SEC website and archived for later viewing. For more information about the roundtable, contact the Division of Enforcement at 202-551-6607.

http://www.sec.gov/news/press/2011/2011-186.htm

===
DISBAND THE SEC >> SO ANOTHER GENERATION ISN'T DESTROYED FOR PROFIT

==
4kids
all jmo

BMFL<OD

next week(s) is here

fwayneh1     Share   Saturday, September 24, 2011 3:50:42 PM 
Re: None     Post #  of 184093   

We're still waiting for the New Rules to rock the "shorters" boats.

New Rules Will Cause Panic For Shorts

Posted: Feb 25 2011 By: Jim Sinclair

Dear Friends,

http://jsmineset.com/

The following is information from Dr. Jim Decosta:

Here is the URL:

http://www.finra.org/Industry/Regulation/RuleFilings/2010/P121892?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+FINRARuleFilings+(FINRA+Rule+Filings)

Quote: There’s 3 new laws gaining attention in the NSS market reform arena:

FINRA 4320 goes into effect on 2/28/11.

It mandates 13 day buy-ins for open delivery failures FINALLY applying to shares of non-reporting corporations. FINRA 2010-043, also starting on 2/28/11 reinstates the “short sale exempt��  (SSE) marking requirements for trade reporting and the OATS system. Those MMs accessing the bona fide MM exemption from executing pre-borrows or “locates��  before admittedly naked short sales must now FORMALLY acknowledge the accessing of that universally-abused exemption.

Being that these trades are theoretically being made to “inject liquidity��  then the excuse to hide the related trade data from the public’s eyes goes out the window. You can’t have it both ways and claim the bona fide MM exemption and later claim that the related trade data needs to be kept secret because it might reveal a “proprietary trading strategy�� .

Truly bona fide MMs that are able to legally access that universally-abused exemption cover their naked short position on the next downtick after their short sale when buy side liquidity is in need of being ejected as share prices fall.

The 3rd new rule which is in effect now states that the offers and bids that MMs post must be of approximately the same size. No longer can the offers be of 1 million shares and the offsetting bid good for the minimum 5,000 shares.

The verbiage in 4320 is especially well done as it FINALLY puts the clearing firms that aid and abet this crime wave on the spot.

With the FFETF, which is made up of 25 different agencies, now on the scene the transparency has increased markedly. You can imagine how critical the lack of transparency is to a crime involving selling nonexistent securities and then refusing to ever deliver that which you sold AFTER being allowed access to the funds of the investor being defrauded.

Here are the links to the rules SR-FINRA-2010-028 and SR-FINRA-2010-043:

http//www.finra.org/Industry/Regulation/RuleFilings/2010/P121522

Notice the part I marked in bold in the quote above:

"FINRA 4320 goes into effect on 2/28/11.

It mandates 13 day buy-ins for open delivery failures FINALLY applying to shares of non-reporting corporations."

I'm going to take a wait and see approach. For one thing, a rule that is not enforced is no rule at all. Enforcement has been a real problem. Here is some further commentary from taskforceviking.

What this means for investors and traders is that many of the games large brokers and market makers use to manipulate a stock by holding down investor interest through short selling, or by using a small sell to offset a large buy to keep a stock from moving in a particular direction, will be illegal, and open to investigation.

Examples of this type of manipulation occur when investors put in bids to purchase say, $100,000 shares of XYZ stock at the current market price of say 10.00 per share. The market maker will purchase those shares in the open market in blocks as they can accumulate shares until the purchase is completed. Then, a market maker will bring down the price through manipulation, by selling short a block of say 5000 shares at $9.95. The ratio of strong buying to selling was 20:1, but after both transactions took place, the stock actually fell $.05.

Thus the market maker controls the market of stock through manipulation, instead of simply allowing for the equity to move according to natural market forces.

Horror stories abound of market maker manipulation and naked short selling. There was even a proven case where an investor owned 150% of the shares that a company legally had in the market. This means, 50% of the investors shares were invisible and were created out of thin air, established through naked short selling by a broker, or market maker.

Tomorrow begins a new day for the US markets, and new rules that could prove interesting for investors. If the SEC and FINRA follow through with enforcing these new rules, then we could see the markets skyrocket upwards as short sellers desperately battle to purchase their necessary stock back at any price.

This new rule seems to be rather equivalent to the uptick rule - yes, it slows down shorting and naked shorting, but it does not address the fundamental problems as I have described (duplication, transparency, misleading stats, etc.) Since it is entirely dependent on effective enforcement, rather than outright ban, it is subject to the kind of systemic failure, biased reporting, jaundiced oversight, money manipulation, captured regulators as Taibbi notes in his latest article. So while its better than nothing, and longs on message boards may see some respite for awhile, I suspect the comfort will be short lived.
---------------------------------------------------
This was great reading too....

How Financial Engineers are ruining the market, the economy and your life.

The truth about Shorting Stocks.

Robert Innes Dec 18, 2008. Updated from time to time.

http://www.stopshortingstocks.com/

  TomSawyer     Share   Saturday, September 24, 2011 3:56:47 PM 
Re: fwayneh1 post# 184092     Post #  of 184093   

FINRA 4320 proved to be useless. Nothing appears to have changed. NSS and shorting abuse keeps runing wild.

  SevenTenEleven     Share   Saturday, September 24, 2011 4:28:26 PM 
Re: TomSawyer post# 184093     Post #  of 184094   

FINRA 4320 proved to be useless. Nothing appears to have changed. NSS and shorting abuse keeps runing wild. - TomSawyer

One could make all the rules and laws one wants. But if there is no one there to enforce them, it really doesn't matter much.

Our payday will come!

Tic Toc

BMFL<OD

next week(s) is here

Last edited by Bull Finch (2011-09-24 16:08:30)

Sheared by the Shorts: How Short Sellers Fleece Investors
Ellen BrownCivil litigation attorney; author, 'Web of Debt'

Unrestrained financial exploitations have been one of the great causes of our present tragic condition." -- President Franklin D. Roosevelt, 1933

Why did gold and silver stocks just get hammered, at a time when commodities are considered a safe haven against widespread global uncertainty? The answer, according to Bill Murphy's newsletter LeMetropoleCafe.com, is that the sector has been the target of massive short selling. For some popular precious metal stocks, close to half the trades have been "phantom" sales by short sellers who did not actually own the stock.



A bear raid is the practice of targeting a stock or other asset for take-down, either for quick profits or for corporate takeover. Today the target is commodities, but tomorrow it could be something else. When Lehman Brothers went bankrupt in September 2008, some analysts thought the investment firm's condition was no worse than its competitors. What brought it down was a massive bear raid on 9-11 of that year, when its stock price dropped by 41 percent.

The stock market has been plagued by these speculative attacks ever since the four-year industry-wide bear raid called the Great Depression, when the Dow Jones Industrial Average was reduced to 10 percent of its former value. Whenever the market decline slowed, speculators would step in to sell millions of dollars worth of stock they did not own but had ostensibly borrowed just for purposes of sale, using the device known as the short sale. When done on a large enough scale, short selling can force prices down, allowing assets to be picked up very cheaply.

Another Great Depression is the short seller's dream, as a trader recently admitted on a BBC interview. His candor was unusual, but his attitude is characteristic of a business that is all about making money, regardless of the damage done to real companies contributing real goods and services to the economy.

Here is how the short-selling game is played: stock prices are set by traders whose job is to match buyers with sellers. Short sellers willing to sell at any price are matched with the low-ball buy orders. When sell orders overwhelm buy orders, the price drops. The short sellers then buy the stocks back at the lower price and pocket the difference. Today, speculators have to drop the price only enough to trigger the automatic stop loss orders and margin calls of the big mutual funds and hedge funds. A cascade of sell orders follows, and the price plummets.

Where do the shorts get the shares they sell? As Jim Puplava explained on FinancialSense.com on Sept. 24, 2011, they "borrow" shares from the unwitting true shareholders. When a brokerage firm opens an account for a new customer, it is usually a "margin" account -- one that allows the investor to buy stock on margin, or by borrowing against the investor's stock. This is done although most investors never use the margin feature and are unaware they have it. The brokers do it because they can "rent" the stock in a margin account for a substantial fee -- sometimes as much as 30 percent interest for a stock in short supply. The real shareholders get none of this profit. Worse, they can be seriously harmed by the practice. Their shares are being used to bet against their own interests.

There is another problem with short selling: the short seller is allowed to vote the shares at shareholder meetings. To avoid having to reveal what is going on, stock brokers send proxies to the "real" owners as well; but that means there are duplicate proxies floating around. Hedge funds may engage in short selling just to vote on particular issues in which they are interested, such as hostile corporate takeovers. Since many shareholders don't send in their proxies, interested short sellers can swing the vote in a direction that hurts the interests of the real shareholders.

The Securities Act of 1933 regulated short selling by imposing an "uptick" rule, which required a stock's price to be higher than its previous sale price before a short sale could be made; and by forbidding "naked" short selling -- selling stocks short without either owning or borrowing them. But the uptick rule was repealed in July 2007; and and an exception created in 2005 turned the rule against "naked" short selling into a sham. The practice was allowed by "market makers" -- those brokers agreeing to stand ready to buy and sell a particular stock at a publicly quoted price. The catch is that market makers actually do most of the buying and selling of stock today. Market making is one of those lucrative pursuits of the giant Wall Street banks.

One of the more egregious examples of naked short selling was relayed in a story run on FinancialWire in 2005. A man named Robert Simpson purchased all of the outstanding stock of a small company called Global Links Corporation, totaling a little over one million shares. He put all of this stock in his sock drawer, then watched as 60 million of the company's shares traded hands over the next two days. Every outstanding share changed hands nearly 60 times in those two days, although they were safely tucked away in his sock drawer. The incident substantiated allegations that a staggering number of "phantom" shares are being traded around by brokers in naked short sales. Short sellers are expected to cover by buying back the stock and returning it to the pool, but Simpson's 60 million shares were obviously never bought back, since they were never on the market.

Any alleged advantages from the liquidity afforded by short selling are offset by the serious harm this sleight of hand can do to companies or assets targeted for take-down in bear raids. With the power to engage in naked short sales, market makers have the market wired for demolition at their whim.

What can be done to halt this destructive practice? Ideally, federal regulators would step in with some rules; but as Jim Puplava observes, the regulators seem to be in the pockets of the brokers. Lawsuits can have an effect, but they take money and time.

Puplava advises investors to call their brokers and ask if their accounts are margin accounts. If so, get the accounts changed, with confirmation in writing. Like the "Move Your Money" campaign for disciplining the Wall Street giants, this maneuver could be a non-violent form of collective action with significant effects if enough investors joined in. We need some grassroots action to rein in our runaway financial system and the government it controls, and this could be a good place to start.


BMFL<OD

next week(s) is here

NSS ~ Counterfeiting Stock ~ MM Games Played   

Moderator: fourkids_9pets   Assistants: Paula, camper9, SevenTenEleven, ThePennyGuru, dehydratedman  Share   Followers: 227 
Created: 7/20/2010 5:52:25 PM 
 
fourkids_9pets     Share  Saturday, October 08, 2011 1:44:01 PM 
Re: None   Tweet  Post #  of 7288   

Dear Occupy Wall Street: Will You Stand with Me?

OCTOBER 7, 2011
BY SHAH GILANI, Capital Waves Strategist, Money Morning

Dear Occupy Wall Street Demonstrators,

Let me start by saying that I applaud your initiative. Grassroots protests are the essence of democracy. And as we've seen with the Tea Party movement and the Arab Spring, nonviolent protests are a powerful way to effect meaningful change.

Yet even though I'm 100% behind you in spirit, I can't fully support your cause.

Don't get me wrong, I want to join you. But I can't - not yet, anyway.

And the reason why I can't support your ultimate goals is a simple one: I don't know what they are.

So how about this? I'm going to tell you what I stand for. I'm going to tell you what my goals are. And if you agree, then we can stand together. And i f you agree with me, I won't wait another minute before joining you whenever and wherever I'm needed.

So here it goes.

The reason I'm already leaning towards your side is that the fountainhead of your disgust seems to be "Wall Street."

Now, I don't know what Wall Street means to you. But to me, it means all the crony capitalists and market manipulators whose calculators and spreadsheets say the present value of their self-serving greed is worth discounting all of America's future.

That's the Wall Street that I'm committed to fighting - the Wall Street that's littered with greed and corruption.

But to me, the "Wall Street" we're fighting against is not synonymous with capitalists. The enemy we share doesn't include the entrepreneurs and self-starters that have built this country up brick by brick.

So if you think socialism is better than capitalism, you can count me out. If you think that redistributing earned income from hard working Americans to support lazy, self-indulgent, able-bodied crybabies is fair, count me out. If you think that making a lot of money, fairly and honestly, is un-American, count me out. And, if you're thinking about violence or destroying other people's property, count me out.

But if you're mad that Wall Street money has bought our Congress; if you're mad that there's an oligarchy of banker puppeteers pulling the strings of the U.S. Federal Reserve; if you're mad that Wall Street is hell-bent on toying with the stock market and turning the screws on fixed-income investors, parents, and retirees to expand their profit margins; and, if you are mad that "too-big-to-fail" banks can wreck the economy and get bailed out, only to become bigger bullies while tens of millions of Americans lose their homes, jobs, and retirement savings, then I am solidly with you.

And, if you're with me, we agree that we need to tear down Wall Street to rebuild Main Street!

That's where we stand, hopefully united.

Now let me offer up a list - a manifesto, if you will - that you may or may not choose to adopt. But remember, I'm not trying to hijack your movement. I just want to offer some vision and clarity.

So these are the goals I'd like for us all, as fed-up Americans, to undertake:

Break up too-big-to-fail banks so they aren't threatening our financial system .

Investigate failed banks for fraud, and indict and incarcerate guilty parties.

Scale banker bonuses progressively with long-vesting stock options.

Legislate pay claw-back provisions and criminal statutes for bad banker behavior.

Eliminate volatility-inducing high-frequency-trading and ETF program arbitrage.

Make all derivatives exchange traded, highly margined, and transparent.

Limit credit default swaps to two times the value of at-risk underlying credits.

Mandate exhaustive studies of the potential market impact of newly created financial products.

Create simple, effective, light-touch regulations with heavy criminal penalties .

Cap Wall Street's political contributions and make them transparent.

Audit the Federal Reserve and limit its lending to domestic banking institutions.

Give the Consumer Protection Finance Bureau (CPFB) criminal indictment powers, including over the Federal Reserve.
Make Wall Street answer to the needs of Main Street, not the other way around.

Please don't get me wrong. It's not that there aren't plenty of other things in the United States that need fixing. I think we'd all agree we need to simplify and "fairify" the tax code, if not throw it out altogether. But, your movement is Occupy Wall Street, so let's stick to that.

There's one last thing. I'm certain that with thousands of supporters you'll find a broad spectrum of ideas and beliefs. That we may be united in belief does not necessarily mean we are all alike .

Take me, for example. In some ways, I am a "Wall Street" guy, and in other ways I am one of the 99% you claim to represent. I want an opportunity to make a good living, honestly and fairly. But, like all of you, like all of America, I am sick and tired of the powerful, moneyed oligarchy that runs America profiteering off the backs of hard working Americans.

That's why we need strong, transparent and fair capital markets and honest, smart leaders. The two aren't incompatible.

So what I'm saying is that I'm ready to join your revolution, if you're ready to accept a Wall Street insider who's determined to restore the system's integrity - not destroy it.

And that's why you're going to hear more from me every week, as I call Wall Street's biggest players onto the carpet. And I can promise you this: Some of the indictments I make are going to shock you.

Sincerely,

Shah Gilani

http://moneymorning.com/2011/10/07/dear-occupy-wall-street-will-you-stand-with-me/

==
4kids
all jmo

BMFL<OD

next week(s) is here

Part 2

July 22nd, 2011 | Tags: BCIT, Bloomberg news, canada, CMKM, CMKX, cnn, deep capture, diamonds, Fox, jon stewart, mark mitchell, msnbc, Naked, NY Post, NY Times, oil, patrick byrne, Rupert Murdoch, SEC, short selling, usa, wall street, WSJ | Category: Uncategorized | Leave a comment
The Destruction of the American Economy
The Office of Financial Regulation presentation April 22nd, 2011 The Destruction of the American Economy.
How the hell did this happen, who’s to blame, and how we can get America back on track.

