Lecture on abuse of social media by stock manipulators

I recently lectured business students at the University of Texas, on the topic of abuse of social media by stock manipulators. I’ve merged the recording of the lecture with my slide presentation and converted it to video below.

As a post-script, I found this experience to be a very positive one, and would welcome similar opportunities in the future.

  1. Reads of Deep Capture,

    I strongly urge readers of Deep Capture to watch this. True, the first 30% repeats what most already know, and the last 70% drills down into arcana of IP addresses, Wikipedia, and an inconsequential but crooked reporter. But collectively, it shows:

    1) There are, beyond any doubt, evil-doers who are deliberately capturing and distorting the discourse;

    2) That their efforts extend to the remotest reaches of cyberspace (i.e., not just Wikipedia, but message boards);

    3) That Judd Bagley is not only the hero, as I have always insisted, but is one far out dude.

    Please watch this in its entirety.


  2. From the tepid applause, it is obvious that your audience didn’t know the value of your work or what you’ve done. They enjoyed the whodunit part of it, The length of time it took to accomplish this can’t be appreciated with just dates. It took a long time and using a comparison of 1st Semester Freshman year, to 2nd semester Junior year would show how long it took.

    I enjoyed this because it organized the timeline for me.

    I think that you missed an opportunity in the teaching aspect. Tell them what your purpose is before you start. Tell them the content of your lesson and then repeat in a summation what they’ve been told. You got two out of three. The lesson is that with the internet, you can have unknown enemies if you take a stand that conflicts with your enemies’ agenda. When money is involved these people will do and say anything to ruin your reputation. With a solid intro, they would have had more appreciation of the attempt at defamation.

    The style of hooking and then delivering to create interest was good. Repetition was good and could be exploited.

    You did an amazing job of compressing this chapter and editing. The example that you used was also excellent to relate the power of the editors at Wikipedia.

    Awesome. Judd!

  3. The only reason I critiqued your presentation is that I think you might have a quite a few requests for it. And I want your audience to be able to appreciate what you’ve done. It is pretty hard to get it across without blowing your own horn and not scaring people from the internet.

    I’m going to listen to it again. I’m left wondering why Jimbo would compromise himself and his work. Pretty shabby.

  4. Thanks Judd, Mark, Patrick, et al. This site is a great source of information

    In case you miss it for your investigations, there was a post in the last comments about a link between X-Chairman William Donaldson and Milken’s Drexel that should be followed up.

    I think there really is a Sith Lord master manipulator and a well oiled machine and information will help the people do what they need to do.


  5. What tenacity Judd!

    If it weren’t for you and the likes of you, the connection to the DTCC would have never been exposed.

    What you laid out is conspiracy and basically organized crime by the investment banking community as the DTCC is owned by the investment banks……….one more reason to let them fail and not give them government money, just protect the currency and depositors and let others take over the business.

  6. Wow ! Nice to see this all laid out nicely. How in the world the ( PIMPS) investment banker’s also became the owners of the DTCC, whose criminal activity is shielded by certain regulators (whores) as the SEC, FINRA, and BD’s, while the (STD’s) the captured journalist who enable this RICO activity.

  7. The last 2 articles by Judd Bagley and Mark Mitchell are great in telling us the “Who” as to these rip offs. The last 10 or so “comments” to Mark’s Feb. 3 article explain the “How” pretty well. What a tremendous service you guys provide!

  8. Judd, this rivals any explanation of what has transpired! Simply marvelously done.

    You weave a captivating story around meticulous detail. Superb use of computer graphics, charts and data.

    It’s time the government heeds its own calls for transparency and peels back the veil over the DTCC. This treasure cove where the thieving pirates process and distribute our loot must be opened for all. Nothing to hide, DTCC? Stop telling us to believe you. Prove it! Open your books….now!

    Congress, DOJ, FBI, do your jobs and initiate this investigation.

    Thank you, again, DeepCapture, and those thousands of others helping out.

  9. Outstanding Judd, now lets see these criminals go into defensive mode before they get hauled off to jail. I’ll bet the DTCC will have soemeting to say in “Short” (Naked ) order!!!

    Also in a totally related unrelated matter….

    Specifically, the charge could be that Kynikos traded while in possession of material non-public information (advance knowledge of the publication of a specific, negative report).

    Jim Chanos, SAC Snared in Wall Street Research Scandal
    Posted Feb 13, 2009 11:08am EST by Henry Blodget in Investing, Newsmakers, Banking
    Related: FFH, ^DJI, ^GSPC

    From The Business Insider, Feb. 13. 2009:

    Jim Chanos, the famous shortseller who nailed Enron, has been dragged into a Wall Street research scandal, along with Steve Cohen’s SAC Capital.

    A suit by Canadian insurance company Fairfax Holdings claims Chanos’s Kynikos and SAC colluded with a Wall Street research analyst to drive down the price of its stock. Both firms vehemently deny this, but they do acknowledge receiving advance notice that the analyst would publish a scathing report on the company. And Kynikos increased its short position in the stock the day before the analyst’s report was published, which will likely be the hardest fact to defend.

    The SEC is now reportedly looking into the matter.

    Bloomberg and the WSJ have detailed write-ups of the evidence released so far, and we’ve analyzed some of the background below. Based on a review of the facts we’ve seen, the case against Chanos and Kynikos is problematic, while the one against SAC is very weak. The risk to Chanos and Kynikos is not “conspiracy to drive the stock down,” which is what Fairfax is trying to prove, but insider trading. Specifically, the charge could be that Kynikos traded while in possession of material non-public information (advance knowledge of the publication of a specific, negative report).

    * Analysts are not prohibited from informally sharing thoughts about companies with investors, and investors are not prohibited from trading on information gleaned in those conversations. (If this were illegal, most professional trades would be illegal. Analysts and investors talk about companies all day long.) The only violation here is the specific knowledge that a negative report would be published on a certain day.

    * Kynikos had advanced, written information about the impending report, and it increased its short position the day before the report was published, which looks bad. The firm’s lawyer says the firm learned of the report’s publication only after it had made the trade, but this may be hard to prove. (An email proves the firm knew about the report, but it is not clear how and when the firm actually learned about it.)

    * The case against SAC looks especially weak: The firm’s lawyer says it was buying Fairfax stock during the period in question, not shorting it. And no evidence has been released suggesting that SAC knew exactly when the report would be published.

    The analyst, meanwhile, John Gwynn of Morgan Keegan, has been fired. Sharing advance notice of reports is, if nothing else, a compliance violation.

    Bloomberg on the facts:

    Kynikos was short Fairfax stock in December, 2002, when the trouble started:

    On Dec. 11, 2002, [Kynikos analyst Mark] Heiman wrote his boss Chanos that an insurance analyst at another investment firm told him that Gwynn was going to initiate Fairfax coverage “at ‘underperform,’ with the thesis being that they are extremely under-reserved in the $3-$5 BN area,” according to an unsealed e-mail.

