The Register weighs in on our crusade

Recently, I revealed a few details of a security flaw I had discovered on the Yahoo! message boards, which made it possible to determine a user’s IP address and username. This would have been nothing more than a curiosity but for the fact that stock message boards are among the preferred venues for short selling hedge funds seeking to spread disinformation about targeted companies.

Recently, I revealed a few details of a security flaw I had discovered on the Yahoo! message boards, which made it possible to determine a user’s IP address and username. This would have been nothing more than a curiosity but for the fact that, as we’ve documented many times on, stock message boards are among the preferred venues for short selling hedge funds seeking to spread disinformation about targeted companies and — often — opponents of short-side stock manipulation.

As I wrote, a few months ago, I used this security flaw to determine an IP address frequently used by Gary Weiss, who, prior to being repeatedly outted by yours truly, was among the most active, anonymous spreaders of such disinformation on stock  message boards, blogs, and Wikipedia. With this information, I was able to prove that Weiss was again engaging in pro-naked short selling sockpuppetry, this time on political blog (a claim later verified).

Cade Metz, a reporter for the prominent British tech publication The Register, took note of the above-referenced security flaw, and wrote a very in-depth piece on it and the part it’s played in Weiss’s latest trip-up, in addition to examining the way this fight has so starkly turned in our favor as of late.

Take a look at Cade’s piece and, if you like it, be sure to Digg it here.

  1. So you can view some of the largest Ponzi Schemes..err I mean Hedge funds that are robbing the system blind during thes troubled times here you go..

    Soros grows while many rival firms shrinkFont size: A | A | A2:18 PM ET 9/1/09 | Marketwatch

    10:31 AM ET 9/9/09
    Symbol Last % Chg
    BAC 16.98 -0.24%
    C 4.60 -1.71%
    JPM 42.57 0.07%
    GS 168.42 0.72%
    OZM 11.14 3.25%
    Quotes delayed at least 15 minutes

    SAN FRANCISCO (MarketWatch) — George Soros’ hedge fund firm grew strongly through the worst financial crisis since the Great Depression, while big rivals mostly shrank, according to results of a survey released Tuesday by industry publication AR.

    Soros Fund Management had $24 billion in assets at the start of July, up more than 14% from the end of 2008 and more than 41% from a year earlier. That made the firm the fifth-largest in the hedge fund industry, up from sixth at the end of 2008, AR said.

    Soros was one of the few investment managers to foresee the global financial crisis that erupted last year. As markets collapsed, he stepped back into trading, helping the firm’s flagship Quantum Endowment fund gain almost 10% in 2008. This year, the fund was up almost 19% through the end of July, AR reported.

    Another manager who saw trouble ahead was John Paulson, head of Paulson & Co. After generating huge gains in 2007 from bets against mortgage-related securities, Paulson continued his winning streak in 2008, partly by betting against financial institutions.

    This year, Paulson bet big on gold and has taken large stakes in Bank of America (BAC) and Citigroup (C). His funds were up as much as 16.38% through the end of July, AR said.

    Despite those gains, Paulson’s assets under management still dropped more than 6% to $27.2 billion this year as investors redeemed some of their money to rebalance portfolios to avoid being too concentrated in certain funds and strategies, AR said.

    Paulson is the third-largest hedge fund firm by assets, maintaining its position from the end of 2008, AR noted.

    Bridgewater Associates, run by Ray Dalio, remains the largest hedge fund firm in the world, overseeing $37 billion in assets at the start of July. That was down more than 4% from the end of 2008, AR said.

    The asset-management division of J.P. Morgan Chase (JPM) remains the second-largest hedge fund business, with $36 billion in assets, up 9.4% from the end of 2008, AR said.

    D.E. Shaw Group remains in fourth place with $26.7 billion in assets. That was down 6.6% from the end of 2008, AR said.

    The asset-management division of Goldman Sachs (GS) ranked sixth, up one place from the end of 2008. Assets under management inched up to $20.8 billion, AR said.

    Och-Ziff Capital Management (OZM) was seventh in AR’s rankings. The firm, run by Dan Och, lost 6.33% of assets in the first half of 2009, bringing its total to $20.7 billion, AR said.

    Baupost Group, run by Seth Klarman, became the eighth-largest hedge fund firm, with assets of $19 billion, up 13% in the first half of 2009, AR said.

    Farallon Capital Management, headed by Thomas Steyer, saw assets fall 10% to $18 billion in the first half of this year. That left the San Francisco-based firm ninth in AR’s rankings.

    Angelo, Gordon & Co., Avenue Capital Group and Renaissance Technologies tied for tenth in AR’s rankings, which $17 billion in assets.

    1. Sean

      We need to know if any of these players did anything illegal. Just calling the market right can generate big profits, and there is nothing wrong with rewards for taking risks. Big profits by themselves do not indicate illegal behaviour.

      Do you have reason to believe these hedge funds used illegal tactice to generate their profits?

      Incidentally, I don’t doubt that FTD’s are still a problem, and they are illegal. But let’s try to find the actual perps, not just blast anyone who makes a big profit.

  2. Fred in all honesty do you think that ANY of these Hedge Funds play by the rules? Also do you know or has the SEC released the name of the Entity that make the 1.7 million dollar bet that Bear Stearns would go down under $30 from 65 in a week and profited 270 million in that week? Also how is it even possible for ONE man (John Paulsen) to make 3.7 billion in ONE year (without doing something illegal) Come on Fred please tell me that you are kidding. PLEASE!!! Watch the following video at the end of this paragraph.Then answer me again.

