As a rule, I avoid criticizing individual public servants. Elected officials are fair game, in my view, but not public servants. They do not wake up and go into work wanting to do a bad job, I know, and I have had too many tailwinds in life to criticize wantonly people who devote themselves to public service of any kind, simply as a matter of principle.
For recently retired SEC Enforcement Director Linda Thomsen, however, I’ll make an exception. (As Mr. Buffett says, “There are times when a man has to rise above his principles.”)
The first story I would like to tell about this Enforcement Director concerns an investigation that the SEC’s San Francisco office was conducting a few years into collusion among short-sellers and crooked journalists who shilled for them using ammunition provided by “research shops” which were fed their material by those same hedge funds, in a kind of “serpent-eating-its-tail” of financial hooliganism. It was a hard scheme to miss: any company shorted by Stevie Cohen (SAC), David Einhorn (Greenlight), Dan Loeb (Third Point), David Rocker, or a handful of others, could count on coming under the “where-there’s-smoke-there’s-fire” journalistic scrutiny of such worthies as Jim Cramer and Dave Kansas, Gary “Scaramouche” Weiss, Bethany “Long, Slow Thing” McLean and Roddy Boyd (both of Fortune Magazine), Carol Remond and Karen Richardson (both of DowJones), Floyd Norris and Joe Nocera, (both of the New York Times), and Herb Greenberg (MarketWatch), that “smoke” often being supplied by research shops of which those same hedge funds were clients. Invariably they’d be naked shorted as well, and show up on the Reg SHO Threshold List, and anyone noticing this constellation of facts occurring over and over with complete regularity could be counted on to be declared “wacky” by these same journalists.
I learned about this investigation because I was invited to a meeting by the SEC investigators conducting it. I’m pretty sure that “invitation” came in the form of a federal subpoena, but I am not completely clear on that, having over the last few years received enough such paperwork to wallpaper my bedroom. In any case, I arrived at the appointed hour, and was sworn in. My deposition was conducted by a man named “Mark” and overseen by his boss, Tracy, both of whose last names I see no reason to reveal. They both were the kind of federal employees that make one swell with pride: They displayed neither favor nor enmity, but simply, white collar professionalism such as has largely been lost in Corporate America. They were prompt, prepared, and business-like, and, without being rude, challenged me fairly aggressively while revealing to me as little as they could.
That said, try as they did, it was impossible for them to be as blank to me as they wished. After all, if someone asks, “What do you know about the possibility that Colonel Mustard killed his victim in the library with a rope?”, then it is resonable to infor that the utterer suspects that Colonel Mustard may have indeed killed someone in the library with a rope. In this fashion, I became reasonably confident that while the New York financial press was bleating about how wacky I must be to notice patterns that many sane observers had noticed, those same patterns had been noticed by others better placed to do something about them than I. (Incidentally, normally I would be loathe to reveal the contents of such a deposition, but given that this is all moot now, yet tied to today’s news, and the bad guys are using FOIA requests to get this stuff anyway, it seems like the right thing to do.)
Somewhere around this time, Jim Cramer and others of the journalists mentioned above received their own subpoenas. All hell broke loose, because they made it break loose (see for example “Herb Greenberg, The Worst Business Journalist in America, on the Conspiracy“). Of course, in a world where editors still had integrity, it would have been considered somewhat unseamly to have journalists reporting on an investigation of which they, themselves, had become the targets (I’m not sure why I mention that: I suppose it seems like it should be germane or something). But as a result, that investigation was promptly shit-canned. There’s no other way to describe it: the investigators were summoned to Washington, publicly crapped upon from a great height by SEC Chairman Chris Cox, the Enforcement Director who signed those subpoenas stood by idly while this happened to her staff, and we returned to our regularly scheduled programming of Muzak and bromide business reporting interrupted occasionally by B-list actors pitching Grandmother-Safe financial products and narcissistic hustlers promising that this time they really wanted to make you money, Mad Money!
Interestingly, not all the press backed up their brethren: editorials by Loren Steffy of the Houston Chronicle spring to mind in this regard. But by and large, the profession of business journalism stood mute while the reporting on a federal investigation was dominated by folks who were themselves the targets of that investigation.
The second story I would like to tell about this SEC Enforcement Director concerns some comments she made in 2008 in a keynote address before the United States Chamber of Commerce. In a pattern that observers of this issue have seen before, when asked about naked short selling, the Enforcement Director avoided the question by simply talking about the virtues of short selling, an issue which is not in contention. This pattern of avoiding the subject of naked short selling has been used time and time again by apologists for the practice (imagine someone being asked about sexual harassment, and answering with a response about the virtues of sex). Unfortunately for the Enforcement Director, her interlocutor, who was standing in the front row, directly in front of her podium, using a microphone that broadcast his voice loudly to the whole room (and you will see in a moment why that is relevant) pressed her on the distinction in a way that we would never see happen in any of the captured business media such as CNBC, New York Times, or Fortune. The Enforcement Director’s subsequent answer (she blamed the victim companies and excused the crime) is instructive because it confirmed, as though further confirmation were necessary, that there are in fact two and only two plays in the apologists’ playbook: first, conflate naked short selling with short selling and discuss the benefits of short selling; second, blame the victim companies and excuse the crime.
3:00 p.m. – 3:30 p.m.
Regulatory Keynote Address: A View from the Division of Enforcement: Perspectives and Priorities
Linda C. Thomsen, Director of the Division of Enforcement, U.S. Securities and Exchange Commission
Introduced and moderated by: Michael J. Ryan, Senior Vice President and Executive Director, Center for Capital Markets Competitiveness
AUDIENCE MEMBER: “You spent a lot of time talking about insider trading and penny stock fraud, but you failed to mention an issue that’s of great concern to the Chamber, and that is naked short selling and the unsettled trades that can result from that. How can the Commission claim that it is serious about enforcement when millions of trades fail to settle every day and companies remain on Reg SHO Threshold Lists for years and years? And, second part of the question, why is the new rule 10b-21 necessary when, as Commissioner Casey pointed out, it makes illegal activity that is already illegal?;
SEC ENFORCEMENT DIRECTOR: “Um… I didn’t hear all of it, unfortunately, but as to the issue of short selling, we recognize that short selling is -”
AUDIENCE MEMBER: “My question was not about short selling. We all know that short selling is legal, and a necessary and efficient part of the market process. I’m talking about naked short selling-the selling of shares one does not have in inventory and probably has no intention of locating or borrowing.”
SEC ENFORCEMENT DIRECTOR: “As to naked short selling, and more generally market manipulation generally (sic), it is an area we are focused on. We have seen fewer cases in that arena because, often times, this is not necessarily with respect to naked shorts, but shorting or market manipulation more generally, because often the components of something that might look to be manipulative are all legal trades as you point out. So it’s a hard case to bring, which is not to say that it isn’t something that we don’t investigate, because we do. So I .. hear and understand the frustration of many on the subject of short selling generally. When we hear complaints about short selling-and, frankly, it is both short and naked short, it is a combination of both-we routinely hear from companies who’ve come in, who worry that they’re being shorted in an illegal way. We routinely take all that information in and look into it. And often times, as I think many defense counsel would be happy to tell you, when we dig in, what we find is that some of the information that has caused people to be shorting is actually true as to the company, and we may very well be confronted with two issues, one on the company and its disclosure side as well as on the trading side. But they’re very difficult cases, which is not to say that we aren’t focused on them and interested in them and indeed this new focus that we have on some smaller companies and smaller issuers will wrap some of those concerns into their focus as well.”