    So in early December Kynikos had secondhand info about an impending report (which, by itself, is meaningless). Heiman then talked to Gwynn himself–and, importantly, updated Chanos:

    “Just spoke to John Gwinn at Morgan Keegan, and he was more critical of FFRX than I’ve ever heard a sell side analyst,” Heiman told Chanos in a Dec. 16, 2002, e-mail, using Fairfax’s former ticker symbol. “Everything from underwriting to accounting to dishonesty.”

    Chanos, on Dec. 18, 2002, forwarded that e-mail to Jeff Perry, then of New York-based SAC Capital, who’s also a defendant. Perry didn’t return a call for comment.

    Heiman then got advance, written information about the impending report from the analyst himself:

    “Last night John Gwinn at Morgan Keegan faxed over to me an outline detailing the issues at FFH, basically those he will be publishing,” Mark Heiman, then an analyst at Kynikos, wrote in a Dec. 21, 2002, e-mail to Chanos that was filed in the case.

    That’s bad… It clearly demonstrates that Kynikos had early knowledge of the report and of what was going to be said. And then the kicker: On January 16, a day that Kynikos increased its short position, Heiman apparently learned that the report would be released the following day.

    Heiman wrote Chanos on Jan. 16: “Just got off the phone with Gwynn at Morgan Keegan — his piece that rips FFH apart is supposed to be published tomorrow. Should be interesting to see how the street reacts.”

    Heiman’s challenge will be to explain what he meant by “just got off the phone.” Kynikos’s lawyer implies that the conversation took place after the market close, which will likely be important. But there is no denying that Kynikos knew that a report was coming and what was likely to be in it, so the strong inference will be that a tipoff about the timing of publication triggered the trade.

    “Kynikos continued to reduce its short position in Fairfax after receiving information in mid-December 2002 about the views of Morgan Keegan’s analyst,” he said. “Kynikos increased its long-standing short position in Fairfax by a modest amount on January 16, 2003, but it did not receive information about the imminent release of the Morgan Keegan report until after the close of trading that day and after Kynikos’s trading on that day had occurred.”

    Bottom line: We have seen no evidence of a “conspiracy” to drive the stock down, which is what Fairfax is trying to prove. But Kynikos clearly had information it should not have had, and Jim Chanos knew about it. The question, therefore, is whether this information constituted material non-public information.

    Anybody see or hear from our master media heads @ CNBC yet about this?? LOL 50% returns my assets.

    These guys have nothing on Arod, they are all cheating to get these results!!!

  10. Atlantic, you bring up a good point.

    The DTCC isn’t the only black box. Canada has the CDS and Europe has Euroclear and Clearstream.

    In practice, buying American stock through these foreign exchanges has no affect on the supply demand curve as any shares the foreigners buy are almost all IOU’s. They are effectively buying and selling call contracts.

    Many have probably forgotten, but when the NASD came up with an anti naked shorting rule in 2004 that worked (before the SEC killed it) and introduced the BBX which would have worked (before the SEC killed it), thousands of companies were listed on the Berlin exchange against their will and without their permission.

    The reason? The thieves could just transfer their shorts to Europe and the European regulators couldn’t do a thing as they don’t regulate American stocks. The SEC couldn’t do a thing as they don’t have regulatory authority over Europe.

    Think how ridiculous it is that all these companies had to beg and plead to be delisted from Berlin so they wouldn’t be shorted to death.


  11. I’d puke if I had anything left to puke.

    Why isn’t this in front of lawmakers ?

    Great job Judd.

    Patrick I’m in awe of your intellect for detecting this so early and making your public call on the falling house of domino’s

  12. Patrick did and interview last year or so with Maria(Partwiththehedgesleo) and Dillion ( Radidon’tknowathingaboutthemarketagain)wherein he called our capital markets and the American Economy a house of cards. They ridiculed him and litterally laughed at him.Well, CNBC has put out a long 2 hr piece about the “Subcrime” debacle and titled it “House of Cards” I hope Patrick gets royalties!!!

  13. Please don’t forget too watch this show tommorrow.

    PBS’ FRONTLINE Investigates How the Economy Went So Bad So Fast in “Inside the Meltdown”
    Tuesday, February 17, 2009, at 9 P.M. ET on PBS (Check Local Listings)
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    Most viewed on msnbc.com

    updated 10:00 a.m. ET, Wed., Feb. 11, 2009
    BOSTON, MA – On Tuesday, Feb. 17, FRONTLINE’s “Inside the Meltdown” investigates the causes of the worst economic crisis in 70 years and how the government responded. Chronicling the inside stories of the Bear Stearns deal, Lehman Brothers’ collapse, the propping up of insurance giant AIG, and the $700 billion bailout, veteran FRONTLINE producer Michael Kirk (Bush’s War) examines what Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke didn’t see, couldn’t stop and haven’t been able to fix.

    “Many Americans still don’t understand what has happened to the economy,” Kirk says. “How did it all go so bad so quickly? Who is responsible? How effective has the response from Washington and Wall Street been? Those are the questions at the heart of ‘Inside the Meltdown.'”

    TV Guide calls “Inside the Meltdown” a “… must-see look at the financial mess affecting us all.” Rolling Stone says it is “… far and away the best account of the collapse on TV.” And USA Today calls the film “… illuminating and sobering… like being a fly on the wall.”

    Story continues below ↓
    advertisement | your ad here


    Watch the trailer at http://www.pbs.org/frontline/meltdown

    “Inside the Meltdown” is a FRONTLINE co-production with Kirk Documentary Group, Ltd. The writer, producer and director is Michael Kirk. The producer and reporter is Jim Gilmore. FRONTLINE is produced by WGBH Boston and is broadcast nationwide on PBS. Funding for FRONTLINE is provided through the support of PBS viewers. Major funding for FRONTLINE is provided by The John D. and Catherine T. MacArthur Foundation. Additional funding is provided by the Park Foundation. FRONTLINE is a registered trademark of WGBH Educational Foundation. The executive producer of FRONTLINE is David Fanning.


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    © MarketWire 2009

  14. you know guys, maybe we owe a small thank you to gary weiss. if it weren’t for this chowderhead’s countless little screwups and 1 major screwup( blogging from the DTCC computer network) we may never have gotten such solid proof on how far this goes. Ironically when i read about this and boyd acting as the official spokesman of the DTCC, it was the final convincing i needed that the DTCC was insolvent. Pulled just about everything out of the market, … saved a fortune. So if your reading this gary, thanks chowderhead. I’ll be back in public capital markets when the DTCC is gone and your hedge fund friends are brought down.

    and Judd, Patrick, and Patchie, you guys are the equivalent of rockstars to me. rock on!

  15. Just a little fyi!!

    The bill hasn’t been written into law yet, but the Senate wants the power to claw back any 2008 bonus of any TARP bank that was more than $100,000.

