Michael Milken, 60,000 Deaths, and the Story of Dendreon (Chapter 6 of 15)

    What follows is PART 6 of a 15-PART series. The remaining installments will appear on Deep Capture in the coming days, after which point the story will be published in its entirety.

    Click here to read PART 1

    Click here to read PART 2

    Click here to read PART 3

    Click here to read PART 4

    Click here to read PART 5

    Where we left off, we had learned that CNBC’s Jim Cramer had declared Dendreon to be a “battleground stock.” And we had learned that Dendreon subsequently came under attack by criminal naked short sellers, right at the time that its promising treatment for prostate cancer had been endorsed by an FDA expert advisory panel, and right before that treatment was to be derailed by some strange occurrences.

    While it is impossible to know who was responsible for the illegal naked short selling (the SEC keeps that a big secret), we know that the people who orchestrated those strange occurrences (which I will describe in due course) and at least seven of the ten hedge fund managers who held large numbers of Dendreon put options (bets against the company) are tied to Michael Milken, the famous criminal who is now considered to be a “prominent philanthropist” with a special focus on prostate cancer.

    Now we learn a bit more about this network and the attack on Dendreon, a company with a promising treatment for prostate cancer…

    * * * * * * * *

    When the FDA’s advisory panel voted in favor of Provenge, most Wall Street research analysts were predicting a bright future for Dendreon. But as naked short sellers piled on with ever increasing gusto, hedge fund managers continued to whisper in reporters’ ears. And two Wall Street analysts did more than whisper – they shouted, day after day, that Dendreon’s treatment for prostate cancer was doomed.

    One of these analysts is named Jonathan Aschoff, and he works for a financial research outfit called Brean Murray Carret & Co.  The day after the advisory panel vote, in an interview with Reuters, Aschoff made the long-shot prediction that the FDA would not approve Provenge, but would instead ask Dendreon to supply additional data showing that the treatment was safe and effective–a process that could take years. Soon after, Aschoff told other media outlets that the FDA would set a “dangerous double standard” by approving Provenge because the treatment “did not meet its primary goal in two Phase III trials.”

    During the first days of April 2007, Aschoff was everywhere, continuously repeating this notion that the FDA would set a “dangerous double standard” by approving Provenge.  On April 9, Aschoff reiterated his “sell” rating for Dendreon, setting a target for the stock at a mere $1.50, which implied that the stock would lose more than 90 percent of its value by the end of the year. Reuters, Associated Press, CNBC and other media dutifully reported Aschoff’s comments as though they shed  light on the merits of Dendreon’s prostate cancer treatment.

    Aschoff’s performance raises a few basic questions. The first is, how did a Wall Street analyst know that it would be “dangerous” to approve a medical treatment? It is an odd day, indeed, when the media turns to Wall Street for wisdom on matters of science and health.

    The second question is, why was Aschoff so confident that the FDA would not approve Provenge? Given that the FDA had followed its advisory panels’ decisions in 97% of cases, and in 100% of cases involving drugs for dying patients, Aschoff’s prediction seemed rather far out. What did he know that the rest of the world did not know?

    The third question is, who is Jonathan Aschoff?

    * * * * * * * *

    In 2003 – back when journalists still occasionally investigated stories, rather than parroting whatever hedge funds and Wall Street analysts whispered in their ears – The Wall Street Journal won a Pulitzer Prize for a story that nailed Jonathan Aschoff for being a fraud.

    According to the Journal, Aschoff often impersonated doctors in order to acquire inside information on the status of drug trials underway at his target companies. A certain Dr. Cunningham, who worked at a cancer center in Dallas, told the Journal that he initially believed that Aschoff was a doctor. But he discovered that he was dealing with a fraud when he mentioned to Aschoff that an experimental treatment had caused some reduction of the “lymphadenopathy.”

    “What’s that?” asked Aschoff.  He didn’t have a clue, even though “lymphadenopathy” is a  common medical term. It means, “swollen lymph nodes.”

    Nonetheless, some years later, the Associated Press, Reuters, and other media outfits were willing to believe that Aschoff knew enough about medicine to be quoted as a reliable source – a source who had, for some reason, concluded that Dendreon’s treatment for prostate cancer was “dangerous.”

    What reason did Aschoff have for reaching that conclusion?

    * * * * * * * *

    One more question: Which hedge funds were paying Aschoff’s bills?

    There is one particular network of hedge fund managers that is known to pay “independent” financial research shops to publish biased or false negative reports on companies that they are selling short.

    Former employees of “independent” financial research firm Gradient Analytics have provided sworn affidavits that hedge fund manager David Rocker–once the largest outside shareholder of TheStreet.com; former employee of  Milken-Boesky crony Michael Steinhardt (who is the son of “the biggest Mafia fence in America) and Steve Cohen–now “the most powerful trader on Wall Street;” reportedly once investigated by the SEC for trading on inside information provided to him by Milken’s shop Drexel Burnham–heavily influenced, edited, dictated, and in some cases actually wrote Gradient’s false, negative research about public companies. That means, of course, that Cohen and Rocker had copies of “Gradient’s” research before it was published, which is also highly improper.

    And emails acquired by Deep Capture show that Cohen and hedge fund manager Jim Chanos, among others in their network, received and traded ahead of biased reports published by a research outfit called Morgan Keegan. After Deep Capture reporter Judd Bagley broke this story, the SEC began (but will probably never conclude) an investigation into the matter.