As you may have gathered, that SEC Enforcement Director was Linda Thomsen.
That would be the same Linda Thomsen who, for the entire 14 year duration of her service in the Enforcement Division of the SEC (the last four as Director), missed the $67-billion-and-counting walking Ponzi scheme/human brown stain known as Bernie Madoff, though concerned citizen Harry Markopolis not only did the work for the Enforcement Division, he all but spray-painted his findings on the lovely Italian marble of the SEC’s posh new DC headquarters.
That would also be the Linda Thomsen who, regarding Mr. Markopolis, acquitted herself so handily in this now-famous exchange with New York Democratic Congressman Gary Ackerman.
That would be the same Linda Thomsen against whom the SEC’s Office of the Inspector General recommended disciplanary action for her role in hanging out to dry SEC Senior Investigator Gary Aguirre, due to his impertinence in trying to subpoena Morgan Stanley CEO John Mack simply because a trail of clues in “the most important insider trading case in 30 years” led directly to him. Aguirre had failed to regonize that the law of the land does not apply to Mr. Mack because he has too much “juice“, as Aguirre’s boss Robert Hanson put it while shutting down the investigation. According to a subsequent report of the United State Senate Judiciary Comittee, by “juice” Hanson meant, “meaning they could directly contact the Director or an Associate Director of Enforcement. That Director was, again, Linda Thomsen, and the Associate Director was Paul Berger, who was, at the time of these events, negotiating for a job with Mr. Mack’s law firm, Debevoise Plimpton, a job which Mr. Berger ultimately took. That report by the US Senate Judiciary Committee summarized the culture of Enforcement Division under Director Linda Thomsen:
“Staff Attorney Gary Aguirre said that his supervisor warned him that it would be difficult to obtain approval for a subpoena of John Mack due to his ‘very powerful political connections.’ Aguirre’s claim is corroborated by internal SEC emails, including one from his supervisor, Robert Hanson. Hanson also told Aguirre that Mack’s counsel would have ‘juice,’ meaning they could directly contact the Director or an Associate Director of Enforcement.
“SEC management delayed Mack’s testimony for over a year, until days after the statute of limitations expired. After Aguirre complained about his supervisor’s reference to Mack’s ‘political clout,’ SEC management offered conflicting and shifting explanations.
“The SEC fired Gary Aguirre after he reported his supervisor’s comments about Mack’s ‘political connections,’ despite positive performance reviews and a merit pay raise.
“After being contacted by a friend in early September 2005, Associate Director Paul Berger authorized the friend to mention his interest in a job with Debevoise & Plimpton. Although that was the same firm that contacted the SEC for information about John Mack’s exposure in the Pequot investigation, Berger did not immediately recuse himself from the Pequot probe. Berger ultimately left the SEC to join Debevoise & Plimpton. When initially questioned, Berger’s answers concerning his employment search were less than forthcoming.
“The SEC’s Office of Inspector General failed to conduct a serious, credible investigation of Aguirre’s claims.”
That would be the same Enforcement Director to whom the SEC’s new Inspector General was obliquely referring, in page after page, for 55 pages, in a report explaining how three well-organized 6th graders could have handled the nation’s naked shorting complaints better than did the SEC Director Linda Thomsen’s Enforcement Division.
That Linda Thomsen is the same one whose resumption of employment with white-shoe law firm Davis Polk & Wardwell (I say “resumption” because Ms. Thomsen worked at Davis Polk until she joined the SEC in 1995) was announced today in this gem (”SEC Enforcement Chief Joins Davis Polk“) from the Blog of Legal Times (”Law and Lobbying in the Nation’s Capital”).
The announcement reads, with no detectable irony:
Linda Thomsen, who headed the SEC’s enforcement division until February, is starting as a partner in the firm’s white-collar defense and government investigations and enforcement practices in June. She will be joining former SEC commissioner Annette Nazareth, who started at Davis Polk last year, and Robert Colby, who joined the D.C. office this year after serving as deputy director of the SEC’s trading and markets division…
Thomsen practiced in Davis Polk’s New York office before joining the SEC in 1995. She started at the commission as assistant chief litigation counsel and went on to become head of enforcement in 2005. After leaving the SEC earlier this year, Thomsen says, “I had no preconceived ideas about where I was going to go, or what I was going to do.” – Translation: “I swear, it never occurred to me to go work for the law firm defending wealthy clients against whom I was overseeing cases until weeks ago.”
At the firm, Thomsen will advise clients on internal investigations and defend them against SEC probes. – Comment: Probes such as those ones she was overseeing weeks ago.
After serving at the agency for 14 years, Thomsen says she understands the kind of questions clients should be asking themselves to stay out of trouble with the commission. “I think I know and can see the kind of issues that get people into trouble, and the kinds of processes that cause them to, perhaps, ignore warning signs,” says Thomsen. - Comment: Yes, I am sure Ms. Thomsen is one of the world’s most recognized experts on the subject of processes that cause people to ignore warning signs.
Thomsen headed the enforcement division as it came under fire for failing to catch Bernard Madoff’s Ponzi scheme, as well as problems that contributed to the meltdown on Wall Street. In response to critics, Thomsen vehemently defends her former division. “I think the professionalism in the division of enforcement is really unparalleled,” she says. ‘If you look at the totality of the enforcement efforts…it’s really a record that I know I’m proud of.”
Considering the world-historic implosion of the US capital market occurring to vamp-til-ready accompaniment of Ms. Thomsen’s blind-piano-player-in-the-cathouse Enforcement Division, I’m at something of a loss for words with which to comment upon Ms. Thomsen’s “pride”.
But it is nice she landed on her feet.
There is something fishy going on with this guy!!
Making the Market Safe
Posted By:Tom Brennan
Topics:Stock Picks | Stock Market
A few key things need to happen before retail investors are playing on the same level field as big money managers, Cramer said Monday. He wants the uptick to be brought back, the end of naked short selling, indictments of the people who broke these rules – all around SEC enforcement.
Cramer shouldn’t even have to call for this, but he does. And he will continue to until the market is fair play for everyone. Watch the video for more on what it will take to get there.
Questions for Cramer? madmoney@cnbc.com
Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com
http://www.cnbc.com/id/30308768
Thanks Anonon I got it.Sad..very sad!!!
What is clear to me is….
Former SEC Enforcement Director Linda Thomsen acted as a defense lawyer for the The Wall Street Counterfeit Machine when she worked for the SEC.
The lawyers at the SEC know that if they pursue the criminal activities of the Hedge Funds, they will:
1) Be blackballed by the Financial Industry, and NOT be able to obtain a multi- million dollar job when they leave the SEC
2) Be fired by the SEC management team as Staff Attorney Gary Aguirre was.
And now Former SEC Enforcement Director Linda Thomsen, who acted as a defense lawyer for the Wall Street Criminals when she worked for the SEC, has obtained a job to continue her defense lawyer work to defend those accused of Wall Street Crimes.