For those American Taxpayers mad about the Wall Street Bailouts, mad about the free falling economy, mad that the unemployment rate is skyrocketing, mad at your depleted 401K portfolios, this is a must read article.

This article will expose everything dirty about Wall Street and our Market Regulators. The crimes committed by the Wall Street Financial Banks/Brokers that lead to the Credit Crisis will be exposed. Crimes that our leaders in Washington and our Market Regulators are so desperately trying to hide from public view.

This report will detail all aspects of the Credit Crisis. You will learn that the Credit Crisis was caused by a combination of risky leveraged derivative bets, which are simply bank gambling debts and by the counterfeiting of stock securities, known as Naked Shorting. This report will detail who participated in these actions, this report will Name Names!

You will learn why the bailout of the banks will ultimately cost American Taxpayers tens of trillions of dollars more then what our leaders are currently forecasting. You will learn what the devastating effects the bailouts will have on our future and our children’s future.

Finally, this report will outline a simple plan that will force the clean up of Wall Street, which should then help turn our economy around.

Who am I and how do I know all this? I am a shareholder of a small company called Bancorp International. Bancorp International, known as BCIT is a small start up company, which was on its way to building itself into a growing successful company, before it was viciously targeted and attacked. The story of BCIT will shock and anger most hard working Americans.

The BCIT and its shareholders are victims of an orchestrated criminal act called Naked Short Selling. We have witnessed the horrors of Naked Shorting first hand.

Naked Shorting is a practice that the large Wall Street Financial Banks/Brokers used to rig the stock market for huge profits by counterfeiting the stock of targeted individual companies with the intent of bankrupting them. Yes counterfeiting of stock!!!

How big is Naked Short Selling? Naked Shorting makes the Bernard Madoff scandal look like a small parking infraction, that’s how big Naked Shorting is!

The fact is the Naked Shorters have counterfeited stock in thousands of American companies over the past few years. The Naked Shorters have stolen trillions away from these companies and their shareholders. Hundreds of thousands of jobs were lost with the destruction of these companies, making Naked Shorting the largest act of Financial Terrorism ever inflicted on the American people.

Yet our own Market Regulators and Congressional leaders have done nothing to stop this. They have turned a blind eye to the plight of all these American companies and their shareholders. They have been well aware of Naked Shorting for years and refused to enforce the laws that would have stopped Naked Shorting. Now they even refuse to go after the criminals, who were involved in Naked Shorting.

The reason why our Market Regulators and Congress refuse to go after the Naked Shorters is because it is the large Wall Street Financial Bankers/Brokers doing the crime.

The evidence in this report will clearly show that in today’s America the large Wall Street Financial Bankers/Brokers are above the law. They hold all the power and are the puppet masters that really run the American Economy, while Congress, the SEC and the DTCC are just their puppets.

Note 1: The Security and Exchange Commission, the SEC, is the police force for Wall Street. Their top job is to protect the public.

Note 2: The Depository Trust Clearing Corporation, the DTCC’s is a private company whose job is to oversee the settlement of virtually all the trades in the United States Market. In other words, the DTCC’s main job is to make sure the brokers are delivering real shares and not counterfeit shares to the investment public.

Note 3: The Senate Committee on Banking, Housing, and Urban Affairs is a Congressional Committee responsible for overseeing the SEC, the Stock Market, and the Banks. They are the ultimate watchdogs of the Economy.

The SEC under the leadership of former Chairmen Christopher Cox, the DTCC under the leadership of Donald F. Donahue and the Senate Committee on Banking, Housing, and Urban Affairs led by Republican Richard Shelby and Democrat Christopher Dodd all are guilty of betraying the American Public.

They all should be immediately fired and all should be investigated for fraud and possible kickbacks. Under their watch they allowed the large Wall Street Financial Banks/Brokers to destroy and pillage the American Economy. These individuals sat back and did noting while the financial elite counterfeited shares of companies like BCIT & CMKX & Siri and thousands of other companies.

BCIT the Smoking Gun.

BCIT is the smoking gun. BCIT has undeniable proof that well over 350 million counterfeit shares of BCIT stock were created by the large banks/brokers. Furthermore, BCIT’s case shows that the SEC, the DTCC and Congress were all well aware of this and refused to do anything about it. The Naked Shorting criminals pocked well over 50 million dollars from the counterfeiting of BCIT stock alone.

After we provide our evidence, we hope you the American Public will begins to understand how broken our Economy really is and will help us spread the word about what is really happening within our economy.

All it takes is for one person to stand up to the injustices and say enough is enough followed by another, then another and soon a movement is born. We hope this report will start such a movement and that you will stand up with us.

We only ask that you forward this report on because this effects EVERY AMERICAN CITIZEN!

Only through public awareness and public pressure will we succeed in getting rid of the criminals that run Wall Street. Only through public awareness and public pressure will we be able to make the changes necessary to fix our Economy.

Without these changes our kids will inherit an America that is a shell of itself. An America with staggering higher taxes, a lower standard of living, and fewer job opportunities. Conversely the Wall Street rich and powerful will continue to get away with their criminal activates against their fellow Americans without any consequences.

Two hundred years ago, our forefathers would have gathered up their guns and pitchforks and used them to run all of the Wall Street Financial Bankers/Brokers, Market Regulators and Congressional Leaders that caused the Credit Crisis out of town.

Today we do the exact opposite. Instead of punishing those who caused the Credit Crisis we bail them out. They destroyed our economy and we reward them by giving them trillions of dollars.

We must change this. The day the large Wall Street Financial Banks/Brokers became greater than the law was the day that the American Economy’s fate was sealed.

We must make the large Wall Street Financial Banks/Brokers accountable for their actions. We must make our Congressional leaders and Market Regulators accountable for not doing their jobs. Accountability must mean firings and jail time for those involved in causing the Credit Crisis or nothing will ever change.

The Credit Crisis

The Credit Crisis is the reason our economy is now in a freefall. Without a Credit Crisis, America would not be knee deep in a recession right now.

The two major causes of the Credit Crisis were risky Leveraged Derivative Bets and Naked Short Selling.

Credit Crisis Causes #1: Leveraged Derivative Betting

Derivatives are used by banks and other major businesses to hedge risk, make a market, or to engage in speculation. Speculation is the Motherload of all EVIL. In other words, derivatives are basically big bets made with a tremendous amount of leverage. Derivative bets can be made on anything like stocks, bonds, currencies, commodities, the housing market, etc. The housing market was the bet of choice by many on Wall Street.

A typical Wall Street Bank/Broker with 1 billion dollars in hard assets was allowed to borrow 50 to 100 billion dollars and then wager that money on the derivative market. When the housing market was going up the Wall Street Banks were making billions on their leveraged bets. The more money they made the riskier bets they made. In good times the high leveraged bets resulted in insane year-end bonuses for all those employed at these Wall Street Banks/Brokers.

The music stopped when the housing market and other derivatives turned south.

What do you suppose happens to that 50 billion dollar housing market bet in a free falling housing market?

A twenty percent housing market downturn would result in a 10 billion dollar loss on the original 50 billion dollar housing market bet. How then does a bank cover a 10 billion dollar loss when the bank only has 1 billion dollars in real value? Can you say “Taxpayers Bailouts”!

Total of the Taxpayer Bailouts

So what is the total value of the combined bets Wall Street made on the derivative market?

If we know this we can quantify how big the total losses will be. This will tell us how much bailout money the banks and Wall Street will ultimately need.

World GDP is about 50 trillion dollars, which represents all of the world’s total hard assets. In 2001 the derivative market was also roughly 50 trillion dollars. This is economically sustainable because 50 trillion dollars of derivative bets were backed by 50 trillion dollars of real assets, an equal 1 to 1 ratio.

However, the derivative market went from 50 trillion in 2001 to a staggering 700 trillion by 2007, all because of leveraged borrowed money.

The ratio of GDP (50 trillion) to the derivative market (700 trillion) went from a realistic 1 to 1 ratio to an unsustainable 1 to 14 ratio all because of GREED from the likes of Goldman Sachs, Citigroup, Morgan Stanley, Bear Stearns, Lehman Brothers and many other.

They made 700 trillion dollars worth of bad bets back by nothing more than thin air. A pack of degenerate gamblers that literally bet the house on the housing market with money they didn’t have and now we the American Taxpayers will be forced to pay off their gambling debt for decades.

What were former FED Chairmen Allan Greenspan, President Bush and Congress doing while the banks were making their 700 trillion dollars worth of bad bets that now threaten to destroy us?

Incredibly our leaders decided that the banks needed no transparency and they were perfectly capable of self-regulating themselves.

The SEC, the police of Wall Street, with the insistence of former Commissioner Annett Nazareth, in 2004, went as far as removing an important regulation that limited the amount of money that investment banks could borrow. With this regulation removed the banks had no more borrowing restrictions. This paved the way for them to borrow unlimited amounts of money, which they used to make even riskier bets on the housing market and other derivatives. The SEC removal of this important regulation is the main reason the derivate market went from 50 trillion to 700 trillion dollars.

Total Bailout Cost

If we take the 700 trillion dollar derivate market, which is nothing more than 700 trillion dollar in bets and take a very conservative 10% drop in derivative prices (10% drop in housing market, commodities, stock market…etc) across the board, we are talking about 70 trillion dollars in betting losses by the large banks. If world GDP is roughly 50 trillion dollar then lets assume bank assets make up 20 trillion of the 50 trillion GDP figure.

The banks would then have 70 trillion in losses and only 20 trillion in hard assets to cover these losses. This would leave the banks with 50 trillion dollars in losses beyond what they could cover themselves (70 trillion minus 20 trillion equals 50 trillion), or in other words they are in need of 50 trillion in taxpayer bailouts.

America are you beginning to realize how big of a catastrophe we are facing?

Now you know why each week the FED and Treasury keep raising the amount of bailout money they are paying out to the banks.

The FED as of today has pledged nearly 8 trillion dollars and the Treasury has pledged 700 billion dollars. This is just the start of the bailouts, we only have 41.3 trillion or so more to go.

The Impact of the Bailouts on the Future of America

Even before any of the bailouts started about half of our tax dollars were going towards paying just the interest, again this is only the interest on our national debt. Now with all the bailouts the national debt will explode in the coming years. Soon all of our tax dollars will go towards paying the interest on the national debt and still this might not be enough. This will leave no money for schools, roads, health care and national defense unless there are major tax increases.

There is no ways around the upcoming tax increases. It might not be this year or next year but very soon. In the years to come our taxes will sky rocket, maybe even double or triple. Our children will be forced to pay life altering higher taxes throughout their lifetime, all because of the sins of the large Wall Street Financial Banks/Brokers.

Believe it or not run away higher taxes is the best-case scenario in this Credit Crisis tragedy. If our leaders continue to allow the large Wall Street Financial Banks to dictate economic policy you will continue to see the banks getting more and more bailout money each month.

Eventually the burden of the bailouts will be far too great for even the American Taxpayer to finance and this could easily lead America into bankruptcy. As shocking as this sounds it will be our reality if the bailouts continue. We simply cannot afford to bailout the banks to the tune of 40 to 50 trillion dollars.

Credit Crisis Causes #2: Naked Shorting

While Leveraged Derivative Betting was the primary cause of the Credit Crisis, Naked Shorting helped amplified the Credit Crisis.

As mentioned above, Naked Shorting is the greatest crime against small and mid size American companies and shareholders in the history of the United States. Naked Shorting over the years has destroyed thousands of American companies, costing trillions of dollars in lost shareholder wealth and hundreds of thousands of lost jobs

The Naked Shorting game is played like this. A large Wall Street Broker targets a company. The brokers then start making big bets that the company’s stock price will go down.

This is called taking a short position, which is legal . Think of shorting as the opposite of buying a stock. When you short a stock, you only make money if the stock price goes down you lose money if it goes up. The further down the stock price goes the bigger the profits you make on your short bet.

Normally it’s up to a company’s performance and market conditions that decide whether or not a company’s stock price goes up or down.

Naked Shorting, which is very ILLEGAL, takes all of this out of the equation. Naked Shorting rigs the market so the targeted company’s stock price always drops regardless of any other factors.

How do the brokers manipulate the stock price? It’s the counterfeiting of stock that gives the brokers total control.

Note: We will discuss in a later section how the target companies can be completely unaware that the brokers are counterfeiting their stocks.

By the brokers adding a never-ending supply of counterfeit shares, the brokers eventually exceed any demand there is for the stock and the stock price drops. How far the stock price drops depends on how many shares the brokers are willing to counterfeit.

Naked Shorting always ensures the brokers have the winning hand.

In summary Naked Shorting is rather very simple, the brokers first target a company, then they place bets that the share price of that company will go down, then they illegally manipulate the share price down by counterfeiting shares, and then they collect the money on their winning short bet.

But wait it gets much worse

The ultimate goal for the Naked Shorters is not to just drive down a company share price, but the real goal is to bankrupt the company.

Bankruptcy is the tool the brokers use to hide the counterfeiting evidence. The millions or billions of extra counterfeit shares, suddenly disappears when the company declares bankruptcy. That’s because bankruptcy eliminates all stock shares, real or counterfeit, they all get wiped out.

The Making of Counterfeiting Shares

When you buy (or short) a stock or even when a big buyer like a Hedge Fund buys (or shorts) a stock the process is the same. You give your broker real money and in exchange your broker is obligated to deliver real stock to you at an agreed upon price.

What people don’t realize is that when you make a stock purchase your broker first sends you an electronic marker to your trading account. YOU DON”T HAVE REAL STOCK YET!!!!!

The electronic marker looks and acts like real stock, people just naturally assume they own the real stock. This is understandable because the electronic marker looks authentic, only your broker, the DTCC, and SEC would know the difference.

Remember the DTCC, the Depository Trust Clearing Corporation is a private company whose job is to oversee the settlement of virtually all the trades in the United States Market. The DTCC’s main job is to make sure the brokers are delivering real shares and not counterfeit shares to their customers.

In reality the electronic marker is nothing more than an IOU from your broker, even though it says you bought X amount of stock at X share price at this time of the day.

The electronic marker confirms the stock amount and stock price of your business transaction between you and your broker but your broker still must go out into the market and retrieve the real stock at that agreed upon price and then deliver that real stock into your trading account.

Up to this point the broker’s actions are perfectly legal. The United States Settlement System gives the brokers 3 business days to go out into the market and purchase the real stock.

For the most part, honest brokers usually deliver real stock to your account close to the same time your electronic marker gets entered into your account. Only in unusual cases like in an extremely volatile market or with an extremely illiquid stock should it take up to three days for your broker to deliver the real stock to you.

But what if your broker has alternative motives? What if your broker wants to manipulate the company your buying stock from? What if your broker decides not to deliver real stock to you and never intends to? Then what happens?

All the electronic markers in your account, now become permanent counterfeit stock . There is no real stock attached to the electronic marker.

At some point you will likely sell the electronic markers, which at that point the electronic markets becomes counterfeit shares of stock.

And why not? You have no idea your holding counterfeit stock.

When the counterfeit stock is sold it goes back into the market for others to buy and sell. At this point the counterfeit stock and the real stock get mixed together and are indistinguishable from one another. Since the counterfeit shares get added in with the real shares the total number of shares of that stock increase with every counterfeit share created.

If the broker repeats this process over and over again with their other clients, it’s easy to see how millions if not billions of extra counterfeit shares can get mixed in with real shares and a company’s share structure can balloon out of control.

Now the company’s whose stock is being counterfeited as well as the company’s shareholder base has no idea this is occurring.

They have no idea that their stock is being diluted to hell and that is the reason the stock price is dropping like a rock. They only know for some unexplained reason the stock price is dropping fast.

