Excellent!!

Someone on CNBC said that “Patrick Byrne was right all along”!!

Times and perceptions must be changing!

http://www.cnbc.com/id/15840232?video=1237183961&play=1

Hopefully this catches on like wild fire.

Why’s buffet sleeping with the enemy? Buying Goldman and naked shorting treasuries?

“But the U.S. Treasury bond bubble of late 2008 may be regarded as almost equally extraordinary.”

In late September, he agreed to buy $5 billion of perpetual preferred stock with a 10% yield from Goldman Sachs, which was reeling after the collapse of Lehman Brothers Holdings Inc. Berkshire also received warrants to purchase Goldman common stock at $115 a share. While the vote of confidence in Goldman by the savvy investor temporarily helped stabilize the bank’s share price at around $120, since then Goldman’s stock has wilted to well below $100.

http://www.nytimes.com/2009/02/27/business/27madoff.html

“Elie Wiesel Levels Scorn at Madoff”

By STEPHANIE STROM

two of the panelists were Jim Chanos and Harvey Pitt (former chairman of the sec).

Have they no shame

SEC alerted about Stanford in 2003

SEC alerted about Stanford in 2003

By Robert Cookson and Michael Peel in London and Joanna Chung in New York

Published: February 26 2009 19:30 | Last updated: February 26 2009 19:30

A whistleblower contacted US regulators more than five years ago with allegations that Sir Allen Stanford’s businesses were involved in an “illegal Ponzi scheme”, the Financial Times has learnt, raising new questions about why authorities waited until last week to shut down the alleged $8bn fraud.

Leyla Basagoitia, a former Stanford employee, raised a series of red flags about the tycoon’s empire in a 2003 employment dispute with her company at a tribunal run by the finance industry’s self-regulatory body. Ms Basagoitia also alerted the US Securities and Exchange Commission at about the same time, her lawyer said, echoing criticisms the agency ignored early warnings about the alleged $50bn Ponzi scheme run by Bernard Madoff.

Ms Basagoitia told an arbitration panel at the National Association of Securities Dealers in October 2003 that she suspected that Stanford Group Company, one of Sir Allen’s key businesses, was “engaged in a Ponzi scheme to defraud its clients”, according to case documents seen by the FT. In 2007, the NASD became the Financial Industry Regulatory Authority, which has come under scrutiny since the Stanford allegations emerged.

In a nine-point critique, Ms Basagoitia pointed to many concerns cited last week by the SEC in its charges against Sir Allen’s businesses, including allegations about the lack of a credible auditor, misselling of investment products and the promise of consistently high returns that did not “correspond to the reality of the markets”.

Ms Basagoitia’s allegations were denied by Stanford and subsequently dismissed by the dispute resolution panel. In addition, she was ordered to pay Stanford $107,782 in damages, in repayment of a loan advanced to her while an employee of the company.

Michael Falick, the lawyer who acted for Ms Basagoitia, described the outcome of the case as “very, very sad”. He added his client contacted the SEC with details of the alleged fraud in tandem with her NASD complaint.

Mr Falick said: “It was really troubling, because the NASD was meant to be a regulatory body.”

The SEC declined to comment on Ms Basagoitia’s case, although it said that it had begun investigating the Stanford empire in spring 2005, well over a year earlier than officials had indicated previously. Finra did not return a call requesting comment, while Ms Basagoitia could not be reached.

The revelation marks another blow to US securities regulators, who have been hit with an avalanche of criticism since missing the alleged scheme perpetrated by Mr Madoff.

http://www.ft.com/cms/s/0/148817be-043b-11de-845b-000077b07658.html?ncli...

To illustrate just how corrupt our DTCC-administered clearance and settlement system is take the case of “acquiringco” (“Aco”) a U.S. corporation that is taking over “beingacquiredco” (“Bco”) via a 1-for-1 share swap acquisition. Assume that both corporations have 100 million shares issued and “outstanding”. Let’s assume further that “Bco” currently has 80 million invisible “securities entitlements” in its share structure resulting from 80 million shares being in a failed to be delivered status that the NSCC has refused to buy-in. This means that the current shareholders of “Bco” have bought and paid for 180 million shares of “Bco”.

All of these investors will receive monthly brokerage statements “implying” that the clearing firm of their broker/dealer (assuming that they are not “self-clearing”) is “holding long” the securities they purchased. They will have obviously been misled as there are only 100 million legitimate shares of “Bco” in existence.

Once the transaction is approved by the vote of shareholders the transfer agent of “Aco” will send to the NSCC a certificate for 100 million shares of “Aco” to be distributed to the shareholders of “Bco”. This obviously will not be enough to pay off all of the investors in “Bco”. To address this disparity the NSCC management will allow their clearing firm “participants” to credit the accounts of their investors in “Bco” with 180 million “securities entitlements” in “Aco”.

