http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_S/threadview?m=tm&bn=17415&tid=918004&mid=918004&tof=1&frt=2

Granted, this punk is a small fish, not a core player. But I wonder who he knows?

http://SmartPeopleSmartMoney.com

My main criticism, however, is against all of the believers in this grand plot. You people believe there is corruption on a scale at all levels of organized society, longstanding, and large enough to destroy world economies and the most you do is bitch about it on the internet? This is a joke. IF I sincerely believed in such a grand scheme I would fight it at all costs. At all costs. Do you understand me? I understand that there are things more important than the life of myself and my daughters. As far as I’m concerned you’re all cowards. Sorry, but its true. Your actions are as criminal as those you condemn. Possibly worse.

ISON .002 bid .005 ask.

Rework the SEC? I hope so, but the past tells me I could sufficate waiting for that action.

“Markopolos said he began his investigation into Madoff in late 1999 when a marketing executive from Rampart Investment Management Company Inc. told him of Bernard Madoff’s fantastic returns. Markopolos said he determined in less than four hours that Madoff’s operation was a fraud”

Then check out Patchie’s site:

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

“While Rampart collapsed a year ago, Mr. Senger continued to fly to Toronto on business, although his recent brokerage contacts or dealings are not identified. On Jan. 30, in a conversation taped by Bermuda Short agents, Mr. Senger said he had just gotten back from a business trip to Toronto. “He says that, ‘Rick and I,’ Rick being his brother and him, ‘had been making money faster than we can count it,’” Assistant U.S. Attorney Rolando Garcia told the judge. Customs records also show Mr. Senger entered the U.S. from Toronto twice in late July, a few weeks before he was arrested at his home in Florida.”

Mr. Markopolos repeatedly referred to his fear that he would be killed if Mr. Madoff learned of his investigation. At one point, noting his experience in military intelligence, he described an offer he made to “go undercover” for the S.E.C. — a proposal that was rebuffed.

And he recalled wearing gloves as he assembled a package of information he planned to slip to Eliot Spitzer, when he was New York’s attorney general, so he would leave no fingerprints.

While one lawmaker asked whether this all wasn’t “a little paranoid,” others agreed that Mr. Markopolos was wise to be cautious given the scale of the fraud he was trying to bring to light.”

Source: Madoff Witness Talks of Other Possible Cases – New York Times

http://www.nytimes.com/2009/02/05/business/05madoff.html?hp

SEC and DTCC Let Wall Street Insiders Reap Billions Selling Securities They Never Deliver

(emailed to 48 major financial columnists, national media & pols)

“Mandated by Congress to be the investing public’s “first line of defense against securities fraud,” the SEC leadership over the past 10 years has repeatedly betrayed its duty to the American people; not only by consistently ignoring tons of evidence of criminal activity brought to its attention, but by delegating its fiduciary duty to protect the investing public to the Depository Trust & Clearing Corporation, a secretive, non-transparent entity wholly owned and operated by Wall Street insiders, that acts only to protect and enhance the interests of it’s Wall Street owners– and which has willfully and deceptively enabled the defrauding of investors with a duplicitous 3 card monty style bait and switch non-settlement system that rapes the investing public, rewards the rapists, and is a root cause of the financial disaster confronting the world today.”

read full blog at: http://calltoaccount.wordpress.com/

I bet you there are some uncomfortable Hedgefund/Ponzi scheme managers squirming at about right now.
“10:45 a.m. | Mini-Madoffs: Asked whether there are any “mini-Madoffs” out there, Mr. Markopolos says that there are and that he is planning to turn in a $1 billion Ponzi scheme to the S.E.C. on Thursday. “Hopefully they listen to me this time,” he said.”

It seems like another too good to be true returns come from none other than James Chanos, the president and founder of Kynikos Associates. If I were a betting man, I am thinking he may be on those documents to the SEC tomorrow. After voicing such displeasure with the SEC, who better than to turn in
the HF industries Lobby Leader? The main mouthpiece for the SEC’s deregulation of markets? Time will tell if I am wrong or right. I have a gut feeling on this one.