    Kenneth Landon, JP Morgan, analyzes provisions tucked into the draft of the bill:

    * The Senate bill provides for a “claw-back” of “excessive” bonuses paid
    to employees for work done during 2008 (i.e., the most recent payment of
    bonuses). The bill defines “excessive” bonus as any amount paid above
    $100,000, not including stock awards. When “excessive” bonuses are
    determined to have been paid, the US Treasury is authorized to seek
    “reimbursement” from both the TARP bank *and* the individual employee.

    Here is the relevant section:
    Sec 6006 (pages 739-40)
    IN GENERAL.-The Secretary shall review bonuses, retention awards, and
    other compensation paid to employees of each entity receiving TARP
    assistance before the date of enactment of this Act to determine whether
    any such payments were excessive, inconsistent with the purposes of this
    Act or the TARP, or otherwise contrary to the public interest.

    NEGOTIATIONS FOR REIMBURSEMENT.-If the Secretary makes a determination
    described in subsection (a), the Secretary shall seek to negotiate with
    the TARP recipient and the subject employee for appropriate
    reimbursements to the Federal Government with respect to compensation or bonuses…

    IN GENERAL.-The term ”excessive bonus” means the portion of the
    applicable bonus payments made to a covered individual in excess of

  16. I want to Thank You guys once again for your great investigations and reporting on the financial crooks running around while the Government agencies who are supposed to be regulating and enforcing rules just sit back and ignore it all.

    Also.. Can one of ya fix the link to the Dark Side of the looking Glass Movie? I want to show it to some fokls but it isn’t coming up anymore for me. Thanks!!

  17. A snowflake seems so small and powerless and mostly they are. They pile up one after another until a point of maximum instability where it only takes that one last snowflake to cause tons of snow to fall in an avalanche releasing energetic change.

    When you send that letter or tell that friend about phantom shares, it may feel hopeless, like your little effort won’t make a difference, but you are like the snowflake.

    Our numbers are piling up and we are going to reach a point of maximum instablity where after all the years of trying, the system will suddenly be forced to change.

    And we will pull back the curtain and see the wizard is a helpless old man and we were wrong to be afraid of him because we always had all the power.


  18. Judd, I tried to listen to your lecture last night and was able to get to slide 36 before it froze up. Maybe there were too many people on the server at one time.

    Later today, I will try the zip download flash version you supplied a link to (221K) above.

    I hope your lecture will become another means for educating the American people and Congress about about the criminals on Wall Street.

  19. Dr. Jim DeCosta,

    I was just reading your letter to the SEC dated Nov 2008 entitled:


    ( http://www.sec.gov/comments/s7-30-08/s73008-40.pdf – 65 pages long )

    For those reading DeepCapture.com, here are the first two paragraphs, which describes the CRIME perpetrated upon the buying public’s 401K retirement plans and stock market investments:

    “Dr. Jim DeCosta November 2008
    The very term “naked short selling” (NSS) has unfortunately been a great aid to the perpetrators of abusive naked short selling (ANSS) frauds. It has allowed the perpetrators of these frauds to proffer arguments intentionally clouded with distractive issues that are not germane to the reforms needed to address this particular form of a “fraud on the market”. There are two vastly different types of “naked short selling”. “Abusive naked short selling” (ANSS) is a form of pre-meditated share price manipulation downwards (a fraud) that involves intentionally refusing to deliver that which is sold while often utilizing the DTCC management’s default assumption that all delivery delays or failures are associated with “legitimate naked short selling” (LNSS) by bona fide market makers until proven otherwise. The trouble is that by the time you can “prove otherwise” the damage is already done and nobody within the entire clearance and settlement system is willing to reverse the damage sustained by the corporation targeted for attack and the shareholders therein via “buying-in” the delivery failures. All of the market intermediaries financially benefiting from these thefts as well as the DTCC management will chime in with perfect harmony that we are “powerless” to reverse these damages by executing buy-ins; it’s just not our job.

    What’s interesting about this particular crime is that the prognosis for the success of the bet being placed by the unknowing buyer of the nonexistent shares being “sold” is instantaneously diminished the second the seller refuses to deliver that which was sold. This has to do with the readily sellable “securities entitlements” that the purchaser of nonexistent shares is “pacified/hoodwinked” with on his monthly brokerage statement. The seller of the nonexistent shares completes the “bait and switch” essentially by secretly changing what the purchaser thought was an equity-based purchase of “shares” of a corporation into what can only be described as some type of undated futures contract (a “derivative” transaction) that in our current clearance and settlement system amounts to no more than a pledge to “eventually” deliver that which was sold unless of course the corporation involved should die an untimely but greatly intended death in the meantime. Now that they
    have bought some time the sellers of the nonexistent shares then typically do everything in their power to hasten the demise of the corporation involved so that “eventually” doesn’t occur. The typical modus operandi is to literally “drown” the company under attack with “liquidity” that is theoretically beneficial to the purchasers of shares. All of this occurring in the dark despite the securities laws clearly stating that the DTCC is responsible to make sure that all securities transactions must “promptly settle” i.e. that being sold must promptly be delivered “in good form” in exchange for the buyers funds makes one a little curious as to why and when did the train fall off the tracks in our current clearance and settlement system.”

    Dr. Jim DeCosta,

    The following sentence in the second paragraph jumps out at me:

    “The seller of the nonexistent shares completes the “bait and switch” essentially by secretly changing what the purchaser thought was an equity-based purchase of “shares” of a corporation into what can only be described as some type of undated futures contract (a “derivative” transaction) that in our current clearance and settlement system amounts to no more than a pledge to “eventually” deliver that which was sold unless of course the corporation involved should die an untimely but greatly intended death in the meantime.”

    So when we the American public buy stocks for our 401K plans, the Criminals on Wall Street instead of delivery REAL shares of stock, as we expect, instead SELL us a FUTURES CONTRACT (to deliver shares sometimes in the future) without ever informing us!!!!!!

    So the Criminals on Wall Street are lying and cheating the American People possibly every time they buy stocks for the 401K retirement plans buy selling us a FUTURES CONTRACT instead of real shares of stock.

    Dr. Jim DeCosta, I think this idea in your letter to the SEC can easily be understood by the American Public and Congress…. The CRIMINALS on Wall Street sell FUTURES CONTRACTS to the American Public instead of REAL Shares of Stock as they placed an order for.

    This shows me that the term “LIQUIDITY” used by Wall Street refers only to the liquidity of THEIR bank account, and has nothing to do with the liquidity of the American citizens’ bank accounts.












  21. Judd, your graphic on how the supply curve shifts to the right as these readily sellable “securities entitlements” resulting from FTDs accumulate in the share structure of the corporation under attack was superb. The resultant drop in share price was very well illustrated.

    There’s another phenomenon that occurs that exacerbates this increased “supply” variable. There’s a “demand” variable I like to call “effective demand”. It is the “demand” for shares that is allowed to interact with this enhanced “supply” of shares to determine share price through the process known as “price discovery”.

    When an abusive naked short seller sells bogus shares into buy orders it neutralizes the natural share price buoying effect of buy orders BEFORE the buy orders can interact with this enhanced “supply” to determine share price. Thus the “effective demand” which is the “demand” that really counts causes the “demand curve” to shift to the left as the “supply curve” shifts to the right. This causes the share price to drop like a rock. These act synergistically into a 2 plus 2=18 type of result.