After the amalgamation the board of directors of “Aco” will think that there are now 200 million readily sellable shares of “Aco” in existence. They will be wrong as there are now 280 million readily sellable shares and/or readily sellable “securities entitlements” weighing down on the share price of “Aco”.

Why didn’t the NSCC management or its participants warn the board of directors of “Aco” that there was quite a bit of invisible toxic waste in the shares structure of “Bco” that should have been brought to their attention? During the voting procedure why weren’t the shareholders of “Aco” allowed to learn the whole truth about this acquisition? Neither the NSCC management nor its participants could tell the truth because it would have exposed this entire “industry within an industry” on Wall Street involving the selling of nonexistent shares and refusing to deliver that which you sold in order to invisibly reroute the funds of U.S. investors into their own wallets

Let’s go a step further, why were the shares of “Bco” sensed by “Aco” to be such a bargain. It’s because of the share price depressant effect of all of those readily sellable “securities entitlements” hidden in the share structure of “Bco”. Shares with massive amounts of unaddressed FTDs will be seen as wonderful bargains and acquired much more often than corporations without any. How many thousands of acquisitions being made by U.S. corporations have resulted in the acquiring company becoming severely but invisibly damaged because the NSCC management refused to buy-in the delivery failures of its abusive participants when it became perfectly obvious that they never had any intent whatsoever in delivering the shares they were selling. All U.S. investors and acquiring corporations have been relegated to be basically buying a “pig in a poke” in our markets due to this refusal to either promptly buy-in the FTDs or at least warn investors of their existence.

“Biden’s son, brother had business ties to Stanford empire
By Carol Eisenberg
February 25, 2009 at 8:55am

Just when you thought R. Hunter Biden’s retirement as a lobbyist had removed the possibility his business dealings might embarrass his father, comes a report that he and his uncle had business ties with Texas financier R. Allen Stanford.

The Wall Street Journal reported Tuesday that a fund of hedge funds run by Vice President Joseph Biden’s son and his brother, James, through New York-based Paradigm Global Advisers was marketed exclusively by companies controlled by Stanford….
……”

( http://news.muckety.com/2009/02/25/bidens-son-and-brother-had-business-links-to-stanford-empire/12061 )

Go to this link and SEE an Interactive MAP of the connections… The story is also continued there…

FEBRUARY 24, 2009
By SUSAN SCHMIDT, STEVE STECKLOW and JOHN R. EMSHWILLER
http://online.wsj.com/article/SB123543815326954907.html#

“A fund of hedge funds run by two members of Vice President Joe Biden’s family was marketed exclusively by companies controlled by Texas financier R. Allen Stanford, who is facing Securities and Exchange Commission accusations of engaging in an $8 billion fraud.

The $50 million fund was jointly branded between the Bidens’ Paradigm Global Advisors LLC and a Stanford Financial Group entity and was known as the Paradigm Stanford Capital Management Core Alternative Fund. Stanford-related companies marketed the fund to investors and also invested about $2.7 million of their own money in the fund, according to a lawyer for Paradigm. …”

QUESTION?????????????

How many members of congress have personal money in Hedge Funds?

Or Hedge Fund type investments?

Does anyone know if this type of information is in the public domain?

Or do members of congress have their money in trust funds, which can hide where the money is invested?

From The Times
February 26, 2009
Christine Seib in New York and Susan Thompson
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5805583.ece

UBS was accused of “serious failure” yesterday by Luxembourg’s financial watchdog as part of its investigation into investments that funds based in the country made in Bernard Madoff’s alleged $50 billion Ponzi scheme.

Commission de Surveillance du Secteur Financier in particular emphasised the weak execution of the bank’s due diligence obligations over its custodianship of a $1.4 billion fund, Luxalpha, that invested in Mr Madoff’s scheme. The regulator deemed this a serious failing in the bank’s duties. It has given the bank three months to show it has put in place the infrastructure necessary to improve its procedures and structures and to pay compensation.

UBS disagreed with the accusations and said it will defend itself vigorously. The Swiss banking giant added in a statement: “Documentation for the fund made it very clear the company was not expected to be responsible for the safekeeping of the assets. The fund documentation contained an explicit waiver to that effect. UBS does not have responsibility to these shareholders for the unfortunate results of the Madoff scandal.”
————

American regulators charged four men with fraud yesterday over three separate alleged investment scams worth a total of nearly $700 million. It was the latest flurry of moves by the FBI and the Securities and Exchange Commission (SEC) after high-profile actions against Bernard Madoff and Allen Stanford, the Texan billionaire.

More frauds are expected to come to light as the recession forces investors to withdraw money from funds, making it impossible for fraudsters to meet redemptions.

John Pistole, the FBI’s deputy director-general, told Congress this month that the agency was investigating 38 possible corporate frauds directly related to the financial crisis.

The US Attorney’s office in New York filed criminal charges yesterday against Paul Greenwood and Stephen Walsh, two New York fund managers. It is alleged that between 1996 and this month the men misappropriated about $554 million invested in their company, WG Trading Investors (WGTI).