Oh no, another rat with his claw in the cookie jar:
http://www.reuters.com/article/politicsNews/idUSTRE53K0WI20090421
IStand,(105) that is the best/pertinent post so far on this blog. You have nailed it in a nutshell. Nuff said!!!
Sorry that should have been 104 not 105!!
Fraud Enforcement and Recovery Act (FERA) of 2009
—————————————
Kaufman, on Floor, Calls for Passage of Financial Fraud Bill
Now on floor, bill will allow federal agencies to ramp up prosecutions of Wall St misdeeds
April 20, 2009
WASHINGTON, DC – In the aftermath of the financial meltdown that has thrown the American economy into a serious recession, U.S. Sen. Ted Kaufman (D-DE) spoke on the Senate floor today in support of legislation to ensure that lawbreakers will be identified and prosecuted for financial fraud.
Punishing complex financial crimes and deterring future fraud are paramount to restoring confidence in our decimated financial markets, he said during a speech on the Fraud Enforcement and Recovery Act (FERA) of 2009, bipartisan legislation he introduced with Sens. Patrick Leahy (D-VT) and Chuck Grassley (R-IA). Debate on the legislation began today.
“If we want to restore the public’s faith in our financial markets, and in the rule of law, then we must identify, prosecute, and send to prison those individuals whose fraudulent conduct has so severely damaged our economy, and harmed so many hard working Americans,” Sen. Kaufman said. “The public needs to know that when mortgage brokers, or credit raters, or Wall Street bankers break the law, they’ll be treated like the criminals they are. We can’t have one set of rules for people who rob banks and another set of rules for banks who rob people.”
…….. Continued at link……
( http://kaufman.senate.gov/press/press_releases/release/?id=ebb59a07-f76d-4546-98e2-c02a921e75e5 )
I just heard about this and do not yet know if this applies to the WALL STREET COUNTERFEIT MACHINE.
This video shows that George Bush tried to warn Congress in 2002 that this economic crisis was coming, if something was not done. But congress refused to listen, along with Barney Franks. This video says it all.
Also that the liberal AMERICAN media did not want this video on You Tube, so they had Time Warner threaten a law suit (proprietary rights) if it was not taken off.
This link is of the same video but is routed through Canada . Everyone in America needs to see this!
http://www.youtube.com/watch?v=cMnSp4qEXNM&NR=1
iStandUp, since it is Washington, who it applies to will be only detirmined by who’s check go’s to whom.
It is over for our US government leaders. They have failed to protect the Citizens at every turn, in every event. The modern form of the money trusts still rule the pretend rulemakers.
They all deserve what they will get, eternity to burn!
Here is for your reading pleasure
U.S. Securities & Exchange Commission calls TRN about “Stress Test” Story
By: ezaltheladiespa
21 Apr 2009, 10:08 AM EDT
Rating: Rate this post: Msg. 1182781 of 1182783
Jump to msg. #
U.S. Securities & Exchange Commission calls TRN about “Stress Test” Story
North Bergen, NJ — This afternoon at around 3:00 PM eastern US time, Turner Radio Network (TRN) received a call from John Polesi at the U.S. Securities & Exchange Commission in Washington, DC.
Mr. Polise asked about our story concerning the “stress test” as reported lower on this page. He specifically asked if we did, in fact, have a copy of the report?
I asked why he wanted to know? He replied “it is a material document.”
He went on to say that the SEC is trying to determine what aspects of the report – if any – the SEC might require publicly traded companies to disclose publicly. I replied that I am aware that such discussions have been taking place between the SEC, the US Treasury and the Federal Reserve and that reports of those discussions have appeared in the main stream media of late.
He then asked “If I send you a request for documents, will you send the report to me?” I replied, “Would the request be a Subpoena?” He responded “No” and then asked, “If the request did come in the form of a Subpoena, if I got the Commission to approve one, would you supply the document?” I responded “We would have to speak with our legal counsel first, but I suspect we would move to quash any such Subpoena.”
He thanked me for my time and hung up.
Caller ID indicated the call originated from 202-551-2000, but that is a non-working number. So we called directory assistance in Washington, DC and obtained the correct number for the US SEC.
After dialing the correct number, we got an automated attendant and selected 5 for the SEC media office. A young man named Kevin answered and confirmed for us that John Polise does work for the Enforcement Division of the SEC and that all telephone calls originating from their office show up on caller ID with that non-working phone number. As such, it appears this inquiry was legitimate.
Clearly, our report about the bank stress test results has struck a raw nerve in Washington, DC and elsewhere. To have both the United States Treasury comment on our story and the United States Securities and Exchange Commission call us literally within hours of our report indicates how seriously the powers-that-be are taking our revelations.
If there was nothing to our report, why all the fuss?
If they think anyone at TRN might be intimidated by a federal inquiry, they are sadly mistaken.
We have successfully defeated investigations by the FBI, The Joint Terrorism Task Force, The US Secret Service, the US Marshal Service, the US Capitol Police and a host of state and local law enforcement agencies over the past eight years of our existence. The SEC doesn’t faze us at all.
We’ve ruffled a lot of feathers with this report. Stay tuned for further developments.
Dr. Jim DeCosta,
I think we agree that ABUSIVE NAKED SHORT SELLING (Counterfeiting) is a type of PONZI SCHEME, although not a classic one.
Based upon the following explanation of a PONZI SCHEME, ABUSIVE NAKED SHORT SELLING (Counterfeiting) would qualify as a PONZI SCHEME:
“A Ponzi scheme is a scam investment designed to separate investors from their money.”
( http://economics.about.com/od/financialmarkets/f/ponzi_scheme.htm )
ABUSIVE NAKED SHORT SELLING is very specifically designed to separate investors from their money.
The explanation of a PONZI SCHEME continues as:
“The scheme is designed to convince the public to place their money into a fraudulent investment.”
The CLEARANCE AND SETTLEMENT SYSTEM that guarantees delivery in 3 days even though delivery never happens with Naked Shorting (Counterfeiting):
“is designed to convince the public to place their money into a fraudulent investment.”
The “CLEARANCE AND SETTLEMENT SYSTEM” FRAUDULENTLY tells stock market investors that it will guarantee delivery, when it does NOT in the case of ABUSIVE NAKED SHORT SELLING (Counterfeiting).
And the FRAUD is further perpetrated via FRAUDULENT monthly brokerage statements delivered over the Internet and by U.S. Mail to unsuspecting investors, since the “CLEARANCE AND SETTLEMENT SYSTEM” has been “rigged” by the Wall Street Criminals to HIDE the truth that delivery was NEVER MADE.
The explanation of a PONZI SCHEME continues as:
“Once the scam artist feels that enough money has been collected, he disappears – taking all the money with him.”
This part of the classic PONZI SCHEME does not seem to quite work with Wall Street PONZI SCHEMEs.
For example, Bernie Madoff with his 65 Billion Ponzi Scheme did not disappear with the money. Maybe it should be said that he could not disappear – that it was impossible for him to disappear, since he could not find a place to hide. Instead, Bernie was forced to continue his Ponzi Scheme by its nature until he finally gave himself up for some reason.
In the case of ABUSIVE NAKED SHORT SELLING…
Is it possible for the Corrupt Market Makers and their Corrupt Hedge Fund Guests to simple walk away from their ABUSIVE NAKED SHORT SELLING PONZI SCHEME designed to separate money from unsuspecting investors?
