MR: Why do you think the SEC didn’t use these regulatory powers (over “investment advisors like Bernie Madoff) in this (Madoff) case?
GA: We can’t really prejudge it at this point. There is a lot of talk in the media that there were personal links between SEC staff and Madoff. One has been identified; I’m not sure he was the only one involved. But stepping beyond personal connections, in general, I believe that the SEC has been reluctant to apply the securities laws to the big players, to Wall Street’s elite. They have often gotten a pass. The SEC is focused on the small players.
In the investigation that I conducted (on a Wall Street “whale”), which is now the subject of a Senate report, there was suspicious trading activity involving both a hedge fund involving an $18 million profit. They also detected a $150,000 profit by a low-level employee of General Electric (GE) and a Taiwanese kung fu instructor. SEC passed on the hedge fund case where the trading indicated millions in profit and SEC focused on the GE employee and the kung fu instructor. The SEC and the US attorney rigorously prosecuted the low-level GE employee, but both passed on any investigation of the major hedge fund.
This is not a rarity; it is more the practice. The exception is when they look at an elite player on Wall Street. Not only is it an exception, if you try to pursue a big player as I did; it can be career-shortening experience. At the SEC, it is a culture of deference. That culture is intolerant of investigations into the Wall Street elite. Keep in mind that the SEC was created to keep an eye on Wall Street, so it has completely lost sight of its mission and that is why we have a situation like the one with Madoff.
MR: What is it about the culture at SEC that steers them away from looking at the big Wall Street players?
GA: All the agencies have to some extent or another a revolving door [where government employees rotate out to the private sector and earn more money]. But at the SEC, what you rotate into is an enormous salary leap. SEC managers may make $200,000. That same person may make $2 million as a starting salary on the outside and can move up from there. Now, when he leaves, I’m not sure he’s worth $2 million as a lawyer, but he takes his Rolodex with him and that Rolodex is gold. The system maintains itself, because those that stay know their turn will come if they play the game. They see a director or associate director move onto a $2 million job with a Wall Street law firm. Then, the departed employee calls back to his former colleagues and says, “you know I really don’t think there is much of a case against so-and-so, I’d like for you to take a look at it.” And the case goes away; the system goes on in perpetuity.
MR: Did you see the revolving door in action in your case?
(On January 31, 2005, prior to the phone call mentioned below, an email beginning with the word “Yowza!” was sent from Jan Lower, an attorney at the Debevoise and Plimpton law firm, to Aguirre’s supervisor Paul Burger. The email described in detail the potential earnings that a former SEC official could receive at the Debevoise and Plimpton law firm – $2 million a year.)
GA: Senior officials at the SEC got a call from Debevoise lawyer asking about a case I was handling. It was clear she wanted the investigation of John Mack to go away so he could become Morgan Stanley’s new CEO. And it did go away. SEC associate director Paul Berger derailed the investigation and when I questioned that decision, fired me. Within a few days of firing me, he made an inquiry through one of his colleagues to the Debevoise law firm to see if they were interested in hiring him. After the case against Mack was dead, Berger took a job with Debevoise and that is where he’s working now. I’ll let you draw your own inferences.
What you have when you leave the SEC is contacts with the SEC, you have the Rolodex and the ability to call back to people you used to work with. I don’t want to single out Burger, I think that is really the culture there. A culture of ‘don’t rock the boat,’ the industry does not want ‘boy scouts,’ and if you can be effective with the SEC through your contacts, that is a very valuable asset you can bring to the table.

http://www.wowowow.com/photo-essay/homes-of-bankers-bernie-madoff-154277

What’s perverse about this is that by pushing the share price low, it actually increases buying and profits to them as the investors think the stock is cheap. The lower they push the price, the more buy volume you’d expect to see and the more money flowing to them.

In the last several “comment periods” hosted by the SEC on abusive naked short selling issues the arguments of those fighting meaningful reform center around all of this wonderful “LIQUIDITY” that they are willing to provide on behalf of investors attempting to buy shares at bargain basement price levels. What investors don’t realize is that in the case of abusive market makers (MMs) and their co-conspiring unregulated hedge funds investors are purchasing relatively cheap tickets onto this “elevator” we refer to as the “markets” but the elevators have unknowingly been pre-programmed to only go in the “down” direction. The question arises as to when does this theoretically beneficial “injection of liquidity” become the INTENTIONAL drowning of U.S. corporations with a tsunami of “liquidity” financially benefiting those that have previously assumed large naked short positions against these companies and what can we do about it.