    Were hedge funds in this network dictating Aschoff’s research, too? I don’t know the answer to that question, but it is worth noting that after the SEC sanctioned Aschoff for impersonating doctors, he went to work for an outfit called Sturza’s Institutional Research, which was owned by a fellow named Evan Sturza.

    The SEC has launched (but of course never completed) multiple investigations of Sturza’s companies, which catered to a particular network of short sellers by publishing negative commentary on biotech companies. For example, in 1996, the SEC began (but has never completed) an investigation into whether Sturza conspired with the above-mentioned Michael Steinhardt and a firm called Gilford Securities to take down the stock of a biotech company called Organogenesis.

    In the 1980s, Gilford Securities employed Jim Chanos (the above-mentioned fellow who is now under SEC investigation for trading ahead of biased research reports). Chanos manages a few hedge funds, the most famous of which is called Kynikos Associates. He is also the head of the short seller lobby in Washington, and a much favored source of information for the New York financial press.

    In 1985 – back when Chanos was still at Gilford; back when journalists did investigations rather than parrot whatever Jim Chanos whispered in their ears – way back then is when The Wall Street Journal published a front page story about a “network” of short sellers said to include Jim Chanos and Michael Steinhardt. The story suggested that this network destroyed public companies for profit and described some of the more egregious tactics – espionage; impersonating journalists to get inside information; conspiring to cut off companies’ access to credit; spreading dubious information – that were employed by Chanos and others in his network.

    At the time, Chanos made some effort to publicly distance himself from Michael Milken. And he recently told one reporter that lawyers threatened him in the 1980s because he was selling short companies that had been financed by Milken’s junk bonds. However, the truth is that Chanos’s short selling in the 1980s tended to support Milken’s machinations, and in later years Chanos remained very much a part of the old Milken network.

    Chanos got his big break in the 1980s by short selling and ultimately destroying a company called Baldwin United. As part of this effort, Chanos and his colleagues at Gilford Securities went so far as to meet with Baldwin United’s bankers, and (through all manner of horror stories) convinced the bankers to cut off Baldwin’s access to credit. Soon enough, the company went bankrupt, and Michael Milken quickly got himself hired as advisor to the bankruptcy.

    According to a well-known businessman who was involved in the bankruptcy proceedings, Milken abused his advisory position, handing out confidential information to his network, which ended up owning much of Baldwin’s assets.

    As the story goes, Chanos’s take down of Baldwin impressed Michael Steinhardt (the short-seller whose father was the “biggest Mafia fence in America”) and Steinhardt introduced Chanos to his key limited partners – including Ivan Boesky (later indicted for manipulating stocks with Milken) and Marty Peretz (a Milken and Boesky crony who would later co-found TheStreet.com, along with Boesky crony Jim Cramer and a few hedge funds in this network).

    Peretz, an aristocrat who has long been a part-time professor at Harvard, introduced Chanos to one of his former students, Dirk Ziff, who manages a hedge fund called Ziff Brothers Investments. The emails cited above show that Ziff Brothers, like Chanos and Steve Cohen, was receiving advance copies of those Morgan Keegan reports.

    Dirk Ziff is part of the network of which I write. Indeed, Chanos launched his first hedge fund out of Dirk Ziff’s offices. This was a few years after Chanos left his position at Gilford Securities, which had a few key clients, one of whom was Michael Steinhardt, son of “the biggest Mafia fence in America.”

    In the 1990s, five Gilford Securities traders–Chester Chicosky, Todd M. Nejaime, Lawrence Choiniere, Kevin P. Radigan, and William P. Burke – were arrested as part of Operation Uptick, the biggest Mafia bust in FBI history. Although some of these traders had left Gilford by the time they were indicted, they were charged with crimes allegedly committed while they were still working for Gilford. Specifically, the Gilford traders were charged with accepting bribes from a Mob-run brokerage called DMN Capital, and for helping to manipulate stocks with a cast of characters that included ten Mafia soldiers and a former New York police detective.

    I asked H. Robert Holmes, who was Chanos’s boss at Gilford, whether he had any comment on the  Mafia’s infiltration of his firm. He said, “I don’t know what you’re talking about? This is bullshit.” He also said he was completely unaware that any Gilford traders had been arrested for accepting bribes and manipulating stocks with a large cast of Mafia goons and Mafia associates. That is, he claimed to be unaware of an event in his company that had been vigorously publicized by the FBI and the SEC.

    By the time of Operation Uptick, of course, Chanos was no longer with Gilford. He was then a “prominent investor” – a member of the world’s most powerful network of financial operators, a network whose members are portrayed by the press as geniuses and heroes, never mind that this is the very network that has been destroying companies since 1980s – the very network that is (as should by now be apparent) comprised of the criminal mastermind Michael Milken and his Mafia-connected cronies.

    As a member of this network, Chanos is, of course, on close terms with Jim Cramer, the CNBC personality who once planned to run his hedge fund out of Milken co-conspirator Ivan Boesky’s offices. It was owing to Cramer that Chanos became the largest donor to the political campaigns of New York Governor Eliot Spitzer, who was Cramer’s best friend and former college roommate. When Spitzer was caught with a hooker and forced to resign, it emerged that the hooker, “Ashlee Dupre”, had been living rent-free in Chanos’s beachside villa. Ashlee called Chanos “Uncle Jim.”