The only possibility I see is through the DTCC process (? I forget the name of it) by which Corrupt Market Makers and their Corrupt Hedge Fund Guests simple “erase” their crimes from the books? So their Short Positions Disappear?
I am hoping that you Dr. Jim DeCosta and/or others can help develop this new description of the PONZI SCHEME delivered by Wall Street Criminals called…..
ABUSIVE NAKED SHORT COUNTERFEIT SELLING
TRN better not be manipulating the market.
The last paragraph should read:
I am hoping that you Dr. Jim DeCosta and/or others can help develop this new description of the PONZI SCHEME created by Wall Street Criminals called…..
ABUSIVE NAKED SHORT COUNTERFEIT SELLING
About the call to TRN from the SEC —
Why do you suppose they askef about the report? Do they want a copy that they don’t have? Or do they want you to prove you have something that they can accuse you of obtaining by illegal means? What harm can come by supplying them with a copy?
I pulled up this little diddy playing around with Google’s new News Timeline (http://newstimeline.googlelabs.com/), check this out:
Congress Needs to Needs to Cut Naked Short Abuses. The Prescott Courier – Feb 14, 1988.
http://news.google.com/newspapers?id=GoMOAAAAIBAJ&sjid=2oEDAAAAIBAJ&dq=naked-short-selling&pg=2694%2C2821195
1988 – great find DCN (post 116).
So, 21 years later and dick all has been done about it.
Post 116 is such a good find, it should go on the front page of this site at the very top.
From 1988, warning that investors will be ripped off if this crime is allowed to continue. People should right click and save it to their hard drive before google censors it.
It is written in such a way that any investor can understand it as 1 2 3.
1 – I place a buy
2 – my broker gets my money, minus interest and doesn’t demand my purchase be filled.
3 – seller’s obligation to me is wiped out when he is able to overwhelm all buying and bankrupt the company. At that point, seller has my money.
It’s so offensive that your own broker would do this to you, but you know at a gut level it is true.
I wonder if this is the same Roxie Webb from Prescott that wrote the 1988 article.
http://roxiewebbsecuritiesmanagement.com/history.html
A potential supporter now? If Deepcapture could reach him, he may be able to spill dirt from the 80’s and 90’s that got us into this mess and why regulators didn’t regulate.
Remember, the DTCC didn’t arrive until 1999.
An apostle of the Church of ShortSelling quoting the chapter and verse:
http://dealbook.blogs.nytimes.com/2009/04/21/another-view-tighten-short-selling-rules-for-now/?hp
Last name is Weiner, so appropriate!
Whining in a hairshirt.
It is time for the answers to become public. Who became rich so that we could become poor and lose our jobs and homes. IT WAS INTENTIONAL!!!
“A systematic attack on the American economic system”
Manipulators on Wall Street get exposed via a new movie “Stock Shock” coming out on DVD in June. Dr. Trimbath makes an appearance and lays it out.
Watch the trailer here: http://stockshockmovie.com/
From the webpage…..
More opining from the shortseller’s camp:
http://jutiagroup.com/2009/04/20/they-have-to-blame-someone/
They must be feeling some pressure. Keep it up folks. Write/call your representative invertebrate in Washingtub today!
Here are Rep. Gary Ackerman words to members of the SEC on February 2nd 2009 concerning their inability to uncover the Bernie Madoff’s Ponzi Scheme in spite of help from Mr. Markopolis nearly a decade earlier:
“I am frustrated beyond belief.
We’re talking to ourselves and you are pretending to be here.
I really do not understand what’s going on.
Previous witness said, you guys, as an agency, act like you are deaf, dumb and blind…
And I figured you were coming here, you were going to testify to Congress…
You have told us nothing.
And I believe that’s your intention.
I figured you’d leave your blindfolds and your duct tape and your earplugs behind, but you seem to be wearing them today …
What the heck went on?
Your mission, you said, was to protect investors.
And to detect fraud quickly.
How’d that work out?
What went wrong? …
It seems to me with all of your investigators…
One guy with a few friends and helpers discovered this thing nearly a decade ago, led you to this pile of dung that is Bernie Madoff, and stuck your nose in it, and you couldn’t figure it out!
You couldn’t find your backside with two hands if the lights were on!
Could you explain yourselves?
You have single handedly defused the American public of any sense of confidence in our financial markets, if you are the watchdogs.
You have totally and thoroughly failed in your mission. Don’t you get it?…
What happened here? …
Do we start with hear no evil? See no evil? Or do no evil?
Take your pick.”
( http://www.youtube.com/watch?v=FOKSkaQoF_I&feature=PlayList&p=BB8182F8E40ACD74&playnext=1&playnext_from=PL&index=34 )
( Rep. Gary Ackerman, D-New York, 5th District, Bayside – on 02/05/09. His spoken words to members of the SEC during a hearing on the Madoff Fraud.)
Maybe, the first “suicide” of many to come.
Freddie Mac acting CFO apparent suicide: reports
Wed Apr 22, 2009 8:18am EDT
WASHINGTON (Reuters) – David Kellermann, the chief financial officer of mortgage giant Freddie Mac, was found dead in his Virginia home on Wednesday, an apparent suicide, police said and CNN said..
Kellermann, 41, was discovered before dawn in his suburban Washington home in Fairfax County, Virginia, police said. They did not confirm the exact cause of death but CNN said it had confirmed he had committed suicide.
FROM HIS BIO>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
David Kellermann’s Summary
Financial services executive with close to 20 years of experience, starting with the day-to-day line valuation, trading, and investing of complex mortgage-backed instruments, debt, and interest-rate derivatives, including swaps, swaptions, options, and futures. With that critical experience, I have succeeded at an ever-increasing level of responsibility in managing a Company with $1 + trillion balance sheet.
My definition of success is the full utilization of my experience and abilities, and those of a carefully chosen and trained team along the lines of excellence.
David Kellermann’s Specialties:
Complex financial instrument valuations, Corporate Finance, and Public Company Accounting and Reporting.
David Kellermann’s Experience
Interim Chief Financial Officer
Freddie Mac
(Public Company; 1001-5000 employees; FRE; Financial Services industry)
September 2008 — Present (8 months)
Responsible for internal and external financial management, disclosure and reporting for $1.8 trillion balance sheet of complex financial instruments and insurance contracts.
Responsible for numerous activities that support the financial management of the Company, including; global equity investor relations; capital structure decisions and management, planning, budgeting, and forecasting; and internal controls.
David Kellermann may or may not be the ultimate culprit as he started in the role in 2008.
Would like to know what his FRE experience was prior to that.
Did he recommend the CDS/CDO involvement?
You will see lots of people associated with this be suicided by those that want to shut them up.
Historical perspective:
The graft and secrecy that has taken this country down has been going on for generations of Presidents, providing funding for covert activities, money laundering, and dirty tricks.
Link that ties the S&L takedown, taxpayer costs to Bush I, his friends, the CIA and the Mob. The GSE’s are huge and the lax policies could have made it possible to steal from the mortgage funders as it was possible to get bogus loans from the S&Ls.
