http://llr.lls.edu/volumes/v35-issue3/hakes.pdf

“Did recent revisions to Article 8 of the Uniform Commercial
Code1 accomplish their purpose without sowing seeds that could
result in either an unintended restructuring of the securities markets
or in an unanticipated financial crisis?”

“The inherent risk to entitlement holders in the indirect holding
system is the failure of the securities intermediary. Because of the
nature of indirect holding and the interaction of priority and
purchaser rules in the indirect holding system, priority to financial
assets is generally given to a securities intermediary’s secured
lenders over its entitlement holders.401 This means that when a
securities intermediary fails, its secured creditors may recover at the
expense of entitlement holders.”

“Several gaps exist in the protections provided by SIPC. First,
not all securities intermediaries are members of SIPC (most notably
banks).446 Banks are also not covered by the Bankruptcy Code,447 so
that the rules governing distribution of assets would come from the
Article 8 priority rules and rules protecting purchasers.448 Second,
not all entitlement holders are customers protected by SIPA:449 The
term customer does not include secured parties who are entitlement
holders.450 A trustee is a single customer even if the trust has
multiple beneficiaries.451 Repo purchasers are generally not
customers.452 Third, each customer is limited to $500,000 ($100,000
for cash delivered to the broker or dealer).453 Note that the dollar
limit is not to the size of the account, but to the shortfall coverage by
SIPA after distribution of assets.454 SIPA does not aggregate certain
customer accounts, thus giving some customers more protection than
the $500,000 limit.455″

http://www.newser.com/story/80527/goldman-helped-greece-hide-catastrophic-debt.html

http://www.finalternatives.com/node/11349

S.E.C. Enforcers Focus on Avoiding Madoff Repeat

This is mildly Encouraging

http://www.nytimes.com/2010/02/09/business/09sec.html?partner=rss&emc=rss

Naked short selling, which is to sell a stock short without first borrowing it, can be done on purpose and has artificially deflated the stock prices of some companies, according to the SEC.

Numerous PIPE-issuing companies may be victims of manipulative naked short selling. This is shown by data tracking how often their shares have been sold but not delivered within eight days of a short sale. Eight out of the 15 companies with the most fails to deliver as of March 19 have issued a PIPE since 2006, according to Buyins.net, and PrivateRaise. Buyins.net tracks stocks with relatively large numbers of failures to deliver.

Advocates for reform, including former SEC chairman Harvey Pitt, believe that no naked short sales should be permitted. The SEC’s current position is that naked short sales are sometimes necessary for market makers to provide liquidity in a stock.

The issue of naked short selling drew extra attention following the bankruptcy of Lehman Brothers on Sept. 13. At the time, the SEC even took emergency measures specifically aimed at protecting against naked short selling.

Working up to that date, failures to deliver Lehman stock shot up from 96,700 on Sept. 3 when Lehman shares traded at $16.13 to 49.7 million on the last day for settlement at 22 cents, according to data made public by the SEC.

The SEC inspector general found that the SEC’s policies and procedures limit the referral of naked short selling complaints, and that its written policies and procedures result in naked short selling complaints being treated differently from other types of complaints of securities law violations.

The SEC division of enforcement replied that the problem of naked short selling is viewed by some market observers as “wildly exaggerated.” The enforcement division also said that the inspector general’s recommendations would not allow for “optimal uses” for the commission’s limited resources.

“There is hardly unanimity in the investment community or the financial media on either the prevalence, or the dangers, of ‘naked’ short selling,” the enforcement division said in a statement appended to the inspector general’s report.

The enforcement division agreed only to change one procedure relating to how it deals with email complaints.

Of approximately 5,000 naked short selling complaints received in the enforcement complaint center between Jan. 1, 2007 and June 1, 2008, only 123 were forwarded for further investigation, according to the report. And those involved subjects that were already the focus of ongoing enforcement investigations. None of the forwarded complaints resulted in enforcement actions.

Source: SEC OIG Report

So the SEC is not going to do anything about Naked Counterfeit Short Selling until 100% of the Wall Street Criminals agree that the SEC should STOP THEIR CRIMINAL ACTIVITIES.

OK… let us take a vote…
Will every Wall Street Criminal who thinks they should no longer be allowed to steal billions, if not trillions of dollars from American Citizens and the United States Treasury every year, please raise your hand?

Uhummm? No Wall Street Criminal is willing to vote for stopping their criminal activity….

Can anyone image the possibility that Wall Street Criminals will vote to have the SEC end their criminal activities, such as, Naked Counterfeit Short Selling?

Can anyone image any legitimate law enforcement agency stating that the criminals have to agree to their own arrest before they can arrest them?

“There is hardly unanimity in the investment community or the financial media on either the prevalence, or the dangers, of ‘naked’ short selling,” the enforcement division (of the SEC)said in a statement appended to the inspector general’s report.

Ok, time for the humanist to have a laugh on me.

http://online.wsj.com/article/SB10001424052748704878904575031442147996562.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsThird#video%3D67AB26A4-8FCB-43CE-88C7-04268853DE45%26articleTabs%3Dvideo