R101

http://dealbook.blogs.nytimes.com/2009/02/04/live-blogging-the-houses-madoff-hearing/?pagemode=print

EXPLANATION OF FIGURE “S”

Failures to deliver (FTDs) generate incredibly damaging “securities entitlements” as unfortunately permitted by UCC Article 8. They are damaging in that they are readily sellable just as if they were legitimate shares which they are not. They are only IOUs meant to be used as ultra-short term “accounting measures” UNTIL the theoretically temporarily delayed delivery of the securities sold occurred. The timeframe anticipated was the perhaps 2 or 3 days associated with “legitimate” delivery delays. The invisible accumulation of “securities entitlements” within the share structure of a U.S. corporation will with 100% certainty result in the manipulation of its share price downwards.

In a clearance and settlement system illegally based upon “collateralization versus payment” (CVP) instead of the congressionally mandated “delivery versus payment” (DVP) those that intentionally refuse to deliver that which they sell need only “collateralize” (the “C” in CVP) the monetary value of this failed delivery obligation on a daily marked to market basis. As the share price predictably falls from this intentional manipulation so too do the collateralization requirements mandated. This results in the unconscionable flow of the investor’s funds to the parties refusing to deliver that which they sold to this unknowing investor despite the fact that they continue to refuse to deliver that which they sold. In a clearance and settlement system illegally based upon CVP you need not deliver that which you sell in order to gain access to an investor’s money. That’s why Congress forbade it.

The proceeds “stolen” from these investors can then be used to establish and collateralize yet larger naked short positions which represents a dangerous phenomenon involving access to “self-generated leverage” (SGL). This “SGL” then results in the self-fulfilling prophecy involving the mere targeting of corporations for destruction by intentionally refusing to deliver the shares that you sell all but guaranteeing their destruction.

The prerequisite for this entire fraudulent scheme is that the parties empowered to do the only thing possible when a selling party absolutely refuses to deliver that which it sold i.e. execute a “buy-in” of this failed delivery obligation refuse to do that which they have all of the power in the world as well as the congressional mandate to do. In the U.S. the power/mandate to buy-in failed delivery obligations rests squarely on the shoulders of the DTCC management and the management and Boards of Directors of its NSCC and DTC subdivisions.

The problem is that these “buy-ins” would be directly antipodal to the financial interests of the abusive DTCC “participants” that amassed these fraudulent naked short positions in the first place. Thus a “conflict of interest” between investors and the management of the DTCC and its owners/”participants” arises. When they came to this fork in the road the DTCC management has WILLFULLY chosen to look after the financial interests of its bosses/participants and balk on their congressional mandate to do whatever is necessary to make sure that all securities transactions “promptly settle” as per Section 17 A of the “34 Exchange Act. Empowering the employees of any institution to forgive the failed delivery obligations of its bosses in an effort to steal from U.S. investors is unconscionable.

When many different co-conspiring parties simultaneously access this “self-generated leverage” leading to this self-fulfilling prophecy then obviously certain synergies can be realized to augment the intention to destroy corporations unfortunate enough to have been targeted for one of these attacks.

In a clearance and settlement system based upon CVP with each and every intentional downtick in share price a portion of the money of the U.S. investor is allowed to be swept off of the table top and into the wallets of these securities fraudsters.

