If you went after so-called “naked shorting” so aggressively, let’s at least be consistent, OK?

Does anyone know if there’s an active protest site out on the web somewhere?

but it was only fantasy
the wall was to high as you can see
no matter how he tried he could not break free….

“Financial waterboarding”:

the illegal MANIPULATION of share prices downwards via the intentional provision of excess “liquidity” by abusive market makers illegally accessing their “bona fide” MM exemption from effecting a pre-borrow or “locate” before making an admittedly “naked” short sale. Each failure/refusal to deliver results in the crediting to the defrauded investor’s account of a readily sellable share price depressing “security entitlement” as per the terms of UCC Article-8. This increases the “supply” of that which by law (again UCC-8) must be treated as being readily sellable in our markets which in turn manipulates downwards the share price “discovered” via the price discovery process.

The muting of the “effective demand” variable represented by buy orders which should provide a share price buoying effect in an unmanipulated market results in significant price discovery aberrations. The “effective demand” variable represents the buy orders not naked short sold into which are allowed to interact with the ambient “supply” variable to determine/”discover” unmanipulated share prices. When BOTH variables are SIMULTANEOUSLY being manipulated in opposite directions then the share price “discovered” in the price discovery process will be grossly distorted to the down side.

Since the NSCC subdivision of the DTCC merely asks that those that absolutely refuse to deliver the nonexistent securities that they sell merely collateralize the monetary value of their failed delivery obligation then as the share price predictably plummets so too do the “marked to market” collateralization requirements resulting in the defrauded investor’s funds flowing to those that sold but obviously never delivered nonexistent securities.

All of this share price manipulation is typically hidden under the guise that these abusive MMs (and their co-conspiring unregulated hedge funds) are providing theoretically beneficent “liquidity” into the markets of thinly traded securities when in reality this theoretical “liquidity” has illegally been converted into “leverage” utilized to access the funds of financially unsophisticated investors acting under the faulty presumption that unconflicted SROs (like that very same NSCC as well as FINRA) and unconflicted regulators are there to provide investor protection.

The DTCC will posit that abusive short selling is not their fault as it is a “trading” issue and they only get involved AFTER the trade is completed. Baloney, it is their refusal to deal with obviously intentional/”strategic” (Dr. Leslie Boni-2003) delivery failures properly that allows criminals to TRADE in this manner. Their policies and their refusal to buy-in obviously intentional delivery failures forms the foundation for this crime wave. The DTCC and their DTC and NSCC subdivisions collectively have 15 of the 16 sources of legal empowerment to “buy-in” intentional delivery “refusals”. Their attaining a veritable monopoly on these sources of empowerment followed by their refusing to execute buy-ins when indicated enables and facilitates the commission of these frauds. The mandated “buy-in” of intentional delivery “refusals” serves BOTH as the only option available when the seller of securities absolutely refuses to deliver that which he sold and as the ONLY meaningful deterrent to the commission of these crimes in the first place.

Sorry I’m so slow to reply. You do have the right to demand delivery even after a delisting or the revocation of registration. Unless you do it in conjunction with several others, however, it wouldn’t do much good.

The DTC subdivision of the DTCC basically runs a “fractional reserve” custody system. This is legal for banks but not legal for a surrogate legal custodian like the DTC. In a fractional reserve clearance and settlement system all you need to do is get “good form delivery” of enough sold shares to service the delivery demands of those investors insisting on acting as their own “custodian”. The most effective way to expose and combat a fractional reserve system is a “run on the bank” wherein people demand the delivery of more shares than the surrogate legal custodian got “good form delivery” of. Historically, whenever this was done the DTCC simply put a “chill” on the delivery of demanded for shares. UCC Article 8 says that a “security entitlement holder” that bought undelivered shares has the right to file an “entitlement order” demanding delivery of that which he paid for. Unfortunately it did not specify the timeframe in which the surrogate legal custodian must act.

The problem is that the NSCC utilizes both a “Continuous Net Settlement” (CNS) system and a self-replenishing “Automated Stock Borrow Program” or “SBP”. The delivery failure of a party that chronically absolutely refuses to deliver the securities it sold will be “cured” by the delivery to the clearing firm’s NSCC “shares account” of shares from a totally different trade. The result is basically an ultra-fast moving Ponzi scheme wherein the intentional delivery refusals of a small group of criminals are constantly being covered up by the deliveries of shares from other trades. Abusive market makers will suffocate share prices while pretending to be the beneficent “injector of liquidity”.

When Bear Stearns went down the level of delivery failures went up 145-fold and nobody got busted. Six months later as Lehman Brothers went under the delivery failures went up 151-fold. Once again, nobody got busted. Put yourself in the shoes of those buying those shares trying to guess the bottom. Imagine how much they enjoyed this “tsunami of liquidity” being provided by these “beneficent liquidity providers”. Abusive short sellers argue that at least the buyers of the shares they naked short sell get in at lower share price levels than they otherwise would have and they’re exactly right. But half price tickets onto the Titanic are still half price tickets onto the Titanic. There is a point at which “liquidity” is illegally converted into “leverage” and this point is crossed all day every day.

The mechanism of exactly why this is powerful information needs to be explained in a simple way. I think it is powerful because a naked short seller can sell at will, driving the price down further, and when the stock is delisted the sellert never needs to deliver any shares.

What need to be understood more fully is the answer to the question why the shares don’t need to be delivered? A buyer can still demand the shares after delisting, right? I fail to see why I can’t demand my shares.

… Fred

This is a good, brief, cogent summary of the problem in our clearing system. It should be used and re-used to spread awareness of the problem.

There is no “insider information” more powerful from an illegal trading point of view than the knowledge that a corporation is about to get delisted or have its registration revoked.

“Financial waterboarding”: the intentional manipulation of share prices downwards via the illegal provision of excess “liquidity” by abusive market makers illegally accessing their “bona fide” MM exemption from effecting a pre-borrow or “locate” before making an admittedly “naked” short sale. Each failure/refusal to deliver results in the crediting to the defrauded investor’s account of a readily sellable share price depressing “security entitlement”. This increases the “supply” of that which is treated as being readily sellable in our markets which in turn manipulates downwards the share price “discovered” via the price discovery process.