Who are the brokers involved in Naked Short Selling? There is the Loop Hole in the system at the DTCC, which is called the Stock Borrow Program, which lets all trades go thru the system at the DTCC regardless to wether or not the brokerage houses and hedge funds find and deliver the actual shares. This flaw is then massively manipulated by these criminals that have flooded the system with Counterfeit / Phantom Shares. Reports have been announced that $30 Trillion dollars a month flows through the DTCC with at least $6 Billion dollars a day of counterfeiting shares and it continues to grow as the counterfeit / Phantoms shares are multiplying since the hole in the system allows all the trades to go through electronically, even though these criminals Fail to Deliver ( FTD’s ) the actual shares. This crack in the system at the DTCC could once again destroy the American Financial System if not corrected soon.

Overstock.com is another company battling Naked Shorting, in their lawsuit awaiting trial ( December 5th, 2011 ) they charge the following large Wall Street Broker Institutions with Naked Shorting. Hopefully this will be the Casey Anthony Trial of the Century in the Business World. It will be the biggest story ever told, now lets see if the business world will cover the trial like they did the OJ Simpson and the Casey Anthony trials 24/7.

The firms are:

Goldman Sachs, Morgan Stanley, Bear Stearns, Bank of America, Bank of New York, Citigroup, Credit Suisse, Deutsche Bank, Merrill Lynch and UBS.

Many other companies have made similar accusations against these same large Wall Street Financial Institutions for Naked Shorting.

To date, no criminal charges have been brought against these firms by the SEC. The SEC refuses to investigate the large Wall Street Financial Banks/Brokers for Naked Shorting.  Goldman Sachs was fined on May 4th, 2010 for counterfeiting / Phantom shares on 385 separate transactions during a two month period of  ( Dec 2008 & Jan 2009 ) Just as Bernie Madoff was all over the news for his so called Ponzi Scheme, more like ( NSS ).  So Goldman Sachs is fined for their Fails To Deliver ( FTD’s ) on May 4th, 2010, the same day they find a car bomb in New York City, yes you guessed it, this story of Goldman Sachs counterfeiting shares should have been all over the TV news, but not once was it covered.  Well, we all know what happen two days later on May 6th, 2010, the FLASH CRASH, and to this day, some 14 months later, we still have no answers to what caused the Flash Crash of May 6th, 2010.  Were these Wall Street criminals sending a message to back off or this is what we will do to your markets as we all witnessed the stock market go from 300 points down around 2:30pm in the afternoon to almost 1,000 points in less than 3 minutes.  Did they send the message to stop looking into the rampart Naked Short Selling that had flooded the stock market with counterfeit shares allowed by the DTCC and the Stock Borrow Program, the whole in the system, that has been manipulated by these criminals.

The SEC ignored decades of evidence surrounding Bernard Madoff and his 50 billion dollar ponzi scheme. Likewise, the SEC has ignored a decade worth of evidence surrounding the over trillion-dollar Naked Shorting scheme. The SEC has ignored tens of thousands of letters from the American Public, letters from the Chamber of Commerce, letters from the Small Business Association over the years demanding they clean up Naked Shorting. There is also the Largest Lawsuit in World History in regards to Naked Short Selling now in Central District of California – United States District Court. It is a case with Allegations of a Government Sting Operation in regards to Naked Short Selling of a company called CMKM Diamonds with the trading symbol CMKX. The case # CV-01-03894-RSWL The case is 7 plaintiffs of CMKM Diamonds ( CMKX ) represented by Al Clifton Hodges vs the SEC Commissioners ( former and current ) that allowed the Counterfeiting of CMKX shares. There are some pretty amazing Allegations by Lawyer Al Clifton Hodges and how the Largest Lawsuit in World History is not all over the news is beyond me. Why is the Government and also the NEWS Media ignoring this Lawsuit.

Apparently it seems inconsequential to the SEC that trillions of dollars of wealth has been stolen away from the American Public by the likes of: Goldman Sachs, Morgan Stanley, Bear Stearns, Bank of America, Bank of New York, Citigroup, Credit Suisse, Deutsche Bank, Merrill Lynch and UBS (as indicated by the Overstock.com lawsuit)

How is this possible when even former SEC Chairmen Cox after several years of denial, finally admitted that Naked Shorting is a big problem? The SEC admitted that Naked Shorting is a market wide problem, as Christopher Cox stated in March of 2008 when Bears went down and then the Government protected the top 19 banks from naked short selling. Then when Lehman brothers went down because of Naked Short Selling, the Government again stepped in to protect 799 financial stocks from Naked Short Selling. What about all the other companies that were being naked shorted like Sirius XM Radio and the thousands of other stocks left unprotected from these corrupt hedge funds and brokerage houses. BCIT is living proof there is Naked Shorting, yet nobody is ever found guilty of doing it. Then they arrest Bernie Madoff in December 2008 just a few months after the financial meltdown on Sept 15th, 2008. What a con job that was, blame it on Bernie Madoff.

BMFL<OD

next week(s) is here

AlanC     Share   Friday, October 14, 2011 8:16:00 PM 
Re: AlanC post# 7350     Post #  of 7361   

The main event begins in December: http://www.overstock.com/50257/static.html

For six years Overstock.com has waged a war to expose Wall Street mischief. We did not go looking for a fight, but our company was attacked, and we learned we were not alone: the same manipulation-for-profit tools that Wall Street had deployed against us had also been deployed against many American companies, harming job creation, innovation, and economic growth. We knew that if left unchecked and unexposed, Wall Street's games could ultimately damage U.S. capital markets.

So in 2005 and 2007 we filed two lawsuits. The first case was against a hedge fund (Rocker Partners) and hatchet-job-for-hire research team (Gradient Analytics), both with ties to Jim Cramer. The second case was against a group of eleven Wall Street prime brokers, culminating in Goldman Sachs. The hedge fund in question (Rocker Partners) hired famed lawyer David Boies, and the prime brokers showed up with an army of the most prestigious law firms in America. Our lawyers were Dore Griffinger, Ellen Cirangle, Jonathan Sommer and Catherine Jackson of Stein & Lubin, a small but excellent San Francisco law firm.

We won the hedge fund case against Gradient and Rocker, extracting an apology, a retraction and over $5 million in cash (it felt good to beat David Boies' firm). In our prime broker case, one of the Wall Street banks (Lehman Brothers) has gone under (two, Bear Stearns and Merrill Lynch were sold at fire sale prices), and another seven paid us millions to let them out.

That leads us to the main event this coming December, when Overstock.com will square off against Goldman Sachs and Merrill Lynch (and Merrill's parent, Bank of America) in a San Francisco courtroom. Recently, in the prosecution of this case, we uncovered evidence of collusive action between Goldman Sachs, Merrill Lynch and other Wall Street bad guys, in a scheme designed to fool regulators and profit illegally at the expense of Overstock.com. As a result of this discovery, in December 2010, we added a Racketeer Influenced and Corrupt Organization (RICO) Act claim and requested treble damages under this RICO claim. We firmly believe the conduct of Goldman Sachs and Merrill Lynch were "racketeering" and "corrupt." We are moving forward: trial is scheduled to commence this year, on December 5, 2011. At trial we will hold Goldman Sachs and Merrill Lynch accountable and expose a slew of illegal Wall Street practices to the public.
____________
This messages and message links contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements include, but are not limited to, statements regarding the conduct at issue in the lawsuit described, related claims and forecasted process, including trial and any outcome. Overstock.com, Inc.'s Form 10-K for the year ended December 31, 2010, its subsequent quarterly reports on Form 10-Q, or any amendments thereto, and its other subsequent filings with the Securities and Exchange Commission identify important factors that could cause its actual results to differ materially from those contained in its projections, estimates or forward-looking statements.

  AlanC     Share   Friday, October 14, 2011 8:17:31 PM 
Re: AlanC post# 7351     Post #  of 7361   

Thanks ezal a wonderful resource:
A good sample of how long we've been battling the Wall Street criminals:

http://www.rgm.com/shortselling.html


RGM Communications Inc.
#427 - 470 Granville Street
Vancouver, BC, Canada
V6C 1V5
http://www.rgm.com/

Listed below are a large number of public information articles and reports detailing the brokerage houses, marketmakers and the conduct of the main "street" characters engaged in the illegal practice of "naked short selling", "death-spiral financing", "failure to delivers (FTDs)" and/or stock fraud. This page is a resource for anyone wishing to educate themselves regarding the depth and breath of these illegal activities. Please note that some of the articles may have been added out of time sequence because they were discovered weeks or months after publication. All the dates are, to the best of our knowledge, when they came into the public domain. If you find additional public information elsewhere on this subject, please forward the published information or hyperlink to rgodwin@rgm.com for review and posting. Thank you.

For other excellence sources of information regarding "naked short selling", FTDs and the various abuses of the market place, please reference  http://www.deepcapture.com/, http://www.thesanitycheck.com/, or http://www.investigatethesec.com.


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

Notice to all Shareholders and Companies affected by Illegal Trading Conduct.

Add your voice and be part of the solution. Help to institute an independent investigation into the misconduct of the Securities and Exchange Commission (SEC).

We are requesting that there be an full, public, and independent investigation by the United States Congress or Senate into the conduct of the SEC regarding the continuing manipulative, abusive and illegal trading practice known as "naked short selling" and other illegal trading conduct. We also request that they investigate why these illegal trading practices has been allowed by the SEC to exist and flourish for over a decade without enforcement.

As witnessed by my letter to the SEC in January, 2004 (http://www.rgm.com/articles/godwin.html) regarding the proposed SHO changes, nothing has happened to improve market enforcement. And by the recent examples of sub-prime mortgage market abuse, fraudulent CDO's and naked shorting of Bear Stearns and Lehman Brothers, it's got worse. Immoral, unethical, and illegal conduct has become systemic and institutionalized in an financial oligarchy of fraud.

As John Kenneth Galbraith stated in his book, The Great Crash 1929: "Regulatory bodies, like the people who comprise them, have a marked life cycle. In youth, they are vigorous, aggressive, evangelistic, and even intolerant. Later they mellow and in old age - after a matter of 10 or 15 years - they become, with some exceptions, either an arm of the industry they are regulating or senile."

Since at least the mid 1990’s, the SEC has been aware of systemic illegal activity and has failed to adequately respond to investor and Company complaints alike. In recent years the Federal Bureau of Investigation,  the Royal Canadian Mounted Police and even the SEC have conducted numerous investigations into these activities and have followed these illegal schemes through to money laundering and other unethical conduct. As a result of the lack of SEC diligent enforcement, every private investor has had their financial integrity jeopardized. Whether its private ownership of common shares, ownership of a mutual fund or participation in a company pension plan, every investor is having money stolen from their pocket by these criminal schemes.

The SEC is guilty of aiding and abetting criminal activities.

Since the SEC has failed to take adequate counter measures to stop illegal trading practices by members of the financial investment industry, we are demanding an independent and full public examination by the United States Congress or Senate as to the reasons for their years of inaction.

  AlanC     Share   Friday, October 14, 2011 8:18:43 PM 
Re: AlanC post# 7352     Post #  of 7361   

By: ezaltheladiespa
14 Oct 2011, 12:14 PM EDT
Rating: Rate this post:

Msg. 1186175 of 1186176

Jump to msg. #

When you remember the SEC saying that NAKED SHORTING didn't exist....and suddenly it became a problem this READ looks a lot different....ANTHONY ELGINDY was shorting with these guys...trillions of dollars have been stolen....so many are responsible and continue to kick the can down the road....

http://www.rgm.com/articles/blamecanada.html

BMFL<OD

next week(s) is here

NSS ~ Counterfeiting Stock ~ MM Games Played   

Moderator: fourkids_9pets  Assistants: Paula, camper9, SevenTenEleven, ThePennyGuru, dehydratedman  Share   Followers: 225 
Created: 7/20/2010 5:52:25 PM 


SevenTenEleven     Share   Tuesday, October 18, 2011 7:43:49 PM 
Re: fourkids_9pets post# 7374     Post #  of 7376   

Thoughts on Knight Capital's angle here?

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=68082335

This is confirmed, I watched all 3 panels yesterday and it was the first panel in which this was discussed by Knight Capital Group who stated that the process of dealing physical securities is wasting time and money resources for self clearing brokers and they are going to place restrictions on such stock. He went further by stating that he would like the SEC to suspend or revoke such stock from further trading once a DTCC chill is in place. Of course a suspension requires the issuer to comply with whatever info is requested and if the issuer refuses they are then revoked. Ultimately he made it clear that questionable securities should not be forced upon brokers to deal with and TAs should be held to higher standards of transparency.

Nobody is against what the DTCC is doing and they are encouraging them to continue. The only complaint was the lack of communication to the issuer as to why the loss of eligibility. The DTCC stated that in order to protect the process from bad apples they were not going to coach them along creating a process of getting around DTCC chills. Essentially they felt by providing specific information it would be used by those who take advantage of the process to continue fraudulent activity. - BigBake1

Appears to me that Knight Capital would like to sweep all of their "short interest" under the rug. They want the help of the DTCC and the SEC to prevent from having to have to cover their short interest and/or the short interest of their abusive short selling clients.

Have to be careful what "changes" the SEC and DTCC initiate. Shorty may be trying to game the system for his own good.

Tic Toc

BMFL<OD

next week(s) is here

wrenchman     Share   Thursday, October 20, 2011 5:40:19 AM 
Re: AlanC post# 185357     Post #  of 185400   

Best explaination of what happened here at FFGO i believe,found it on another board!!!

Long, but a worthwhile read about the DTCC issue:


The DTCC has still yet to issue a public statement explaining their reasons for disqualifying certain securities, so investors are left only to surmise their own conclusions as best as they can. However, this is not difficult once the machinations are understood.

We investors all know NSS is a reality. If it weren't, there'd be no such thing as a RegSho threshold list.

We also know the SEC has provided Market Makers with the right to "maintain an orderly market". This 'right' gives MMs the ability to naked short. Unfortunately, the SEC never set forth guidelines and or limitations, or atleast, not enforced guidelines/limitations. It is unclear just exactly how much the MMs have abused this right, but it's safe to say they do it daily and have done so for years.

MM are corporations in business to make money. Some MM corporations are billion dollar companies. Their size lends them considerable power to influence and corrupt. The SEC is peculiarly, often found ignorant of many violations. Watch L2 long enough and it becomes plain as day, the MM manipulations. Plain as day as it may be, the SEC still never sees it. Hmmm...

It is no new thing for MMs to incure fines for the violation of laws, rules, and regulations, but slaps on the wrist are usually the extent of it. Multiple, multiple slaps on the wrist. Another capital Hmmm...


Knowing that MMs are in business to make money, have violated laws, rules, and regulations repeatedly to do so, and have the right to NSS, it takes no stretch of the imagination to realize they are (a large?) part of the ills of the markets, and in particular, the everso easily manipulated, heavily diluting microcap markets.


The one common element amongst the majority, if not all, of the NDE companies is unregistered shares. Unregistered shares are shares issued by the company without prior SEC knowledge. One has to wonder why a company would not want the SEC to know they are issuing new shares (much less, why a TA would be gagged)? Were the shares issued to an entity other than an accredited investor? That's an SEC violation right there! Were shares issued to a family member? Niece? Nephew? Acting under the guise of a 'consultant'? Were shares issued for something other than business related services or inventory? The questions can be many, with unregistered shares.

Backing up a bit, let's revisit MMs. They are powerful corporations who are known violators of SEC laws, rules, and regulations, for the sake of making money. While the common investor is often denied Transfer Agent information such as share structures, MMs are not just common people. They are the very companies who initially distribute newly issued unregistered shares. With a phone call and their powerful corporate influence, they easily find information the rest of the public cannot. They know in advance, if and when a company is issuing new unregistered shares. This advance notice can easily be profited from by simply NSS prior to the new dilution. Since 98% of all microcap companies dilute their shares structures, this becomes a MM's goldmine venue for NSS.

Given the irresistibly profitable opportunity NSS provides MMs who have the SEC endorsed 'right to maintain an orderly market', only the blindest would not see how NSS could become excessively abused to goldmine levels.