    I tell you all this only to show the relationships that bind some particularly destructive short sellers and miscreants. It is this network that attacked the big banks last year, helping trigger the collapse of the financial system. And members of this network are the most “prominent” players in the biotech space.

    One of those players is Jonathan Aschoff, the doctor-impersonating fraud who was, in the Spring of 2007, making the long-shot prediction that the FDA would not approve Dendreon’s “dangerous” treatment for prostate cancer. As we know, Aschoff previously worked for Sturza’s Institutional Research, run by a fellow who faced multiple SEC investigations (none of which led to any action) for allegedly publishing false information to help short sellers (such as Michael Steinhardt) manipulate stocks.

    Under the strain of those investigations, Sturza shut his operation down. Now Sturza helps manage a hedge fund called Ursus. Ursus is owned by Jim Chanos, the Steinhardt protégé who housed the hooker of Cramer’s former college roommate, Eliot Spitzer.

    Ursus specializes in shorting biotech stocks. There are Wall Street brokers who say that Ursus was short selling Dendreon while Sturza’s disciple, Jonathan Aschoff, was bashing the company and others in this network were looking to cash in.

    But it is difficult to know for sure whether Ursus was selling short. It is difficult to know who was responsible for flooding the market with at least 9 million (and maybe tens of millions of) phantom Dendreon shares. It is difficult to know because the SEC does not require hedge funds to disclose their short positions, and does not release information on who is selling stock and failing to deliver it.

    As far as the SEC is concerned, it’s all a big secret.

    But we do know that Aschoff was predicting that Dendreon’s stock would sink to $1.50 right after Dendreon received an overwhelmingly positive vote from the FDA’s advisory panel, and right before Dendreon was derailed by some singularly strange occurrences. In addition, we know that at this time only ten hedge funds on the planet held large numbers of Dendreon put options (bets against the company), and that at least seven of those hedge funds can be tied to the famous criminal Michael Milken or his close associates.

    Michael Milken, of course, is not just a criminal, but also a “prominent philanthropist” whose Prostate Cancer Foundation has received much acclaim from the world at large. But, as we will see, it was not just those seven hedge funds, but Michael Milken himself, who stood to earn a tidy profit from the strange occurrences that were to derail Dendreon, a company with a promising treatment for prostate cancer.

    * * * * * * * *

    To be continued…Click here for Chapter 7.

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    57 Responses to “Michael Milken, 60,000 Deaths, and the Story of Dendreon (Chapter 6 of 15)”

    1. Brusky says:

      Asscough puts out the BS so Michael and buddies can Milk the system.

      What a wonderful country we live in.

      • SueRae says:

        Abolish the SEC and hand the casework over to the FBI. The one constant in this series is the SEC’s hands-off policy when it comes to this cabal of crooks that have ruined so many companies. Dendreon will survive or fail on its own merits, even though they have been kicked down the stairs several times by these crooks. Sadly, we may never know what other promising treatments will never see the clinic, much less the market, because of the greed of this crimianl boys’ club. Gimme some rope.

      • Don says:

        These people will not stop destoying lives untill they are 6 feet under,,,,I find it hard to believe that Milken is still walking the streets..So much for justice……The rich protect the rich…

        Steal a candy bar and go to jail steal a few billion and pay a fine,and play some golf, just ask MIKE MILKEN..

        The fraud that Maydoff did was laid out for the sec and the sec did nothing …HERE AGAIN IT IS BEING LAID OUT FOR THE SEC AND THEY WILL DO NOTHING,,,AMERICA GOV IS JUST CORRUPT..



    2. Boston Pete says:

      All these crooks, cronies, and misanthropic machinations…

      The underlying, and perhaps most egregious perp, is one of inaction rather than those doing diabolical deeds: the SEC!!!

      Markopoulis was right: incentivize finding and punishing criminal activity. The SEC is far worse than an international joke. Of course, there are good people working there, but its gangrenous from the top down.

      Let Madoff be the first of these human pollutants to face punishment due.

      “We the People” has been effectively hamstrung. And now, it’s time for retribution, for revolution.

    3. t. tucker says:

      My, my, Michael Milken! What have you been up to?

    4. sean says:

      Mark, thanks again. I have sent these reports to several prominent people and some other reporters and asked if this was more important than the “Junk” they are currently writing about. Some of the responses should be interesting. “Disbelief” (sp) is the other reaction that I have gotten from a Dr. friend of mine and others. The word is getting out. The miscreants are scrambling for cover. Who will squeal first? My money is on Herb Greenbelly. Has anyone heard from him lately? LOL!!AK??

    5. huck says:

      So Mark, are you going to tip us off, in chapter 15, exactly how high the scum has instilled corrupt “leaders” of this once great country? I happen to know of a fine spot to escape too…..

    6. sean says:

      No one has ever asked the question.. Howcome the SEC jumps at the request of Hedgefunds and other miscreants to investigate companies that they intend to victimize but never paid attention to the Harry Markopolos’ of the world who actual had valid proof of fraud on this criminal Madoff? There was also advanced warning on Stanford too!!! Yet the SEC just IGNORED IT!!! Based on the above info from Mark, the SEC never completes their investigations on these Criminals but the surely completed their investigation of Dr. Byrne and Overstock and found nothing. I want to see that same resolve regarding Chanos et al. Hell the even exonerated Gradient but they settled with Patrick.. HUH? If they were not guilty of anything, why settle?? Just go to court right!!LOL!!