    “Byrne launched two websites, – a mini-site on worldstock, education and Wall Street corruption, and Deep Capture – a comprehensive website describing the “capture” of our nation’s capital market exchanges, SROs, regulators and congressional oversight. Byrne is also rumored to have financed a film detailing the role of naked short selling in helping to fuel the global financial meltdown. View the video here”:

  3. It’s One Year After Lehman and Alan Greenspan Feels Fine

    Posted Sep 09, 2009 01:03pm EDT by Aaron Task in Newsmakers, Banking

    For all the breathless media coverage of the pending one-year anniversary of Lehman Brothers’ bankruptcy, the real story is how little has changed since that “cataclysmic” event.

    As The Wall Street Journal details, financial reform efforts have faltered while big bonuses and risk-taking are back in vogue on Wall Street.

    Perhaps the biggest evidence of how little things have changed is the continued appeal of Alan Greenspan to media outlets and conference organizers alike.

    Greenspan, who topped most of the “who’s to blame for the crisis” lists in late 2008-early 2009, offered a backhanded defense of his tenure as Fed chairman by telling the BBC that “speculative excesses” are a normal function of capitalism. “It’s human nature: unless somebody can find a way to change human nature we will have another crisis,” he said, according to Reuters.

    That may very well be true, and the history of capitalism is a history of booms and busts. But Greenspan championed the idea that tech-led productivity could smooth out the business cycle and rarely warned about speculative excesses while Fed chairman, other than his infamous “irrational exuberance” comment in 1996 (after which he went mum).

    By both his actions and inaction as Fed chairman, Greenspan condoned and contributed to both the tech bubble of the ‘90s and the housing/securitization bubble of the ‘00s. Viewed through this lens, Greenspan’s latest comments about human nature are an attempt to salvage his legacy, which is
    one of bubbles and bailouts — not the unfettered capitalism he purportedly champions.

    A final insult, if not further proof of how little has changed, Greenspan is also being quoted as saying “a lot of pieces are falling into place for recovery” at a Rodman & Renshaw conference.

    Citing “remarkable growth in output per hour,” Greenspan suggested “surprises are on the upside,” Bloomberg reports.

    So Alan Greenspan is waxing about the productivity miracle again and presumably being paid handsomely for the appearance — yet very few are questioning the validity of the message or its messenger.

    If that doesn’t tell you how little things have changed “one-year later”, I’m not sure what will.

  4. Couple of things. Many are aware of the collapse of BSC price to the 2 dollar level Most are not aware that due to the damage done behind closed doors ol JPM raised that bid to the 10 dollar are for those who were still holders or hmmm who were buying off that low. Meaning if someone came in large on 2.5 or 5 dollar calls they did very well or if they just took the stock at 3/4/5. I point this out because even after this damage was done someone was exploiting. Just as OL Soros and gang who were banging them down were also taking them on the lows.

    Now Greenspan. GOLLY GEE, what was he saying before we ran into that BSC collpase and for whom was he working.

    Sorry fellows but don’t be expecting concious from those who are financial sociopaths. Heck Cramer had to have his pants pulled down by Stewart before he then had to watch a video of how to FEIGN sincerity. Any expecting the Greenspans, Fuld, Thaines etc to feel bad re their behavior or complicity are naieve. These guys have made MONEY their LOVE and they don’t care who they hurt to get such.

    Finally ONE year PLUS later since BSC, Near a year for LEH. Enough data out there to choke a horse and NO significant perp walks. HMM guess it never happened. It was just a figmant of our imaginations. Ya no let bygones be bygones and lets begin again.

  5. Yup Jim you’ve hit the nail on the head. The gang of theives knows how to use the legal system to stall, delay and confuse. While doing so they reposition and put on new disguieses. Cramer now dresses himself as a GOOD GUY. Yup a crusader. Chanos does his Hedge funds aren’t so bad. Einhorn does his it was the fault of the agencies, while the Gasperino’s do the so I guess Patrick Byrne was right all the time. YUP! While all this is happening, the liars cheats and theives buy up the equities on the cheap to benefit on the upside. Oh and lest we forget OL SHELBY who did nada, Cox is now moved on. And life goes on in the good ol USA. Writing about it, pointing it out or making a movie is NOT the solution. Enforcement is. So who is going to be the champion. Oh that’s right Elliot Spitzer is making a comeback. GEESH. YIKES. UGH

  6. Imagine that. Greenspan, arguably the proximate cause of the bubble goes to work for John Paulson the largest financial beneficiary of the bubble. Si solummodo deinde tamquam exemplar (”if only there were a pattern”).

  7. Fred, for more of your reading pleasure..

    Hedge-Fund Investor Goal: An Exit Plan
    by Gregory Zuckerman
    Wednesday, September 9, 2009
    provided by

    Before last year’s panic, it seemed like the only thing hedge-fund investors cared about was getting into the hottest funds.

    Now the No. 1 goal for some of those investors is making sure they can get their money back.

    After learning the hard way that making a hedge-fund investment and cashing out of it are two very different things, pension funds, endowments and other investors are paying closer attention to the terms of redemption agreements — and are tying up cash only if they are sure they won’t need it anytime soon.

    More from

    • Credit Suisse Analysts on AIG: ‘Little to No Value for Common Equity’

    • GE Shares: Channeling Pink Floyd, J.P. Morgan Issues Upgrade

    • Dollar Selling Stokes Commodities, Stocks

    “Assessing liquidity and the ability to get money out of hedge funds has become among the most important issues for investors,” says Reid Bernstein, a veteran investor in hedge funds who helps run OneCapital Management Partners LLC in New York.

    The caution comes just as the prospect for longer-term, illiquid investments is improving — and the hedge-fund business works on a comeback. So far this year, a hedge-fund index compiled by Hennessee Group LLC is up 17% through August, the New York investment-advisory firm said, outgaining both the Dow Jones Industrial Average and Standard & Poor’s 500-stock index.

