Manipulating Gold and Silver: A Criminal Naked Short Position that Could Wreck the Economy

Naked short selling of gold and silver — a threat to the stability of the financial system and evidence that our markets are rigged

Everyone from U.S. Senators to prominent hedge fund managers say that criminal naked short sellers had a hand in the financial collapse of 2008, but the regulators aren’t listening. Not a single criminal has been prosecuted. Indeed, the regulators continue to allow the miscreants to manipulate the markets — not just the stock markets, but also the markets for corporate bonds, derivatives, U.S. Treasuries, and all manner of commodities – even when the regulators are provided with indisputable evidence of a massive crime in progress. They could easily fix the flaws in the settlement system that allow much of the manipulation to occur, but they refrain from doing so either because they are too captured by the miscreants or too cowed by the possible consequences of throwing the lights on what may be an enormous confidence game.

So I am inclined to say that it is hopeless. Everyone loves an optimist – but, yes, it is hopeless. We are like the audience in one of those cheesy horror flicks – yell and scream all you like, but the dumb blonde is still going to walk into that room and get hacked to pieces. Except that it is not a movie. It is real. And it’s not just the dumb blonde who is going to get slaughtered. It is all of us. It is our economy. It is our standard of living. It is our financial system – the lifeblood of the nation.

The latest case of regulatory indolence was recently exposed by Andrew Maguire, a successful metals trader and whistleblower who went to the Commodity Futures Trading Commission with data that strongly suggested that a small number of criminal short sellers had rigged the markets for silver and gold. Maguire not only provided the regulators with a Dummies’ guide to how the manipulation generally worked, but also warned them of a specific crime – a dramatic take-down of the gold and silver markets – that he said would occur at an exact time on a specific date in the near future. That is, Maguire told the regulators that a massive crime was about to happen, and the crime happened precisely as he predicted it would.

With Maguire’s warning, the regulators were able to watch a crime unfold, right before their eyes, in real time. Then the regulators thanked Maguire by saying, in essence, “you’re a nuisance, go away.” This is not just appalling, but scary, because the criminal activity that Maguire exposed is much bigger than the Madoff Ponzi scheme, and more likely to result in serious damage to the American economy. Indeed, there is a strong case to be made that our national security is at stake. As Maguire stated in a recent interview with King World radio, the manipulators have likely created a massive naked short position that can easily be exploited by foreign entities who might see financial or even political gain in eviscerating the dollar.

Maguire’s email exchange with the CFTC is remarkable reading. In one email he writes:

“Thought it may be helpful to your investigation if I gave you the heads up for a manipulative event scheduled for Friday, 5th Feb. The non-farm payrolls number will be announced at 8:30 ET. There will be one of two scenarios occurring, and both will result in silver (and gold) being taken down with a wave of short selling designed to take out obvious support levels and trip stops below. While I will no doubt be able to profit from this upcoming trade, it is an example of just how easy it is to manipulate a market if a concentrated position is allowed by a very small group of traders…I sent you a slide of a couple of past examples of just how this will play out.

“Scenario 1. The news is bad (employment is worse). This will have a bullish effect on gold and silver as the U.S. dollar weakens and the precious metals draw bids, spiking them higher. This will be sold into within a very short time (1-5 mins) with thousands of new short contracts being added, overcoming any new bids and spiking the precious metals down hard, targeting key technical support levels.

“Scenario 2. The news is good (employment is better than expected). This will result in a massive short position being instigated almost immediately with no move up. This will not initially be liquidation of long positions but will result in stops being triggered, again targeting key support levels.

“Both scenarios will spell an attempt by the two main short holders to illegally drive the market down and reap very large profits.”

It would be hard to get more specific than that. As Maguire says in the same email: “The question I would expect you might ask is: Who is behind the sudden selling and is it the entity/entities holding a concentrated position? How is it possible for me to know what will occur days before it will happen? Only if a market is manipulated could this possibly occur.”

The CFTC had previously had the courtesy to call Maguire and listen to his concerns, but by the time Maguire sent the message laying out the crime, the CFTC had stopped returning his emails. The regulator showed no real interest, and let the crime happen. After the crime occurred, Maguire wrote another email:

“A final email to confirm that the silver manipulation was a great success and played out EXACTLY to plan as predicted. How would this be possible if the silver market was not in the full control of the parties we discussed in our phone interview?…I hope you took note of how and who added the short sales (I certainly have a copy)…Surely some discussions should have taken place between the parties by now. Obviously they feel they can act with impunity…”

After that, Maguire sent several more emails detailing manipulation of the gold and silver markets. He received no replies. So he wrote a final email, providing still more evidence in support of his case and stating: “I have honored my commitment to assist you and keep any information we discuss private, however if you are going to ignore my information I will deem that commitment to have expired.”

