August 17, 2009

WASHINGTON, DC – Sen. Ted Kaufman (D-DE) released the following statement today after the Securities and Exchange Commission (SEC) announced it is again seeking public comment on reinstating some version of the uptick rule:

“For the markets to have credibility, we need urgency at the SEC to restore a level playing field for investors. The SEC’s process to date has been way beyond deliberative behavior. It’s been four months since the SEC proposed reinstating a version of the uptick rule, and we’re still in the comment period. What’s worse, if the SEC was going to seek additional comment, it should have issued immediately a proposed rule that short sellers must pre-borrow the stock or that DTCC implement a centralized “hard locate” system, two solutions that would end naked short selling with an enforceable rule that are still sitting on the SEC’s shelf.

I’m concerned the SEC is too worried about the effects of its proposed rules on convenience for high speed trading programs than it is on protecting investors through action. As we learn more every day about market developments like flash orders, co-location of servers at the exchanges, high frequency trading and dark liquidity pools, which have happened with SEC approval, I’m concerned the SEC still is not putting investor interests first.”

( http://kaufman.senate.gov/press/press_releases/release/?id=e2012ba8-6fc2-445c-aab8-ae70b2ef1de1 )

I agree:

NOTE the SEC’s recent use of the word “curb” instead of word “prosecute”.

Is it not true that their first prosecution after all these years occurred only recently?

The fraternity brothers protect each other quite well.

The United States has the BEST “Naked Counterfeit Short Selling Machine” in the World thanks to the SEC, which in TURN attracts the BEST FINANCIAL CRIMINAL MINDS to Wall Street from around the world.

Dear Friends,

I implore you to act. Send this or an email in your own words to Chairman Shapiro of the SEC.

All gold shares are small caps. That is why they have been prey to these destructive elements.

This site is read by 500,000 people.

Please make this small effort for the hard work we do to help you all on a daily basis.

Please remember in the body and in the subject to say, “In support of the above bid short selling rule.”

Email your response to: chairmanoffice@sec.gov

Sincerely,
Jim

Dear Chairman Shapiro,
Subject: In support of the “above bid short selling rule.”

As a seasoned investor and due to hedge fund organized short raids pounding all bid in sight, markets in general and financial institutions specifically collapsed in March and are still on very precarious grounds, despite help from the “invisible” hand of the Fed. Many smaller stocks have never recovered, despite a solid future ahead of them.

I understand that you are still soliciting commentary on the matter of the Uptick Rule (above bid rule) and short selling. Illegal short selling persists and investors are being unduly punished for the benefit of “rogue traders” and under the pretext of maintaining liquidity supported by academic studies and a large parade of self interested professors.

I have no problem with legitimate short sellers. Naked short selling (the most damaging of all) via Canada and other non-US sites persists, despite the fact it is considered illegal. What do you need to see to reinstate integrity to North American financial markets, and save investors, pensioners and businesses (large and small) that have been the foundation of a thriving America?

The time has come to take action. The frequency trading, front running, quasi-derivatives, insider trading and wanton naked short selling make a mockery of our markets. They make Mr. Madoff look like a Saint. Everyone knows it. Who will be left to trade at the end of this?

Chairman Shapiro, I realize it takes time to get up to speed on the issues confronting your organization. Please hurry, time is not on our side. You and I are getting older and future generations will pay the consequences of our inaction.

Thank you for listening,

Best Regards,
Jim Sinclair

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Message: 6 of 3716

http://www.cringely.com/2009/08/is-technology-evil/

I am not sure if my explanation above is 100% (please correct me where I am incorrect).

Yet in thinking about the depressing stock price effect upon targeted companies of Naked Counterfeit Short Selling, I came to the realization that a cash merger is one way for a targeted company to FLUSH OUT all the Counterfeit Shares. This may be the ONLY WAY for a company to successfully rid itself of Naked Shares.

So in the end, the Wall Street Counterfeit Machine not only can destroy a company, it can also destroy the dreams of a developing company to REMAIN INDEPENDENT and become a bigger company.

It looks possible that the Naked Counterfeit Short Selling of the biotech company MEDX shares through the years MAY ALLOW the proposed merger with BMY to easily succeed, since ONLY THE YES votes are being counted (YES votes = Tendered Shares):

“Naked Shares Could Make This Merger Successful….

BMY and MEDX BOD could receive the percent vote they need to close this merger simple by VIRTUE of all the unknowable amount of COUNTERFEIT SHARES Floating in the Clearance and Settlement System by the manipulating Hedge Funds as Guests of Corrupt Market Makers.

So how many official outstanding share are there for MEDX?