Scenario: WXYZ company has 10M o/s with 5B a/s. It's a given that the company will dilute. MMs then abuse the "orderly market" rule, knowing they can easily cover (if they ever decide to) when the o/s nears or equals the a/s. The obvious shorting profitability is so irresistible, even the Pope would succumb.

Unlike common investors, who cannot easily short microcap stocks, MMs are tacitly given the exclusive right by the SEC, though the SEC never intended the right to be used and abused to such extents as the MMs do.

So, here we have known violators of laws, rules, and regulations sitting at the controls of the goldmine. NSS, after many years, and being unbelievably profitable, has blown way out of manageable proportions. Clearing houses are clearing disproportionate amounts of 'air-shares'. These clearing houses know this cannot go on forever. The House of Cards has to fall, eventually. So, where do they start, to correct this problem? At the heart of the problem, the initial instigators: the companies who issue unregistered shares.

It should be noted that companies who issue unregistered shares are not likely to file complaints to the SEC against MMs who are naked shorting their stock excessively. That'd be like one crook complaining to the cops about another crook who robbed him of something he stole. The MMs know this, which is why they take full advantage of the microcap companies that issue unregistered shares. It becomes a viciously profitable cycle and the small investor is the one caught in the middle, as the loser. The company wins (profitable excessive dilution), the MM wins (extremely profitable NSS), the common investor loses.

Even though I have been caught unaware, and charged excessively, for trading in NDE securities, I still applaud the DTCC for taking this baby step in restricting questionable securities. If it spreads to all other brokerage firms and clearing houses, which I think is likely (due to growing clearing costs), and forces microcap companies to become more transparent, then it is the change we have needed that has not came a moment too soon.

BMFL<OD

next week(s) is here

Deep Capture: exposing the crime of naked short selling



What Happened To Deep Capture?
• From “the corner of Wall and Broad with pitchforks and nooses”: My April, 2006 letter to the Wall Street Journal
• A Respectful Invitation to All Hoodlums, Cutpurses, Thugs and Assorted Miscreants Named Herein
• Memo to Barry Minkow and Sam Antar: Roll Early, Roll Often
• The Honorable Gill Freeman Throws Book at Barry Minkow, Nicks Paymaster Sam Antar. Plus, A Question for Whitney Tilson, Minkow Paymaster #2
• Today’s “If Only There Were a Pattern” Moment: Sam Antar Crony Barry Minkow Still a Crook. Who Knew?
• Truman Show Moments and Doublethink on the Road to Deep Capture
• Fortune Magazine Gets the Vapors Defending Goldman Sachs




What Happened To Deep Capture?

Posted: 23 Jan 2012 09:43 PM PST


On any other day, that might seem strange: Ali Nazerali Wants Own Past Sealed in Orwell’s Memory Hole

In October 2011, Ali Nazerali, a Canadian resident of Pakistani origin who has operated boiler rooms (according to regulators, though he was not charged) and whose business relationships drew the scrutiny of DeepCapture, went to court in British Columbia to obtain an injunction against the 1st Amendment to the US Constitution (the one regarding freedom of speech and press). In an ex parte proceeding (meaning that DeepCapture was not even notified of the proceedings, let alone allowed to present any argument), the Canadian court issued an injunction ordering that DeepCapture be disappeared like some recalcitrant Argentinian muckracker. Immediately and also without notification, US corporations Google, Bing, and GoDaddy complied with this foreign court’s order to disappear all trace of DeepCapture from existence.

However, in December, 2011 DeepCapture had its chance to speak in court in Canada. Once it had heard our side, the Court pulled its injunction, and found that Nazerali’s lawyers had misled the Court.

As famed Stoic philosopher Nicholas Cage put it in Con Air, “On any other day, that might seem strange.”


But this is, after all, the world of DeepCapture, where dogs and cats dance together and the fire rain falls. So now, the rest of the story….

Early in 2011 Mark Mitchell began a multipart story exploring the way that various elements of transnational Organized Crime, international terrorist financiers, and foreign intelligence services have entwined, infiltrated the global financial system, and are manipulating and destabilizing it.

Which sounds like a lot to swallow, I know, until one considers that on July 25, 2011, President Obama signed an Executive Order declaring a national emergency on pretty much precisely those grounds:

I, BARACK OBAMA, President of the United States of America, find that the activities of significant transnational criminal organizations, such as those listed in the Annex to this order, have reached such scope and gravity that they threaten the stability of international political and economic systems. Such organizations are becoming increasingly sophisticated and dangerous to the United States; they are increasingly entrenched in the operations of foreign governments and the international financial system, thereby weakening democratic institutions, degrading the rule of law, and undermining economic markets. These organizations facilitate and aggravate violent civil conflicts and increasingly facilitate the activities of other dangerous persons. I therefore determine that significant transnational criminal organizations constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States, and hereby declare a national emergency to deal with that threat.

The US National Security Council immediately followed up with this statement:

“Transnational organized crime (TOC) poses a significant and growing threat to national and international security, with dire implications for public safety, public health, democratic institutions, and economic stability across the globe. Not only are criminal networks expanding, but they also are diversifying their activities, resulting in the convergence of threats that were once distinct and today have explosive and destabilizing effects…. The apparent growing nexus in some states among TOC [Transnational Organized Crime] groups and elements of government—including intelligence services—and high-level business figures represents a significant threat to economic growth and democratic institutions… As they expand, TOC networks may threaten stability and undermine free markets as they build alliances with political leaders, financial institutions, law enforcement, foreign intelligence, and security agencies.”

These statements from the White House and NSC are precisely on point with DeepCapture’s thesis. In fact, the Executive Order goes on to name four criminal networks which figure prominently in Deepcapture’s story.

We knew DeepCapture’s story would raise eyebrows, but we believed, and still believe, that it is important journalism concerning issues that clearly are of global concern and should be part of the public debate. And as journalists, we at DeepCapture are quite proud of having been so far ahead of the curve, and so shockingly far ahead of the US mainstream media, which (we contend) are (with rare exception) such lapdogs to corporate America, and especially to the financial system, that they would never have been able to put this story together even if all the relevant evidence was shoved up its nose (which it was). Deep Capture believes that it is not incidental that only the British journal The Economist has been able to cover this issue, with such recent stories as:

America’s dodgy financial plumbing: TOO A FAIL COUNT –The sheer number of unsettled trades is rattling regulators

Financialterrorism: THE WAR ON TERABYTES – Policymakers worry about attacks on America’s financial system

NAKED SHORT – SELLING: A not-so-short story

In September 2011 Altaf Nazerali, who, while not a central character in the story, is mentioned numerous times, contacted us raising concerns that certain statements regarding him were inaccurate. Mark looked back at his reporting and, in cases where he believed it was warranted, modified the story: While we believe that facts should be reported, we are never above taking another look at the story to make sure that we are as fair as possible. Good journalism stirs good debate. And we are responsible journalists.

Mark sought further contact with Nazerali in early September but heard nothing further.

Then without any warning to Deep Capture, Nazerali attempted to silence Deep Capture.

On October 18, 2011, without notice to Deep Capture, Mark, or Deep Capture’s internet hosts, Nazerali filed a lawsuit in Vancouver, Canada and appeared the same day before a judge seeking an injunction taking Deep Capture off the internet and seizing its domain name. Only Nazerali and his lawyer were in the courtroom when he asked for this injunction so the judge only heard one side of the story. Nazerali got his injunction.

Ali Nazerali delayed serving formal notice of this injunction on Deep Capture and its reporters. The first mailed service was made about 10 days after the injunction was made. The actual personal service did not occur for several weeks. Nazerali did not comply with Canadian law and promptly serve Deep Capture with copies of all of the affidavits and legal submissions he put before the judge on October 19, 2011 at his one-sided injunction application. That only came to our attention in late November. All of this had the effect of delaying Deep Capture’s ability to seek relief from the court.

However, Nazerali’s lawyers immediately sent notice of the Canadian court’s injunction against Deep Capture to Google, Bing, GoDaddy, and other internet companies demanding that they comply with it, and black out the DeepCapture site.

Amazingly (to me), these US companies complied, and blacked out Deep Capture. GoDaddy took down the site. Google and Bing both erased all of DeepCapture from the caches. In the most literal sense, we disappeared down Orwell’s Memory Hole.

On December 13, 2011 Deep Capture and Mark were able to appear before the British Columbia court . We presented our case through affidavits showing the basis for our reporting. We presented the judge with the governing Canadian law which places severe restrictions on pre-trial injunctions, limiting them to rare and special circumstances which do not apply to Deep Capture.

Ruling from the bench (i.e., immediately), the judge denied Mr. Nazerali’s request that the injunction be extended beyond December 13, 2011.

In addition, the judge expressly ruled that Ali Nazerali’s lawyers had misled the judge who heard Nazerali’s earlier argument on October 19, 2011.

At that point Deep Capture was free to return to the internet.

However, Ali Nazerali was not done. He had his lawyer send an e-mail to Rackspace citing to the original October 19, 2011 injunction order and asking that Rackspace refuse to host Deep Capture. He neglected to tell Rackspace that the British Columbia court had already refused to extend the injunction and that it had ceased to have any force. And he certainly did not tell Rackspace that the British Columbia court had criticized Nazerali’s submissions to the original judge on October 19, 2011, finding that Nazerali’s lawyer had misled the court.

Ali Nazerali wants to keep Deep Capture and its reporting away from the public. But why would Mr. Nazerali sue Deep Capture, a Utah company, in Canada? We can only speculate. As Gary Weiss (himself a shill for criminal elements, as has been widely documented within DeepCapture) noted in his blog almost immediately after the original injunction was issued, Canadian law provides far less protection for free speech than is guaranteed by the United States Constitution. In fact, Canadian defamation law differs in so many key respects from United States law that at least one federal court has held that Canadian defamation judgments are unenforceable against United States citizens.

In fact, one key difference is what is meant by “defamatory.” It is true that the Canadian court noted that Deep Capture’s reporting regarding Mr. Nazerali was “defamatory.” But, importantly, this does not mean that it was not true or that it was not fair reporting. It does not mean that such statements may not be published. And it does not mean that Mr. Nazerali is entitled to any damages. Rather, it simply means that the statements regarding Mr. Nazerali tended to harm his reputation.

“Carole took the cookies from the cookie jar” is defamatory under the law of British Columbia. Stating that Carole took the cookies tends to harm her reputation even if she did, in fact, take the cookies. Here Mr. Nazerali has been involved with certain individuals and cultivated certain relationships that may harm his reputation as such connections become known. But this does not mean that such relationships cannot, and should not, be fairly and freely reported.

Importantly, no court has held that Deep Capture’s reporting as to Mr. Nazerali was “actionably defamatory.” After the Canadian Court was given the chance to read Mark’s affidavit explaining the basis for his reporting, it denied Mr. Nazerali’s request for an extension of the injunction keeping Deep Capture away from the public on the basis that the claims and defenses should be heard and determined by a jury at a trial.

Most hilariously, I had an idea that seems to have worked. For years a Cone of Silence had surrounded Deep Capture: once the supine and obedient mainstream press could no longer speak for me, but had to confront me, in my own words, on this website, they revealed themselves for what they were: barroom bullies who, once called out, stick their faces back in their beers and pretend not to have heard. But during the time that DeepCapture was blacked out, the Cone of Silence surrounding Deep Capture finally lifted: parties that once made great circumlocutions to avoid mentioning us (lest they let readers evaluate the arguments and evidence for themselves) suddenly are pounding their chests. So I decided to let DeepCapture stay down for a few weeks, to give them a chance to strut about it: I am utterly confident that, now that Deep Capture is back online, they will return to muttering into their beers, as has been their practice lo these many years.

Deep Capture has been unavailable for a couple months. Now that we are back on-line you deserve to know what happened, especially since the facts should cause concern in everybody that appreciates the role a free press and free speech play in a free nation (and the offending story will be republished, in full, and with a great deal of new information that Nazerali’s legal jousting caused to come our way: thank you, Ali Nazerali).

The US mainstream media are apparently unconcerned by a foreign court’s injunction to black out a US website, and think unremarkable the alacrity with which Google, Bing, and GoDaddy would accede to such an order. Thus, Deep Capture was forced to tell the rest of this story (which, we maintain, is but a microcosm of the whole story of capture) in order to pursue our investigative reporting within our constitutional rights of free expression of speech and press.

After all, we are the red pill.






From “the corner of Wall and Broad with pitchforks and nooses”: My April, 2006 letter to the Wall Street Journal

Posted: 25 Sep 2011 09:50 PM PDT


Here’s the Naked Truth About Overstock.com

Gandhi said, “First they ignore you, then they laugh at you, then they fight you. Then you win.” Holman Jenkins Jr.’s April 12 Business World column “Do Nudists Run Wall Street?” moves us to stage No. 3: It contains the normal amount of distortion I have come to expect from financial media, but as it also makes the first attempt to confront the right issue, it is a step forward. Bravo.

Mr. Jenkins claims that I “propound a theory” that Overstock’s “shares are grossly undervalued.” This is wrong: I have never lamented Overstock’s valuation nor connected it to the naked shorting issue. The “elaborate Webcasts . . . found at businessjive.com” cited by Mr. Jenkins never once mention Overstock. He provides no other citations, which is appropriate, as there are none. Last, the quote he attributes to me, “If I’m crazy, why am I running a public company?” is something I never said. I challenge Mr. Jenkins to produce this or any similar quote.

However, Mr. Jenkins correctly depicts me as a jihadi against naked shorting. I do believe blackguards have practiced “failure to deliver” (FTD) for profit, while incidentally destroying businesses and (probably) destabilizing our capital markets. I also think that if this nation ever grasps how its savings have been looted through this mechanism, a few million Americans are going to show up at the corner of Wall and Broad with pitchforks and nooses. Thus, financial journalists spin countless, “Just another CEO who’s mad at shorting” stories, of which Mr. Jenkins’s piece is an example.

Patrick M. Byrne
President
Overstock.com
Salt Lake City






A Respectful Invitation to All Hoodlums, Cutpurses, Thugs and Assorted Miscreants Named Herein

Posted: 16 Sep 2011 10:07 AM PDT


Mark Mitchell’s writings seem to be striking a nerve, at last. After months of no response but silence, in the last few weeks DeepCapture has suddenly been receiving all manner of Nasty-Grams and intimidating phone calls from various people and organizations mentioned in Mark’s work. The similarity of the threats would almost make one think there was a plan. In any case, I will lay out four ground rules here.

1) DeepCapture remains committed to the highest journalist standards. Any error in our work should be pointed out immediately, and we will rectify it .

2) DeepCapture is better than mainstream media, whose intellectual self-confidence, rigor, and integrity I described in my 2008 piece, “Carol Remond Tells a Joke She Doesn’t Get (DowJones)”:

“Before publishing the following critique of Carol Remond’s recent article on Copper River, I contacted Carol for comment. Unlike Joe Nocera and Floyd Norris (both of the New York Times), who have at least had the integrity to defend their work, however haplessly, Carol refused any on-the-record comment on this subject. Thus she joins that tradition of journalistic worthies which includes Bethany McLean, Herb Greenberg, and Roddy Boyd, who refuse to defend their work. They can critique, but not engage, opine, but not defend: the sophomores of intellectual discourse.“

Because DeepCapture is better, we are happy to engage, and self-confident enough in our work that we practice “right of response” journalism: We will publish, unedited, any response (of any reasonable length) by miscreants named in our stories. If Specially Designated Global Terrorists have spokesmen, we’ll publish them.

3) All goombas should understand that the day anything untoward occurs is the day that The Collected Works of Mark Mitchell 2008-2011 appears in the in-boxes of 41.7 million people.

4) Finally, Mark has been acting entirely at my direction. So all nastiness should be directed at me, not him.