    As the share price drops like a rock so too do the collateralization requirements resulting in the investor’s funds flowing freely to those absolutely refusing to deliver that which they sell. Since crooks don’t “forget” to deliver that which they sell think of “failures to deliver” or “FTDs” as “refusals to deliver” or “RTDs”. If I were an abusive NSCC participant I wouldn’t deliver anything I sold either if it wasn’t necessary to get my hands on the unknowing investor’s funds.

    In order to get 100% of the investor’s funds you do need to deliver that which you sold. But since you can steal 99% of an investor’s funds so easily via the corrupt policies of the DTCC without delivering anything then who cares about that last 1%. Great presentation Judd!

  22. What’s described in the above comment is bad enough and it makes you wonder how any corporations survive these attacks. But it becomes much worse when you consider that all of this stolen investor money flowing to the crooks can then be redeployed back into the market to establish and collateralize that much larger of a naked short position.

    This phenomenon results in “self-generated leverage” which then leads to the self-fulfilling prophecy that once targeted for an abusive naked short selling attack any corporation can be taken down. This entire “industry within an industry” is built upon the foundation that DTCC management can with 100% certainty be counted on to pretend to be “powerless” to buy-in these delivery failures which they actually have 15 separate responsibilities/mandates clearly empowering them to do so. Since a buy-in is the only cure available when the seller of shares absolutely refuses to deliver that which it sold then our entire financial system’s future is in the hands of the DTCC management and the “banksters” it fronts for.

  23. Perhaps I have missed this but…..

    Without forced buy ins, stocks that have been naked shorted are in even worse shape. The sale of unregistered shares creates a larger shareholder base than is authorized. Example authorized is 50mm and total outstanding due to fraud is 100mm. As the price goes up and shareholders want to get out, there is once again more supply than there should be, unless there is FORCED delivery which would actually turn a sell into a buy to correct the original imbalance created by the naked short.

    Make sense?

    Without a fix in the settlement system that GUARANTEES delivery of REAL shares, the problem for a company that has been victimized, not only never goes away, it gets worse.

    Dr. Jim, your comments on this, please.


  24. Davidn,

    You mentioned the former SEC chairman Donaldson being asked about naked shorting – denied it existed – then resigned.

    I looked him up in Wiki and found the following:

    “Influence of tenure on the credit markets crisis of 2007-08

    As Chairman, Donaldson presided over the meeting at the SEC on April 28, 2004, that was held at the request of the major Wall Street investment houses, including Goldman Sachs, then headed by future Treasury Secretary Henry M. Paulson, Jr. The firms requested that the SEC approve an alternative to the so-called “net capital rule”, or responsibility to hold regulatory capital in their brokerage units. They also wanted to avoid European Union regulation of the entire investment banking conglomerates, since the EU had agreed not to scrutinize foreign firms at the consolidated level if the SEC were to do so instead.

    A 1999 law, however, put investment bank holding companies, the consolidated groups of their hundreds of subsidiaries, beyond SEC oversight. The investment banks therefore lobbied for a decision that would allow “voluntary” regulation at the holding company level by the SEC.

    The Commission under Donaldson voted unanimously to change the regulation as the investment banks requested. Under the final rules the large investment banks were “subject to substantially fewer requirements,” according to the adopting release.[4]

    In the 2004 rulemaking, the Commission under Donaldson decided to rely on the firms’ own computer models for determining the riskiness of investments, “essentially outsourcing the job of monitoring risk to the banks themselves.”[5] Donaldson and the other Commissioners who voted for the rule change were aware of the risks at the time, as indicated by the comment at the April 28, 2004 meeting by Commissioner Harvey Goldschmid. “If anything goes wrong,” said Goldschmid, who supported Donaldson in voting for the proposal, “it’s going to be an awfully big mess.”[6] A report by the SEC Office of the Inspector General[7][8] after the near-failure of Bear Stearns stated that the standards the Commission adopted under Donaldson in 2004 were inadequate to warn of the firm’s impending crisis.

    The only briefing the Commission received that criticized the regulatory change prior to its adoption came from Leonard D. Bole, an information technology consultant, who found the risk models used by investors no better in 2004 than during the 1998 failure and bailout of the hedge fund, Long-Term Capital Management. At the time of the rulemaking the SEC took no action to contact Bole to follow up on the briefing that he submitted.[5]”

    This last sentence is interesting:

    “At the time of the rulemaking the SEC took no action to contact Bole to follow up on the briefing that he submitted.[5]”

    It is also interesting that SEC Chairman HELP further de-regulate the investment banks:

    “A 1999 law, however, put investment bank holding companies, the consolidated groups of their hundreds of subsidiaries, beyond SEC oversight. The investment banks therefore lobbied for a decision that would allow “voluntary” regulation at the holding company level by the SEC.

    The Commission under Donaldson voted unanimously to change the regulation as the investment banks requested. Under the final rules the large investment banks were “subject to substantially fewer requirements,” according to the adopting release.[4]”

    So SEC Chairman Donaldson helped deregulate the banking industry, denied the existence of Naked Shorting, then resigned. And the company helped establish was big into Naked Shorting?

    So where is Donaldson today, I wonder?

  25. Can any one of you name the company that is responsible for the most Naked Shorting on Wall Street or in the World for that matter? The market has gone down from a high of 14K to 7.5K as I write this post and this companies stock is almost @ a 52 week high. This company is never ,ever mentioned yet they are at the heart of our greatly discussed dilemna, Market Manipulation and Naked Shorting. All of the financials including the kingpin Gangbankster Goldman Saks have be humbled from a high of 257 to 48 now back to 88 and still this company is standing as strong as ever in the face of the most precipitous(sp) drop of the stock market in the last 50 years. Bear Stearns, Lehman and Merrill have gone to the wayside, Bank of America and Citi are soon to be on the Nationalization block and this company is wrong and strong. And strangely enough not even this site mentions them that much.
    How powerful are these guys that even the invisible/almighty DTCC gets more notice than this publicly trade company. I don’t even think the SEC knows if these guys exist and if they did they would never investigate them.
    The company I speak of is none other than Knight Trading(NITE) Comments are welcome, especially from Dr. Decosta. My question is WHY?

  26. If the above 2 comments don’t either nauseate or infuriate you thoroughly then overlay them with the fact that we no longer have an “uptick rule”. Now not only can the abusive market makers, “banksters” and unregulated hedge funds access the funds of investors without ever delivering that which they sell now they can knock out bid after bid to get the drop in share prices to fall that much quicker and that much lower to add some gasoline as an accelerant to the above described fire.

    After 70 years of providing protection to U.S. investors right in the midst of a worldwide demand for naked short selling reform the “banksters” and the SEC had the cajones to remove what little protection we had left via rescinding the “uptick rule”.