    But many hedge-fund investors still are smarting from the crisis that deepened after the collapse of Lehman Brothers Holdings Inc. last September. A slew of hedge funds prevented investors from withdrawing money the funds had plowed into convertible bonds, obscure companies, distressed debt, private placements and other assets that couldn’t be dumped quickly. Some investors suspected hedge funds were using the market’s turbulence as an excuse to hoard their clients’ cash.

    In a dramatic example of how hard it has become for funds to persuade investors to hand over money for the long haul, Cerberus Capital Management LP tried to get investors to move assets to a new fund with longer lockup provisions, even lowering fees to entice them. Many of the hedge-fund firm’s investors balked and have asked to withdraw $4.77 billion from the firm’s original hedge funds, or 70% of the assets belonging to outside clients in the funds.

    Some hedge-fund investors might be worrying too much, analysts say. Some attractive hedge-fund strategies require the use of a gate to protect the fund and investors in case there is a rush for the door before profits materialize. “I do not have a problem with gates. They protect long-term investors, and there are lucrative strategies right now that are less liquid,” says Allen Hall of Mill Creek Capital Advisors LLC, which invests in hedge funds. “I do have a problem with firms that don’t match their assets with their liquidity and then suspend redemptions.”

    At the same time, a rash of opportunities has developed for deals that might take two years or so, partly because hedge-fund clients are unwilling to tie up their cash. One medium-size hedge fund says it was offered the chance to make a loan to a promising gold miner, but the transaction was a hard sale to the fund’s investors because there would be no profits for a few years.

    Some hedge funds have begun raising money to invest in illiquid securities, adopting a more private-equity-like structure with three-year term financing and incentive fees taken as money is handed back to clients.

    Despite the market’s surge since early March, redemptions remain on hold at numerous high-profile hedge funds. Citadel Investment Group LLC recently told investors it will return $250 million by Oct. 1, and more at year end. Investors requested roughly $1 billion of cash from the fund as of the end of 2008, according to letters Citadel sent to investors.

    Farallon Capital Management LLC and Millennium Partners have been slowly handing money back or expect to return it soon. Tudor Investment Corp. has paid off some investors after suspending redemptions in its Tudor Global BVI Fund last year and splitting the fund in two but still has more requests to meet, according to a person familiar with the situation.

    Some hedge-fund firms insist that the market’s rebound has validated their decision to bar redemptions. Other funds were handcuffed by terms that prevented them from handing back money when the exodus reached a certain percentage of assets.

    Investors share some of the blame, since many agreed to give hedge funds the right to block clients from fleeing but never thought that would happen. In other cases, hedge funds prevented clients from withdrawing money even though the terms of their investor agreements didn’t allow for such a move, gambling that investors wouldn’t bring a lawsuit because that would hurt the fund’s performance.

    “There’s a balance between protecting your business and protecting your investors,” says David Gold, who advises corporate pension plans on hedge-fund investments. Given the market’s recent surge, “there are very few positions that are” impossible to sell. Instead, selling at “a discount is not what they want to do.”

    —Joseph Checkler contributed to this article.

    Write to Gregory Zuckerman at [email protected]

  8. While I applaud efforts to expose naked short selling, I deplore the use of XSS attacks as a means to impersonate others. There isn’t much of a moral difference between the moral issue of stealing a provider’s data based on their privacy policy and being a naked short seller. If you could do the same thing through legal means – that’s one thing. Acting in the arena of XSS to steal identity information supplied under an implied privacy and anonymity guarantee is no less theft than using the anonymous ID to promote fake news or information about companies. It’s wrong.

    I deplore naked shorts, but I deplore stooping to the level or the crooks to expose them as well. If you are really serious about making the system work, we need to draft and support legislation calling for open market trading – no hidden hedge funds, no false securities, no scams – just open trading that all can have access to know who is doing what. That would end the practice altogether – as no one could hide dirty deals under the covers.

    While exposing the flaw would be fine, using it for other purposes is morally wrong, and might be subject to criminal statutes in the U.S. My barometer for doing the morally correct thing is to first ask “Is this any better than the act of someone whom I feel is wronging others?”

    If that answer is “no” – then the tactic is wrong and needs a serious re-thinking. Losing the moral upper hand by stooping to dirty tricks only makes the criminals look wronged and the act look either desperate or zealous. The laws may have been ignored by a system that was financially motivated to look the other way or was actively gaining financially by doing so (a la the SEC lawyers who were doing insider trades based on inside knowledge). That doesn’t mean that breaking the laws in pursuit of those individuals is up to other individuals outside the government or LEA’s.

    When we make ourselves judge and jury, we only convict ourselves. I want naked shorting stopped as well – but I wouldn’t stoop to doing a XSS attack and stealing other people’s information in that cause. I think you ought to think about that; it’s a serious criticism from someone who believes in the cause, but wonders about the wisdom of the actions undertaken. At some point, you have to ask yourself that question. IS what you were doing a morally correct pattern of behavior, or was it an attempt to try to show others that you are above the law in pursuit of your cause?

    I don’t like the answer I reach, and I think it isn’t a practice that I would want to pursue in search of fame or notoriety. Better to act within the legal framework and thought a fool than to act out in anger and remove all doubt.

    Take this as honest criticism from someone who believes the cause is right, the methods are wrong. You can get information without breaking laws – there are countless other ways to do so. It just takes effort and time.

  9. To Jim Hall,

    What I am saying is that all dealings should be above board. There are laws to protect us, though the last decade or so the SEC has been a dismal failure own by the traders and not responsive to public outcry.

