Ignoring that fact has no particular usefulness except to replace those managers with persons more competent.

That Congress itself may be implicated from such failure due to its close association with commerce is obviously one of the first rocks to look under for the culprits. Why should anyone be reelected to ignore the obvious since most are incumbents who’ve been there right along?

Identifying incompetence is as important as identifying the best and brightest of any leadership cadre, and in order to exercise the right of citizenship and pursue social justice. CEO’s who benefited from the financial crisis should go, just as those in Congress who allowed it to happen on their watch under their administrative obligations to the nation. It isn’t rocket science; but ignorning the impact of mismanagement surely makes imbeciles of the public returning them to office, or tolerating the mismanagement they deliver.

Replied to my post above about the foreign broker loophole. Reply says that it’s the foreign depository, not the foreign broker who has the account with DTC/DTCC.

I don’t see what difference that makes. Whatever entity has an account with DTC/DTCC, if that entity does a sell of 1000 shares and then does not deliver in say T+3, then that entity gets bought in for 1000 shares on T+4 and gets charged for the buyin. Anonymous said something about buying ion the entire depository, but that makes no sense. Just buyin the amount of failures.

We need to keep up this dialog until it becomes clear.

… Fred

That’s a scary mindset but it is the mindset of the naked short selling community. How would you like to be trying to feed your family as an employee of a corporation that he and his colleagues targeted for destruction? Do you think people with this mindset bother performing “locates” as per Reg SHO before making short sales? Look at the charts on deepcapture.com illustrating share prices versus failures to deliver. I think it’s pretty easy to recognize the cause and effect. That interview should scare the absolute you know what out of you when recognizing that Wall Street is inundated with that mindset!

Due to the phraseology used in UCC 8-501 you are left with only two options. You can either ban failures to deliver entirely except for bona fide MMs OR you need somebody to buy-in delivery failures the second it becomes obvious that the seller of shares had no intent whatsoever to deliver that which he sold perhaps on T+6 or so.

In regards to the execution of “buy-ins” when the NSCC management with the congressional mandate “to act in the public interest, provide investor protection and “promptly settle” all securities transactions as well as 15 of the 16 sources of empowerment to execute buy-ins pretends to be “powerless” to do so then FTDs need to be banned entirely except for truly bona fide market making.

“Buy-ins” are the ONLY solutions available when the seller of securities refuses to deliver that which he sold. The fear of a buy-in is the only source of truly meaningful deterrence to these crime waves. The NSCC management is refusing to provide the only cure as well as the only source of deterrence to these thefts.

The ability to merely refuse to deliver that which you sell and thereby establish a naked short position as well as cause the “issuance” of readily sellable “shares” albeit they TECHNICALLY have no “legal owner” nor are they TECHNICALLY “outstanding” which depress the share price which gives value to your naked short position is too tempting for most crooks to not take advantage of.

Can you appreciate why the NSCC management has to attempt to “intentionally deceive” investors as shown in post # 72. Remember these are the same guys that have cornered a monopoly on the sources of empowerment to execute buy-ins and then intentionally refuse to deploy it in order to look after the financial interests of their corrupt NSCC participating “bosses” that are the financial beneficiaries of these thefts. If NSCC management has the ONLY cure available when their bosses refuse to deliver that which they sell and has the ONLY source of deterrence available to dissuade these thefts and refuses to provide it then of course their corrupt “bankster” bosses are going to set up shop in this “regulatory vacuum” they have graciously provided.

Take another look at that “Sears Holding” chart. This occurred AFTER Reg SHO went into effect. Does it look like having “reasonable grounds” to believe that a “locate” would result in delivery by T+3 is working out well?

go to the 9 minute mark

Bring a vomit bag

All you have to do is to concentrate on UCC Article-8-501. It FORCES securities intermediaries (NSCC participants) on Wall Street to treat the holders of “securities entitlements” as being able “to exercise all of the rights and property interest to the shares they have an entitlement to”. Those are the exact same rights that “legal owners” of shares have.

This phraseology converts mere “securities entitlements” which were designed to be “accounting measures”/IOUs denoting a failed delivery obligation into this weird species of “share” that TECHNICALLY has no “legal owner” and that is not TECHNICALLY “outstanding”. But from a damage point of view they are very much “outstanding”.