Considering that Kellerman had been at FRE for sometime, he did know a lot…
Today: David Kellermann acting CFO of Freddie Mac has committed “suicide”. He has been questioned about what’s going on at Freddie Mac. Maybe he had something to say that would be damaging? Have a look at this if you have time. Part 2 starts out with the same introduction, but about 2 minutes in, the story goes into more details that aren’t included in Part 1. http://www.brasschecktv.com/page/411.html
David Kellerman is the new Cliff Baxter.
It remind me of when Gary Webb committed suicide instead of finishing his tell all book.
I think arms, drugs and money laundering through the market are all part of the same criminal syndicate.
He’s the one that broke the story that while the DEA banned drugs to keep prices high, the CIA was bringing them into the country to fund their unauthorized arms activities.
http://en.wikipedia.org/wiki/Gary_Webb
“On the morning of December 10th 2004, 49 year old, Gary Webb was found dead in his modest, recently sold Carmichael, California home. Webb allegedly died from two *self-inflicted* gunshot wounds to the head from a .38 caliber pistol. The Sacramento coroner, Mr. Lyons, hastily ruled Webb’s death a suicide heralded by his now infamous pronouncement: “It’s unusual in a suicide case to have two shots,” he said, “but it has been done in the past, and it is in fact a distinct possibility.”
George Bush’s Iran Contra ran drugs through Bill Clinton’s Mena Arkansas. John Kerry ran the hearings on Iran Contra and John McCain was on the advisory board of a group funding the death squads.
http://whatreallyhappened.com/RANCHO/POLITICS/MENA/mena.html
What if the two parties are actually one party (two sides of the same coin) and they try to divide us with phony left / right issues when the real issue is that a criminal syndicate runs the country and is bleeding the average person dry?
The NEW WALL STREET PONZI SCHEME
…Endored by…
…..the “Securities Cops” – the SEC and the NSCC.
The Corrupt Market Makers and their Corrupt Hedge Fund Guests with the help of the Corrupted Clearance and Settlement System here in the United States have devised a New Type of PONZI SCHEME….
…Instead of stealing money from their investors, they steal money from unsuspecting buyers of long shares of stock.
With this New Type of PONZI SCHEME, Corrupt Market Makers and Corrupt Hedge Funds steal money from Long investors via ABUSIVE NAKED SHORT COUNTERFEIT SELLING while at the same time damaging or destroying Corporations subjected to their COUNTERFEIT SELLING….
One way to describe a PONZI SCHEME is:
“So you borrow from Peter, you pay Paul. Then you borrow from John to pay Peter. It just keeps going on and on, until the whole thing collapses of its own weight.” (Vinny Catalano on NPR.org)
This is HOW The NEW WALL STREET PONZI SCHEME works…
A Corrupt Wall Street Firm using the THE WALL STREET COUNTERFEIT MACHINE takes an order from Peter-Long-Shares for xxxx long shares in company ABCD. (We will call this Corrupt Wall Street Firm, Take-Your-Money-and-DELIVER-NO-SHARES.)
Instead of selling xxxx shares of company ABCD to Peter-Long-Shares, they take Peter-Long-Shares’ Money and put it in an interest bearing account with the intent of NEVER DELIVERING xxxx shares of Company ABCD to Peter-Long-Shares.
Since the firm Take-Your-Money-and-DELIVER-NO-SHARES, did NOT Own, and did NOT Borrow shares of ABCD Company, it sells Counterfeit Shares to Peter-Long-Shares.
The STOCK SHARES sold to Peter-Long-Shares were:
- NOT Owned
- NOT Borrowed
- NOT Delivered
- WILL NEVER BE DELIVERED
And CORRUPT Clearance and Settlement System allows Peter-Long-Shares’ stock account to SHOW Delivery of Long shares even though his money sits in an Interest-Bearing-Account unused to buy long shares in ABCD.
Because the Clearance and Settlement System FRAUDULENTLY guarantees delivery in 3 days, Peter-Long-Shares receives a confirmation that his order for long shares in ABCD was filled. And the next monthly brokerage account statement FRAUDULENTLY states xxxx long shares of ABCD were Delivered to his stock account.
Even though Peter-Long-Shares paid 100% of the cost for xxxx long shares in ABCD (plus a commission fee) – HIS MONEY was NEVER USED to BUY Long Shares of ABCD, and the intent of the SELLER, Take-Your-Money-and-DELIVER-NO-SHARES, was to NEVER DELIVER ANY LONG SHARES to Peter-Long-Shares’s stock account.
At this point TWO IMPORTANT QUESTIONS Must be Asked?
1.) What happens to Peter-Long-Shares’ money that was NEVER USED TO BUY LONG SHARES in ABCD?…
…That now sits in a money-bearing-account whose interest is Not given to Peter, but instead is given to a brokerage company?
2.) And what did Take-Your-Money-and-DELIVER-NO-SHARES “SELL” to Peter-Long-Shares?
… when it Did NOT OWN, Did NOT BORROW, NEVER DELIVERED and NEVER INTENDS TO DELIVER REAL SHARES of ABCD to Peter-Long-Shares in exchange for cash payment at 100% the cost of xxxx long shares in ABCD?
This is where the brilliant design of THE WALL STREET COUNTERFEIT MACHINE by Wall Street Criminals (and protected by the captured SEC) allow corrupt Wall Street Players to operate a PONZI SCHEME with impunity day after day, year after year.
The CORRUPT CLEARANCE AND SETTLEMENT SYSTEM has been converted from the Congress Mandated “DVP” to the illegal “CVP”:
- DVP: “Delivery Versus Payment” (LEGAL)
- Payment by Buyer at 100% the Cost of Stock Shares
…To Receive…
- Delivery of Real Company Shares
…Was ILLEGALLY Converted To…
- CVP: “Collateralization Versus Payment” – (ILLEGAL)
- Payment by Buyer at 100% the Cost of Stock Shares
…To Receive…
- Delivery of Counterfeit Company Shares to fulfill the Fraudulent 3 Day Delivery Guarantee
- Buyer’s money NOT USED to buy Real Shares of Company Stock
- Buyer’s money put in an interest-bearing-account
- Buyer is essentially Sold a FUTURES CONTRACT, in which the SELLER promises to buy and then deliver Real Shares at some unspecified future date to replace the Counterfeit Shares created for delivery to Buyers account.
(NOTE: The CORRUPT CLEARANCE AND SETTLEMENT SYSTEM allows the Seller of Counterfeit Shares to NEVER DELIVER real shares, since there is NO TIME LIMIT for delivery. )
- With the ILLEGAL Collateralization System, the SELLER is allowed to gain access to the Buyer’s Money BEFORE the Seller Buys and Delivers Real Shares of Company Stock to Buyer who make a Payment at 100% the Cost of the Company Shares.
This is the NEW WALL STREET PONZI SCHEME that the SEC and NSCC “securities cops” allow the Brilliant Wall Street Criminals to operate day after day, year after year with impunity.
The CORRUPT MARKET MAKERS along with their CORRUPT HEDGE FUND GUESTS are allowed by the “Securities Cops” to “sell” Counterfeit Shares of Company Stock, which is mis-leadingly called “Naked Short Selling”, to unsuspecting buyers of real stock shares under the cover of the Fraudulent 3 Day Delivery Guarantee, and the monthly Fraudulent Brokerage Statements received by Buyers showing they have real long shares.