To that email, a CFTC official finally replied: “I have received and reviewed your email communications. Thank you so very much for your observations.” That was it. Thanks a lot and goodbye. No follow up questions. No acknowledgement that a crime had occurred. No apparent interest whatsoever.

Maguire was understandably peeved. As he said in his radio interview, “I kept a live commentary going on that entire scenario. How they were going to flush it down below 15, how it then went down below 15, and how then they were putting big block offers hitting all the bids to stop it getting back through the technical level of 15 so as not to trigger covering by the shorts and inviting longs to get long again. To me, you don’t get any better than that, how could anyone predict that unless they knew what was going to happen, not just saying it’s going to move in one direction, but it’s going to move in one direction then another direction – all in a matter of minutes.”

Not long after the massive crime took place, the CFTC held a public hearing on manipulation of the metals markets. Maguire was specifically barred from participating. He told King World radio that he believed one CFTC official, Bart Chilton, wanted him to attend the hearing, but Chilton is a lone “Elliot Ness” crime fighter working in an agency that is dominated by the feckless and the corrupt. “There are a lot of people at CFTC wanting to look the other way,” Maguire said.

However, the hearing (a partial transcript and video of which can be found at the excellent financial blog Zero Hedge) did yield an interesting piece of information. In the course of answering an unrelated question, Jeffrey Christian, a former Goldman Sachs staffer who is now the head of a metals trading firm called CPM Group, stated that “precious metals…trade in the multiples of a hundred times the underlying physical…” (the italics belong to me and a lot of other people whose eyes popped out of their heads when they heard this).

What Christian was saying is that every ounce of gold or silver is being sold 100 times. This would not be problematic if we were speaking of some dusty market in Central Asia with rows of traders’ stalls wherein some commodity (such as gold, silver, radios or Kalashnikovs) were being sold and resold in rapid-fire succession: there, our sensibilities about scarcity, value, and price discovery would actually grip reality. Here, however, we are talking of markets where the distinction between reality and representation has become as blurry as the last round of a game of musical chairs, enabling some sellers to offload  paper IOUs promising eventual delivery of silver and gold – promises that would be impossible to keep if some small segment of the buyers were to demand delivery of the real thing.

This is quite similar to the naked short selling of stocks, where traders sell stock that does not exist, but enter IOUs in their computers, and then “fail to deliver” what they have promised. It is hard to distinguish this from fraud (notwithstanding the Efficient Market Hypothesis of financial theory, which maintains, essentially, that it shouldn’t matter).  Christian, the fellow who inadvertently revealed the massive naked short positions in gold and silver, said that he didn’t see this as a problem because “there are any number of mechanisms for cash settlement,” and “almost all of these short positions are in fact hedges…”

This is slightly absurd. Later in his testimony, Christian himself said that it was “exactly right” to say that the hedges are nothing more than hedges of “paper on paper” – a particular sort of merry-go-around where one IOU is settled by another IOU, with these IOUs outnumbering real gold and silver by multiples of a hundred times.

As for the notion that cash settlement solves the problem, Maguire noted in his radio interview that cash settlement “is the very definition of default. If somebody wants to buy gold and silver and instead they’re given cash, that is a default.” In addition, “there are people who will not want cash – Chinese, Vietnamese, Russians – people looking for the metal, they will want to take it, and that will cause a default on the Comex [the metals exchange] because the Comex will be drained…that was the word that was used by several people making testimony [at the CFTC meeting], that the Comex would be drained…”

Maguire added: “What’s going to happen, if you’re an Asian trader, or a non-Western trader, who has no loyalty, or doesn’t care about homeland security or anything else, who says, now wait a minute, if I can establish in my mind that there is 100 ounces of paper gold, paper silver for example, for each ounce of real silver, than I have a naked short situation here that I can squeeze and they can go on the spot market which is basically a foreign exchange transaction, short dollar, long silver to any amount they want – billions, trillions — whatever they want, and they can take this market, squeeze this market, and blow it up…”

In other words, the problem isn’t just that criminal naked short sellers manipulate the metals market downwards. It is that they have created a condition where a foreign entity can merely demand delivery of real metal to induce a massive “squeeze” that sends the price of metals skyrocketing, putting huge downward pressure on the dollar. Meanwhile, says Maguire, with prices rising, “for 100 customers who show up there is only one guy who is going to get his gold or silver and there’s 99 who will be disappointed, so without any new money coming into the market, just asking for that gold and silver will create a default.”