Very respectfully,

Patrick Byrne

Editor-in-Chief

DeepCapture.com






Memo to Barry Minkow and Sam Antar: Roll Early, Roll Often

Posted: 24 Mar 2011 03:52 PM PDT


An email Sam Antar sent on May, 2010 puked out of my junk email folder today. Note that besides addressing it to me, the board of directors of Overstock, Overstock’s president Jonathan Johnson, and our colleague Kevin Moon (who counts IR among his many duties), Sam addressed it to various staff members of the SEC (messieurs Israel, Korb, Simpson, Fitzsimons, and Carnall).

Note that Sam also sent it to a number of financial writers with whom Sam is on good terms, and whose names will be known to regular readers of DeepCapture: Joe Nocera and Floyd Norris (both of New York Times), Roddy Boyd, and Gary Weiss, all of whom had an awful lot to say about me until I confronted them in the pages of this website, at which time they reverted to mumbling into their beers rather than engage DeepCapture in debate. Which is, I think, a good indication of how confident they truly were of their own research, argument, and prose: they talked big in the locker-room and at the weigh-in, but pissed themselves stepping onto the mat.

Being the nice guy I am, I answered Sam, albeit belatedly.

Sam’s email to me, and my reply, are below.

=========================================================================

From: Sam E. Antar [mailto:sam@whitecollarfraud.com]
Sent: Sunday, May 09, 2010 8:14 AM
To: Patrick Byrne; Board – Jonathan Johnson; Kevin Moon; Joseph Tabacco
Cc: ‘Israel, Kenneth D.’; ‘Korb, Norman J.’; ‘Caleb Newquist’; ‘Gary Weiss’; ‘Joe Nocera’; norris@nytimes.com; ‘Aaron Elstein’; ‘William K. Wolfrum’; ‘Felix Salmon’; ‘roddy boyd’; ‘Simpson, Richard’; ‘Fitzsimons, Brian’; ‘Carnall, Wayne’; ‘Corpfin-ENFLiaison’
Subject: Overstock.com Q2 2010 Conference Call
Importance: High

Dear Patrick Byrne and other persons from Overstock.com:

Overstock.com’s Q2 2010 conference call is scheduled for today at 3 PM ET. I will be calling in. I expect to be permitted to participate in said call and ask relevant questions about Overstock.com. As I recall, in 2005 you allowed a lay person named Phil Saunders AKA Easter Bunny to participate in the call.

Sam E. Antar

Web site: www.whitecollarfraud.com

Blog: www.whitecollarfraud.blogspot.com

=========================================================================

From: Patrick Byrne
Sent: Thursday, March 24, 2011 2:59 PM
To: ‘Sam E. Antar’; Board – Jonathan Johnson; Kevin Moon; Joseph Tabacco
Cc: ‘Israel, Kenneth D.’; ‘Korb, Norman J.’; ‘Caleb Newquist’; ‘Gary Weiss’; ‘Joe Nocera’; norris@nytimes.com; ‘Aaron Elstein’; ‘William K. Wolfrum’; ‘Felix Salmon’; ‘roddy boyd’; ‘Simpson, Richard’; ‘Fitzsimons, Brian’; ‘Carnall, Wayne’; ‘Corpfin-ENFLiaison’
Subject: RE: Overstock.com Q2 2010 Conference Call

Dear Sam,

By odd coincidence, your email from last May popped out of our junk email filters today. I say “coincidence” because you have been on my mind of late, given the sudden return to prominence of your esteemed friend Barry Minkow, another felon who “reformed” himself and became, like you, the recipient of various “It takes one to know one” puff-pieces from the financial media. However, according to today’s WSJ,

“Barry Minkow Charged in Fraud Against Lennar: Federal prosecutors charged former fraud investigator Barry Minkow with conspiracy to commit securities fraud by allegedly disseminating false information in 2009 about home builder Lennar Corp., according to court documents filed Thursday in Miami federal court. The complaint charges that Mr. Minkow, along with a person identified as Conspirator A and others, conspired to ‘artificially manipulate and depress Lennar’s stock’ …. The charge against Mr. Minkow comes with a maximum prison term of five years. …. The criminal complaint also says that Mr. Minkow abused his relationship with federal law-enforcement officials and induced them to open up an investigation into Lennar…”

Shocked, am I. Shocked, I say. It turns out that Barry’s “reformation” was just another scam, and he actually remained a criminal all along? And his “It takes one to know one” shtick was just a cover he used for smear campaigns to move stock prices? And the financial media did not do their homework before writing their lotion-job profiles of him? And he gulled federal officials into going along for the ride?……….. No, that couldn’t possibly be. That’s just far too whacky a story.

So that is why unearthing your email today is so serendipitous, Sam. I’ve been thinking of writing you to ask your opinion on this matter. Could a man [] be a convicted felon, reposition himself as contrite and repentant, claim to the public to be using his skills as a swindler to ferret out crime, get the press and the federal government to buy into it, then conduct smear campaigns simply in order to manipulate stocks on someone else’s behalf? In your unique view, how plausible is that scenario, Sam? You seem like just the guy to ask, especially since DeepCapture’s technological forensics establish such good fellowship between Barry and you (and for that matter, Gary Weiss, whose email I note you included above).

While you’re at it, is there any chance you can explain why Barry Minkow gave sworn testimony that you wired him $100,000 “out of nowhere,” and then, wired him another $150,00 (see Minkow transcript, 10:39 to 10:46)? Especially as you are a bankrupt and hold yourself out as virtually penniless, this seems a little odd: Do you often wire people $250,000 for purposes they cannot define?

In December the Florida judge found that Barry actually did not do any research, but just smeared. Yet Barry also gave testimony that Whitney Tilson paid $40,000 to Barry. It seems odd that someone like Whitney would rely on research from Barry, especially as (per the judge) Barry’s research is phony. Any idea what that payment was for? Whitney Tilson has become oddly unresponsive to my emails.

Remember, Sam: Roll early, roll often. Oh, but you know that already.

With hopes of big things in your future, I remain,

Your friend,

Patrick M. Byrne

Journalist, DeepCapture.com

PS You may have been busy last week, Sam, and missed my two essays on these matters. Enjoy.

March 17: Today’s “If Only There Were a Pattern” Moment: Sam Antar Crony Barry Minkow Still a Crook. Who Knew?

March 17: The Honorable Gill Freeman Throws Book at Barry Minkow, Nicks Paymaster Sam Antar. Plus, A Question for Whitney Tilson, Minkow Paymaster #2


Today a May, 2010 email from Sam Antar puked out of my junk email folder. Note that, besides addressing it to me, the board of directors of Overstock, Overstock’s president Jonathan Johnson, and our colleague Kevin Moon (who counts IR among his many duties), Sam addressed it to various staff members of the SEC (messieurs Israel, Korb, Simpson, Fitzsimons, and Carnall).



Sam also sent it to a number of financial writers with whom Sam is on good terms, and whose names will be known to regular readers of DeepCapture: Joe Nocera and Floyd Norris (both of New York Times), William Wolfrum, Roddy Boyd, and Gary Weiss, all of whom had an awful lot to say about me, until I confronted them in the pages of this website, at which time they reverted to mumbling into their beers rather than continue (and thereby have to mention DeepCapture). Which is, I think, a good indication of how confident they truly are of their research, argument, and prose in the face of DeepCapture’s.



Being the nice guy I am, I answered Sam, albeit belatedly.





From: Sam E. Antar [mailto:sam@whitecollarfraud.com]
Sent: Sunday, May 09, 2010 8:14 AM
To: Patrick Byrne; Board – Jonathan Johnson; Kevin Moon; Joseph Tabacco
Cc: ‘Israel, Kenneth D.’; ‘Korb, Norman J.’; ‘Caleb Newquist’; ‘Gary Weiss’; ‘Joe Nocera’; norris@nytimes.com; ‘Aaron Elstein’; ‘William K. Wolfrum’; ‘Felix Salmon’; ‘roddy boyd’; ‘Simpson, Richard’; ‘Fitzsimons, Brian’; ‘Carnall, Wayne’; ‘Corpfin-ENFLiaison’
Subject: Overstock.com Q2 2010 Conference Call
Importance: High



Dear Patrick Byrne and other persons from Overstock.com:



Overstock.com’s Q2 2010 conference call is scheduled for today at 3 PM ET. I will be calling in. I expect to be permitted to participate in said call and ask relevant questions about Overstock.com. As I recall, in 2005 you allowed a lay person named Phil Saunders AKA Easter Bunny to participate in the call.



Sam E. Antar



Web site: www.whitecollarfraud.com

Blog: www.whitecollarfraud.blogspot.com









From: Patrick Byrne
Sent: Thursday, March 24, 2011 2:59 PM
To: ‘Sam E. Antar’; Board – Jonathan Johnson; Kevin Moon; Joseph Tabacco
Cc: ‘Israel, Kenneth D.’; ‘Korb, Norman J.’; ‘Caleb Newquist’; ‘Gary Weiss’; ‘Joe Nocera’; norris@nytimes.com; ‘Aaron Elstein’; ‘William K. Wolfrum’; ‘Felix Salmon’; ‘roddy boyd’; ‘Simpson, Richard’; ‘Fitzsimons, Brian’; ‘Carnall, Wayne’; ‘Corpfin-ENFLiaison’
Subject: RE: Overstock.com Q2 2010 Conference Call



Dear Sam,

By odd coincidence, your email from last May popped out of our junk email filters today. I say “coincidence” because you have been on my mind of late, given the sudden return to prominence of your esteemed friend Barry Minkow, another felon who “reformed” himself and became, like you, the recipient of various “It takes one to know one” puff-pieces from the financial media. However, according to today’s WSJ,

“Barry Minkow Charged in Fraud Against Lennar: Federal prosecutors charged former fraud investigator Barry Minkow with conspiracy to commit securities fraud by allegedly disseminating false information in 2009 about home builder Lennar Corp., according to court documents filed Thursday in Miami federal court. The complaint charges that Mr. Minkow, along with a person identified as Conspirator A and others, conspired to ‘artificially manipulate and depress Lennar’s stock’ …. The charge against Mr. Minkow comes with a maximum prison term of five years. …. The criminal complaint also says that Mr. Minkow abused his relationship with federal law-enforcement officials and induced them to open up an investigation into Lennar…”

Shocked, am I. Shocked, I say. It turns out that Barry’s “reformation” was just another scam, and he actually remained a criminal all along? And his “It takes one to know one” shtick was just a cover he used for smear campaigns to move stock prices? And the financial media did not do their homework before writing their lotion-job profiles of him? And he gulled federal officials into going along for the ride?……….. No, that couldn’t possibly be. That’s just far too whacky a story.

So that is why unearthing your email today is so serendipitous, Sam. I’ve been thinking of writing you to ask your opinion on this matter. Could a man could be a convicted felon, reposition himself as contrite and repentant, claim to the public to be using his skills as a swindler to ferret out crime, get the press and the federal government to buy into it, then conduct smear campaigns simply in order to manipulate stocks on someone else’s behalf? In your unique view, how plausible is that scenario, Sam? You seem like just the guy to ask, especially since DeepCapture’s technological forensics establish such good fellowship between Barry and you (and for that matter, Gary Weiss, whose email I note you included above).

While you’re at it, is there any chance you can explain why Barry Minkow gave sworn testimony that you wired him $100,000 “out of nowhere,” and then, wired him another $150,00 (see Minkow transcript, 10:39 to 10:46)? Especially as you are a bankrupt and hold yourself out as virtually penniless, this seems a little odd: Do you often wire people $250,000 for purposes they cannot define?

In December the Florida judge found that Barry actually did not do any research, but just smeared. Yet Barry also gave testimony that Whitney Tilson paid $40,000 to Barry. It seems odd that someone like Whitney would rely on res

Today a May, 2010 email from Sam Antar puked out of my junk email folder. Note that, besides addressing it to me, the board of directors of Overstock, Overstock’s president Jonathan Johnson, and our colleague Kevin Moon (who counts IR among his many duties), Sam addressed it to various staff members of the SEC (messieurs Israel, Korb, Simpson, Fitzsimons, and Carnall).

Sam also sent it to a number of financial writers with whom Sam is on good terms, and whose names will be known to regular readers of DeepCapture: Joe Nocera and Floyd Norris (both of New York Times), William Wolfrum, Roddy Boyd, and Gary Weiss, all of whom had an awful lot to say about me, until I confronted them in the pages of this website, at which time they reverted to mumbling into their beers rather than continue (and thereby have to mention DeepCapture). Which is, I think, a good indication of how confident they truly are of their research, argument, and prose in the face of DeepCapture’s.

Being the nice guy I am, I answered Sam Antar today, albeit belatedly. Below I reproduce Sam’s email to me, and my reply.

From: Sam E. Antar [mailto:sam@whitecollarfraud.com]
Sent: Sunday, May 09, 2010 8:14 AM
To: Patrick Byrne; Board – Jonathan Johnson; Kevin Moon; Joseph Tabacco
Cc: ‘Israel, Kenneth D.’; ‘Korb, Norman J.’; ‘Caleb Newquist’; ‘Gary Weiss’; ‘Joe Nocera’; norris@nytimes.com; ‘Aaron Elstein’; ‘William K. Wolfrum’; ‘Felix Salmon’; ‘roddy boyd’; ‘Simpson, Richard’; ‘Fitzsimons, Brian’; ‘Carnall, Wayne’; ‘Corpfin-ENFLiaison’
Subject: Overstock.com Q2 2010 Conference Call
Importance: High

Dear Patrick Byrne and other persons from Overstock.com:

Overstock.com’s Q2 2010 conference call is scheduled for today at 3 PM ET. I will be calling in. I expect to be permitted to participate in said call and ask relevant questions about Overstock.com. As I recall, in 2005 you allowed a lay person named Phil Saunders AKA Easter Bunny to participate in the call.

Sam E. Antar

Web site: www.whitecollarfraud.com

Blog: www.whitecollarfraud.blogspot.com

From: Patrick Byrne
Sent: Thursday, March 24, 2011 2:59 PM
To: ‘Sam E. Antar’; Board – Jonathan Johnson; Kevin Moon; Joseph Tabacco
Cc: ‘Israel, Kenneth D.’; ‘Korb, Norman J.’; ‘Caleb Newquist’; ‘Gary Weiss’; ‘Joe Nocera’; norris@nytimes.com; ‘Aaron Elstein’; ‘William K. Wolfrum’; ‘Felix Salmon’; ‘roddy boyd’; ‘Simpson, Richard’; ‘Fitzsimons, Brian’; ‘Carnall, Wayne’; ‘Corpfin-ENFLiaison’
Subject: RE: Overstock.com Q2 2010 Conference Call

Dear Sam,

By odd coincidence, your email from last May popped out of our junk email filters today. I say “coincidence” because you have been on my mind of late, given the sudden return to prominence of your esteemed friend Barry Minkow, another felon who “reformed” himself and became, like you, the recipient of various “It takes one to know one” puff-pieces from the financial media. However, according to today’s WSJ,

“Barry Minkow Charged in Fraud Against Lennar: Federal prosecutors charged former fraud investigator Barry Minkow with conspiracy to commit securities fraud by allegedly disseminating false information in 2009 about home builder Lennar Corp., according to court documents filed Thursday in Miami federal court. The complaint charges that Mr. Minkow, along with a person identified as Conspirator A and others, conspired to ‘artificially manipulate and depress Lennar’s stock’ …. The charge against Mr. Minkow comes with a maximum prison term of five years. …. The criminal complaint also says that Mr. Minkow abused his relationship with federal law-enforcement officials and induced them to open up an investigation into Lennar…”

Shocked, am I. Shocked, I say. It turns out that Barry’s “reformation” was just another scam, and he actually remained a criminal all along? And his “It takes one to know one” shtick was just a cover he used for smear campaigns to move stock prices? And the financial media did not do their homework before writing their lotion-job profiles of him? And he gulled federal officials into going along for the ride?……….. No, that couldn’t possibly be. That’s just far too whacky a story.