    7. jdevine42 says:

      Relatively few people know of or care about Dendreon (excpet investors and PC sufferers) and so this story, admittedly compelling, is basically ignored by the masses (or them that feed the masses their information). Everybody knows the big banks and brokerages and most have no idea of the D.C. machinations that drove them to destruction. If this D.C. story, as it relates to those financial insitution collapses could be brought to the masses, only then might the outrage become loud enough to make congress take notice, and only then will the captured press outlets be forced to begin reporting on this issue and only then will the light shine bright enough to finally expose these cockroaches for what they are; financial terrorits who have done more damage to this country than Bin Laden ever dreamed. We need this story to reach critical mass and it can only be done if a MASS MEDIA outlet takes up the story. Are there no potential Woodward and Bernstiens remaining in the mass media journalistic world anymore? Hell, how about Geraldo? To really clean out this mess how about Mike Murphy or Patrick Byrne for SEC chairman?

    8. AMMASS says:

      This same Group of miscrents including Jim Chanos , David Rocker , and some of the same Media people doing their mischef were on the SHORT side of a Biotech Co. known as Imreg which was also involved in Immno- therapy. Imreg had very favorable results in a 300 patient phaseIII trial involving HIV patients. Given the drug IMREG I ,the patients were living longer. Those on the placebo were dying or gettig worse.
      The trial showed a 5×1 result of the drug Imreg I over those receiving the placeo. The FDA turned ImregI down. The Advisory Committee (AC) of the FDA was highly influenced by one of the panelists ,a pediatrician from North Carolina (as I recall) who knew nothing about Immuno Theraputics. The SHORTS were selling the Stock of Imreg short on the morning of the AC meeting. That was 21 years ago,not much changes with these miscrents. The Company went Bankrupt.

    9. Solomon MacKay says:

      Media, Mafia, what’s the diff?

    10. akcje says:


      Wow! The power of repetition surely condemns. And it will cause the downfall of all those crooks.

      In part-3 we have learned that Steinhardt’s father, Steinhardt Sr, was the ” biggest Mafia fence”
      In part-4 we have learned it 2 more times.
      In part-5 we have learned it only 1 time. -This must be the reason some found the part-5 a bit short (and naked of facts)
      In part-6 we have really learned it. 3 more times, that Steinhardt’s father, Steinhardt Sr, was the ” biggest Mafia fence”

      Let’s see who can pass an IQ test and predict the next number in this sequence: 0, 0 , 1, 2, 1, 3,… ?

      Let me help you to catch the crooks: If anybody has missed it: The father of Steinhard is Steinhard. And the Steinhard Sr was called once the ” biggest Mafia fence”. For those that still have missed it, let me repeat… Oh, but I repeat myself…

      I can’t wait until this saga will get out in one contiguous piece. So we can enjoy all 27 repetitions on one page.
      This piece is getting real dangerous to those described.

      Oh, and sorry to distract again with immaterial items. You know, we hedge fund paid boiler room cramers tend to distract, detour, derail, demean, debase, deflect,… But I can’t find any more material stuff, than accusation by association, being a son of somebody or other family relations. After all it is all in the family.

      Hannibal aka Byrne noted on the DnDn board, that readership of the Deep Capture increase. But he has failed to thank me 🙂

      C’mon Mitchell, I know you can do better than this! After all Hannibal promised us. I will impatiently wait.

      • Don says:


        These people have killed more Americans than Bin Ladden . and they use a pin…….



    11. sean says:

      AK what took you so long? Had to get your scripts from your handlers huh? Well Ithought you could have been better prepared. It seems to me as if you have brought a plastic knife to a gunfight!!You lose!! Also these details just have to be scaring the crap out of the goood old boys huh? More to come?? I think so!!

    12. Denise Hubbard says:

      Understanding Market Manipulation and more oversight may help the economy in a huge way. See stockshockmovie.com for a new movie/DVD release about this.

    13. DCN says:

      So criticism of the narrative style is all you have today?

      There are associations, and then there is history of an operational relationships with said associations. The significance between the two is vast. What part of that don’t you understand?

      • akcje says:


        DCN > So criticism of the narrative style is all you have today?

        I’m still waiting for the substance. I have no doubt, that some of those named may well be crooks. But I’m disappointed after all those promises in the content. Learning who knew whom, who worked with whom, who slept with whom, may be very helpful if you have something concrete.

        DCN > history of an operational relationships

        Right. Working in the same funds or for each other. And so?

        So far the whole thing is build on some funds holding puts on DNDN when it was in $15+ range after the ’07 Panel. A very reasonable thing to buy a put or short a biotech waiting for an approval when the stock has skyrocketed (Note that even DnDn CEO sold a large portion at $15) And many of those positions could be a part of a play on both sides. Betting for a large stock move either direction, not just down)

        Eventually Mitchell will get to the part where a couple of doctors with COI were pushing FDA to withhold the approval. (Sorry for being a spoiler 🙂

        Indeed a clearly bad story. But will he come with anything else than just repeating a suspicion that FDA decision was influenced by the short funds? I doubt. And for a prosecutor to start an investigation something more substantial would be needed.