The securities laws state that a truly bona fide MM is allowed an exemption from both pre-borrowing and making “locates” before making admittedly naked short sales. This exemption was designed to address the reality that in fast moving markets a truly bona fide MM may not have time necessary to execute a pre-borrow or “locate”. In reality a truly bona fide MM is mandated to address BOTH order imbalances in markets involving an overabundance of buy orders that dwarf sell orders by naked short selling a MODERATE amount of shares into the imbalance AND order imbalances in markets characterized by an overabundance of sell orders that dwarf buy orders by buying back shares ESPECIALLY WHEN HE HAS A PREEXISTING NET NAKED SHORT POSITION IN THAT ISSUER’S SHARES. The assumption of the regulators was that MMs would remain close to net neutral. The problem is that our clearance and settlement system has been illegally converted to one based on “collateralization versus payment” (CVP) instead of the congressionally mandated “delivery versus payment” (DVP). Thus the sale of shares by abusive MMs even when they don’t exist still allows them access to the funds of unknowing investors despite their constant refusal to deliver that which they sold. As the readily sellable “securities entitlements“ resulting from these failures to deliver invisibly accumulate in the share structures of issuers targeted for attack then the share price can predictably be placed into a “death spiral” downwards. This then lessens the collateralization requirements for these failed delivery obligations which in turn results in the investment dollars of the unknowing investors unconscionably flowing into the wallets of those that continue to refuse to deliver that which they sold.

When naked short selling onto the buy side after naked short selling a MODERATE amount of shares the truly bona fide MM allows the order imbalance to seek out a higher share price level wherein the natural forces of supply and demand can find an equilibrium level. If a MM is not willing to “inject liquidity” into BOTH types of markets then he is not legally allowed to access that incredibly powerful but universally abused exemption. The fraudulent accessing of this exemption forms the foundation for a large percentage of abusive naked short selling frauds as abusive hedge funds are willing to shower willing MMs with fees, commissions and order flow in exchange for their illegally accessing this exemption. Part of the problem is that there is basically no “barrier to entry” to becoming a “market maker”. All one has to do is to file a 15c2-11 on a corporation or “piggy back” onto some other MM’s filing and voila you’re a “market maker” with access to that trillion dollar exemption.

A PROPOSED SOLUTION-“THE 98% RULE”

If a “theoretically” bona fide MM wants to access that exemption he needs to be FORCED to “prove” the bona fide nature of his acts by doing what a truly bona fide MM does. He needs to be FORCED to place and permanently leave a bid for the same amount of shares that he is naked short selling at perhaps 98% of the level at which he is naked short selling. This way the damage done by his naked short sale which results in a failure to delivery and the procreation of readily sellable “securities entitlements” that drive down the share price via inflating the “supply” of readily sellable “shares and/or securities entitlements” will be at least partially mitigated. As it stands now there is a “regulatory vacuum” in this arena and most MMs will do whatever it takes to attract the business of hedge funds that currently spend $11.2 billion annually in fees and commissions to those market intermediaries willing to be the most “accommodative” to the financial interests of the hedge fund manager. Entrusting MMs with absolutely no “barrier to entry” to some sort of “honor system” in the midst of trillions of dollars of temptation is unconscionable.

If you get a moment study the Reg SHO “comment letters” on the sec.gov website tendered by the various securities industry and hedge fund lobbyists and learn about all of this wonderful “liquidity” they have to generously offer to us investors.

Mad Money’s Cramer Calls 2008 ‘Year of Natural Gas’.

Publication: Gas Processors Report

Publication Date: 09-JUL-08

COPYRIGHT 2008 Hart Energy Publishing, LP.

The natural gas market is getting a lot of attention from Jim Cramer, host of CNBC’s Mad Money program. In fact, the influential stock market analyst has called 2008, “the year of natural gas.”