So that is why unearthing your email today is so serendipitous, Sam. I’ve been thinking of writing you to ask your opinion on this matter. Could a man could be a convicted felon, reposition himself as contrite and repentant, claim to the public to be using his skills as a swindler to ferret out crime, get the press and the federal government to buy into it, then conduct smear campaigns simply in order to manipulate stocks on someone else’s behalf? In your unique view, how plausible is that scenario, Sam? You seem like just the guy to ask, especially since DeepCapture’s technological forensics establish such good fellowship between Barry and you (and for that matter, Gary Weiss, whose email I note you included above).

While you’re at it, is there any chance you can explain why Barry Minkow gave sworn testimony that you wired him $100,000 “out of nowhere,” and then, wired him another $150,00 (see Minkow transcript, 10:39 to 10:46)? Especially as you are a bankrupt and hold yourself out as virtually penniless, this seems a little odd: Do you often wire people $250,000 for purposes they cannot define?

In December the Florida judge found that Barry actually did not do any research, but just smeared. Yet Barry also gave testimony that Whitney Tilson paid $40,000 to Barry. It seems odd that someone like Whitney would rely on research from Barry, especially as (per the judge) Barry’s research is phony. Any idea what that payment was for? Whitney Tilson has become oddly unresponsive to my emails.

Remember, Sam: Roll early, roll often. Oh, but you know that already.

With hopes of big things in your future, I remain,

Your friend,

Patrick M. Byrne

Journalist, DeepCapture.com

PS You may have been busy last week, Sam, and missed my two essays on these matters. Enjoy.

March 17: Today’s “If Only There Were a Pattern” Moment: Sam Antar Crony Barry Minkow Still a Crook. Who Knew?

March 17: The Honorable Gill Freeman Throws Book at Barry Minkow, Nicks Paymaster Sam Antar. Plus, A Question for Whitney Tilson, Minkow Paymaster #2

earch from Barry, especially as (per the judge) Barry’s research is phony. Any idea what that payment was for? Whitney Tilson has become oddly unresponsive to my emails.

Remember, Sam: Roll early, roll often. Oh, but you know that already.

With hopes of big things in your future, I remain,

Your friend,

Patrick M. Byrne

Journalist, DeepCapture.com

PS You may have been busy last week, Sam, and missed my two essays on these matters. Enjoy.

March 17: Today’s “If Only There Were a Pattern” Moment: Sam Antar Crony Barry Minkow Still a Crook. Who Knew?

March 17: The Honorable Gill Freeman Throws Book at Barry Minkow, Nicks Paymaster Sam Antar. Plus, A Question for Whitney Tilson, Minkow Paymaster #2




This posting includes an audio/video/photo media file: Download Now




The Honorable Gill Freeman Throws Book at Barry Minkow, Nicks Paymaster Sam Antar. Plus, A Question for Whitney Tilson, Minkow Paymaster #2

Posted: 17 Mar 2011 09:12 PM PDT




Barry Minkow spent last week in plea negotiations regarding a federal indictment on which he is hoping to receive only 5 years, says his lawyer. (LA Weekly: Barry Minkow to plead guilty to insider trading). In December, 2010, a Florida judge threw her proverbial book at Barry Minkow, and it glanced off Sam Antar, who had been paid Barry’s paymaster to the tune of $250,000, Barry had testified. In addition, the judge found as a matter of fact that Sam Antar destroyed documents necessary for her trial. Minkow also gave sown testimony that well-known New York hedge fund manager Whitney Tilson paid him $40,000: more on this below.

Sam Antar, generally not short of opinion, has suddenly developed laryngitis.

Barry Minkow and Sam Antar are two of the most remarkable swindlers in recent American history, each guilty of frauds measured in the hundreds of millions of dollars. Two decades ago their names gave off the same foul stench that Bernie Madoff’s does today. So Deep Capture invites Whitney Tilson to explain why he would join legendarily convicted financial criminal Sam Antar in making payments to also-legendarily convicted financial criminal Barry Minkow, who now is pleading guilty to his 58th financial felony. (You know how to reach me, Whitney. DeepCapture will give you 250 words, with no editing. But we may provide commentary. )

What is more to the point of DeepCapture, however, is that until this latest turn of events, Barry Minkow and Sam Antar had, notwithstanding their prior convictions on massive financial crimes, successfully repositioned themselves within the US financial media as experts in crime-fighting (see 60 Minutes‘ 2006 puff-piece on Barry Minkow, “It Takes One to Know One“, and Fortune Magazine’s 2007 lotion-job on Sam Antar, “Takes One to Know One“). Barry and Sam used the imprimatur of the mainstream press to return to criminal behavior (which Barry has now acknowledged). The ease with and degree to which the New York financial media swallowed this remarkable bullshit will attest for a generation to the intellectual corruption and broad imbecility of broad swathes of the US financial media.

No, seriously. That really happened. Two convicted financial felons, the Madoff’s of their generation, made comebacks by gulling the financial press into writing lotion-job stories saying that they were now reformed and devoted to stopping crimes, not committing them. Here is UPI on Barry Minkow: “Barry Minkow: Cleaning up, reaching out.” Here is, again, Fortune Magazine from late 2007: “Takes one to know one -Sam Antar, the felonious former CFO of Crazy Eddie, is now teaching students and prosecutors how to spot fraud in public companies.” And then, it turns out, both used their new-found status as authorities to whom the press turned in order to resume their criminal activity, which again, as of yesterday, leaves Barry hoping for only a five year sentence, and his paymaster Sam Antar with laryngitis.

In the spirit of reconciliation and forgiveness, however, I will offer the US financial media one concession: your gullibility is understandable. In high school I had a history professor who brought an actual American Nazi to class, and let us argue with him. For many of my classmates debating the Nazi was like trying to nail Jell-O to the wall. I discovered that only if one can grasp the concept of “complete venality” can one defeat a scoundrel. Many people, however, are intellectually helpless against such people, because deep down they cannot grok the possibility that anyone can spin and lie and spin and lie and spin and lie and spin some more, then lie and lie on top of it.

I believe that the preceding accurately describes the mentality of some US journalists who gave these knuckleheads more credit than they should have. For others, however, giving credence to Sam Antar or Barry Minkow was simply an expression of an ideological commitment: those publications favor Wall Street over the United States, and they were willing to give credence to Barry and Sam’s work in order to further the agenda of Wall Street, which is more or less the purpose of their publications.

I know that is a lot to accept. So don’t trust me, trust a Florida state court judge, The Honorable Gill Freeman, who brought her hammer down on Barry Minkow. Judge Freeman’s entire opinion can be read here: Order Granting Lennar’s Motion for Sanctions–Dec 27 2010 (warning: It is so scathing one almost feels sorry for them. Or, well… maybe not.)

I cannot help resist quoting at length from it: as you read Judge Freeman’s words, please remember my description of the American Nazi.

THIS CAUSE came before the Court on Plaintiffs Motion for Sanctions and for entry of default and other relief against Defendants Barry Minkow and the Fraud Discovery Institute, Inc. for their willful and egregious litigation misconduct. The parties filed extensive papers in support and in opposition of the motion, and the Court held a two-day evidentiary hearing on August 26 and 27, 2010 at which time Mr. Minkow was examined by Plaintiffs’ and Defendants’ counsel, as well as the Court.

Having carefully considered all the papers, the evidence filed by both parties, evidence introduced at the hearing, including Mr. Minkow’s testimony, and arguments of counsel, it is ORDERED and ADJUDGED that Plaintiffs’ Motion be, and the same is hereby, GRANTED as set forth below, based on the following findings of fact and conclusions of law.

With full knowledge of the rules and his obligations as a litigant in this Court, Mr. Minkow has withheld key documents, destroyed or discarded important evidence, concealed the identity of material witnesses, willfully violated court orders, and engaged in actions to cloud his misconduct. Minkow repeatedly intentionally misrepresented these matters to his own lawyers, in sworn affidavits filed with this Court, at depositions in this case, and at the evidentiary hearing itself, including in response to questions from this Court. Mr. Minkow was repeatedly impeached by his own documents, documents he never produced in this case as to material issues. The evidence clearly and convincingly established that Minkow has acted knowingly, unilaterally, and improperly in deciding what evidence is relevant and what information Lennar, the Court, and his lawyers should and should not know.

Minkow’s misconduct has been pervasive, intentional, and committed to gain unfair advantage over Plaintiffs and to deceive this Court. Lennar and its counsel spent numerous hours investigating Minkow’s activities in this litigation, and evidence which Plaintiffs have repeatedly requested has been discarded and/or irretrievably lost.

Plaintiffs’ right to fair process and trial has been severely and irrevocably compromised. No remedy short of default, together with full reimbursement of the attorneys’ fees and costs incurred in connection with Plaintiffs’ extensive and continuous efforts to obtain evidence and discovery, can restore Plaintiffs to “the position [it] would have occupied in the absence of [Minkow's] willfulness and bad faith.”

…

In its papers and at the evidentiary hearing, Lennar introduced substantial evidence that Minkow created and tendered false documents in this case.

…

Fact No.7: In this case, Minkow has been represented by three experienced, capable attorneys: Alvin Entin and Joshua Entin of Florida, and Michelle Baker of California. The Court finds that Minkow misled his attorneys multiple times on material issues.

…

Fact No.9: Minkow testified he could not recall whether he sent the letter to any person with whom he worked on the Lemlar investigation, including Tracy Coenen, Terry Gilbeau, Paul Palladino, Jeff Sachs, Sam Antar, or Shannon Boelter, or otherwise instruct any person to preserve documents in connection with this litigation. [emphasis added]

…

Fact No. 11: The evidence also showed that Tracy Coenen, Terry Gilbeau and Sam Antar deleted emails about Lennar they had exchanged with Minkow…

…

Fact No. 21: On October 7, 2009 Minkow submitted an affidavit swearing that he had produced all documents in his possession, custody, and control responsive to Lennar’s document demands and this Court’s June 15 and July 9, 2009 Orders. (Ex. 10 at”if”if 5-7; Ex. 8; Ex. 16; Ex. 20.)

Fact No. 22: These sworn statements in Minkow’s October 7, 2009 affidavit were false. At the time he represented that he had made a complete production, Minkow had possession, custody, or control of numerous documents responsive to Lennar’s document demands and this Court’s June 15 and July 9, 2009 Orders, including but not limited to, the following documents material to this case:

• a version of the November 30, 2008 engagement agreement between Minkow and Nicolas Marsch containing a six-page, 11-point “confidential proposal” (Ex. 202); .

• another version of the November 30, 2008 engagement agreement between Minkow and Nicolas Marsch containing materially different compensation terms (Ex. 200);

• numerous emails with Mr .. Marsch, Paul Palladino, Tracy Coenen, Sam Antar,Terry Gilbeau, Shannon Boelter, and other individuals involved in the Lennar investigation;

Fact No. 23: Minkow knew he had possession, custody, or control of these and other documents, but made the decision to withhold them.

…

Fact No. 25: At the August 26,2010 hearing, Minkow admitted that he withheld these documents and others but said it was “negligent” because, at the time he represented he had produced all responsive documents, Minkow was working “18 hours a day” filming a movie about his life and he was “swamped and overwhelmed.” The Court does not find this testimony credible and rejects this excuse.

Fact No. 26: On several subsequent occasions, when he was not filming a movie including as recently as August 11, 2010, Minkow continued to withhold documents and falsely represent that he had produced all documents in his possession, custody, or control responsive to Lennar’s document demands and this Court’s June 15 and July 9, 2009 Orders.

Fact No. 27: On each occasion, Minkow knew he had possession, custody, or control of such documents responsive to the Court’s Orders, but he–alone-made
the decision to withhold them.

Fact No. 28: Minkow’s year-long withholding of documents was not inadvertent, accidental, or negligent.

Fact No. 29: Minkow withheld documents he perceived to be harmful to his case. Among other things, the concealed documents demonstrate:

• that Minkow’s investigators questioned the accuracy of statements of fact he included in his report on Lennar;

• the perfunctory nature of Minkow research and investigation before he accused Lennar and its executives of operating like a ponzi scheme, giving its COO a disguised kickback, being a financial crime in progress, and other statements; and

• Minkow’s use of possibly illegal means to obtain personal, confidential information about Lennar, its executives, and others.

Fact No. 30: By withholding these documents, Minkow wilfully violated the Court’s June 15,2009 Order and the Court’s July 9, 2009 Order.

…

Fact No. 31: Minkow introduce~ no credible evidence to substantiate his assertion that he was unable to produce documents because his Hewlett Packard computer was stolen, crashed, and/or was hacked.

Fact No. 32: The evidence showed that in February 2010, Minkow was named as a defendant in another matter by a company called Medifast, Inc. … Lennar is not a party to that case.

Fact No. 33: In April and May 20 I 0, Medifast had· served Minkow with requests for documents in their case. On July 1, August 10,16, and 23,2010, Minkow produced more than 4,000 pages of documents to Medifast, including scores of emails. Among the documents produced to Medifast were documents that should have been, but were not, produced in this case despite this Court’s June 15 and July 9,2009 Orders.

Fact No. 34: When confronted at the evidentiary hearing with a document from the Medifast production, but not produced here, one that was responsive to Lennar’s document requests-Minkow testified, “I never even thought this had anything to do with it… What in the world would make me think I had to tum it over to Lennar?”

Fact No. 35: This testimony is not credible and, even if it were, demonstrates Minkow’s contemptuous disregard for the rules of litigation and his belief that he–not the Court-determines what is relevant.

Fact No. 36: The documents Minkow produced to Medifast-but not in this case-refute Minkow’s testimony that he was unable to produce emails in this case because his computer had been stolen, crashed, and/or hacked.

Fact No. 37: Lennar has incurred great expense to procure some evidence from third parties, and it is highly probable considerably more evidence that Minkow should have produced has been withheld, deemed irrelevant by Minkow himself, concealed and/or destroyed. Due to Minkow’s misconduct, neither Lennar nor the Court has any way of knowing the nature, extent, or volume of evidence that should have been produced but has been concealed and destroyed.

…

Fact No. 40: Minkow had represented that the Hewlett Packard computer on which he performed the vast majority of work related to his investigation of Lennar (and on which he had exchanged untold numbers of emails with Tracy Coenen, Terry Gilbeau, Paul Palladino, Jeff Sachs, Sam Antar, Shannon Boelter and others) had earlier been hacked, and likely was destroyed and/or discarded; after Minkow was added as a defendant in this case, after being served with a preservation letter, after being served with a Notice of Deposition Duces Tecum requiring the production of documents, and after Plaintiff had filed its first sanctions motion.

Fact No. 41: Minkow has not introduced any credible evidence that all information from the Hewlett Packard was copied, duplicated, stored, and preserved without the loss of discoverable evidence.

Fact No. 42: Minkow admitted that the transfer of his email archives from the Hewlett Packard to a new computer was “incomplete.”

Fact No. 43: On July 21,2010, the Court ordered Minkow to appear and provide testimony at an evidentiary hearing scheduled for August 4, 2010. The
Court allowed Minkow to appear in San Diego and provide testimony via videoconference.

Fact No. 44: Lennar made significant preparations to arrange the videoconference for the hearing on August 4.

Fact No. 45: On July 30,2010, Minkow agreed to voluntarily appear live in Miami at the evidentiary hearing scheduled for August 4, 2010.

Fact No. 46: Lennar relied on Minkow’s representation and Lennar’s counsel made significant preparations to attend and examine Minkow in person at the
hearing on August 4 in Miami.

Fact No. 47: On the morning of August 3, 2010, Minkow informed the Court that he would not attend the hearing scheduled for August 4, 2010 in person or via video conference from California. Minkow asserted that on August 2, 2010, while in Los Angeles awaiting a flight to Miami, he became ill and went to the emergency room at a Los Angeles hospital. Minkow represented that he was restricted from traveling to Florida for the hearing.

Fact No. 48: On August 4 and 10, 2010, the Court ordered Minkow to produce, among other things, evidence that he had been to the emergency room / hospital.

Fact No. 49: Ten days later, on August 20, 2010, Minkow submitted an affidavit wherein he admitted that he had not gone to the emergency room. Minkow had lied to Plaintiffs, the Court, and his own lawyers.