    14. ravenseye says:

      i wouldn’t count on geraldo.
      the dark side used him in the past.
      that was the day i gave up on him
      and lost interest in his reporting.
      wasn’t long after he lost his show
      if i recall correctly.

    15. Lenofus says:

      Tuesday, April 14, 2009 10:40:18 AM
      Dendreon Corp Hearing Brean Murray making cautious comments (timing uncertain)
      – Notes that may stay on sidelines until full data is released.
      – Brean Murray has a Sell rating and $1 price target on DNDN.
      16 Apr 2009 07:52DNDN Brean Murray Raised DNDN to Hold from Sell
      29 Apr 2009 07:33DNDN Brean Murray Raised DNDN to Buy from Hold, price target: $35

      That dollar target was reiterated several times. People acted on that information. Let’s see how they handle the pending lawsuits. What goes around………………

    16. Solomon MacKay says:

      Almost all organized crime is perpetrated by multigenerational family groups. Some is not. All organized crime is perpetrated by people that have associations with one another. Some people that have associations with one another do not commit organized crime, some do. Of those that do, one of the most important investigative techniques are those used to demonstrate the associations and organizational structure. The resulting demonstrated structure and associations are what make the activities of these groups of people “organized crime” and not just crime. The difference is important. If organization can be demonstrated, what appears to be merely an unfortunate set of circumstances will then be shown to be an organized set of activities.


    17. harveydawabbitt says:

      well i posted the link to the 6th chapter on wiki leaks and it has dissappeared.
      i sent a e-mail asking wtf!!!!!! NO RESPONSE YET.
      maybe i am looking in the wrong spot. but i posted it under the headline UNITED STATES.



    18. sean says:

      This could lead to open season on AK7 and his friends no?

      SEC urged to reward whistleblowers
      By Joanna Chung in New York

      Published: July 1 2009 19:06 | Last updated: July 1 2009 21:16

      Regulators should pay whistleblowers for information about frauds, according to an official investigating the US Securities and Exchange Commission’s failure to uncover Bernard Madoff’s $65bn scam.

      Wall St’s white-collar criminals
      Bernard Madoff’s sentencing on Monday June 29 was the latest in a series of high-profile Wall Street criminal cases such as Bernie Ebbers and WorldCom, as an FT gallery shows
      David Kotz, SEC inspector-general, said “bounty” schemes would provide “necessary incentives” for individuals to bring complaints about possible illegal activity. There was evidence that similar programmes by the Department of Justice and the Internal Revenue Service had been effective, he said.

      “Although the bounty system has been in place at the SEC for more than 20 years, there have been relatively few awards made,” he said. The current system applied only to insider trading cases and criteria for judging awards were “vague”.

      More charges likely in Madoff case – Jul-01In depth: Madoff scandal – Jun-29His proposals were made in a letter to Paul Kanjorski, chairman of the House financial services sub-committee on capital markets, which is helping to revamp financial regulation.

      Since missing the Madoff fraud, the SEC has been hit by an avalanche of criticism. Credible allegations about the scam were brought to its attention by Harry Markopolos, a whistleblower, for at least a decade.

      Mr Kotz said information that led to a civil penalty from “any violator” of federal securities laws should trigger a bounty, and that would help regulators to uncover future frauds.

      His recommendations reinforce proposals by the US….


      • kddublin says:


        This is an important story you reference…employment at the SEC is a career step to Wall Street. Until whistle blowing is made more rewarding, or we we can find somone that cares more about truth, justice, and the american way, then they do about money, then they won’t bite the Wall Street hand that is to eventuallly feed them.

        Look what Gary got for his effort. Whistle blower laws can be made much better, and if they are, more people will come forward with evidence. We need to make whistle blowing the most lucrative choice if we are goig to clean up Wall Street. It shouldn’t have to be that way, but it is.

        Spread this story please.

        Again, great job Mark…stay after them!!!

    19. sean says:

      Tell me if this train of thought by Bud Burrell sounds familiar.. Like this story of Dendren.

      Location: Blogs Bud Burrell – Front and Center
      Posted by: bburrell 6/30/2009 12:03 PM
      Yesterday, in scanning terrorism sites, I found a link to The Terror Finance Blog, and bells went off. Searching back, I found that they had referenced the twice convicted felon Amir Elgindy as a primary example of such market related actions. I then remembered that the DOJ had indicated that they expected to file as many as 35 to 40 additional indictments in this case, which involved bribery of FBI agents, which is normally a very hot button with the DOJ. Typically, not a single superceding indictment was forthcoming.

      The DOJ could not have made this case without finding that the SEC was in it up to their collective duffs. Despite this, not one SEC official was indicted, despite plentiful evidence of their collusion with Elgindy, attorneys Weiss and Lerach, and many more. Hard evidence was the foundation of the conviction of Elgindy, in the form of clean transcripts of the actual web site he ran in support of his shorting syndicate. This site demonstrated the involvement of many of the major hedge fund operators, market makers, and more.

      The most repeated and glaring reference I have made with regard to illegal naked short selling has been to its role as a tactical tool to launder money and evade taxes, moving money offshore for various terrorist enterprises, including organized crime, terrorists and narco-terrorists, domestic and international. I have proved this over and over again, in case after case, only to be met by a black hole of silence from our authorities. I have shown them link after link to name after name, all of them repeatedly involved with one another is hundreds of transactions. The silence of the response has been deafening.