In the past few months, he has recommended Anadarko, Apache, Chesapeake Energy, Devon Energy, XTO Energy, El Paso Corp. and Southwestern Energy as strong stocks.

Why is Cramer backing the natural gas industry? He says it is the “fuel of the future” because it is cleaner than the other alternatives. He also cites the fact that natural gas prices are still much lower than oil prices, which is bound to change given their traditional pricing averages.

http://www.accessmylibrary.com/coms2/summary_0286-34825570_ITM

Note that the AVERAGE pick is down more than 60% in 4 months….but does Jimbo talk about it? Nah- he’s too busy running for SEC Chairman…

There are no words to describe this man that do him justice…..none

I am so angry that I wonder what other posts have been censored here. This site loves the cockroaches.

I’m sure this post will be censored by morning, but I have to wonder why this site is so worried about protecting the cockroaches.

We’re going to take this country back, but appears that deepcapture is one of them.

It’s hard to change a system, but it is easy to hold individual a-holes accountable and the media whore lapdogs that get paid to lie for a living should be the first to the public internet photo pillory.

There’s a lot of anger in this country and it wouldn’t take much to direct them to the people that are screwing them.

Every time I hear CNN say “a country divided”, I hear the banksters trying to get us to fight with each other over abortion or gay marriage or republican versus democrat or red states versus blue states rather than to realize that business cycles and the rat race are their making and it’s the people versus the counterfeiting thieves.

We’d all double our standard of living if we could get rid of the parasites.

$3 trillion of $10 trillion in government debt is provably counterfeit. Think about that.

Every time some government official says that we need to pay down the debt, think that a Madoff is enabling some offshore billioniare to counterfeit thirty cents for every $1 we borrow.

http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20081019/REG/310209975

These wallstreet criminals are like lice. They are hard to get rid of and are contagious, but we can get rid of them if we quarantine our politicians and media from their influence.

These people that are paid to lie, like Stu Goldstein at the DTCC (Larry Thompson hired an outside contractor as a PR expert as he got tired of trying to lie with a straight face) or Carol Remond aka Redmond (why did she have to change her name) or Gary Weiss and his baloney brigade, they all need to be exposed.

Counterfeiting is not an anonymous, systemic crime that we can’t fix.

Individual greedy human weasels and cockroaches make it happen and those weasels should be displayed to the world.

My suggestion is pictures on the front page.

Here’s a start.

Herb Greenberg:

http://www.thesanitycheck.com/Portals/0/PrisonHerb.jpg

Jim Cramer

http://www.thesanitycheck.com/Portals/0/cramersubpoena2.jpg
http://www.thesanitycheck.com/Portals/0/cramersubpoena1.jpg

Guilty looking fund manager:

http://www.thesanitycheck.com/Portals/0/dog2.jpg

In the USA, does the SEC worry about “Social Unrest”?

People are now becoming better-informed about corruption on Wall Street – and they have connected-the-dots that the SEC is not doing its job as an investigative & enforcement regulatory agency of the securities industry, especially now that Cox has ordered the SEC to investigate itself. What a joke! This failed-institution should be dismantled immediately — and the entire building should be cleansed.

Is it time to organize a “MILLION INVESTOR MARCH ON CORRUPTION” — straight to the footsteps of the SEC Building?

I hope for “justice” – and I hope Ms. Mary Shapiro, Obama’s new appointment to Chair the SEC, will not be a “tool” for the Hedge Funds to engineer even faster Bear Raids.

If Ms. Mary Shapiro does not reinstate the Uptick Rule and enforce the illegality of fail-to-delivers caused by Naked Short Selling, then she will have failed at the job — same as Cox.

It is time for “justice” — to make the playing field level again.

Hang_’em_High

I think he’s like the guy that drives the “getaway car”. He facilitated the mechanics of fails by setting up a computerized system where he needed to naked short to accept the buy to the nearest 100th of a second and by dealing with so many other systems (NYSE, Canada, Germany, Arca, etc.), he could hide the fails.

But, he doesn’t seem to be the guy making all the money.

He’s a great patsy, a family run company built from scratch on a dime, paying the big guys (payment for order flow) to send him business, then turning a blind eye when the business is raping the system or laundering money.

I can’t wait for this site to start naming the billionaires that were actually responsible for the heists.