But UNREPORTED and HIDDEN by the “Securities Cops” is the simple fact that the CORRUPT MARKET MAKERS along with their CORRUPT HEDGE FUND GUESTS are allowed to gain access to the Buyers Money without requiring them to BUY REALS SHARES AND DELIVER REAL SHARES of company stock shares to the Buyer (even though the Buyer paid 100% of the Cost of REAL Company Stock Shares).
With this NEW WALL STREET PONZI SCHEME, the Corrupt Hedge Funds do not steal money from their investors…
… instead they steals money from unsuspecting Buyers of Real Shares of Stock, who are unknowingly sold Counterfeit Shares of a company stock, and whose money is eventually diverted into the pockets of Corrupt Market Makers and Corrupt Hedge Funds so they can pay themselves and/or their investors more money – robbing Peter-Long-Shares to Pay Take-Your-Money-and-DELIVER-NO-SHARES and their investors.
The Corrupt Hedge Funds selling Counterfeit Shares of stock are NOT Brilliant Stock Pickers…
… they are merely Brilliant Wall Street Criminals with a NEW PONZI SCHEME who are protected by the “Securities Cops,” the SEC and the NSCC.
What could be simpler than selling Counterfeit Shares of Stock, setting up Counterfeit Short Positions with these Counterfeit Shares, and Stealing the Cash Money that was Never used to Buy Real Shares?
This NEW PONZI SCHEME is a win-win for all the Corrupt Market Makers and their Hedge Funds Guests:
- They make “Easy Money” on their Counterfeit Short Positions by increasing the supply of shares for sale to make their Short Positions Self-Fulfilling – Increasing Supply of Stock Shares AUTOMATICALLY LOWERS PRICE.
(This is illegal, criminal manipulation of a stock)
- And They make “Easy Money” by taking the Cash Money supplied by the Buyers for Real Shares of Stock, which were NEVER Bought and NEVER Delivered.
(This is illegal use, illegal diverstion of the buyers money)
And unlike a classic Ponzi Scheme, this NEW WALL STREET PONZI SCHEME will NOT COLLAPSE until and unless the Wall Street Security Cops declare these ILLEGAL Actions a CRIME… At this moment, the SEC and the NCSS are the great protectors of this NEW WALL STREET PONZI SCHEME.
The above is a First Draft.
All suggestions for correcting it or for improving it are welcome!
Dead men such as David Kellerman sometimes tell tales.
He may have just gotten overwhelmed or have been involved in the genesis of the issues.
Can’t say, but let’s stay tuned.
istandup, I love this summary from DCN’s link 114. It was written in the 1980’s warning this practice had to be banned or it would bankrupt vulnerable companies.
http://news.google.com/newspapers?id=GoMOAAAAIBAJ&sjid=2oEDAAAAIBAJ&dq=naked-short-selling&pg=2694%2C2821195
The basic idea:
1. You purchase a share
2. Your broker and the crooked seller both think it will go down. Rather than ask for the share to be delivered, your broker keeps your money and collects interest on it.
3. Eventually, the crooked seller overwhelms all buying and bankrupts the company. Your broker has to give your purchase money to the crooked seller now.
The technique is used to bankrupt any company that isn’t profitable and which is thinly traded enough that the crooked seller can influence the price.
Notice this paragraph in the link above:
“Naked short selling does not require the selling broker dealer to deliver any stock and that is part of the deal on the onset.”
Part of the deal on the onset? The buying and selling brokerage have contractuallly agreed not to have a delivery?
This was written in 1988 by the owner of a securities firm (Roxie Webb). Someone from Deep Capture should contact him to see if he knows how x-clearing arrangements are set up.
http://roxiewebbsecuritiesmanagement.com/history.html
Sammy and DCN,
I have saved the images from this link – thanks DCN – and plan on extracting the TEXT from this article and posting it here for everyones use.
Thanks to both iStandUp and DCN. That article is a great find, written in Feb. 1988, a decade before any of this happened. The DTCC didn’t form until 1999.
http://news.google.com/newspapers?id=GoMOAAAAIBAJ&sjid=2oEDAAAAIBAJ&dq=naked-short-selling&pg=2694%2C2821195
It’s chilling to see the industry saw this coming and decided to screw the little guy and American small business and their employees anyway.
It makes me wonder how many other possible good guys from the industry like this Roxie are out there to help the cause.
I can just imagine people in the industry talking among themselves “I can’t believe congress doesn’t close this loophole, but other brokerages are grabbing these billions in investor money, so I may as well, too.”
Then they extend the scheme beyond penny stocks to big stocks, bonds, etc. over the decades until finally they crash the whole country’s economy.
Speaking of history, here’s naked shorting from 1920!
Is anyone familiar with the Stutz Motor Car company? The shorts tried to drive his company out of business because they could smell blood as competitors went to assembly lines, but Alan Aloysius Ryan stood firm, hitting every share with a buy.
Suddenly, one day in 1920, he announced to the world that he owned 105% of the outstanding shares and that he wanted the sellers to deliver him his shares.
The clearing brokerages stood to be bankrupted as they stood as the middle men who facilitated the short sales, even though there weren’t enough shares to deliver.
The NYSE decided to protect their own, even setting up a “protective committee” to protect their members. Despite the threat of criminal proceedings, they delisted the company and set the price that Ryan had to sell the naked shorts shares at. The price was far below the highest price he paid to buy the shares in his own company. They banned the private sales he tried to set up with shorts anxious to cover at $500 – $1,000 per share (stock traded $391 before being delisted), because they said he couldn’t do a private sale when sales were halted.
The exchange argued that they were above any court and they charged Ryan with “conduct or proceeding inconsistent with just and equitable principles of trade”. His crime? Asking for the sellers to deliver what they sold to him. He complained that the governors of the NYSE exchange were the same people naked shorting his company and it was unfair for them to act as judge and jury. He tried to quit the exchange and they said he couldn’t quit because he was under investigation.
The company was under pressure from creditors and much of the stock he bought and that had to sell at a lower price was bought on credit. His debts got intertwined with the debts of the company and he and the company went bankrupt. The same groups that lent him money were able to collapse him into bankruptcy as the shares he provided as collateral, which no longer traded had no collateral value. He was forced to sell the stock at 2% of the high price he paid for it.
http://query.nytimes.com/mem/archive-free/pdf?res=9806E5D81131E03ABC4953DFB266838B639EDE
http://query.nytimes.com/mem/archive-free/pdf?_r=1&res=9B03E0D71131E03ABC4E53DFB266838B639EDE
http://query.nytimes.com/mem/archive-free/pdf?res=9507EEDD1E31E03ABC4C52DFB266838B639EDE
http://query.nytimes.com/mem/archive-free/pdf?res=9404E6DB133FE432A25754C1A9629C946195D6CF
http://query.nytimes.com/mem/archive-free/pdf?res=9C03EFDB133AE03ABC4952DFB066838B639EDE
http://query.nytimes.com/mem/archive-free/pdf?res=9B06E6DD1130EE3ABC4152DFB7668389639EDE
http://query.nytimes.com/mem/archive-free/pdf?res=9C03E7DA1639EE3ABC4C51DFB066838B639EDE
http://query.nytimes.com/mem/archive-free/pdf?res=9F0CEED91E3EEE3ABC4951DFB7678389639EDE
Looking with the benefit of history, you can’t help if there was a conspiracy against him by competitors, creditors and naked shorts, all from the same group, that saw great value in getting rid of a privately controlled competitor. You also wonder if this was already happening in 1920, how much more savvy and powerful the families that control Wallstreet have become in the intervening 89 years.
naked short selling features prominently in this article about the government bailout plan
http://www.avaresearch.com/article_details-76.html
To Ron Doc and the person posting as To Sarge, thank you for the confidence and support! Ron Doc, I have read that poem before, I have always found it to be relevant in times of increased political and social turmoil.