    Note one thing there: the SEC may have been asleep at the wheel, but there are other agencies that can be brought to bear. In pursuit of Justice, you keep knocking on doors till you find the right one. You don’t simply give up. No one asks you to do that, and if you choose it – then you’ve chosen that.

    What I am saying is to act correctly and keep working at it legally. That should be the first rule of seeking a redress of wrongs.

    Have a nice day. Don’t worry, be happy.


  10. I am watch the Madoff /SEC failure hearings and it is official David Kotz is now captured by the Agency in my honest opinion.
    Freecode you want the Deepcapture Team to bring a knife to a gunfight. It is simply this, they don’t play fair and thus neither should we!!!

  11. To Sean and Jim Hall,

    This is not a war and even then – that’s no excuse. That’s the equivalent of saying that “the laws and the system can’t work at all, so I’ll take them into my own hands.”

    No amount of chest-thumping justifies breaking the law. If it did, there wouldn’t be any laws. If this is simply too hard to figure out, I’d suggest a class on ethics. It is better to fight from a position of being above board than stooping to the same tactics as others. If you stoop to their level – you’ve just joined them, only your anger blinds you to that fact.

    You could win so much more public sentiment if you simply stood up and spoke out versus acting outside the law or trying to take it into your own hands. You aren’t elected, you aren’t appointed and you aren’t employed to enforce the law. You have the right to speak out and be heard, but you have no right to harass or intimidate others, steal identity or credentials, or execute and distribute malware or any other bad acts on other people.

    Nowhere in the US Constitution is there a right of spying on others as long as you believe you’re right. If there was – we’d have a whole society of wingnuts acting out to harm others. I fully support people’s rights to request redress through legal means. I fully support people’s right to have disagreements. What I don’t support though – and let me be clear here – is someone acting outside the law for purposes that they zealously believe makes them “above the law.”

    That’s the same sort of thinking that leads to terrorism. When an extremist believes that they are “above the law” – they justify their violence by saying that “look what they did” or “we must show them we mean business” – but they are wrong. They are placing themselves above the law and they are wrong.

    I would expect that people are definitely against the practice of naked short selling. What I don’t expect though, is that people support breaking laws in the manner prescribed in the article. It is wrong and you know it.

    You can get mad at me – but it does not change the fact that if information is publicly available – that’s one thing; when information is the private data of another individual and you surreptitiously take that data through cracking, malware or other illegal means, then you’ve simply broken the law.

    No, the ends do not justify the means. That is not an acceptable statement. Do things the right way, the legal way, and the morally correct way. You can win if you’re strong enough and persistent enough. These “shortcuts” are what gets you into trouble.

    Have a nice day. It’s honest criticism. I don’t find the means acceptable for individuals. Law Enforcement – with a warrant – yes; individuals pursuing their own cause? No.


  12. Freecode, please direct me to where you have written such as you have here to the Miscreants that have stolen so much from so many. Then and only then coul you make a statement such as you have here, until then it is us vs them BY ANY MEANS NECESSARY!!! They may break the rules but we should follow them… too funny. Until you can provide the above we will go back to our on topic discussion about the corruption in our capital markets and captured regulatory agencies.

  13. i can assure you freecode that no one on deepcaptures team has broken any laws.
    i think you maybe very very young and naive, at least your writing appears to portray you that way.

  14. After listening to this hearing, I wonder when the SEC had time to investigate Overstock and others that complained about naked shorting and market manipulation and even Mark Cuban and his insider trading while the likes of Madoff and Stanford were looting pension plans and individual of almost 100 billion dollars. Who made these decisions (Shapiro and Cox) and when are they going to come in front of congress to answer for their misdeeds.
    For whom the bell tolls. The hearing below is hard hitting and detailed.

  15. The law is to protect us.
    HA ha ha.
    How does the law allowing market makers to endlessly flood the market with shares they don’t own ,will never buy in, and if delisting takes place [the ultimate goal for these people which they reach time and again] never covering the phony nonexistant shares and pocketing our money.
    How does this benifit any one but the market makers?
    What kind of a level playing field is this?
    How about all the small companys killed by this method before they could have a chance to prove their product/technology was viable?
    How about all the companys ruined and their assets gobbled up at fire sale prices by the same miscreants who drove the company stock price down till they were delisted?
    How about all the men dying of cancer dendreon could have saved?
    This is protection?
    Kid if your new here do your homework before you start telling the old war horses here what we should do and how the law is to protect us.
    I have been trying to get any person in our government who is supposed to be interested in protecting the citizens of the united states of america to do their job since 2000.
    All with heavy documentation explainations and perp lists.
    They listen to their boss the money makers not the citizens.
    I am also a blogger under the bunnyb tag.
    I have been trying to educate ,warn and get mad as hell anyone I can reach since the start of 2000.
    Also do your homework on the stock market crash in the twentys .The hearings that followed .What the government promised to do to protect investors and what we actually received in protection.
    The only rule I see being enforced is the golden rule, he who has the gold makes the rules.

  16. Sean,

    The same thing came to mind.. Martha, Mark, Patrick and a whole lot of other people who were pursued who didn’t intend to harm others and the only result of the investigations were to find nothing or to suppress the price of the stock. Even people who don’t follow the market considered Martha’s prosecution a witchhunt and excessive. I felt that the SEC lost credibility with the way they went after her.

    There may have not been undue influence and in reading the report, it was actually Swanson who kept questioning where the investigation was going. I’m glad that Kotz made it clear that Swanson was not involved in a cover-up. I’m glad that he was exonerated in the testimony.