      I am now forced to query whether or not our SEC is in fact a supporting co-conspirator in these various criminal and terrorist enterprises by choice. There are reports of the topics of their meetings with the worst of these scum perpetrators. Billions of dollars of investments have been stolen or converted from the securities of thousands of companies and issuers, taken from the pockets of millions of individual investors. The SEC in its arrogance doesn’t even deny this anymore.

      Can the SEC be allowed to continue to stand in this light? How can the DOJ ignore such horrific conduct, executed with such impunity and arrogance? The SEC IG is being ignored by the SEC. What he needs are real police powers, like the OPR (Office of Professional Responsibility) of the FBI. He needs to either get these powers, or bring in the DOJ and GAO to investigate the SEC with grit and authority. Jim Cramer said it best. You just need to arrest one illegal short seller and “Perp Walk” him, and this would be over here in the US. Globally is another issue.

      As we watch the major news organizations go into the tank on this matter, one has to ask why. Many major journalists were named as being linked to the Elgindy matter, the proto-proof that counterfeiting of all forms of commercial securities was being used for racketeering and terrorism money laundering. Where was their testimony? Where were the indictments of these co-conspirators and supporters, the major hedge funds who bragged about abusing the law?

      The mechanisms now being used are much harder to penetrate than they were 5 to 8 years ago. Offshore special purpose entities are now wholesale, used by all operating elements of this criminal activity, in a monstrous treasonous conspiracy. Did Enron teach nothing to our law enforcement officials? This is Enron Redux, times billions.

      I encourage you to reach out to your elected officials, first nicely, then with a figurative fist if nice doesn’t work. Do the same to FINRA, surely worse than even the SEC. Their members would not have behaved quite so badly if FINRA itself had not given its tacit approval to their malfeasance and greed.

      If you say this will take too long, I say, so what. I was described by every insult imaginable 6 to 8 years ago. Not now. It is better to be feared for speaking up, than to have dirt kicked in your financial and legal face by vermin when you don’t.

    20. Sandy says:

      There was a biotech company that came up in a screen for high return covered calls and the call premiums were outrageous. I decided to sell the calls naked as this is usually a sign that the stock will fall.

      Sure enough, the thing went into a freefall from $22 to less than $1 ON NO NEWS. I made 100% on my trade, but to me it was just a trade.

      I dug in farther and found out the problem. The company raised $100 million and had spent about $4 million of it and in the offering was a clause that they had to give their money back if it became delisted off the Nasdaq. Since it was trading below $1, it was delisted.

      The people that put up the hundred million (and presumably shorted it) took over the board, replaced management and got the asset.

      The only reason this was possible is it was possible for them to collapse the share price by selling IOU’s far in excess of the public float. There was no limit on share supply.

      Someone used a loophole in a contract to steal the asset.

      • harveydawabbitt says:



    21. Anonymous says:

      Anthony Elgindy’s thread, with a history containing every message going back years is here.


      This includes posts where he shorted the airlines on Sept. 10th, 2000, attended the funeral of his friends, CIA agents hung upside down from a bridge in Iraq, where he traveled under a fake name and where he was finally arrested for working with a corrupt FBI agent.

      I’m not trying to tie Sept. 11th or arms into this (although the two buildings that contained all the financial records were destroyed and the world’s largest arms dealer Adnan Khashoggi (Lady Di’s Dodi Fayed’s cousin) brought down 100,000 retail accounts by collapsing MJK Clearing on Sept. 11th, 2001 with Milken office manager Valerie Redhorse), but I believe that the reason this doesn’t get fixed is Milken is a part of an even bigger group that is sucking America dry.

      Milken crony Adnan Khashoggi was involved in BCCI and the savings and loans collapse.


      This doesn’t get fixed because our leaders are up to their necks in the blood money stolen from the rest of us.

    22. Anonymous says:

      Anthony Elgindy’s thread, with a history containing every message going back years is here.

      siliconinvestor.advfn .com /subject. aspx?subjectid=23993

      This includes posts where he shorted the airlines on Sept. 10th, 2000, attended the funeral of his friends, CIA agents hung upside down from a bridge in Iraq, where he traveled under a fake name and where he was finally arrested for working with a corrupt FBI agent.

      I’m not trying to tie Sept. 11th or arms into this (although the two buildings that contained all the financial records were destroyed and the world’s largest arms dealer Adnan Khashoggi (Lady Di’s Dodi Fayed’s cousin) brought down 100,000 retail accounts by collapsing MJK Clearing on Sept. 11th, 2001 with Milken office manager Valerie Redhorse), but I believe that the reason this doesn’t get fixed is Milken is a part of an even bigger group that is sucking America dry.

      Milken crony Adnan Khashoggi was involved in BCCI and the savings and loans collapse.


      This doesn’t get fixed because our leaders are up to their necks in the blood money stolen from the rest of us.

    23. Anonymous says:


      Adnan was tied into Elgindy the jailed naked short who shorted the airlines on Sept. 10th, 2001. On Sept. 11, 2001, MJK Clearing brought down 100,000 retail accounts.

      Not one word from the mainstream media.