Fact No. 50: Minkow swore that he could not “recall” what he had said to his lawyers and his assistant the morning of August 3, 2010 because he was on pain medications. The Court does not find this testimony credible.

Fact No. 51: The Court finds that Minkow intentionally deceived Plaintiffs and the Court regarding the emergency room visit because he knew that such a claim would require this Court to postpone the August 4, 2010 hearing.

Fact No. 52: At the August 26,2010 hearing, Minkow testified that he “didn’t think it [whether he went to the emergency room] mattered. I had a doctor verifying I was ill, and I thought that is all that mattered.”

Fact No. 53: This testimony is not credible and demonstrates Minkow’s contemptuous disregard for the rules of litigation and his belief, again, that he-not the ermines what is relevant.

Fact No. 54: At the August 26, 2010 hearing, when Minkow was impeached by the fax header on his own doctor’s letter, Minkow testified for the first time that the assistant who picked him up in Los Angeles was not in San Diego, California, as he earlier had testified, but rather was in Orange County, California.

Fact No. 55: This testimony contradicts his affidavit ofless than a week earlier in which he swore that his assistant “drove to Los Angeles from San Diego, California.”

Fact No. 56: When confronted with his contradictory. affidavit, Mr. Minkow testified that the location of his assistant was “irrelevant.”

Fact No. 57: This testimony is not credible and demonstrates Minkow’s contemptuous disregard for the rules of litigation and his consistent belief that he, not the Court, determines what is relevant.

…

PERVASIVENESS OF MINKOW’S MISCONDUCT

Fact No. 95: Minkow’s withholding and destruction of evidence, concealment of witnesses, and false testimony constituted a fraud on the Court.

Fact No. 96: Minkow has displayed no regard for the Court’s Orders, his testimonial oaths, the administration of justice, or his obligations as a litigant.

Fact No. 97: Minkow had ample opportunity to correct his misconduct and avoid sanctions. Minkow chose not to do so.

Fact No. 98: Minkow has wrongfully acted as though it is his right, not that of the Court, to determine what documents are relevant, what issues are material, and what information the Plaintiffs, the Court, and even his own lawyers should and should not know.

Fact No. 99: Minkow has displayed no appreciation of, or remorse for, the burden and expense that his withholding and destruction of evidence, concealment of
witnesses, false testimony, and other misconduct have caused Plaintiffs and the Court.

Fact No. 100: The Court finds that the likelihood Minkow would comply with his discovery obligations or the Court’s Orders in the future is unlikely.

Remember what I said above about the American Nazi? How if someone lies and spins and lies and lies some more, they can actually keep going for a long time? When you catch them out in a lie, they often apologize, say they are sorry. Lots of them even cry (really, I see it every time I deal with sociopaths). They then continue with a new lie, a new spin, until you catch them again. They just keep going and going.

That is a pretty fair description of Judge Freeman’s description of Barry Minkow. Withhold evidence and lie about it by saying the evidence was destroyed; Destroy the evidence then lie about that; when confronted, say that your computer was hacked and that evidence i








Barry Minkow Master Mind of the ZZZZ Best Fraud
By gzfraud| 1 video

http://www.youtube.com/watch?v=JydqCyFsmS8&feature=player_detailpage#t=6s

Former white collar criminal Barry Minkow has uncovered hundreds of millions of dollars in fraud.

5T WD haha

BMFL<OD

next week(s) is here

fourkids_9pets     Share   Friday, March 04, 2011 2:57:40 PM 
Re: camper9 post# 1713     Post #  of 8371   

New FINRA 4320 Short Sale Delivery Requirements

FINRA 4320. Short Sale Delivery Requirements

(a) If a participant of a registered clearing agency has a fail to deliver position at a registered clearing agency in a non-reporting threshold security for 13 consecutive settlement days, the participant shall immediately thereafter close out the fail to deliver position by purchasing securities of like kind and quantity.

(1) Provided, however, if a participant of a registered clearing agency has a fail to deliver position at a registered clearing agency for thirty-five consecutive settlement days in a non-reporting threshold security that was sold pursuant to SEC Rule 144, the participant shall immediately thereafter close out the fail to deliver position in the security by purchasing securities of like kind and quantity. The requirements in paragraph (b) shall apply to all such fails to deliver that are not closed out in conformance with this paragraph (a)(1).

(b) If a participant of a registered clearing agency has a fail to deliver position at a registered clearing agency in a non-reporting threshold security for 13 consecutive settlement days (or 35 consecutive settlement days if entitled to rely on paragraph (a)(1)), the participant and any broker or dealer for which it clears transactions, including any market maker that would otherwise be entitled to rely on the exception provided in paragraph (b)(2)(iii) of Rule 203 of SEC Regulation SHO, may not accept a short sale order in the non-reporting threshold security from another person, or effect a short sale in the non-reporting threshold security for its own account, without borrowing the security or entering into a bona-fide arrangement to borrow the security, until the participant closes out the fail to deliver position by purchasing securities of like kind and quantity and that purchase has cleared and settled at a registered clearing agency.

(c) If a participant of a registered clearing agency reasonably allocates a portion of a fail to deliver position to another registered broker or dealer for which it clears trades or for which it is responsible for settlement, based on such broker or dealer's short position, then the provisions of this Rule relating to such fail to deliver position shall apply to the portion of the fail to deliver position allocated to such registered broker or dealer, and not to the participant.

(d) A participant of a registered clearing agency shall not be deemed to have fulfilled the requirements of this Rule where the participant enters into an arrangement with another person to purchase securities as required by this Rule, and the participant knows or has reason to know that the other person will not deliver securities in settlement of the purchase.

(e) For the purposes of this Rule, the following terms shall have the meanings below:

(1) the term “market maker” has the same meaning as in Section 3(a)(38) of the Exchange Act.

(2) the term “non-reporting threshold security” means any equity security of an issuer that is not registered pursuant to Section 12 of the Exchange Act and for which the issuer is not required to file reports pursuant to Section 15(d) of the Exchange Act:

(A) for which there is an aggregate fail to deliver position for five consecutive settlement days at a registered clearing agency of 10,000 shares or more and for which on each settlement day during the five consecutive settlement day period, the reported last sale during normal market hours for the security on that settlement day that would value the aggregate fail to deliver position at $50,000 or more, provided that if there is no reported last sale on a particular settlement day, then the price used to value the position on such settlement day would be the previously reported last sale; and

(B) is included on a list published by FINRA.
A security shall cease to be a non-reporting threshold security if the aggregate fail to deliver position at a registered clearing agency does not meet or exceed either of the threshold tests specified in paragraph (e)(2)(A) of this Rule for five consecutive settlement days.

(3) the term “participant” means a participant as defined in Section 3(a)(24) of the Exchange Act, that is a FINRA member. The term “registered clearing agency” means a clearing agency, as defined in Section 3(a)(23)(A) of the Exchange Act, that is registered with the SEC pursuant to Section 17A of the Exchange Act.

(This is 3(a)(23)(A): The term "clearing agency" means any person who acts as an intermediary in making payments or deliveries or both in connection with transactions in securities or who provides facilities for comparison of data respecting the terms of settlement of securities transactions, to reduce the number of settlements of securities transactions, or for the allocation of securities settlement responsibilities. Such term also means any person, such as a securities depository, who (i) acts as a custodian of securities in connection with a system for the central handling of securities whereby all securities of a particular class or series of any issuer deposited within the system are treated as fungible and may be transferred, loaned, or pledged by bookkeeping entry without physical delivery of securities certificates, or (ii) otherwise permits or facilitates the settlement of securities transactions or the hypothecation or lending of securities without physical delivery of securities certificates.


(5) the term “settlement day” means any business day on which deliveries of securities and payments of money may be made through the facilities of a registered clearing agency.


==========================================


WHY IS FINRA 4320 SO EXCITING TO THE SECURITIES LAWYERS AND THE CORPORATIONS THAT HAVE SURVVIVED THESE NSS ATTACKS?

1) It finally addresses abusive naked short selling in non-reporting issuers. Up until now the regulators and SROs have found that the investors in development stage corporations somehow did not deserve the provision of investor protection.

2) Even though it is entitled “short sale delivery requirements” it covers the failures to deliver (FTDs) involved with intentionally mislabeled “long sales”. One way to bypass the newer short selling rules is to illegal mislabel your short sale as a “long sale” and just voluntarily fail to deliver the shares.

3) It affects FTDs held in “ex-clearing” because all (approximately 1,000) clearing firms that are “participants” of the NSCC/DTCC are indeed “registered clearing agencies” in and of themselves. (see 3(a)(23)(A) in the smaller print above.)

4) It addresses the FTDs of even market makers held at registered clearing agencies. The bona fide MM exemption from needing to pre-borrow or “locate” shares before making admittedly naked short sales is the main loophole being abused. THIS IS A VERY BIG DEAL.

5) It expressly forbids a crooked clearing firm from “crossing” failed to be delivered shares to a co-conspiring clearing firm in order to reset the 13-day clock. These illegal “wash sales” are pandemic.

6) There is no “grandfathering” in of old delivery failures held in illegal “ex-clearing arrangements” as these are still FTDs as nothing ever got delivered. The mere marking to market of the monetary value of failed delivery obligations has nothing whatsoever to do with making the “good form delivery” of the securities sold needed to accomplish the “settlement” of a trade.

7) In the abusive naked short selling world there are very, very bad guys and other semi-bad guys. The semi-bad guys will probably voluntarily cover their not so huge naked short positions BEFORE the really bad guys will have time to. They may even go net long after covering knowing that their bigger brother bad guys might be in deep doo-doo.

8) All of the crooks are not going to run willy-nilly tomorrow morning and cover BUT THOSE CORPORATIONS WITH IMMENSE NAKED SHORT POSITIONS THAT ARE ABLE TO PULL OFF SOME SORT OF LARGE CORPORATE ACCOMPLISHMENT WILL BE GREATLY BENEFITTED AND THEIR NAKED SHORT POSITIONS MIGHT RISE TO THE TOP OF THE “SHORT POSITIONS TO IMMEDIATELY COVER” LIST.


=============================================================



From HookMeister:

Doc, I've posted this question previously and haven't heard any response from anyone so I thought I'd ask you if you don't mind.

With respect to the NSS issue and the new regulations starting Monday, will MMs who already hold short positions prior to the new regulations be required to now comply with the new regs concerning their already existing short positions or will it only apply to new short positions going forward??

Hi HookMeister,
It’s actually the combination of all of the various new rules kicking in right now that will FINALLY make a difference as they all block some of the various loopholes in existence. The weak link has always been that the old rules only applied to delivery failures held at “registered clearing agencies” like the NSCC. The crooked clearing firms simply “paired off” outside of the NSCC, entered into illegal “ex-clearing arrangements” and forgave each other’s delivery obligations. Instead they chose to merely mark to market the monetary value of their failed delivery obligations and hide them in a “side pocket”. As a result, U.S. investors have no clue as to the damaged nature of the corporation they are investing in.

What the various “securities cops” were just reminded of is that these crooked clearing firms are indeed “registered clearing agencies” in and of themselves as per the ’34 Exchange Act. Up until now, nobody has been tallying the delivery failures hiding in these illegal “ex-clearing arrangements”. The new FINRA 4320 as of tomorrow mandates the buying in of 13 day old delivery failures of non-reporting issuers (like Medinah) IF MEDINAH’S NAME APPEARS ON THE FINRA THRESHOLD LIST. Medinah’s name is to appear on this list if both their delivery failures exceed 10,000 shares and are worth over $50,000 in the aggregate. Although Medinah’s approximately 1.3 billion shares of failed delivery failures are currently (@12-cents) worth approximately $156 million MEDINAH IS STILL NOT ON THE LIST. This is a testimony to the pandemic nature of these illegal “ex-clearing arrangements”

Why is this? FINRA leaves the tallying of the delivery failures up to the NSCC. The NSCC only tallies the delivery failures officially held at the NSCC which the crooks now avoid like the plague as the hiding spot for their delivery failures. The NSCC management, which operates as an “SRO” or “self-regulatory organization”, insanely holds that the delivery failures held by their “participants/bosses” outside of the NSCC in “ex-clearing arrangements” are of a “contractual” nature which is none of their business.

Wait a minute, the SEC has said that the SROs like FINRA and the NSCC are to provide “the first line of defense against market abuses”. Congress in Section 17A of the’34 Exchange Act mandated that its parent the DTCC “promptly settle” all securities transactions. This means that the sellers of securities must promptly deliver that which they sold on or near T+3. Illegal “ex-clearing arrangements” intentionally circumvent the “prompt settlement” of securities transactions. By definition, an SRO like the NSCC is mandated to “draft and enforce rules and regulations and to monitor the “BUSINESS CONDUCT” of its co-owning “participants.”

How can the management of an SRO like the NSCC with that SRO mandate as well as that congressional mandate as well as acting as the party acting in the capacity of providing “the first line of defense against market abuses” claim that it has no authority to address the efforts of their bosses to intentionally circumvent the “prompt settlement” of securities transactions? How can you claim to be “powerless” to follow a congressional mandate?

Forced buy-ins of 13-day old delivery failures are critical as they represent the only source of meaningful DETERRENCE to these crimes and they are the only treatment available when the sellers of securities absolutely refuse to deliver that which they sell. With FINRA 4320 in effect, non-reporting issuers are FINALLY afforded protection via mandated buy-ins but only if that 10,000 shares and $50,000 worth of delivery failures metric is reached. If the NSCC management continues to refuse to tally the delivery failures held in these “regulated clearing agencies” known as “clearing firms” in these “ex-clearing arrangements” in order to keep their bosses from being bought-in then the issue of a “securities cop” with all of these various mandates acting to directly aid and abet as well as cover up these frauds comes front and center.

The gist of it is that the mere marking to market of the monetary value of a failed delivery obligation has nothing to do whatsoever with the congressionally mandated “prompt settlement” of a securities transaction. In fact, although from a distance it serves to lend an air of legitimacy it actually is the ideal COVER UP FRAUD used to mask the fact that “prompt settlement” is not occurring.

Most securities lawyers I work with predict that FINRA 4320 will force the NSCC management to pull a “Pontius Pilate” and wash its hands of this aiding and abetting role and providing this cover up fraud and buy-in these previously unaddressed delivery failures which they theoretically had no idea existed. No doubt they will say WE ARE SHOCKED, SHOCKED and shame on you abusive bosses of ours. We had no idea these crimes were being committed on our watch.

The concept of a “securities cop” like the NSCC intentionally MANIPULATING downwards the metric needing to be reached so that investor protection is provided in order to look after the financial interests of its misbehaving bosses is unconscionable and the investing public will not tolerate these thefts any longer.

source

original post from camper9

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1) WHY DO ABUSIVE NAKED SHORT SELLERS NEVER, NEVER, NEVER VOLUNTARILY COVER THEIR NAKED SHORT POSITIONS?

ANSWER:

A) They can easily gain access to the funds of uneducated investors without ever delivering anything to them. All they’re asked by the NSCC to do is to collateralize the monetary value of the failed delivery obligation on a marked to market basis. As the readily sellable share price depressing “security entitlements” resulting from all of these intentional delivery failures pile up the share price and therefore the collat. requirements drop allowing the investor’s money to flow to the party refusing to deliver that which they sold.

B) Until 4320 came along there was no deterrence, no forced buy-ins, no perp walks and no meaningful fines levied.

C) There’s a huge bonus available for bankrupting a company i.e. no taxable capital gains.

D) Often they run up so high of a naked short position that they can’t even stop their daily NSS-ing lest the share price go up and the collateralization requirements of the immense uncovered position become unbearable.

E) This is their turf and they know the loopholes better than uninformed investors (excepting of course the average Medinah investor that will soon be omniscient in these matters or die trying.)

F) These crooks have high paid lobbyists that keep convincing the politicians that the injecting of liquidity by even abusive MMs is critical to allow our markets to function smoothly.

G) The delivery failures were invisible to the investing public and the “securities cops” until 4320 came along as well as the new DTCC “obligation warehouses”.

2) What is the direct result of this phenomenon?