    There still leaves a whole lot of improper behavior on the part of those who launched bogus investigations into companies whose only faux pas was to speak up about the system. It costs money to survive an SEC investigation and the shareholders end up paying for the way the SEC rewarded employees as discussed at the hearing. They were promoted not on successful inquiries, but simply on how many inquiries.

    What about Mack and Pequot and the firing of G.A.? Gary’s superiors have all melted away into WS.

    Markopolos is such a qualified person to be involved. He would be able to analyze companies’ reports and red flag those that should be investigated. He has an understanding of the agency and he would be such an asset. Let us all ask the SEC to get Markopolos and Aguirre working for us. They both have shown the qualities it takes to make a difference.

    Kotz, Markopolos, Aguirre.. what a message that would send.

  17. freecode, do you have posters of unicorns in your home?
    Dreamcatchers dangling from your rearview mirrors?
    I’m starting to think you just might.

  18. To Sean,

    I have written for years and fought for the years to stop fraud when I have seen it. I’ve worked with the appropriate governmental bodies and agencies as I can to take corrective measures and bring justice where needed. Sometimes it has been successful, sometimes not.Some do and act, others did not and we are where we are. I don’t have to justify being honest – and again – your ends do not justify your means. I am neither young nor naive – I believe in our system, something you seem to totally disregard if you believe that “by any means necessary” is justification for breaking the rules and laws of society.

    I have no doubt about the central core of what I am stating: your cause is just – your methods are wrong. If you believe theft of identity, impersonation of others or harassment, threats and deceit are okay – then you aren’t likely to win many converts to the cause.

    Have a nice day.


  19. Sorry Free Code but DATA and TESTIMONY prove that during 3 days in SEPT 08 the financial markets NEAR collapsed. They did so because of the many who didn’t do their jobs and the MANY who were complicit. Idealism is nice but THIS IS WAR. In 2001 they attempted to crush the financial system and affect the defense and legislature by the use of a primitive method of flying planes into buildings. The YEARS after such saw a shift in strategy where the enemy identifed the weakness in our system and used that weakeness which included the flaws of humanity to allow the next attack. Except this ATTACK was done via computers and the push of sell buttons. While the strategy was being played out there were many who could have stopped it but didn’t. So we were attacked and BSC was one of the first to be hit. This IS WAR and when in war you do all you can to win. Whether it be the use of spies, taps or identifying the liars/cheats and thieves by use of tracking. You may not agree with it. You might not like it but in WAR you do what is necessary to WIN. The bottom line is they DIDN’T collapse the financial system but they DID exact change and that change can be see in onwership of equities, destroyed companies and new programs that are being shoved down our throats. The sad part is that there were so many who didn’t grasp what was going on when Bobo and Patrick and many others identified the flaw YEARS AGO: ILLEGAL USE OF NAKED SHORT SELLING. Unfortunately the thread between the complict whether it be MS/BSC/LEH or Gary Weiss and the many miscreants was not a single thread easy to break but a thread of many that was twisted in both application and thought. Here and now the solution is simple. Put the liars/cheats/thieves and the complicit in JAIL.

  20. Hi anonymous,

    Naked short selling is not war – it’s crime. The two are different and all the ALL CAPS posts in the world do not change that fact. I agree that those who break the laws should go to jail. I agree that naked short-selling is wrong.

    I disagree that the ends justify the means. A stong society does not need to sink its moral fiber to right wrongs, nor change its basic principles either. When we do, we become as weak as those we characterize as “wrong”, for we choose to follow their path and not the path of the strong.

    It isn’t an easy struggle – but it isn’t war either. It’s called Justice – and it takes time, effort and cooperation. If all you intend here is to silence a potential ally because you disagree with that philosophy – then you will succeed at showing a level of intolerance that will rob you of any credibility.

    Gary Weiss is but one person – the problem here is that you haven’t seen the forest because you’re focused on a tree. If you have evidence of naked short selling – then you need to be able to provide that to the FTC, your Congress critters, the Feds, and anyone who will listen to credible evidence. If you don’t – declaring something as “war” when it is only criminal smacks of demagoguery and will put people off.

    There is no difference between a zealot and a terrorist; they both believe that they possess the only “right” to do as they please. I’m asking you to be a better person and go after the crooks through legal means, and that is “wrong?” Really?

  21. Freecode, , as I surmised you were unable to respond to my request thus I will no longer respond to you. Your agenda has just be proven and I have not disparaged you in anyway doing so. My final word to you is “We don’t need to have you as a convert”,people are wising up and now know that they were robbed, thanks to Judd, Mark,Partrick et al.It is all out in the open now. “Night can only run for 12 hours before day catches it”.

    Anonymous great post. Mary thanks.

  22. Someone is trying to takeoover the thread, lets get back on topic.

    Do you think Mack kknows he is about to get investigated??

    Morgan Stanley’s Mack to pass CEO job to GormanFont size: A | A | A5:51 PM ET 9/10/09 | Marketwatch
    SAN FRANCISCO (MarketWatch) — Morgan Stanley’s John Mack will relinquish the chief executive title and pass the reins to the current co-president, James Gorman, at the start of 2010, the investment bank said late Thursday.

    Mack will continue as chairman while London-based co-President Walid Chammah will become chairman of Morgan Stanley International, the firm added.

  23. Freecode please give this a chance,
    I would like to ask Dr. Decosta to provide to freecode some of the material proving bad publicty that coincide with massive naked shorting driving down the price of a stock.Sometimes killing the company.
    The proof he has collected on who did what and how they profited. The list of authoritys and enforcement divisions we have pled our case to. The NCANS group and their efforts and who we tried to convince in the legal/political system only to get such gems as ‘we don’t have the power to force buy ins’ and ‘That trading information is not public because it would reveal trading tactics’ or my favorite’Naked short selling has no effect on the market’.
    We need every person we can find to start the education ball rolling.
    Knowlege is power and many with knowlege is a great power.
    Freecode I don’t think its war I think its feeding time.
    We are prey they are predators.
    Heads up.
    From one sheep to another.
    “There are wolfs here”.
    The bad part is the shepherd appears to be one of them or at least on their payroll.
    I for one need all the help we can get here.