STEP BY STEP ANALYSIS

1) Criminals sell shares they don’t own, they don’t borrow nor do they perform a bona fide “locate” for (as per Reg SHO).
2) They simply refuse to deliver that which they sold. What could be easier?
3) A “failure to deliver” (FTD) results on the books.
4) The FTD procreates what was supposed to be an ultra-short term “accounting entry” known as a “securities entitlement”.
5) The default assumption made by the DTCC is that the FTD was of an ultra-short termed “legitimate” nature until proven otherwise. (but by the time you can prove otherwise the DTCC management will predictably refuse to do the only thing that can be done to address it i.e. buy it in.)
6) These “securities entitlements” have been allowed to be readily sellable by their purchasers as per UCC-8 whose authors ASSUMED that the DTCC would follow through on its congressional mandate to “promptly settle” all securities transactions. Otherwise they would have restricted their resale UNTIL delivery was achieved because they were well aware of the share price depressant effects of readily sellable but mere “accounting measures” able to increase the “supply” of securities that interacts with the “demand” for securities that dictates share prices via the “price discovery” process.
7) The DTCC management empowered to buy-in “securities entitlements” when it becomes obvious that the seller of shares had no intent to deliver what he sold then curiously plead to be “powerless” to do so leaving no other unconflicted party empowered to buy them in. Why? Because it’s obviously not in the financial interests of the DTCC management’s abusive bosses the “participants” of the DTCC.
As the “securities entitlements” invisibly accumulate in the share structure of the corporation under attack the share price predictably drops due to the artificially manipulated upwards “supply” of that which is readily sellable whether they be real shares or mere “securities entitlements”.
9) As the share price predictably drops so too do the collateralization requirements.
10) A portion of the investor’s funds then flows to the sellers of nonexistent shares despite the fact that they continue to refuse to deliver that which they previously sold. The previously agreed to “settlement date” was T+3 or 3 days after the trade was done.
11) This money can then be deployed back into the market to amass and collateralize that much higher of a level of FTDs and that many more incredibly damaging “securities entitlements” procreated by the FTDs.
12) The share price now ACCELERATES in its downward path.
13) The collateralization requirements plunge proportionately.
14) The unknowing investor’s funds then are in free flow to these criminals allowing yet more access to this “self-generated leverage”.

Now you can see why these mere “accounting measures” used to denote failed delivery obligations (“securities entitlements”) were to be bought-in by the DTCC when it became obvious that the seller of shares had no intent whatsoever to ever deliver that which he sold. One can also intuit why Congress insisted that the DTCC “promptly settle” all securities transactions i.e. buy-in delivery failure that reach perhaps 3 or so days in age past “settlement date”. Opportunists could obviously tap into this “self-generated leverage” once they learned that the DTCC management was going to balk on their congressional mandate while catering to the financial interests of their bosses.

All of the steps needed to access this “self-generated leverage” have been put in place by DTCC policies. All one must do to access this “theft machine” is to simply refuse to deliver that which you sold. Again, what could be easier?

Recs: 1 AP’s coverage….

Subpoenas for the SEC?? Wonder if they dare throw ‘em down?

Lawmaker says SEC hindering House’s Madoff probe
By MARCY GORDON, AP Business Writer Marcy Gordon, Ap Business Writer 28 mins ago
WASHINGTON – House lawmakers on Wednesday accused the Securities and Exchange Commission of impeding their probe into the agency’s failure to uncover the alleged $50 billion Bernard Madoff fraud.

The clash between lawmakers and high-ranking SEC officials at a House Financial Services subcommittee hearing came after the man who waged a decade-long campaign to alert the regulators to problems in Madoff’s operations denounced the agency for its inaction. Whistleblower Harry Markopolos also said he had feared for his physical safety and would turn over new evidence that Madoff had not acted alone.

In loud, angry exchanges, lawmakers threatened to issue subpoenas to SEC officials to compel their testimony in the case.

Pennsylvania Democrat Paul Kanjorski, the panel’s chairman, vented frustration after the SEC’s acting general counsel said the five officials appearing at the hearing couldn’t answer lawmakers’ questions about the Madoff case because it’s under investigation. The five SEC commissioners voted earlier to assert a privilege in not having officials answer lawmakers’ questions.