A) Companies that have been under attack for as many as 14 years are going to have accumulated enormous open naked short positions if the crooks have failed to bankrupt them before the world learned that they were MISDIAGNOSED as “scammy pump and dumps”.

3) What is the biggest benefit of 4320 once a company under attack gets onto the “nonreporting threshold list”?

A) Mandated buy-ins on day 13 by a party (clearing firm) that doesn’t particularly care what he pays for the stock because he gets to hand the bill to the guilty party.

4) What is the main truly meaningful deterrent to committing these crimes?

A) The fear of being bought-in at an inopportune time by a party that doesn’t care what he pays.

5) What is the ONLY cure available when the seller of securities absolutely refuses to EVER deliver the securities that it sold after contracting to deliver them by T+3?

A) Mandated buy-in.


(from www.theminingplay.com, posted by Brecciaboy)

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A DIFFERENT WAY OF LEARNING THE HEINOUS NATURE OF “EX-CLEARING” CRIMES

Your brokerage firm uses a clearing firm to “clear” the trades you make. Corrupt clearing firms have a metaphorical backroom known (metaphorically) as a “sponsor table” room. When you buy Medinah shares let’s pretend you pay with a bucket full of silver dollars. If the clearing firm of the MM that sold you shares refuses to deliver that which you purchased your bucket of coins goes into your clearing firm’s “sponsor table” firm. Your coins are dumped onto the table that the clearing firm of the MM “sponsored”.

These “sponsor tables” are unique in that that have netting around them. The floor of the “sponsor table” room is unique in that it tips as share prices drop. Since nothing was delivered your coins exist in a state of limbo UNTIL delivery occurs if it ever occurs. As the share price predictably tanks and the floor tips from naked short sales which open up more and more “sponsor tables” the clearing firm of the crooked MM as well as the crooked MM itself get to collect all of your coins that slipped into the netting EVEN THOUGH THAT WHICH THE MM SOLD NEVER EVEN EXISTED. Your coins “collateralize” the debt of the crooked MM.

The interest that your coins earn is split by your clearing firm and the crooked MM IF AND ONLY IF YOUR CLEARING FIRM REFUSES TO YELL AT THE MM AND ASK HIM TO DELIVER THAT WHICH HE SOLD TO HIS CLIENT i.e. you. In other words if he is willing to throw your financial interests under the bus he gets to share in the interest earnings. “Sponsoring” tables is easy, all you have to do is to refuse to deliver the securities that you sell.

Every night the crooked MM that sold you nonexistent shares gets to go into the “sponsor table” room and collect whatever coins fell into the netting from all of the tables he sponsored which might be in the thousands or tens of thousands after 14 years. If the crooked MM “recruits” other MMs and various hedge funds to sponsor tables the coins will flow into the netting very rapidly FROM ALL “SPONSORED” TABLES as the share price plummets. If they succeed in bankrupting the company they targeted to destroy all of your coins will be gone and in the possession of the crooked MM despite the fact that he still hasn’t delivered anything and what he sold to you doesn’t even exist.

After you bought the shares you got a monthly brokerage statement that “implied” that your clearing firm was “holding long” your shares. You probably assumed they were in some type of vault at the DTC depository. Two corrupt clearing firms can easily “pair up” outside of the NSCC (ex-clearing) and offer each other and each other’s clients the use of their “sponsor table” rooms. This amounts to allowing a bunch of crooks to sell a given clearing firm’s clients fake shares and never deliver them if and only if the other clearing firm extends the same courtesy. The NSCC management mandated to regulate the “business conduct” of its “participating clearing firms” that co-own the NSCC holds that what their bosses do outside of the NSCC proper is none of their business.

(from www.theminingplay.com, posted by Brecciaboy)

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My most popular question du jour has to do with historically when do the naked short sellers typically cover. The answer is usually never or about as often as a tiny junior explorer makes a discovery like that at Lipangue which is next to never.

First of all, you have to qualify which type of short sellers you’re referring to-the jet skiers or the aircraft carriers.

The jet skiers are the smaller market makers, broker/dealers, hedge funds, prime brokers, etc. that might be short only perhaps 30 million shares. They have a lesser ability to collateralize their naked short position as the PPS advances. They’ll typically cover first but they’re actually in the catbird seat because they can cover and then go net long if they know that an aircraft carrier that’s short maybe 400 million shares is in deep doo-doo. When there’s blood in the water on Wall Street all bets are off.

Aircraft carriers can’t turn on a dime and cover and go net long like the jet skiers can. At this point in the battle the jet skiers are ticked off at the aircraft carriers because they were probably “recruited” by the aircraft carriers to help finish off this “scammy” PinkSheet piece of gradu that turned out to be a little feistier than anticipated.

One thing about abusive naked short sellers is that they have discipline. They’ll cover when they know their goose is cooked. When you’re naked short thousands of development stage U.S. corporations the aircraft carriers only have “X” amount of net capital reserves to spread around to collateralize these “open positions”. If you “accidentally” ran up an immense naked short position but failed to kill your target you’re typically left with 3 options to still win the war. You can do whatever is needed to get your target delisted, bankrupt them or get their registration revoked. If Medinah lands a generous JV arrangement then all 3 of those options are gone.

Since abusive naked short sellers never really know how many other crooks are naked short the target then it sometimes becomes a race to beat the others to cover. Oftentimes the jet skiers have no choice in covering because the clearing firm they operate through starts sweating bullets because it is eventually on the hook for the failed delivery obligation. If the jet skiers do not supply much order flow to the clearing firm then they’re apt to be thrown under the bus. Clearing agreements always spell out that the clearing firm can buy-in those “open positions” whenever they so choose. Since the monetary value of all open naked short positions needs to be collateralized on a daily marked to market basis it’s usually financial constraints that lead to the covering.

When the goose is indeed cooked, a powerful option is lost to the crooks. When under duress the crooks can always transfer a naked short position “across the street” like a hot potato until the heat is off. Then it’s transferred back by another illegal “wash sale”. When the goose is cooked and everybody knows it there won’t be any willing co-conspirators to accept that transfer. The new FINRA Rule 4320 kicking in soon looks really nice. For the first time the CLEARING FIRM of the bad guys is handcuffed from misbehaving.


(from www.theminingplay.com, posted by Brecciaboy)

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IS NSS TECHNICALLY “UNLAWFUL” OR “ILLEGAL”?

In regards to issues of “unlawfulness” or “illegalities” in the securities markets one has to go to the all encompassing anti-fraud rule within the ‘34 Exchange Act namely Rule 10b-5.

Rule 10b-5 -- Employment of Manipulative and Deceptive Devices
It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,

a. To employ any device, scheme, or artifice to defraud,

b. To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or

c. To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person,
in connection with the purchase or sale of any security.


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The first concept to keep straight is that a technically “unlawful” act has nothing to do with whether or not that act is regularly prosecuted by the authorities. The DOJ or FBI usually need a referral from the SEC before they come on the scene. When it comes to abusive naked short selling crimes the SEC, FINRA, and the DTC and NSCC subdivisions of the DTCC are squarely in “cover up” mode. The last folks the regulators and the SROs want sniffing around is the DOJ, FBI or the FFETF [Financial Fraud Enforcement Task Force] with the power to put people in jail.

IS WHAT IS DESCRIBED BELOW AN “UNLAWFUL” SCHEME TO DEFRAUD DONE IN CONNECTION WITH THE SALE OF A SECURITY?

1) A corrupt MM illegally accesses the universally abused bona fide MM exemption from needing to effect a pre-borrow or “locate” before making admittedly naked short sales. He has no intent to ever deliver that which he is selling. Note that a truly bona fide MM that legally accesses that exemption would cover that naked short position on the very next downtick in share prices when the injection of buy-side liquidity is needed.

2) He sells nonexistent shares to a buyer but refuses to either deliver them or buy them back when the share price drops.

3) The buyer’s account is credited with a readily sellable share price depressing “security entitlement” as per UCC Article 8. Because of this the buyer is blindfolded to the deceit/fraud.

4) As these “refusals to deliver” and the “security entitlements” they spawn accumulate invisibly in the share structure of the corporation targeted for destruction the share price predictably tanks because the “supply” of that which must be treated as being readily sellable (shares and/or “security entitlements”) is knowingly and intentionally being manipulated upwards (scienter).

5) Since the NSCC only mandates that its “participants” collateralize the monetary value of failed delivery obligations on a daily marked to market basis as the share price drops (gets MANIPULATED downwards-a crime) so too do the collateralization requirements.

6) This results in the funds of the investor flowing to the MM that illegally accessed the bona fide MM exemption but refused to cover his naked short position on the very next downtick after the naked short sale was made as a truly bona fide MM would have. This flow of investor funds occurs despite the fact that what was sold never existed and never got delivered. With this being the NSCC policy, imagine the checks and balances that would be in place in a clearance and settlement system with integrity should abusive participants access this gold-plated invitation to defraud investors. The alarm bells would start sounding on about T+6 or so and forced buy-ins would rapidly occur.

Quite clearly this is an “unlawful scheme to defraud investors done in connection with the purchase and sale of a security”.


WHAT IS THE “SCHEME” TO DEFRAUD?

The “scheme” is to be able to sell nonexistent securities via illegally accessing the bona fide MM exemption and avoid the costs or potential unavailability associated with making legitimate pre-borrows in order to gain access to the funds of the investor without ever having to deliver the nonexistent shares you sold.

WAS THE BUYER OF THE SHARES DECEIVED OR DEFRAUDED?

The buyer was under the impression that he was buying and getting delivery of SEC-registered units of equity ownership (“shares”) in a corporation of which there are a finite amount “outstanding” as indicated on that company’s financials. He was deceived. He thought he was acquiring a voting power equal to the amount of shares he purchased divided by the number of shares advertised as being “outstanding” in the company’s 10-K. He didn’t get this. He thought he would earn preferential tax treatment for all of his shares on any “qualified dividend” the company issued. He will not get this as per IRS policies limiting the tax preferential treatment only to the number of shares legally “outstanding”.

He thought that the amount of shares readily sellable at any given time were just the number of shares “outstanding” plus any shares borrowed for the sake of legitimate short sales and subsequently sold. He was wrong. He thought that in the case of insolvency he had a valid claim to the percentage of assets calculated by dividing the number of shares “outstanding” by the number he purchased (dissolution rights). He was wrong. He thought that there were no parties on Wall Street heavily financially incentivized to bankrupt this company. He was mistaken. He thought that the DTCC was going to follow its congressional mandate to make sure that his trade would “promptly settle” i.e. buy-in the delivery failure on perhaps T+6 when it became obvious that the seller had no intent to deliver that which he sold. Again, he was deceived/defrauded.


AS PER SECTION “C” OF 10B-5 DOES THIS “COURSE OF BUSINESS…OPERATE AS A FRAUD OR DECEIT UPON ANY PERSON IN CONNECTION WITH THE PURCHASE OF A SECURITY”?

Of course it does.


WALL STREET’S REBUTTAL: STEALING THE FUNDS OF INVESTORS IN DEVELOPMENT STAGE U.S. CORPORATION ACTUALLY HAS ALTRUISTIC UNDERPINNINGS.

FACT: The most readily available supply of shares to borrow and then legally short sell come from margin accounts and institutional shareholders trying to earn a little margin interest to increase their “alpha”.

FACT: The nonmarginable “penny stocks” typically attacked do not have many if any shares in either location and are thus difficult or extremely expensive to legally short sell.

FACT: The best way to circumvent this reality is to work with crooked MMs willing to illegally access their bona fide MM exemption. Access is typically attainable by directing cash generating order flow in the direction of a willing MM.

THE MINDSET OF SOME ABUSIVE NAKED SHORT SELLERS: The destruction of certain U.S. corporations and the stealing of the funds of investors in companies that we abusive naked short sellers deem (in our infinite wisdom) to be “scams” is actually a good way to “hasten the demise” of these “scammy pump and dumps” so that future investors don’t get swindled by these scamsters. In other words, stealing from investors is a good way to address assumed stealing from investors and perpetrating a heinous form of securities fraud is the proper way to address suspected frauds.


The question arises; why not just file a complaint with the SEC in order to perform your “shareholder advocate” role.

Possible answer: That doesn’t pay as well.


ISSUES REGARDING SECTION b OF 10b-5 AND THOS MANDATED TO KEEP TALLIES OF DELIVERY FAILURES

Section b deals with facts of a “material” nature. It deems it unlawful to EITHER “make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading in connection with the purchase or sale of any security”.

In connection with the “full disclosure” of all “material” facts to prospective investors what fact could possibly be more “material” to the prognosis for the success of a potential investment then the presence of an enormous amount of share price depressing “security entitlements” poisoning the share structure and prognosis for success of a corporation?

Note that Section b makes it unlawful to omit to state a material fact. Who is or should be in possession of the combined number of delivery failures residing in either the DTCC or in “ex-clearing arrangements”? The answer is BOTH the NSCC as the party keeping the tally as well as FINRA mandated to receive the reports of the NSCC and construct and maintain the “threshold lists”.

The question arises as to how these 2 SROs mandated to act as “the first line of defense against market abuses” (as per the SEC) and also acting with the mandate to create and enforce laws associated with the “business conduct” of its “participants” in the case of the NSCC and “members” in the case of FINRA can refuse to keep this most “material” of all information secret from prospective investors.

The answer is simple, due to the levels of historical abuses our SROs and regulators are stuck in “cover up” mode and by definition you cannot be acting in robust investor protection mode and cover up mode simultaneously. What is at stake here is millions of U.S. citizens learning that many of the investments they have made throughout history in development stage corporations never had a chance to succeed. Instead the fates of these corporations, the jobs they could have provided and the investments made therein were thrown under the bus in exchange for some type of corrupt vigilante type service.

It is extremely obvious that in order to move from cover up mode where investors have no clue how damaged the corporation is that they are buying shares of back into robust investor protection mode an embarrassingly obvious event must occur. The sellers of nonexistent shares caught gaming the system must be FORCED to go into their wallet, retrieve the stolen money and buy back and deliver the shares they promised to deliver on T+3 but refused to.

The obviousness of this only solution and the refusal to demand it up until now has forever tarnished the integrity of our markets. Once the share price depressing “security entitlements” are forcibly removed from these corporate share structures then an unmanipulated “supply” variable can finally interact with an unmanipulated “demand” variable to “discover” an unmanipulated share price through the price discovery process. What could possibly be a more obvious remedy to finally reroute our SROs and regulators away from cover up mode and back into investor protection mode.

SUMMARY

Relatively defenseless nonmarginable “penny stocks” are the easiest for short sellers to bankrupt. The problem is that they are the most difficult to LEGALLY short sell since very few shares are held in margin accounts or by institutions willing to loan them out. Short sellers not afraid to act outside of the securities laws can easily find corrupt MMs to ILLEGALLY “rent out” space under their “bona fide MM” umbrella of immunity from having to pre-borrow or make a “locate” before making naked short sales. Avoiding either expensive or unavailable “pre-borrows” is often the inducement to break the law. The corrupt MMs are rewarded for their breaking of the law by cash generating order flow from the criminals refusing to play by the rules.

The added expense and difficulty to legally short sell development stage securities in a sense should add protection to these corporations that are relatively defenseless during their particular stage of development in these “corporate incubators” known as the PinkSheets and the OTCBB. It is also true that these circumstances could foster and promote “pump and dumps”. The concept that abusive naked short sellers justify stealing the funds of today’s investors in order to hasten the demise of corporations in order to protect future investors in that (allegedly) “scammy” corporation from being defrauded by corrupt management teams represents a pathological mindset beyond comprehension. At the very least, these criminals should carry some form of billion dollar “malpractice” insurance when their diagnosis that “X” U.S. corporation is a “scam” proves to be unfounded.


(from www.theminingplay.com, posted by Brecciaboy) Emphasis above is mine.


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thanks to camper9 .. brecciaboy and the miningplay.com for
the above posts .. wanted to combine all of the posts into
one for ease of access and reading on the NSS board

thanks to greg for the request

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4kids
all jmo

5T WD haha

BMFL<OD

next week(s) is here