They’re invisible and that’s what the crooks that sell securities to U.S. citizens and refuse to deliver that which they sell need! What I just described in the 3 lines above is that for all intents and purposes THE IOU ITSELF JUST MAGICALLY BECAME THE “SHARE” THAT IS THE SUBJECT OF THE IOU. Who cares if it TECHNICALLY has a legal owner or not? That’s why “entitlements” are so tricky and so subject to abuse.

Thus if you can create a “securities entitlement” then you can create an incredibly damaging “share” of a slightly different species that packs all of the dilutional damage that a real “share” does. What’s the easiest way to create a “securities entitlement”? You refuse to deliver the securities that you sell. What happens when a crook refuses to deliver that which it sold? He established a naked short position. What else happens when you refuse to deliver that which you sold? You cause the “issuance” of readily sellable “securities entitlements” which automatically drive the share price down which gives your naked short position value. You get two for the price of one; you place a negative bet against a corporation and the mere method of how you placed your bet (by refusing to deliver that which you promised to deliver) has increased the prognosis for the success of your bet! Now how clever is this fraud?

Now the task becomes to find an UNCONFLICTED member of an SRO, or of the SEC or of one of the congressional oversight committees willing to do the right thing to once and for all end these thefts of the investment funds of U.S citizens.

May 11, 2008

Elaine Meinel Supkis

http://elainemeinelsupkis.typepad.com/money_matters/2008/05/elaine-meinel-5.html

This has to do with the phraseology used in UCC Article-8-501 in regards to what are referred to as “securities entitlements”. Raising the “legal ownership” issue presents an intentional misrepresentation to investors that our markets in some corporations targeted for destruction are not “rigged” to go anywhere but downwards.

@dtcc: “One of the allegations made in some of the lawsuits is that the Stock Borrow program counterfeits shares, creating many more shares than actually exist. True?”

Thompson:” Absolutely false. Under the Stock Borrow program, NSCC only borrows shares from a lending member if the member actually has the shares on deposit in its account at the DTC and voluntarily offers them to NSCC. If the member doesn’t have the shares, it can’t lend them.

Once a loan is made, the lent shares are deducted from the lender’s DTC account and credited to the DTC account of the member to whom the shares are delivered. Only one NSCC member can have the shares credited to its DTC account at any one time.
The assertion that the same shares are lent over and over again with each new recipient acquiring ownership of the same shares is either an intentional misrepresentation of the SEC-approved system, or a profoundly ignorant characterization of this component of the process of clearing and settling transactions”.

This statement is TECHNICALLY 100% accurate but also 100% misrepresentative. NSCC participants do indeed “donate” the shares of their clients into the SBP’s lending pool of securities for use in “curing” delivery failures. Before being lent the donors of shares do indeed need to have them in their NSCC “participants share account” from which they are indeed debited. Then they are indeed “credited to the DTC account of the member to whom the shares are delivered”.

“Legal ownership” is then transferred to the buying party whose purchase order resulted originally in a failure to deliver. This occurs via the transmission of an electronic book entry. It is also 100% accurate that “only one NSCC member can have the shares credited to its DTC account at any one time”.

Now comes that little tiny multi-trillion dollar “material” fact that was omitted. The party receiving the borrowed shares as the new “legal owner” then has all of the right in the world to re-donate them right back into that very same SBP lending pool as if they never left in the first place. Perhaps it’s easier to picture all of the shares held in the lending pool as being white marbles of various sizes. It is critical to realize that they all look alike because they are all kept in an “anonymously pooled” format. “Anonymous pooling” forms the foundation for many, many types of fraud.

Let’s artificially dye red the parcel of shares chosen by the NSCC to cure any particular delivery failure. The “red” parcel of shares that were borrowed are then credited to the “shares account” of the party receiving the borrowed shares i.e. the purchasing party. It as the new “legal owner” of that particular parcel of shares can then re-donate that “red” parcel of shares right back into the lending pool from whence it just came out of.

There they sit waiting to “cure” yet another delivery failure. Soon that same “red” parcel of shares might be “co-beneficially owned” by a dozen different U.S. investors. Soon a dozen different DTCC participating brokerage firms will be earning interest from the loaning of the SAME parcel of shares. That’s why the DTCC and its participants are in no hurry to disrupt this current ultra-corrupt status quo. THE “LEGAL OWNERSHIP” OF THAT RED PARCEL OF SHARES GOES ONLY TO THE LAST PARTY RECEIVING DELIVERY OF IT.