Kanjorski accused the agency of impeding the panel’s investigation, calling it a “lack of cooperation” and an “abuse of authority.”

Linda Thomsen, the agency’s enforcement director, said the SEC takes the Madoff case very seriously, but asserted there were confidential areas related to the ongoing investigation that could not be publicly discussed.

The SEC officials said the agency is looking at possible changes in the wake of the scandal, including more frequent examinations of investment advisers and improving its process for assessing risk.

Because of the SEC’s inaction, “I became fearful for the safety of my family,” Markopolos said.

“The SEC is … captive to the industry it regulates and is afraid” to bring big cases against prominent individuals, Markopolos said. The agency “roars like a lion and bites like a flea” and “is busy protecting the big financial predators from investors.”

While the SEC is incompetent, the securities industry’s self-policing organization, the Financial Industry Regulatory Authority, is “very corrupt,” Markopolos charged. That organization was headed until December by Mary Schapiro, President Barack Obama’s new SEC chief.

Markopolos discovered additional funds that funneled money to Madoff — whose managers he said willfully turned a blind eye to his improprieties because they were paid generous fees. Markopolos said he will present his findings to the SEC’s inspector general. If proven, they would substantiate the assertions of many analysts that the alleged fraud was far too large for Madoff to have conducted alone.

In New York, a trustee liquidating Madoff’s investment firm told a federal judge Wednesday that nearly $950 million in cash and securities has been recovered for investors. Trustee Irving Picard said $111.4 million in cash had been recovered from financial institutions and about $300 million in securities were identified although it was unclear what they were worth.

JPMorgan Chase & Co. and Bank of New York Mellon Corp. last week said they would transfer a combined $534.9 million from Madoff’s investment firm accounts to Picard. Investors have until July 2 to place their claims.

European investors who feared they lost millions investing with Madoff have a chance to recoup some or all of their money from the banks that marketed the stricken funds, according to lawyers in Europe who are preparing a possible U.S.-style class-action lawsuit.

Back in Washington, the SEC has been sustaining volleys of criticism from lawmakers and investor advocates over its failure to discover Madoff’s alleged $50 billion fraud, which could be the biggest Ponzi scheme ever, despite the credible allegations brought to it over years. Against the backdrop of the worst financial crisis since the 1930s, the SEC is being accused of further eroding investor confidence and lawmakers of both parties are calling for a shake-up of the agency.

Madoff, a prominent Wall Street figure, was arrested in December after allegedly confessing to bilking investors in what the authorities say was a giant Ponzi scheme, possibly the largest ever. His repeated warnings to SEC staff that Madoff was running a massive pyramid scheme have cast Markopolos as an unheeded prophet in the scandal.

“The SEC was never capable of catching Mr. Madoff. He could have gone to $100 billion” without being discovered, Markopolos testified. “It took me about five minutes to figure out he was a fraud.”

Markopolos, a former securities industry executive and fraud investigator, brought his allegations to the SEC about improprieties in Madoff’s business starting in 2000 after determining there was no way Madoff could have been making the consistent returns he claimed using the trading strategy he touted to prospective investors.

Markopolos and his team of four investigators fruitlessly pursued the quest through this decade with agency staff from Boston to New York to Washington, raising 29 specific red flags regarding Madoff’s operations. But the SEC never acted.

Now thousands of victims who lost money investing in Madoff’s fund, which was separate from his securities brokerage business, have been identified. Among them are ordinary people and Hollywood celebrities — as well as big hedge funds, international banks and charities in the U.S., Europe and Asia. At least one investor apparently was pushed to commit suicide.

Markopolos disclosed that he anonymously conveyed a package of documents on Madoff to former New York attorney general Eliot Spitzer, but noted Spitzer took no action. Spitzer’s family trust was among the victims that lost money investing with Madoff.

Markopolos also suggested that senior editors at The Wall Street Journal may have prevented a reporter from pursuing leads he provided because the newspaper “respected and feared” Madoff.