    In January Rep. Gary Ackerman, a dem. from NY, filed Bill HR 302 IH mandating the reinstallation of the “uptick rule”. This is the guy that just teed off on the SEC reps in front of Congress recently. Fingers crossed!

  27. Rep. Gary Ackerman’s friend lost his life’s savings to Madoff scheme. He is the man to send as much information to to educate him about what is truly taking place here.

    Washington, DC
    2243 Rayburn House Office Building
    House of Representatives
    Washington, DC 20515
    Phone: (202) 225-2601
    Fax: (202) 225-1589

    Bayside Office
    218-14 Northern Boulevard
    Bayside, NY 11361
    Phone: (718) 423-2154
    Fax: (718) 423-5053


  28. Sean,
    Regarding your post 31, I think I remember looking at NITE and if memory serves me correctly, I believe I connected Nite and Scottrade by means of Roger Riney, CEO and Prez of Scottrade. I am thinking he ( Mr. Riney is also on the board of NITE. Deserves more investigation.

  29. Sean,
    Riney is/was also on a committee for FINRA…….So, he is Prez and CEO Scottrade, is/was on board for Knight (NITE), and is/was on a committee for FINRA…Smell something?

    Committee Members
    Norman Frager Flagstone Securities, LLC St. Louis, MO
    E. John Moloney Maloney Securities Co., Inc. St. Louis, MO
    Rodger O. Riney Scottrade, Inc. St. Louis, MO
    Jeffrey A. Schuh Wells Fargo Investment Services Minneapolis, MN
    Gail Werner-Robertson GWR Investments, Inc. Omaha, NE

  30. Don’t you love deregulation and a world without rules to keep the thieves from stealing every last nickle from us taxpayers?

    In what could turn out to be the greatest fraud in US history, American authorities have started to investigate the alleged role of senior military officers in the misuse of $125bn (£88bn) in a US -directed effort to reconstruct Iraq after the fall of Saddam Hussein. The exact sum missing may never be clear, but a report by the US Special Inspector General for Iraq Reconstruction (SIGIR) suggests it may exceed $50bn, making it an even bigger theft than Bernard Madoff’s notorious Ponzi scheme.

  31. Judd, as always you have done a superb job on this presentation. Your efforts, along with the rest of the Deepcapture team, will forever be remembered in history books when all is said and done.

    It saddens me to think that as a nation we have so few people like yourself that use your talents for the good of the people. So many have chosen the path of greed to drive their motivations and the resultant is the crisis we now live.

    We will all be forever greatful for your efforts.


  32. Kevin,
    The American way seems to be “GET MY PIECE OF THE PIE” no matter how I get it, or who I destroy financially in the process. I am a true American, but I am now seeing how other countries see us and why they hate us. They were on the outside looking in, while we were on the inside with blinders on and drinking the KOOLAID. This is not the America I thought I knew but am sadly lumped into this evil by being born here. The end times are nearing.

  33. Clearthinker, Your point is accurate. Again to outline the corruption of our current DTCC-administered clearance and settlement system the body of law that allows for the creation of readily sellable “securities entitlements” to be procreated by FTDs is called UCC Article-8. One clause within UCC-8, I think it’s either 8-103 or 8-104, specifically states that you may not have your participants issue “securities entitlements” such that if you add their number to the number of shares currently “outstanding” you exceed the number of shares “authorized” as per the corporation’s “Charter” or “Articles of incorporation”. Exceeding the “authorized” limit puts a corporation into the forbidden state of “overissuance”.

    Neither the DTCC, NSCC or SEC will tell a prospective investor how many incredibly damaging “securities entitlements” are in the share structure of a given corporation. The ’33 Act, however, mandates that they reveal this extremely “material” information. There is no piece of information more “material” to the prognosis for an investment than the # of “securities entitlements” currently poisoning its share structure. They can’t reveal this because it would reveal how corrupt our clearance and settlement system. Remember the SEC already admitted that the number of “securities entitlements” preexisting in the share structures of U.S. corporations was so massive that they couldn’t be dealt with without creating issues related to “market volatility”.

    The law states that the DTCC has to do the math yet the DTCC refuses to do the math.
    A corporation could have an “authorized” maximum of 100 million shares with 99 million currently “outstanding”. They could have 80 million readily sellable “securities entitlements” in existence and refuse to warn the corporation that they are technically in a state of “overissuance”.

    The DTCC “cherry picks” UCC-8 and follows the parts that are in the financial interest of their “participants” and they refuse to follow the parts that are not in their participants financial interests. The employees, NSCC management, is simply looking out for the financial interests of its bosses the “banksters” that own and administer the NSCC. Management and the owners/participants are the “alter ego” of each other.

    In order to follow UCC-8 the NSCC would have to count every “securities entitlement” resulting from FTDs held by its participants whether they’re held in ex-clearing arrangements, at the NSCC, at trading desks, held offshore, etc. They have to refuse to do this lest the investing world learn of the corruption and how our markets are grossly rigged in favor of the NSCC participants and their hedge fund “guests” over the U.S. investing public.

  34. Judd, this should help the cause no??

    How 9,000 Business Reporters Blew The Mother Of All Meltdowns

    How 9,000 Business Reporters Blew The Mother Of All Meltdowns

    Diane Tucker
    Independent writer/producer/director

    Posted February 15, 2009 | 10:31 PM (EST)

    How could an army of business reporters blow the biggest story since The Great Depression? That’s the musical question posed by former Wall Street Journal business and investigative reporter Dean Starkman, while he was doing a little freelancing this month for Mother Jones magazine.

    Starkman said you may be surprised how many business editors blame you, dear reader.

    “If we had written stories in late 2000 saying this whole thing’s going to collapse,” said Fortune managing editor Andy Serwer, “people would have said, ‘Ha ha, maybe,’ and gone about their business.”

    Ditto Marcus Brauchli, executive editor of the Washington Post: “I regret that when I was at the Wall Street Journal, we didn’t keep the focus on some of these questions, including the possible moral hazard posed by the structure of Fannie Mae and Freddie Mac. But these are really difficult issues to convey to a popular audience.”

    Well, dudes, what did you offer us doofuses instead?

    Edgy-yet-flattering profiles of Merrill Lynch’s Stan O’Neal and Lehman Brothers’ Dick Fuld…those pieces noting how Countrywide Financial’s Angelo Mozilo liked to dress well…the Home Depot marketing stories…all the cheerleading and Flip That House fluff that diverted resources from the real task at hand.

    Starkman took down Wall Street reporters for delivering personality-driven stories instead of deconstructing balance sheets or figuring out risk.

    Coverage of Citigroup produced reams of profiles of its influential former chief, Sandy Weill, his successor, Chuck Prince, and his protege-turned-rival, Jaime Dimon, but precious little about Citigroup’s role in bringing subprime lending from the mortgage industry’s margins into the mainstream.

    To be fair, the business press was stressed out by its own rounds of white-knuckle layoffs.