      From wikipedia:

      “Khashoggi, along with Ramy El-Batrawi, was the principal financier behind GenesisIntermedia, Inc. (formerly NASDAQ: GENI), a publicly traded Internet company based in Southern California. After the September 11, 2001 attacks, Khashoggi’s U.S.-based checking accounts were frozen and Khashoggi was unable to make a margin call with Native Nations Securities, whose CEO and largest shareholder, at the time, was Valerie Red Horse, former office manager of junk bond king Michael Milken. In turn, Native Nations and Red Horse were unable to meet their obligations on the margin loan to MJK Clearing, Inc.[2][3] Trading in the stock of GenesisIntermedia was halted in September 2001. Khashoggi’s unwillingness to pay his margin loan to Native Nations Securities, and Native Nations (and Red Horse’s) inability to pay its debts to MJK Clearing, began a series of bankruptcies that ended in the largest payout in Securities Investor Protection Corporation history.[4][5] Native Nations Securities and MJK Clearing both eventually filed for bankruptcy.[6]”

    24. sean says:

      So let me get this straight, AK3 has said that Mark style is not to his liking but the DOJ likes it. So who should we go with??HHHHMMMNNN. I think the DOJ!!

      Curshen’s cursin’ ….. and guilty.

      Jonathan Curshen, mentioned in this news item and in DeepCapture, pleaded guilty in NY on June 24 and is to be sentenced in September. DOJ press release: http://newyork.fbi.gov/dojpressrel/pressrel09/nyfo062409.htm

      St. Kitts Honorary Consul Arrested on Fraud Charges

      Mr. Jonathan R. Curshen, St. Kitts-Nevis Honorary Consul to Costa Rica who was appointed by the Douglas-led Government in 2005, was arrested in New York on September 4, 2008 during an FBI sting operation and later charged with conspiracy to commit securities fraud. His partner, 50 years-old Bruce Grossman, was arrested on Sept. 5 in New Orleans and remains in jail.

      [ ………………… ]

      In fact, if the proper investigation was done, the Government would have known that Jonathan Curshen was charged with securities fraud in April of 2003 in an alleged “pump and dump” scheme where he was paid to hype a company via the internet, telephone and mail in violation of the antifraud provisions of the federal securities laws in the United States.

      An article which appeared in “Deep Capture” an internet web site, alleged that an undercover team member once travelled to Costa Rica to meet Curshen and that Curshen admitted he participated in illegal naked short selling and that he threatened to kill anyone who revealed this. The article further alleged that Curshen admitted to money laundering and the use of special untraceable debit cards to pay off government officials.


      http://www.pamdemocrat.org/Newspaper/Details.cfm?Nz=$7GIJ2 &Iz=$(BDL#P

    25. sean says:

      Hopefully these blog will allow us to stop dregging up ancient history and keep up with current happening like this!!!

      SEC lawyer raised alarm about Madoff: report
      Thu Jul 2, 1:48 am ET

      WASHINGTON (Reuters) – A U.S. Securities and Exchange Commission lawyer warned about irregularities at Bernard Madoff’s financial management firm as far back as 2004, The Washington Post reported on Thursday, citing agency documents and sources familiar with the investigation.

      Genevievette Walker-Lightfoot, a lawyer in the SEC’s Office of Compliance Inspections and Examinations, sent emails to a supervisor saying information provided by Madoff during her review didn’t add up and suggesting a set of questions to ask his firm, the report said.

      Several of the questions directly challenged Madoff activities that turned out to be elements of his massive fraud, the newspaper said.

      Madoff, 71, was sentenced to a prison term of 150 years on Monday after he pleaded guilty in March to a decades-long fraud that U.S. prosecutors said drew in as much as $65 billion.

      The Washington Post reported that when Walker-Lightfoot reviewed the paper documents and electronic data supplied to the SEC by Madoff, she found it full of inconsistencies, according to documents, a former SEC official and another person knowledgeable about the 2004 investigation.

      The newspaper said the SEC staffer raised concerns about Madoff but, at the time, the SEC was under pressure to look for wrongdoing in the mutual fund industry. Walker-Lightfoot was told to focus on a separate probe into mutual funds, the report said.

      One of Walker-Lightfoot’s supervisors on the case was Eric Swanson, an assistant director of her department, the Post reported, citing two people familiar with the investigation.

      Swanson later married Madoff’s niece, and their relationship is now under review by the SEC inspector general, who is examining the agency’s handling of the Madoff case, the Post reported.

      Swanson, no longer with the agency, declined to comment, the Post said.

      SEC spokesman John Nester also declined to comment, citing the ongoing investigation by the agency’s inspector general, the newspaper said.

      (Writing by JoAnne Allen; Editing by Eric Walsh)

    26. Paul says:

      Here’s a little chart I made of the relationships that Chanos has with Cramer, Dirk Ziff, Morgan Keegan, et al.



    27. sean says:

      Good stuff Paul, thanks and way to connect those crriminals!!!

      • Paul says:

        You’re welcome, sean. I also posted the flickr links to the other maps for Part 3, 4, and 5 in the comments to the respective articles. They should be showing up shortly pending anti-spam confirmation by the moderator. 🙂

        I actually tried posting these links to the DC forum but the phpbb software wouldn’t allow a first-time poster to post anything with [img] links. Can you post these in the forum? You have enough posts in the DC forums that you should be able to.