Madoff, who was at one point chairman of the Nasdaq Stock Market and sat on SEC advisory committees, was “one of the most powerful men on Wall Street and in a position to easily end our careers or worse,” Markopolos said.

Markopolos recommended ways to revamp the SEC, including replacing its senior staff and establishing a central office to receive complaints from whistleblowers.

In December, Christopher Cox, then the SEC chairman, pinned the blame on the agency’s career staff for the failure over a decade to detect what Madoff was doing. He ordered the SEC’s inspector general, H. David Kotz, to determine what went wrong. Kotz has expanded his inquiry to examine the operations of the divisions led by Thomsen, who has been the enforcement chief since mid-2005, and Lori Richards, who has headed the inspections division since mid-1995.

Schapiro has said that because Madoff carried out the scheme through his investment business and FINRA was empowered to inspect only the brokerage operation, it wasn’t possible for the organization to discover it.

FEBRUARY 4, 2009, 2:19 P.M. ET
By PATRICK YOEST and MICHAEL R. CRITTENDEN
http://online.wsj.com/article/SB123376121943648081.html

WASHINGTON — The Securities and Exchange Commission was sharply criticized by both U.S. lawmakers and the fraud investigator who blew the whistle on Bernard Madoff’s alleged Ponzi scheme Wednesday, describing the regulator as scared to pursue cases against top securities firms and investors.

“You are both a captive regulator and a failed regulator,” Harry Markopolos said of the SEC in highly anticipated testimony to a U.S. House subcommittee.

Mr. Markopolos detailed his nine-year effort to alert federal regulators about Madoff, who is accused of engineering one of the largest swindles in U.S. history. The SEC was “unable to understand” the complex financial instruments involved in the alleged fraud, Mr. Markopolos said, and regulators weren’t interested in pursuing investigations against influential firms and investors.

Mr. Markopolos also said Wednesday that he also tried to tell former New York Gov. Eliot Spitzer of Mr. Madoff’s actions.

“The SEC was never capable of catching Mr. Madoff,” Mr. Markopolos told a House Financial Services subcommittee.

Mr. Markopolos described his efforts in the terms of a Tom Clancy novel, sprinkling his testimony with talk of intelligence networks, the Russian mob, drug cartels and collecting information from “field operatives.” He claimed he feared for his life as he sought to expose Mr. Madoff’s actions, even making sure to remove his fingerprints from an envelope with Madoff information he handed to former New York Gov. Eliot Spitzer during an appearance in Boston.

“When you are zeroing out mobsters, you have a lot to fear,” he said. “If [Madoff] would have known my name, and he had a team tracking it, I wouldn’t have been long for this world.”

Lawmakers agreed that Mr. Markopolos was right to take precautions. “When you deal with the kind of characters that you were trying to bring to the bar of justice, you have to be concerned, not only for yourself, but to family members that are near and dear to you.” Rep. Al Green (D., Texas) said.

Mr. Markopolos said that in December 2005, he contacted a reporter at The Wall Street Journal, resulting in a number of phone calls and emails. Mr. Markopolos said he thinks that senior editors prevented the reporter from the newspaper’s Washington bureau from flying to Boston to meet and discuss the Madoff issue. A spokesman for Dow Jones & Co., publisher of The Wall Street Journal, declined to comment on Mr. Markopolos’s statements.

Also during testimony, Mr. Markopolos said he gave Mr. Spitzer a package with information about Mr. Madoff when Mr. Spitzer appeared at the John F. Kennedy Presidential Library in Boston.

“I figured the odds were high that he was a Madoff investor,” said Mr. Markopolos, an independent fraud investigator.

Mr. Spitzer’s family real estate firm had in fact invested with Mr. Madoff. According to Mr. Markopolos, he took care to remove his fingerprints from the package he gave to Mr. Spitzer.