    The disintegration of the financial media’s own financial underpinnings could not have come at a worse time. Office politics became Byzantine, and productivity demands on the newsroom — more, faster — grew ever more pronounced. Time-consuming investigations were undertaken at the reporter’s own risk. If a lead didn’t pan out — no matter why — it hit your productivity numbers, putting your career in peril.

    Okay, so dead-tree journalism was partly to blame. But didn’t regulators also fail to do their jobs?

    Back in the 1980s, a great deal of tough Wall Street coverage was driven by the aggressive work of prosecutors and the Securities and Exchange Commission. But then came the Clinton-era push toward deregulation that reached its extreme during the Bush administration, as the federal government unceremoniously pulled the finance cops off the beat. For a time, Eliot Spitzer filled the void with his aggressive prosecution of Wall Street misdeeds, but for the most part, covering financial corruption without regulators was like trying to clap with one hand.

    Let me get this straight. The only person patrolling Wall Street was Eliot Spitzer? But wasn’t he preoccupied with another kind of street activity? And while we’re on the subject of riveting television, I recall watching Lehman employees carrying out boxes of records, a spectacle that pushed Bloomberg columnist Jonathan Weil over the edge:

    “Is there anybody left in the government with a pulse? Where’s the yellow police tape? How about a cease-and-desist order to prevent document destruction? Can anyone give me a good reason why Lehman offices shouldn’t be treated as a crime scene now?”

    Can anyone give me a good reason why Bernie Madoff is still livin’ la vida loca in a penthouse? Why Merill Lynch is getting away (so far) with secretly handing out bonuses?

    “It’s true the federal regulators disappeared. But there were lots of state regulators who were going after this in a big way, lots of people on the ground, lawyers, consumer advocates, scholars, who saw what was happening, and the press didn’t give them much attention,” said former WSJ reporter Michael Hudson. Hudson is now with the Center for Responsible Lending.

    Some Mother Jones readers included Starkman on their dishonor roll:

    How could you possibly write a story about MSM reporters who missed the big collapse, and ignore all the bloggers that warned repeatedly about the coming misadventures in real estate, credit, derivatives, and finance? That’s the real takeaway from this era — traditional journalism left a vacuum, one that was quickly filled.

    — Barry Ritholtz, 2/11/2009, 5:53 PM

    What Dean [Starkman] forgets is that he blew it as well. A few of us did write tough stories about Wall Street. I was there, and I can tell you Dean wasn’t one of them.

    — Charles Gasparino, 2/11/2009, 8:38 PM

    Some Mother Jones readers accused MSM business writers of now acting as apologists for the culprits:

    I’ve lost track of the articles I’ve read attempting to “explain” how so many bright people made such a bad mistake. The upshot is that since everybody was doing it, and nobody wanted to get left behind, it was all perfectly normal, and nobody should be held accountable. Except that people’s retirement accounts were wiped out. People are losing their homes, and now their jobs.

    — Paul (no last name provided), 2/12/2009, 1:31 PM

    To read Dean Starkman’s full story in Mother Jones, click here.

    To read in-depth reporting on the pros and cons of the new economic stimulus package designed to fix this mess, click….er….click…

    Who am I kidding? I can’t think anyone in the MSM who is on top of this story, can you

    Thanks for all that you guys do!!!

  35. Sean,
    The explanation goes like this. The bigger the market maker is the more visibility of buy orders they have. Nite has, or used to have, two-thirds of the action on the OTC markets. You need to have visibility of a buy order in order to naked short sale into it. NITE has “first dibs”.

    When a buy order for a relatively defenseless development stage corporation lands on Wall Street the antennae of the DTCC participants go up and there’s a race to be the first to NSS into the buy order. Why? Because it’s free money even for those refusing to deliver that which they sell. Everybody on Wall Street knows of the self-fulfilling prophecy on Wall Street. All you have to do is keep selling nonexistent shares all day long when you see a buy order and refuse to deliver that which you sold and you win the investor’s money. There’s no risk when those empowered to do buy-ins (the NSCC) pretends to be “powerless” to do so. With no risk of being bought-in it’s all reward and no risk.

  36. Knight ( NITE) appeared on the NOBO/OBO list on just about every stock I owned that was questionable of being attacked and ( illegally) naked shorted. IMO, it was not questionable, it was calculated. These stocks were buried. Start ups, little cash flow, and the attack begins, then death spiral then bankrupt. Nite always sat on the bid / ask on each of these stocks.
    I once called interactive broker to ask about their list of USA companies listed on the stock short list and how they became on the list. The broker said as soon as they become a company or no later than 30 days of their inception. I knew then ALL stocks/companies are manipulated.

  37. Knight’s annual report:


    pg. 30

    Securities sold, not yet purchased at market value $1,755,813,000

    They don’t disclose who clears for them.

    pg. 21

    One firm clears the majority of our trades and holds the majority of our assets within Global Markets. Consequently, we are reliant on the ability of our clearing brokers to
    adequately discharge their obligations on a timely basis. We are also dependent on the solvency of such clearing brokers. Any failure by the clearing brokers to adequately discharge their obligations on a timely basis, or failure by a clearing
    broker to remain solvent, or any event adversely affecting the clearing brokers, could have a material adverse effect on our business, financial condition and operating results.

  38. Coincidently, Pershing was founded by X SEC Chairman William Donaldson, who is on the advisory committee to advise Obama.

  39. Again our stories seem to be onesided here, Who else is on this Committee to advise President Obama, “Robert Shapiro” and is he not one of the good guys? Come on guys lets keep both eye on the ball please. Thanks!!!

  40. Shapiro isn’t listed.

    The members will include former Securities and Exchange Commission Chairman William Donaldson, former Fed Vice Chairman Roger Ferguson, UBS Americas Chairman and Chief Executive Officer Robert Wolf, General Electric Co. Chief Executive Officer Jeffrey Immelt and Service Employees International Union Secretary-Treasurer Anna Burger, according to an administration official

  41. Sean,
    It is perfectly ok to say he is advising Obama, because he is. It is also ok to say some of these scoundrels were advising Bush Sr., Clinton and Bush Jr. I keep both eyes open. If you do, you’ll see this is a both party thing. The question only begs did our leaders know about this and were in on it, or are they in the dark like most Americans?

  42. Becoming the biggest market maker in the world is one way to get that superior visibility of buy orders to increase naked short selling opportunities. Question: What’s the next best way to not only get superior visibility of buy orders but also the ability to make a fortune by renting out your cient’s shares to those trying to kill the corporation you invested in?
    Answer: Charge $7 per trade and use it as a “loss leader” to enhance visibility of buy orders and rental opportunities.

  43. Sean, it isn’t republican versus democrats. Both parties are OWNED by the thieves as the thieves get them elected.

    Most people don’t know about “Payment for Order Flow”. Knight doesn’t have to show a bid or offer to get hit. They pay for the right to match the best bid or offer, which in my mind screws up the auction market.

    Q. Who was the first to introduce payment for order flow?

    A. Madoff

    Here’s what Knight thought about rule SHO.