  24. Fighting fire with fire doesn’t make you an arsonist, anarchist, or antiChrist.

    Again, no laws broken here.

    My hat is off to Judd.

  25. I spoke to the SEC’s head of training and public education a couple of weeks back. Here’s his quote:

    “Naked Short Selling is not illegal. I challenge you to show me where it is stated that it is (illegal)…”

    Seems we need to start employing blunt instruments as the subtlety of the law(?) is confusing the hell out of these clowns to the detriment of every real investor in this country.

  26. Freecode, you can try to disract or brush it as you so choose but we were attacked and that attack was derived from a strategy and the TACTIC of using illegal naked short selling. Yup I used Caps for that word TACTIC to help some see the nuances in that forrest. There are reams of evidence of the illegal use of Naked short selling so I don’t need to go there. As for it being a an attack by use of financial terroism there is also testimony of such as well. So let’s get real here. A nation was attacked by some very very bright individuals who exploited the avarice of some very foolish people as as this was occurring from the incipient stages of the strategy there were many who were out front of cameras and behind closed doors doing all they could to ingore what was being brought to their attention. No different than the hero who was involved with security of the WTC that brought to the attention the risk re an attack by air and unfortunately was correct and died saving the lives of many while afterwards those who were negligent did the feiged sincerity when they KNEW they were told and yet they still didn’t upgrade systems and protection. So too the Shelby’s of the world who is on tape, of the cox’s or the many others who knew and in the process rather than address and protect dissed the hero’s such as Acguire. So if the TRUE investigative journalists can bring forh the truth by use of a trojan than so be it. You and your ilk can spend the next 20 years talking about it while there are those who will solve it. For that the majority who will be protected are thankful just as the majority are thankful for those who did water board and prevented additional attacks. So does the end justify the means. In war: YOU BETCHA!!

  27. Re John Mack.. unfortunately that will be what happens to the many who were complicit. They simply do the walk away and avoid being addressed. In the end ol Gary was proven right. So what if the failure of those to act responsibly cost so many so much and affected so many lives negatively. Who remembers Mack and his imploring those in position to protect MS. Notice they did along with GS, AXP. And when it was all said and done the game of triage continued as C was stripped of Smith Barney and given to MS and voila MS stock rose from near death and at 8 to 30’s and beyond while C sucks wind. Oh and let us not forget ol Mozilla did the run for cover long before CFC went by by and cut the deal with BAC as the govt went along. WHY? Mozilla began his defense way back then. As have many others including Cramer. But there is good news. Dem Sen Ted Kaufman. Kudos to him and the many here who are not deaf and blind to facts.

  28. Jim Hall,
    Point out to the SEC’s head of training the laws against fraud and counterfeitingNaked shorting cannot be magically made legal with those laws in place.

  29. FYI –

    I just went to to see if ETFs were also being subjected to Naked Counterfeit Short Selling. I looked at SLV and saw Naked Counterfeit Short Selling.

    Then I noticed two interesting things:

    – Link to on the left side
    – And a note in upper left corner, “Data now provided by SEC bi-weekly!”

    I do not remember reading that the SEC is providing data bi-weekly now.

    I wonder if this means that the Wall Street Counterfeit Machine has found another hole to crawl through or have chosen to move their operations to another method, which is NOT reported to the public by the SEC, such as, ex-clearing?

  30. i am enrolled in ITT-TECH for the computer forensics course.
    i intend to use my education in this arena.
    i wont have problem one with hacking sayyy the fed reserve computers or government sachs computers. of course i will be licensed and legal.
    provided i pass the course.
    someones gotta do it.
    i step up to the plate so hopefully we can get the info America wants and needs.

  31. Albert Einstein’s quote on insanity: doing the same thing over and over again and expecting different results.

    Folks the SEC is captured, and is run by a bunch of Lawyers, rather than getting frustrated and hoping the SEC will do something different this time around, I suggest people take a different stance, in the 2010 Midtem election vote every single incumbent politician out of office. Stop buying anything goldman in your 401 K, refinance your mortgage out of goldman, Avoid Goldman like the vampire blood sucking squid they are . Avoid their IPO’s and anything they underwright, the only way for change to occur is for we the people to send a very strong message, that we are fed up already.

  32. irieblue. this suggestion is another that is idealistic. Wait till the mid term election. Let me get real objective. Washington Mutual/Wachovia were both absorbed in the two weeks following the shameful NO vote for the TARP last year that simply allowed those who were attacking the fuel to slam them lower and as a result the second ban was put in place. BUT to the point in those few days many an investor/employee was damaged. So time is of the essencee. By mid term who knows who would or will be affected next as nero fiddles. Now I’m not expecting more of the same for there seems to be the move to the ok..we ooopsed and we are fixing it so lets move forward. Geithners town hall smacked of such. Heck even Bobo’s latest blog suggest Gasperino is a good guys. HMM good guys don’t bash the chit out of you for years and then one day wake up and say.. So Patrick Byrne was right. HMM hey mr investigative journalist, it takes you how long to acknowledge that. How about the good ones KNOW it and report it versus play the game of distortion and attack. Same goes for the existing in congress. So what do we do. We press and press and confront and press until there IS CHANGE. And we do not sit back waiting for the rats to sneak their way out of the box as they take early retirement or step aside. Or heck let them do a PR that suggests Cramer was right with his Rant. Maybe someone should ask Ol Cramer how he KNEW they knew nothing. Oh that’s right he’s already done his self confession on a video. I do agree with you re don’t buy their products etc. And I’ll add tell them WHY?