Mr. Markopolos didn’t say when he attempted to inform Mr. Spitzer of Mr. Madoff’s activities. Mr. Spitzer served as New York state attorney general before his tenure as governor, a position he resigned in March after revelations of his use of a high-priced New York escort service.

Reached at his office Wednesday, Mr. Spitzer said he had “absolutely no recollection” of ever meeting Mr. Markopolos.

“Obviously, I wish people had listened to him,” Mr. Spitzer added.

Mr. Markopolos said that Mr. Madoff is not alone. He plans to turn in a “mini-Madoff” to the SEC’s inspector general Thursday and urged lawmakers and regulators to pursue Mr. Madoff’s alleged accomplices, including the feeder funds that brought in additional funds.

“My team was out there in the field talking to the Madoff feeder funds and identifying who they were,” Mr. Markopolos said. “There are 12 more out there lying low in the weeds in Europe that you have not heard of yet.”

Lawmakers on the panel lavished praise on Mr. Markopolos, while focusing their criticism on the SEC for missing warnings about Mr. Madoff for years.

“Unfortunately, our regulators failed to follow his road map and heed his warnings,” Rep. Paul Kanjorski (D., Pa.) said. “As a result, thousands of investors were hurt.”

Rep. Scott Garrett (R., N.J.) the subcommittee’s ranking Republican, said the alleged Madoff fraud wasn’t a result of a lack of regulation, but instead a lack of coordination and information sharing among regulatory bodies such the SEC and the Financial Industry Regulatory Authority, or Finra.

The entities, Mr. Garrett said, didn’t pay enough attention to Mr. Madoff’s broker-dealer operations.

“At least some of the things, had they been implemented earlier, at least in this case, it appears that the improprieties would have been discovered much earlier,” Mr. Garrett said.

The Madoff case, along with similar alleged frauds that have been uncovered in the last two months, have focused criticism on the SEC as federal policy makers consider a wholesale overhaul of the U.S. regulatory system.

“We have to re-engineer the SEC going forward,” Rep. Ed Royce (R., Calif.) said.

Write to Michael R. Crittenden at michael.crittenden@dowjones.com

http://online.wsj.com/article/SB123376121943648081.html

“… President Obama admitted Tuesday he made mistakes after two of his cabinet nominees, Tom Daschle and Nancy Killefer, were forced to bow out because of revelations over their nonpayment of taxes. But what kind of mistakes?

One was clear. “There aren’t two sets of rules,” he told NBC News, “one for prominent people and one for ordinary folks who have to pay their taxes.” ….”
( http://www.csmonitor.com/2009/0205/p08s01-comv.html )

The questions that comes to my mind are:

Why are there two sets of standards on Wall Street? ……….
One for the “Insider Wall Street Fat Cats?” And one for those who are not insiders?

Why can the “Insider Wall Street Fat Cats” sell stock they continually refuse to delivery (counterfeit shares) year after year right under the eyes of the SEC and FINRA, and the common man and woman, who are not insiders, are NOT allowed to sell non-deliverable shares to the “Insider Wall Street Fat Cats”?

Why are the “Insider Wall Street Fat Cats” allowed to operate a “Wall Street Counterfeiting Machine” in the Wall Street CLEARANCE AND SETTLEMENT SYSTEM FOUNDED UPON “COLLATERALIZATION VERSUS PAYMENT” (CVP) in which they sells shares of stock that they refuse to deliver year after year? And the common person is Not allowed to do this?

R101

Recs: 5 Re: Linda Thomsen on the way out (?)
WaPo is still carrying water for Wall Street. As Markopolos says, FINRA is entirely a protector of Wall Street’s big predators, enabling them to victimize other investors. Must we remind WaPo and others that Mary Schapiro just came from FINRA, which paid her $2.7 million last year, and she takes over the SEC for $180K. She has come to the SEC for only one reason: to do more for the big predators there. JMOO

Apparantly we are not the only ones that are of the above opinion!!

R101