  44. My statement was’nt about Rep or Dem. I think they are all crooks for the record. However I wanted you guys to see that we do have an inside man is all!!
    Also check this out!!!

    Recs: 1 the Wall Street Banksters used to Naked Short Stocks to get Money to loan out. Do they see the writting on the Wall??
    Brokerages Tighten Hedge Fund Financing
    Brokerage firms are reducing financing and other services to hundreds of hedge funds, in a move that could accelerate the shakeout among these heavy-hitting investors.
    Under financial pressure, securities firms are dividing their hedge-fund clients into lists of those they consider best able to weather the financial turmoil and those they’re less sure of. The result is that more funds may have to merge, find other financing at higher cost or close.

    The squeeze, described by a range of brokerage-firm and hedge-fund officials, takes different forms. For instance, they say firms have reduced financing for the flagship fund run by John Meriwether, a founder of Long-Term Capital Management, the fund whose near-collapse caused a brief market crisis in 1998. The move has forced Mr. Meriwether’s Relative Value Opportunity fund — down 42% in 2008 — to reduce its borrowing to finance trades, putting pressure on returns. Mr. Meriwether, whose firm is called JWM Partners LLC, declined to comment.

    View Full Image

    Hedge-fund officials John Meriwether, above, of JWM Partners and Kenneth Griffin, below, of Citadel Investment have been pressed by banks.

    Banks also have pressed Kenneth Griffin’s Citadel Investment Group, whose biggest funds lost 54% last year, to sell some securities and reduce its borrowing to finance trades. Goldman Sachs Group Inc. increased financing costs last year when a big trade went sour for another large fund, Glenview Capital Management. J.P. Morgan Chase & Co. has tightened financing terms for some funds.

    Being on banks’ less-favored lists doesn’t necessarily mean a death knell for hedge funds — private investment partnerships that cater to institutions and the rich and have wide discretion in their strategies. Plenty of such funds could continue, especially smaller ones that don’t rely heavily on Wall Street. Funds also could get off the lists if their returns rebound or they get cash infusions from investors. But since many hedge funds make heavy use of borrowed money, or leverage, reduced financing can crimp performance.

    View Full Image

    Funds on Wall Street banks’ A-lists receive, besides financing, perks such as stock research, trading data and introductions to executives of companies in which they might invest. Among funds on the A-lists are such stalwarts as Moore Capital Management, Tudor Investment Corp. and SAC Capital Advisors.
    The B-List
    But Wall Street banks have put 200 or more other funds on what might be called B-lists: funds seen as either too risky — because they could fold — or not profitable enough to the banks.

    The moves reflect a sharp reversal. For years, banks competed hotly to draw hedge funds to their “prime brokerages,” which handle securities trading and lend clients money. Now prime brokers are in retrenchment as their parent banks reel from losses and take care not to take undue risk in lending out their cash.

    Hedge funds’ short-term trading has made them a major force in financial markets, influencing prices of assets from stocks to oil, but their clout is slipping as some post big losses. Their assets have fallen to about $1.4 trillion from $2 trillion in mid-2008, according to the firm Hedge Fund Research. Hedge funds closed at a record pace last year, with around 1,300 liquidating, the firm says.

    Fund Squeeze
    Hedge funds that are among those named by brokerage firms as likely survivors amid turmoil in the industry:

    The shakeout could lead to continued instability in the financial markets in the near term as troubled funds sell assets. Longer term, fewer hedge funds could mean lower financial-market volatility, since the funds tend to be such rapid traders.

    Wall Street banks’ fund lists aren’t uniform. Goldman has a “tail list,” meaning funds at the tail end of its ranking of clients by size and profitability to Goldman. J.P. Morgan has a “platinum” list of preferred fund clients, who get a “high touch” menu of premium services. Others are offered a “low touch” list of services.

    Whats the matter with the Big Banksters, are they thinking that the SEC will finally stop Naked short selling??

    Just my opinion


  45. Davidn, don’t forget that the $1.7 trillion of FTDs cited is marked to market on the end of that quarter being reported. Imagine what it was before some of those companies lost 90% of their value.

  46. These are the 17 primary dealers who are failing to deliver US treasuries to their customers.

    There is probably an overlap between this list and the people failing to deliver securities.

    BNP Paribas Securities Corp.
    Banc of America Securities LLC
    Barclays Capital Inc.
    Cantor Fitzgerald & Co.
    Citigroup Global Markets Inc.
    Credit Suisse Securities (USA) LLC
    Daiwa Securities America Inc.
    Deutsche Bank Securities Inc.
    Dresdner Kleinwort Securities LLC
    Goldman, Sachs & Co.
    Greenwich Capital Markets, Inc.
    HSBC Securities (USA) Inc.
    J. P. Morgan Securities Inc.
    Mizuho Securities USA Inc.
    Morgan Stanley & Co. Incorporated
    UBS Securities LLC.


  47. It would appear the SEC is going after the Money Bags of wealthy people NOT affiliated to the 17 above listed dealers who ANSS the market. Sir Allen who? (gives a chit) Stanford. Granted, I am glad they caught the crook but, there are plenty sitting on boards of our regulatory agencies ripe for the picking……WAKE UP SEC !!!!

  48. One thing is for sure. If you are a regulatory agency agent and you EVER played ball with the financial market crooks who brought the WORLD to her knees, the CROOKS have just as much on you as you have on them. To turn in the crooks is to turn in yourself. WE NEED AN INDEPENDENT INVESTIGATIVE AUTHORITY to clean house !!!

  49. Davidn, I think the key metric is the monetary value of current FTDs divided by monetary value of equity trades cleared monthly or annually. That will point to the bad guys.

    Recall that the buying brokerage firm is heavily financially incentivised to direct his buy orders to the parties most likely to naked short sell into that order. Why? Because the buying broker gets the interest earnings from his client’s funds UNTIL delivery is finally made (if at all). Those funds also get to count towards the buying firm’s net capital reserves. The result is the “survival of the corruptest” DTCC participants. That’s a pleasant form of natural selection!

  50. I guess Stanford did have PLENTY of POLITICAL CONNECTIONS…..lol
    Look what you BILLIONS GETS YA?

    “Caribbean Caucus” Lawmakers Took Trips On Stanford Jets

    By Zachary Roth – February 17, 2009, 3:03PM

    Last May, buried in a long Bloomberg report about Stanford’s tussles with Stanford University over his claim to be descended from the school’s founder, was this nugget:

    Members of the House Caribbean Caucus take annual trips to the region on Stanford’s jets. Lawmakers are required to reimburse companies at a first-class commercial rate, which is often a fraction of the actual cost.

    The House Caribbean Caucus? We don’t mind telling you, we weren’t even aware of its existence.