  33. I might be off topic here but uh, did anyone notice 51 THOUSAND ticker symbols suddenly becoming untradable? I had no idea there were that many grey sheet stocks in existence. Who owned those equities? How did FINRA decide which ones would survive and which would not? If there were outstanding short positions in those stocks will there now be a “taxable event” related to them? I guess we will never know.

    1. I have a question for the group. How come short figures disclosed by the OTC

      have much smaller values for the same month than the fails to deliver numbers disclosed by the SEC? Shouldn’t the short numbers be bigger (first you legally short before naked shorting)?

      How could the short numbers be so much smaller than the fails numbers?

      In both cases, the numbers are much tinier than would be expected, considering the bulk of OTC companies are likely to fail over time.

      This seems like a good area to investigate.

      1. fails include both long fails and short fails. this is a problem with the ftd listings. When you see these, look into the company and look for 144 stock, etc…they have a delay before sale but when clear to sell, they also have a longer settlement due to the paperwork.

  34. Whose side is the SEC on anyway??LOL!!
    Take this SEC!!

    Somebody FINALLY stands up to the SEC
    Judge rejects SEC/B of A settlement, orders trial 09/14 12:00 PM

    (Reuters) – A U.S. Judge rejected a Bank of America Corp (BAC:$16.6901,$-0.2799,-1.65%) settlement with the SEC and ordered a trial, according to a court document
    * Judge says proposed settlement is neither fair, reasonable or adequate
    * Judge says settlement “does not comport with the most elementary notions of justice and morality”
    * Judge says Bank of America never actually provided the information the court requested
    * Judge calls the proposed settlement a “contrivance” designed to provide SEC with “the facade of enforcement” and Bank of America a quick resolution of an embarrassing inquiry” at shareholder expense

  35. SEC: protecting long-term investors a priority
    reuters news:

    (Since when? – JRH)

    WASHINGTON (Reuters) – The first responsibility of the U.S. Securities and Exchange Commission is to protect long-term investors if their interests conflict with short-term traders, the head of the SEC said in a letter revealed on Monday.

    “I firmly agree that the commission’s focus must be on the protection of long-term investors,” SEC Chairman Mary Schapiro said in a Sept 10 letter to Senator Ted Kaufman, Democrat of Delaware.

    Kaufman had asked the SEC to review what he called “questionable” developments in the structure of capital markets such as so-called dark pools, flashes, and co-location.

    Schapiro said that vigorous competition among short-term traders can lead to important benefits for long-term investors but that if their interests conflicted, the SEC had a “clear responsibility” to uphold the interests of long-term investors.

    The SEC has been examining market structure issues and is probing aspects of trading and transparency at “dark pools,” where large block trades are done away from central exchanges.

    It is also reviewing co-location, where firms rent space at exchanges like NYSE Euronext (NYX.N: Quote, Profile, Research, Stock Buzz) in an attempt to shave valuable microsecond from trading times.

    On Thursday, the SEC is expected to consider a proposal that would ban the use of flashes, or when exchanges flash buy and sell orders to member firms before revealing them publicly.

    Schapiro said the SEC must keep a careful watch on the rapid advancements in trading technology to ensure that sophisticated traders are not favored and that federal rules keep pace with market developments.

  36. I had to post this overhere from the Investorsvillage board..

    In response to msg 36983 by n-tres-ted ignore topic, view thread , thread start

    Re: USDC Judge Jed S. Rakoff
    I have a word that describes this paragraph …. DEEPCAPTURE!


    Overall, indeed, the parties’ submissions, when carefully

    read, leave the distinct impression that the proposed Consent

    Judgment was a contrivance designed to provide the S.E.C. with

    the facade of enforcement and the management of the Bank with a

    quick resolution of an embarrassing inquiry – all at the expense

    of the sole alleged victims, the shareholders. Even under the

    most deferential review, this proposed Consent Judgment cannot

    remotely be called fair.


  37. Schapiro likely to ‘comment period’ and ’roundtable’ any proposed changes until all interested parties meet their maker.

  38. Dr. Jim DeCosta,

    Thank you again for your “hard hitting” letter to the SEC.

    It is now obvious to me that the SEC has no intention of ever eliminating “Naked Counterfeit Short Selling,” because this would prevent Wall Streeters from running their extremely profitable Second Tier Ponzi Scheme. So we are left with seeing continual announcements from the SEC about how they are proposing another change in REG SHO.

    In fact, I suspect the Original Secret Purpose for setting up REG SHO was to institutionalize and to protect this Wall Street Second Tier Ponzi Scheme.

    In thinking about this, I recently make the connection to the fact that most American Workers today have a 401K Retirement Plan instead of a Pension Plan. Instead of professional Wall Streeters overseeing a pension plan, now each individual American worker is a single small fish in the sea with no one looking out for their welfare on Wall Street.

    REG SHO, this Wall Street Second Tier Ponzi Scheme, allows corrupt Wall Streeters to steal money from any small fish American Worker’s retirement fund with ease and with protection from the SEC as defense lawyers for their Wall Street fraternity brothers.

    Keep up the good fight Doctor!

  39. istandup,

    I think our “phrase of the day” award has to go to Judge Rakoff in the B of A case. He labeled the SEC’s role in accepting the B of A settlement as the SEC providing the “facade of enforcement”. The role of a truly “captured” regulator is to provide the “facade of enforcement” so that misguided investors under the illusion that the SEC and the SROs are providing effective “investor protection” will gladly place their bets on the table. What you need is the presence of a police-like entity that refuses to act in a policeman-like role.