To quote from the MEDX Schedule 14D-9 on page 3:
“The shares of Common Stock are hereinafter referred to as the “Shares.” As of July 24, 2009, there were
128,952,242 Shares issued and 128,918,402 Shares outstanding.”

So officially there are 128,918,402 Shares outstanding.

But this number does NOT REVEAL How Many Counterfeit Shares are floating in the system as “security entitlements or IOUs”. “Security entitlements / IOUs” are NOT counted as official shares in the STSTEM, but one is allowed to buy them, sell them, and vote them as if they were official shares.

For the sake of illustration, let us say there are 228,918,402 Million shares of MEDX floating in the Clearance and Settlement system because of all the Naked Counterfeit Short Selling of MEDX through the years.

This would mean that there are an EXTRA 100 Million extra shares of MEDX in the Clearance and Settlement system as “security entitlements or IOUs” over and above the official float of 128,918,402 shares that have been collateralized.

In this example, the merger of BMY and MEDX would be approved with ONLY 64,459,202 shares tendered – that is with 50% of the official Shares outstanding…..

…BUT 64,459,202 in fact would ONLY BE 28% of the total share floating around the Clearance and Settlement System ( 64.5 / 228.9 million shares = 28%).

This means that 28% of the total shares floating in the system would be COUNTED as 50% of the official shares outstanding. Thus 28% would allow the merger to succeed.

This, of course, would mean that MEDX the Company and the MEDX Shareholders were getting screwed by the Naked Counterfeit Shorting Selling in many multiple ways. In this last way, by allowing less than 50% of the total shares floating in the Clearance and Settlement system to approve a merger.

Sad but true…….

THOUGHTS ABOUT THIS PROCESS……
An official count of ALL VOTES is avoided in this process chosen by MEDX BOD, since only the YES VOTES are counted – that is. only the shares TENDERED are counted.

In contrast, if the MEDX BOD had called a special meeting for a vote on the proposed merger, ALL VOTES, both YES and NO votes would have been counted.

In this process, the first 64,459,202 tendered shares will be counted as 50% of the official shares outstanding, even though it is only 28% of the total share in the system.

Also legal counsel for MEDX and BMY may very well know about this and have advised this process for a couple of reasons:

1.) Use the Naked shares to easily get 50% or more of the official share outstanding.

2.) And to flush out all the Counterfeit Shares that have been depressing the stock price of MEDX, since BMY will ONLY have to pay for the official number of shares. All the Counterfeit shares will have to be paid for by the Counterfeiters, who very well may have made much more than $16/shr over many years.

Unfortunately, the SEC regulations completely BLINDFOLD us MEDX investors and we will never be allowed to know about any EXTRA COUNTERFEIT SHARES of MEDX floating in the Clearance and Settlement System.

SEE following post for more information from Expert Dr. Jim DeCosta:

http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_M/threadview?m=mm&bn=11469&tid=181713&mid=181713&tof=34&frt=2
”

( http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_M/threadview?m=mm&bn=11469&tid=182238&mid=182238&tof=1&frt=2 )

http://www.businessinsider.com/john-macks-short-selling-hypocrisy-2009-3

The new Weiss:

John Carney said: Mar 19, 8:18 AM
The coincidence of naked shorting and rumors has a far more innocent explanation.

Those rumors helped sparked spikes in short selling, and primes brokerages struggled to keep up with the heavy volume. Sometimes the brokerages sold shares on behalf of clients that they had not yet located or borrowed.

Most naked shorting likely occurs in this way. That is, “naked short selling” is actually a problem originating with prime brokers failing to locate and borrow shares for clients, rather than part of a nefarious market manipulating strategy.

There’s little evidence that naked short selling is an effective means of manipulating stock prices. A recent paper made this point: “In permissible short selling, the party owed shares is the security lender (who used to own the shares before lending them for short selling), while the party owning the shares is the new buyer. In naked short selling, the party owed the shares is the new buyer, while the party owning the shares is (still) the current owner. The buyer in both cases is the same, so the price should not be different. The only difference is who acts as the effective lender of the security: in permissible short selling, the lender is the current owner; in naked short selling, the new owner acts as the effective lender. From a price perspective, it is difficult to see how that matters.”

To put it differently, short-selling can depress prices and increase volatility. But it can do this without “naked shorting.” There’s no real added value to naked shorting in terms of depressing stock prices. (Although it can save money in fees paid to securities lenders.)

Carney:

http://www.businessinsider.com/naked-shorting-doesnt-matter-2009-3

http://www.sec.gov/news/press/2009/2009-185.htm

Let’s see how long they decide to talk about it…

http://www.stockwatch.com/newsit/newsit_newsit.aspx?bid=Z-C:*SEC-1633463&symbol=*SEC