The other 11 purchasers of this very same parcel become “co-beneficial owners” and they don’t “legally own” anything at all. The 11 clients of these brokerage firms that purchased that same “red” parcel of shares are TECHNICALLY “securities entitlement” holders. That’s why that statement is 100% accurate but 100% misrepresentative.

At the end of the day the LAST party of the 12 different brokerage firms receiving the “red” parcel of shares becomes the sole “legal owner”. Who cares who the “legal owner” is when UCC Article-8-501 mandates that any “securities entitlement” holder must be given the ability “to exercise all of the rights and property interest attached to that security”.

The argument proffered is a “red herring” trying to hide the fact that the markets in certain U.S. corporations targeted for destruction are “rigged” to go nowhere but downwards.

What the General Counsel forgot to mention is that the NSCC management mandates that all shares held in the lending pools at the SBP are held in an “anonymously pooled” format. The red dye basically reversed the “anonymous pooling” to allow a more transparent view of what is really occurring.

These frauds are somewhere in between a Ponzi scheme and a “shell game”. The pea under one of the shells is the “legal ownership” title to any parcel of shares. The DTCC management tells the unknowing investors to concentrate on the “legal ownership” pea while it is cranking out an infinite amount of “securities entitlements” behind the curtain.

What U.S. investors need to realize is that the “securities entitlements” that are generated by each and every failure to deliver on Wall Street and each and every “borrow” from the NSCC’s SBP’s “lending pool” of securities are for all intents and purposes “shares” due to the phraseology used in UCC-8-501. They are admittedly a rather odd species of “shares” being that they TECHNICALLY have no “legal owner” and they are TECHNICALLY not “outstanding”. That’s why it is so disingenuous for the leaders of an SRO (self-regulatory organization) to say “concentrate on the “legal ownership” pea”.

Since this rather odd species of “shares” being “issued” are readily sellable they have all of the dilutional damage that a legitimate “share” does.
Do not be misled by those arguing the “ownership” issues or how the number of shares “outstanding” does not go up and therefore abusive naked short selling is not harmful. Every single shareholder of the company cited above is damaged by the share price depressant effect of those 11 extra parcels of shares that are above and beyond the number of shares TECHNICALLY “outstanding”.

Let’s look at that statement again: “The assertion that the same shares are lent over and over again with each new recipient acquiring ownership of the same shares is either an intentional misrepresentation……”.

The same shares are indeed lent over and over again contrary to the above statement but he is correct in stating that each new recipient does not acquire “ownership” because only the last party receiving the borrowed shares does.

Now as far as the issue of making “intentional misrepresentations” I’ll let you be the judge as to who is making “intentional misrepresentations”. As far as why the need to make “intentional misrepresentations” to the investing public that’s where the focus should be.

Let’s address the issue raised by the interviewer in the text of the question regarding the “counterfeiting of shares”. Does the SBP Technically “counterfeit shares”? Again it’s misrepresentation through semantics. Technically what is getting “counterfeited” are “securities entitlements” and not “shares” issued by a corporation but since UCC-8-501 mandates that the holder of “securities entitlements” be allowed “to exercise all of the rights and property interest in that security” there are indeed “shares” being counterfeited but they’re that odd species of readily sellable “shares” that TECHNICALLY don’t have a “legal owner” and TECHNICALLY aren’t “outstanding” like it makes a difference to the U.S. investors whose retirement funds are flowing into the wallets of those refusing to deliver that which they sell!

http://video.google.com/videoplay?docid=-8295984779951129935

I highly recommend this article about AIG and other articles located here. They are posted in reverse chronological order.. so start at the bottom.
http://www.ritholtz.com/blog/2009/04/aig-before-cds-there-was-reinsurance-part-2/

AND WRITE ABOUT NAKED SHORTING!

http://finance.yahoo.com/banking-budgeting/article/106872/Short-Sellers-Squeezed-All-Around;_ylt=AmtDErDgjrFmND_QXfYK3si7YWsA?sec=topStories&pos=9&asset=TBD&ccode=TBD