  40. I think we need the FBI and its forensic accountants to pick up the ball.
    The SEC has fumbled enough…Disband it. Along with FINRA.

  41. Here ,hear both Jims’. This is about to come to a screeching way or the other it is reaching a point of no return if it has’nt already!!!

  42. Here’s the quote from the Judge:

    “The parties’ submissions, when carefully read, leave the distinct impression that the proposed consent judgment was a contrivance designed to provide the SEC with the façade of enforcement and the management of the bank with a quick resolution of an embarrassing inquiry,” Rakoff wrote.

  43. In 2005 Bernie Madoff tried to provide the “facade of enforcement” to the SEC at a roundtable when he claimed that there was no way that anyone could pull anything off on Wall Street because of the SEC’s heightened diligence. Fast forward to 2009 when Cramer lost it on TV screaming that “they (the SEC)know nothing, nothing”. Now the standard line of the proponents of the totally corrupt status quo is that since Reg SHO became effective in Jan. of 2005 there’s no longer any problem in regards to delivery failures. Fast forward to one year ago yesterday when Lehman Bros. goes down in flames and their FTDs at the DTCC went up 57-fold from their previous all time high levels as the share price fell off of a cliff. The response of the mainstream media and the SEC was that they found no firm evidence that abusive naked short selling played a role in the near collapse of our entire financial system. A 57-fold increase in FTDs from the all time high in FTDs is not compelling evidence. Okeedokee!

  44. Dr. Decosta don’t for that the “SEC” is still investigating the trader that placed the 1.7 million dollar put on Bear Stearns that netted 270 mill in one week, to see if someone knew something was going to happen or if they were just lucky. I wonder what happened to the result of that inquiry??LOL!!! INVESTIGATE THE SEC!!! Oh that’s right David Kotz just did that and it did not turn out very well did it?? Mary Shapiro should also be investigated. This latest farce (Bank of America/SEC) was done under her and Khuzamis’ watch , no?

  45. Will anyone take on the captured Ragingbull website. If you log onto the JAGH board with a new name and appear as a long you will be booted no matter what you say.

    We sent in irrefutable posts proving that Ru4real and Jag-this were one and the same basher and they were never taken down for a multi-alias violation. But any poster appearing as a long will be gone almost instantly unless posting over the weekend when RB staff is not present.

    The RB JAGH board is captured lock, stock and barrel. Prove it to yourself by going on the board and create a new profile and post as a long and you will be taken down shortly.

    What a crock that board is.

  46. Dr. Jim DeCosta,

    I like the “phrase of the day” award you gave to Judge Rakoff in the B of A case.

    The “Facade of Enforcement” is, in my opinion, exactly what the SEC has become. And I think this describes what “REG SHO” was and is today.

  47. One judge see’s the SEC is a POS and is FOS and is wanting to dig deeper !!!

    udge Rejects BofA-SEC Pact, Sets Trial Date

    SEPTEMBER 14, 2009, 12:53 P.M. ET

    Federal District Judge Jed S. Rakoff rejected a proposed $33 million settlement of allegations by the Securities and Exchange Commission that Bank of America Corp. “materially lied” in shareholder communications about bonuses to employees of Merrill Lynch & Co.

    Instead, Judge Rakoff set a Feb. 1 trial date on the allegations in his New York courtroom.

    Judge’s Order: BofA-SEC Pact

    The SEC and Bank of America had sought the judge’s approval of a consent decree to resolve charges that the bank concealed an agreement to pay up to $5.8 billion in bonuses to Merrill executives.

    In an order issued Monday, Judge Rakoff acknowledged the public interest in settling disputes rather than having them go to trial. Nonetheless, he wrote, “even upon applying the most deferential standard of review,” he was “forced to conclude that the proposed consent judgment is neither fair, nor reasonable, nor adequate” to protect the public interest.

    In effect, Judge Rakoff found, the settlement would force the victims of the alleged misstatements–Bank of America shareholders–to pay an additional $33 million.

    “It does not comport with the most elementary notions of justice and morality, in that it proposes that the shareholders who were the victims of the bank’s alleged misconduct now pay the penalty for that misconduct,” the judge wrote.

    The judge has noted that SEC policy directs that culpable executives be punished for misleading shareholders, something the commission had not sought in this case.

    Write to Jess Bravin at [email protected]

  48. Where the hell is the SEC’s Lehman Investigation:

    From Bloomberg:

    “Airport Runway

    On Sept. 17, two days after Lehman Brothers filed for Chapter 11 bankruptcy, the number of failed trades climbed to 49.7 million, 23 percent of overall volume in the stock.

    The next day, the SEC announced its ban on shorting financial companies in 2008. The number of protected stocks ultimately grew to about 1,000. On Sept. 19, the commission announced “a sweeping expansion” of its investigation into possible market manipulation.

    The ban, which lasted through Oct. 17, didn’t eliminate shorting, according to data from the SEC, the NYSE Arca exchange and Bloomberg. Throughout the period, short sales averaged 24.7 percent of the overall trading in Morgan Stanley, Merrill Lynch & Co. and Goldman Sachs Group Inc. on NYSE Arca. In 2008, short sales averaged 37.5 percent of the overall trading on the exchange in the three companies.

    To date, the commission hasn’t announced any findings of its investigation.

    Pollack, the former SEC regulator, wonders why.

    “This isn’t a trail of breadcrumbs; this audit trail is lit up like an airport runway,” he said. “You can see it a mile off. Subpoena e-mails. Find out who spread false rumors and also shorted the stock and you’ve got your manipulators.”

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