    But according to this announcement from the Inter-American Economic Council, which appears to be from circa 2005, it has some pretty interesting co-chairs:

    Co-Chairs of the Congressional Caribbean Caucus Congressman Donald Payne (D-NJ), Congressman Robert Ney (R-OH), Congressman Pete Sessions (R-TX), Congressman Tom Feeney (R-FL), Congressman Charlie Rangel (D-NY), Congressman John Sweeney (R-NY), Congressman Mel Watt (D-NC), Congressman Phil English (R-PA), Congressman Steve Chabot (R-OH) Congresswomen Donna Christensen (D-VI), and Congresswoman Diane Watson (D-CA).

    That’s something of a rogue’s gallery…

    Ney, of course, did jail time after pleading guilty to lying about his involvement in the Jack Abramoff scandal.

    Feeney also was implicated in the Abramoff scandal, and was named one of the “20 Most Corrupt Members of Congress” in a report by Citizens for Responsibility and Ethics in Washington.

    Sweeney also made CREW’s list, and went on an Abramoff-funded junket to the Northern Mariana islands with Tony Rudy.

    Rangel is currently being investigated by the House ethics committee in connection with, among other issues, unpaid taxes on income from a Caribbean vacation home.

    This story just gets more and more interesting…


  51. Cornyn….I have written him over and over about the issue of NSS. No wonder he keeps blowing me off with boiler plate answers.

  52. RandR,
    It is beginning to look like there is no Honest Joe left to save us from them?

    Cornyn Took Caribbean Junket On Stanford’s Dime

    By Zachary Roth – February 17, 2009, 2:20PM

    So we already knew that Allen Stanford — the Texas banker charged by the SEC today with running an $8 billion “fraud of shocking magnitude” — had some pretty impressive political contacts with both parties.

    But it looks like his relationship with one of his home-state senators, Republican John Cornyn, may have been especially cozy.

    According to Cornyn’s Senate disclosure reports — posted on the site Legistorm.com, which tracks privately financed trips by members of Congress — the Stanford Financial Group paid for the Texas senator and an unnamed companion to take a November 2004 trip down to Antigua and Barbuda, the tiny Carribean nation where the company has its headquarters.

    The three day trip is described by Legistorm as a “financial services industry fact-finding mission hosted by constituent company with substantial operations on site.”

    The site adds:
    Sen. Cornyn discloses expenses for himself and a companion, but does not disclose the identity of the companion.

    The total cost of the trip: $7,441.00

    It would be hard to blame Cornyn if financial regulation wasn’t the only thing on his mind while he was in Antigua. The trip occurred right after the November 2004 election, during which Cornyn was working hard for George W. Bush. And just last Sunday, the New York Times travel section described Antigua as a group of “famously paradisiacal islands that actually lives up to the hype.”

    The paper continued:
    An array of über-luxurious resorts have cashed in on the lush surroundings, and provide their well-heeled guests with so many hedonistic diversions that many never emerge to see what lies beyond the resort gates.

    Sounds like just the spot for some fact-finding!

    We’ve told you all about Stanford’s generous record of contributions to lawmakers from both sides of the aisle — and especially to those with authority over the banking sector. The New York Times has gone further, reporting that Stanford’s contributions appear to focus “particularly on legislators considering bills that would change offshore banking rules.”

    Cornyn this year became a member of the Senate Finance committee, though in 2004 he was not a member.

    We’ve put in a call to Cornyn’s office to ask what he learned on the “fact-finding mission” Stanford paid for — and who his mystery companion was — and will update with anything we learn.

    Thanks to reader B.K. for the tip.


    Stanford Financial Group Co. – Sponsor of Congressional Travel

    No. Cost
    Trips Selected 2 $8,157
    Approved by Republicans 2 $8,157
    Approved by Democrats 0 $0

    View Details / PDF Traveler/ Dates Approver Destination/ Purpose Cost
    Albright, C H Jr
    02/04/05-02/04/05 Barton, Rep. Joe (-TX) New York, NY
    Energy policy panel discussion $716.70

    Cornyn, Sen. John (-TX)
    11/04/04-11/07/04 Cornyn, Sen. John (-TX) Antigua and Barbuda
    Financial services industry fact-finding mission hosted by constituent company with substantial oper… more $7,441.00


  53. What ever happened to Refco? They had a failure of $10 billion (twice what the SEC claimed the entire problem across all brokerages was) and the media had just clammed up on it.

    They took it public, then like a month later bankrupted it, screwing the new shareholders.

    It’s amazing going through old sanitychecks, recording evidence the SEC refused to follow up on four years ago.

    Here’s an SEC rule banning suing corrupt prime brokerages, for instance.


  54. I followed some of your links. It’s a way to pay a bribe – run up a profit in a illiquid commodity investment.

    Wow, I had no idea.

    You’d think Bush would have wanted to expose this?

  55. I don’t want to get off topic, but things would make a lot more sense if you think of Bush and Clinton as part of the same club.


    The Iran Contra affair involved bringing drugs into Mena Arkansas (Governor Clinton) and shipping out arms. Think about it, then shake your head and think about it some more. It starts to make sense when the rose colored glasses finally come off.

    Ask yourself why the head of the NYSE (Grasso) met with drug dealers in Columbia?


    Appreciate the role of money laundering in Wallstreet. The estimate from the DOJ is that $1 trillion is laundered through the stock market each year. Divided by 300 million Americans, that’s $3000 for each person or $12,000 for a family of four, laundered through the market EACH YEAR.

    It’s no wonder that as the DeepCapture team pulls on the dandelion that is Wallstreet, that the roots go to some pretty nasty places.

  56. What does illegal drug sales and the market have in common?
    People freely give up their money , they get F***ed up by this, and the money winds up in the same pockets of the same players.

  57. Did someone say PERSHING LLC ? See Wire Transfer Stops…I wonder who tipped of Pershing?

    Wire Transfers Stop

    A day after Madoff’s arrest, Pershing LLC, the Jersey City, New Jersey-based clearing firm, told Stanford Group it would no longer process wire transfers to its Antigua affiliate, citing suspicions about its reported investment returns, according to the SEC.

  58. there was a comment in an article that an unnamed clearing firm refused to send funds to SBI for those infamous securities because they couldn’t get information about SBI stability.

    Madoff, SBI. Clearing agency… So what was the clue? Was Madoff sending money to SBI via the clearing agency and Madoff was the red flag. The timing is curious.

  59. what is really about it , is that when they changed the rules and allowed the pension funds to start investing in stocks, they enabled the same miscreants that you all talk about now. so the money is gone already. it is a giant ponzi scheme and the only reason it has not fallen yet, is because so many american sheep are asleep and continue to have trust in their government and in the institutions of regulation etc. the sheep feel that everything will eventually come back and that this is just a temporary movement down, but it is not. all these people work in tandum because they are all the same mindset . it is insane but they like it . they love stealing other people’s money. they enjoy it. it is what they are. it is all they are. it is all they have ever been . its in their blood. this is what they do and they do it good. our problem is how we must deal with this. i can say many things, but the sensors around here will not allow the things that must be said to be said. the people who run this blog know many things, but they fail to come to grips with what it is they are dealing with and why these things happen. until we can look examine these things truthfully and admit these things to ourselves without flinching, we will always be the victims of this kind of crap.

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