      • Paul says:

        If you can’t no worries… just wondering. 🙂

    28. sean says:

      Sorry Paul I am unable to post links as yet (not enough posts under my belt)

      Also did you guys see our only honest political representative is at it again in our favor.

      Sen. Kaufman again zaps SEC

      Kaufman: SEC Decision to Ignore Madoff Signs Latest Example of Culture in Need of Change

      July 2, 2009

      Sen. Ted Kaufman (D-DE) released the following statement following reports of an internal Securities and Exchange Commission (SEC) decision to disregard suspicions surrounding Bernie Madoff’s business practices as early as 2004:

      “This is just more evidence of the serious mistakes made by the SEC in recent years. From the flawed decisions to permit massive increases in leverage at banks to the repeal of the uptick rule to failures to regulate rating agencies or stop abusive short selling – this is the latest example of a culture at the SEC to treat those it’s intended to regulate as clients rather than protect investors.

      The five current commissioners need to admit the mistakes in the past and act decisively to change the SEC. I’ve yet to see them reevaluate these bad decisions in an objective manner and establish clearly that a new day has arrived. The first thing the SEC can and should do is properly deal with abusive short selling by reinstating some form of the uptick rule and a pre-borrow requirement on short sales. I will continue to push the SEC to stand up for investors by adopting clear rules and enforcing them aggressively.”


    29. sean says:

      One way or the other this story is getting out!! ONE WAY OR THE OTHER!! Read the story and watch the videos, it has reached “Critical Mass” Matt Taibbi (sp) knows what he is talking about!!!


      • DCN says:

        The entire article can be seen:

        I have been a fan of Matt Taibbi since his days at the “The eXile”, which was a hilarious and profane english-language publication in Russia, yet also had some excellent reporting that was followed in the foreign policy community (Putin has since kicked it out of the country, and they can now be found at exiledonline.com).

        His last big article in Rolling Stone, “The Big Takeover”, absolutely killed. He is going to be due for some awards this year.

    30. irieblue says:

      Washington Post cancels lobbyist event.. For $250,000 the Post was allowing lobbyist’s to meet with their reporters!!


    31. sean says:

      It’ll be a cold day in hell before these enablers and criminals admit that they were wrong!!

      SEC Should Have Said ‘Sorry’ for Madoff, Ex-Chairman Pitt Says

      Share | Email | Print | A A A

      By Tom Cahill

      July 2 (Bloomberg) — The U.S. Securities and Exchange Commission should have apologized for missing Bernard Madoff’s $65 billion Ponzi scheme, former chairman Harvey Pitt said.

      “I would’ve liked to see the SEC say, ‘We’re really sorry,’” Pitt told reporters in London today at a briefing hosted by CQS UK LLP, the hedge-fund firm founded by Michael Hintze. “I never heard that from anyone at the SEC.”

      Madoff, 71, was sentenced to 150 years in prison in New York this week for running the biggest investment fraud in U.S. history. Pitt, chairman of the SEC from 2001 to 2003, said the agency examined Madoff’s firm four times and didn’t spot his fraud due to “human failure.” The SEC may have developed a blind spot because it’s “over-lawyered” and needs more traders, managers and veterans of markets, Pitt said.

      “That’s been a weakness at the SEC,” said Pitt, who was a partner at the law firm Fried, Frank, Harris Shriver & Jacobson LLP before joining the agency. “Part of the problem is you can’t find fraud with just lawyers.” Pitt is the chief executive officer of Washington-based consulting firm Kalorama Partners LLC and an adviser to CQS.

      Pitt said he had a plan for spot checks at investment management firms that he failed to push through before leaving the SEC. The system may have helped catch Madoff or similar frauds, he said.

      “At a bare minimum, it would have made it more difficult,” Pitt said. “Unfortunately, Bernie Madoff committed his fraud very easily.”

      To contact the reporter on this story: Tom Cahill in London at tcahill@bloomberg.net

      Last Updated: July 2, 2009 13:29 EDT


    32. John Hoefle says:

      Though it appears in a somewhat incidental role, my suspicion is that Lazard is a much bigger player in this operation. The group known as “Milken’s Monsters” is probably more accurately described as “the children of Meyer Lansky,” and the Milken machine ran largely, at least at first, on laundered dope money. Drexel Burnham Lambert was a joint operation of Morgan and Rothschild, and its spawn have played a major role in the rise and fall of the derivatives bubble. You have a remarkable story here, and I congratulate you on a job well done. Thanks.

    33. hmp49 says:

      Chanos did not “ruin” Baldwin-United or Enron. Those companies did that themselves, and Chanos merely recognized that before other people did. If he “investigated,” even using “questionable tactics,” that doesn’t make him responsible for their business failures – or frauds.

      Most articles bemoaning short-sellers are by “investors” who made bad decisions, and want to blame someone else for their losses. Coincidentally, the people they want to blame are those who were right when they themselves were wrong.

    34. Williams says:

      Excellent site you’ve got here.. It’s hard to find high quality writing like
      yours nowadays. I truly appreciate individuals like you!
      Take care!!


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    At the time much of the content on DeepCapture.com was written, the Great Financial Crisis of 2008 was either on the verge of happening or had just occurred. In those days, emotions among this publication’s contributors were raw and, in an effort to get their warnings noticed and appropriate blame placed, occasionally hyperbolic language and shocking imagery were employed.

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