Jim Hall, I got a kick out of those links you posted, especially this one:
http://dealbook.blogs.nytimes.com/2009/04/21/another-view-tighten-short-selling-rules-for-now/?hp
I was tempted to leave a comment on that story when I read it, but I noticed that everything that I had to say had already been said by the vast majority of the other responses already posted.
THE CREDITING OF “LONG POSITIONS” WHEN COMBINED WITH THE WORDING OF UCC-8 CREATE WONDERFUL OPPORTUNITIES FOR “COUNTERFEITING” RELATED THEFTS
In studying abusive naked short selling frauds you need to appreciate the role of this financial accounting term referred to as a “long position” in a corporation’s shares. First of all it has nothing to do with the “legal ownership” of the “shares” of a corporation. On Wall Street the party inscribed on a transfer agent’s “record of ownership” is the “legal owner” of those shares. The investor/purchaser of the shares held in “street name” at the DTCC becomes the “beneficial owner” of that which he purchased. When it comes to these rather peculiar “long positions”/”securities entitlements” nobody “legally owns” them. They have “holders” but no “legal owners”. That’s what makes them invisible to prospective investors and a corporation’s management team.
In reviewing how the NSCC’s “Automated Stock Borrow Program” (SBP) operates we saw how the lending of a (conveniently) impossible to trace parcel of shares from the SBP’s self-replenishing “lending pool” of securities done in order to “cure” a failure to deliver resulted in the buying party in a transaction involving a delivery failure receiving the borrowed shares. Along with the borrowed shares came the “legal owner” title. Unfortunately for “long” investors the specific investor whose shares were chosen to “cure” the delivery failure cannot be identified and told that he just lost “ownership” of that which he purchased.
We also saw how the brokerage firm who “donated” the shares chosen to cure the delivery failure was awarded a “long position”/”securities entitlement” theoretically denoting his right to demand those loaned out shares back at a time of his choosing. This one “loan” resulted in the transference of “legal ownership” of a given parcel of shares to the recipient as well as the generation of a separate “long position” out of thin air. UCC-8-501 then came along and empowered the “holder” of this “long position”/”securities entitlement” (the “donor” brokerage firm FBO his client the investor) to “exercise all of the rights and property interest of the “shares” that got sent electronically to the new “legal owner”. So now we have 2 separate parties being allowed “to exercise all of the rights and responsibilities that comprise the SAME parcel of securities”.
The new “legal owner” of this particular “parcel” of shares now has all of the right in the world to “re-donate” this same parcel of impossible to trace shares right back into the same lending pool of securities it just came out of as if it never left in the first place. Once it is chosen to “cure” a delivery failure then 3 separate parties will be allowed “to exercise all of the rights and property interest that comprise that security”. The “legal owner” title will go to the most recent party receiving the borrowed shares.
All of the rest of the parties that at one time held the “legal owner” title to this one parcel of shares now become “co-beneficial owners”. FINRA, the DTCC, the NSCC and the SEC have no problem whatsoever in this “counterfeiting machine” known as the NSCC’s SBP even though after a period of time perhaps a dozen different “co-beneficial owners” have the right to sell that SAME parcel of shares. Apparently all of these SROs and regulators have no problem with the obvious share price depressant effect associated with the massive increase in the “supply” of that which by law (UCC-8-501) must be treated as being readily sellable.
When the DTCC and NSCC get sued for the facilitation of naked short selling crimes and “counterfeiting” abuses associated with their SBP the SEC always shows up with an “amicus curiae” brief recommending to the judge to dismiss the case because we at the SEC find no problem with how the SBP operates. They insanely claim to the judge that the SBP does not serve to “counterfeit” shares because the number of shares “legally owned” does not go up in number. That’s an interesting claim for the party with the congressional mandate to provide investor protection and market integrity.
Of course the number of shares “legally owned” and “outstanding” does not go up in number but the number of “legally owned” shares is only one part of the “supply” variable that interacts with the “demand” variable to determine share price. The “supply” variable also includes all of these readily sellable “long positions”/”securities entitlements” that DTCC participants are creating right and left via not only SBP loans but also via every single delivery failure that the NSCC management pretends to be “powerless” to buy-in even after it becomes obvious that the seller of securities had no intent whatsoever to deliver in the first place.
We also see this “long position” terminology on an investor’s monthly brokerage statement wherein even if the investor’s clearing firm never did get delivery of that which its client purchased the client is still awarded a “long position” in the “securities held long” column. You have to keep in mind that these “long positions” being awarded all over the place are over and above the number of shares already “outstanding” and they TECNICALLY have no “legal owner”; instead they have “holders” referred to as “security entitlement holders”.
Securities scholars argue as to whether a “loan” from the SBPs “lending pool” that involves the transference of “legal ownership” is a “loan” or a “sale”. The DTCC argues vehemently that it is a “loan” and therefore they have the right to credit the account of the “lender” with a “long position”/”securities entitlement” to denote his “right” to call in the “loan”. If it were characterized as a “sale” because of the transfer of ownership then the DTCC would have no right to credit the donor firm with a “securities entitlement”.
A financial arrangement referred to as a “repurchase agreement” bridges this gap in that in an “RA” the seller retains the right to buy the shares back within a given amount of time. Repurchase agreements are used all the time to mask delivery failures and to facilitate naked short selling thefts. If the seller has the right to buy it back then why not just keep the shares and “hypothecate” the shares to the counterparty. “Hypothecation” refers to pledging shares without delivering them.
The net-net of all of this is that the granting of “long positions” is very tricky and easily abused and those with a superior working knowledge of how things operate on Wall Street can absolutely run circles around Joe Sixpack. That’s why we have theoretically UNCONFLICTED SROs and UNCONFLICTED regulators THEORETICALLY protecting Joe and his family. If they refuse to do so for any of a variety of reasons then the investment funds of Joe and his family will easily be rerouted into the wallet of those “banksters” committing these thefts while leveraging their superior working knowledge of sometimes complex financial arrangements.
The ability of Wall Street insiders to credit these nebulous “long positions” to the accounts of investors in and of itself is not that damaging. But when you factor in UCC-8-501’s mandate for clearing firms holding these “long positions”/”securities entitlements” created out of thin air to allow their “holders” to “exercise all of the rights and property interest that comprise that security then you have laid the foundation for massive levels of theft of an unknowing investor’s money by those with this superior working knowledge.
Dr. Jim DeCosta,
You stated:
“Securities scholars argue as to whether a “loan” from the SBPs “lending pool” that involves the transference of “legal ownership” is a “loan” or a “sale”. The DTCC argues vehemently that it is a “loan” and therefore they have the right to credit the account of the “lender” with a “long position”/”securities entitlement” to denote his “right” to call in the “loan”. If it were characterized as a “sale” because of the transfer of ownership then the DTCC would have no right to credit the donor firm with a “securities entitlement”.”
Interesting…. Here are some thoughts that came to mind while reading this paragraph………….
Yesterday as I was writing the first draft of the WALL STREET PONZI SCHEME, I noted in my mind and in the text that the BUYER’s brokerage statement says he is long xxxx shares, even though HIS MONEY was NEVER USED to buy long shares…. His Money was placed in an interest-bearing-account.
By calling the shares used to cure the FTD a LOAN, the DTCC can allow the BUYER’s Money to remain in an interest-bearing-account so the Wall Street Criminals can divert this money into their pockets. The use of the word “LOAN” also allows the Wall Street Criminals to counterfeit more and more shares to drive the stock price down, which then gives them the ability to steal the BUYER’s money.
On the other hand, IF the DTCC referred to the shares used to cure FTDs as a “SALE,” then the money in the interest-bearing-account would have to be transferred to the firm SELLING the shares to the BUYER.
So it appears that the use of the word “LOAN” enables the WALL STREET COUNTERFEIT MACHINE to operate efficiently – creates the greatest amount of income for the Wall Street Criminals – allows the Criminals to leverage the BUYER’s money to its greatest extent.
On the other hand, the use of the word “SALE” might cripple or prevent the WALL STREET COUNTERFEIT MACHINE was operating.
This is a little off topic but a MUST READ!!!
How the Wall Street Journal and the New York Times Buried the Madoff Scandal for at Least Four Years
By EAMONN FINGLETON
An old maxim has it that newspaper editors separate the wheat from the chaff, then print the chaff. By this standard, the editors of the Wall Street Journal showed special deftness in their handling of the Madoff affair.
They used the occasion of whistleblower Harry Markopolos’ testimony in Washington in February to address seemingly every minuscule detail of the scam. They even published an irrelevant, if lovingly crafted, floor plan of the Madoff firm’s office in the Midtown Manhattan Lipstick building. Yet, in all their apparent desire to “flood the zone” (maybe they were angling for a Pulitzer!), one detail was missing. Not a word of explanation was offered about the curious role played by the Journal’s own Washington-based investigative reporter John R. Wilke.
As Markopolos’ written testimony made clear, Wilke long ago knew the score. As far back as 2005, he had been entrusted with Markopolos’ now famous dossier raising no less than 29 red flags about Madoff. It is hardly an exaggeration to say that, on the strength of an afternoon’s research, a good reporter could have worked up any one of Markopolos’ points into a cracker of a front-page story. Taken as a whole, the dossier represented the biggest “career development opportunity” any journalist has been handed since Deep Throat delivered the goods on Richard Nixon to Woodward and Bernstein a generation ago.
There are differing accounts of what happened next. According to Markopolos, Wilke was hot to trot but needed the blessing of higher-ups. And, unfortunately, the Journal’s “news” operation is apparently run much like an Amtrak marshaling yard. As months turned into years, Markopolos’ 29 red flags festered like so many rotten tomatoes in some desk jockey’s in-tray. Other sources, however, place the blame firmly on Wilke’s shoulders. Apparently, he started to dig but lost heart because there was so little publicly available information on Madoff’s modus operandi.
It is all very puzzling. The question, of course, is why would Markopolos lie about something like this? And then there is the simple fact that his testimony on other, more weighty matters has already been resoundingly vindicated.
What is not in dispute is that, to the Journal’s eternal shame, the story eventually came out only after an avalanche of redemptions left Bernie with nowhere to hide and he turned himself in. In the interim, by remaining silent, the Journal played a devastatingly ignominious role in one of the biggest and most brazen scams in history.
If the Journal’s shame is particularly acute, virtually no one in the wider American financial journalism profession emerges from this fiasco with much credit.
One dog that snoozed in its kennel was the New York Times. The Madoff scam was, of course, a local story for the Times, not least because Times editors undoubtedly knew many of Madoff’s victims socially. It is surprising, to say the least, that no Times person ever seems to have sensed there was something fishy going on in the Lipstick building. The Upper East Side was buzzing with rumors about his apparently sensational investment returns. Many a New York socialite either had money invested with him – and boasted of it in a loud stage whisper – or at least wanted to do so.
Yet it was only on the day of Madoff’s arrest that the Times condescended to inform its readers that many of his more alert peers had sensed he was a fake all along. For years, he had been pegged as an outright Ponzi artist by Goldman Sachs and Credit Suisse, for instance, and he was blacklisted also at Deutsche Bank, Merrill Lynch, and UBS. Indeed, as far back as 1991, CounterPunch contributor Pam Martens, in her capacity as a Wall Street broker, had told him she was on to his game and had so advised a client. For thousands of aggrieved Times readers, who lost their life savings in Bernie’s financial Bates Motel, the question is why they were the last to know.
For the rest of the story..
http://www.counterpunch.org/fingleton04232009.html
My last line should read:
On the other hand, the use of the word “SALE” might cripple or prevent the WALL STREET COUNTERFEIT MACHINE from operating.
It is simply amazing to me that George Soros is not yet in the slammer.
And, what’s worse, is that the administration seems to regard him as some type of Yoda while the (Times/WSJ) press lionizes him.
Here’s our new sister site:
http://www.soroswatch.com/
Term ’sister site’ is IMHO.
But I think they are onto something/someone…
Businessweek magazine 4/27/09, new article:
“Banks Aren’t Yet in the Clear
Analysts see several reasons why the recent strong earnings reports by the likes of Wells Fargo and Goldman Sachs may not be repeated”
THIS ARTICLE QUOTES MOB-OWNED ANALYST DONN VICKERY – GRADIENT ANALYTICS.
WHEN WILL THESE GOONS GO AWAY?
http://www.businessweek.com/magazine/content/09_17/b4128019360698.htm?campaign_id=rss_daily
How George Soros is attempting to ruin Bank of Ameroica:
New Businessweek article:
http://www.businessweek.com/magazine/content/09_18/b4129000840714.htm?campaign_id=rss_daily
‘The Connecticut state treasurer, Denise Nappier, who controls a $20 billion retirement fund, called for you to step down today. The Service Employees International Union has mounted a campaign against you, in part because BofA is said to be actively lobbying against the Employee Free Choice Act, which would eliminate the secret ballot in union elections.
First of all, the SEIU would like to unionize Bank of America, and so I think they have an ulterior motive. And then secondly, I was told that the state of Connecticut owns 1.4 million shares [of BofA]. I own around 5 million, so I’m going to outvote her.’
MoveOn involved as well (though you don’t see that in that story?? Why??). You need to go here to see the nexus:
http://www.seiu.org/2009/04/tens-of-thousands-of-taxpayers-to-protest-at-100s-of-bank-of-america-branches-nationwide.php
Conclusion: George Soros is behind much of the union-forming fomenting with BAC through MoveOn. Gee, do you think George might be shorting the bank/country/world? Wouldn’t he love to cripple BAC? Worker’s rights? Think George really cares?
Hedge Fund colleagues?:
http://www.newser.com/story/57203/cash-rich-italian-mafia-grows-in-recession.html
Why Patrick isn’t tracking down Soros more closely eludes me…