“There are no prisoners taken in this kind of environment,” Maguire added. “All they need to establish is that it is naked, and by the admission of [former Goldman staffer] Christian at the meeting…we have a definition of physical actually being paper…They get that in their heads and its locked, it’s a done deal, then we don’t have to wait…there is a profit to be made here, and there is nothing [anybody] can do about it because it’s a foreign exchange transaction, and there are no limits on a foreign exchange transaction, and obviously foreign exchange transactions are coming to light, there [is talk] of manipulation…”

Indeed, Maguire says that he has received phone calls from wealthy individuals in Asia looking for the go ahead to exploit the naked short position. “The only question they have in their mind is can we establish that this is a naked short position, that’s the only thing they had to clarify, it’s become clear, it is now clear [that the naked short position is massive], and no doubt they do their own due diligence, but basically [the naked short position] has been admitted at the only metals meeting [the CFTC hearing] that we’ve ever had…”

Maguire says that the naked short selling scam is in the trillions of dollars, making it by far the biggest financial fraud in history. He calls it “financial terrorism” and accuses the naked short sellers of “treason” for putting national security at risk. It might be hard to believe that foreign entities are plotting to crush the U.S. economy, and perhaps they are not, but there is no doubt that loopholes in the clearing and settlement system – not just for metals, but also stocks, bonds, Treasuries, and derivatives – could quite easily be exploited by any foreign entity desiring to do harm to the U.S. economy. The only dispute is whether such a desire exists.

Maguire and Adrian Douglas of GATA, an organization that lobbies against manipulation of the metals market, took their concerns to the mainstream media and had a number interviews scheduled. However, every one of those interviews were suddenly cancelled. This is not surprising. The mainstream media has consistently shied away from stories about illegal naked short selling and market manipulation, partly because the media outlets are captured by the powers that be on Wall Street, and partly because investigative journalism is now viewed as an anachronism – a time-consuming effort that might have been suited to Woodward and Bernstein back in the 70s, but not to the downsized news rooms tasked with churning out tepid and meaningless “he said, she said” mimeographs for a population of readers who (so it is said) want their “news” fast, and don’t care a whit for in-depth reporting.

Meanwhile, just as the stock manipulators have engaged in a coordinated effort – deploying threats, ruthless smear campaigns, and slick lobbying – to keep their crimes out of the spotlight, so too will the gold and silver manipulators. Adrian Douglas of GATA notes that at the precise moment that his GATA colleague Bill Murphy began to speak at the CFTC meeting, the video camera recording the event experienced “technical problems” – problems that were fixed at the precise moment when Murphy stopped talking. Douglas concedes that this might have been a coincidence, but when this sort of thing happens often enough, a little healthy paranoia is probably a good thing. That said, everyone loves an optimist, so I’ll say the camera really went kaput.

But…ack…another coincidence: The day after Maguire gave his radio interview, he was the victim of a hit and run collision. Somebody sped out of a side alley at top speed, smashed into Maguire’s car, and then tried to escape. A high-speed chase ensued, and the perpetrator was caught by police. The British press has reported that this might have been an assassination attempt, or a threat, but as yet there has been no word from the police. Maguire was injured, but not seriously. Let’s be optimistic, and say this was an accident – assassinations and threats only happen in the movies.

But…ack…another coincidence: Shortly before somebody crashed into Maguire’s car, the CFTC caught on fire. This fire happened to be located in the one small basement room where gold and silver trading data and other pertinent documents were kept. The CFTC claims that its investigation of metals manipulation, for what it was, did not burn.  So maybe it was just an accident. Maybe some eager CFTC regulators were down there smoking cigarettes. Maybe it was stress. Maybe they’ll keep investigating. Maybe they’ll bust the criminals.

Maybe, just maybe…yes, everyone loves an optimist, so let me make this clear – the horror show that is our regulatory system is going to have a happy ending. There will be no massacre. The financial system will be just fine…really…maybe… or maybe not.

* * * * * * * *

Update: Another coincidence: GATA reported recently that there has been an attack on the King World website — the website that contains the radio interview of Maguire and his emails to the CFTC. This was an apparent attempt to shut down the website and prevent the scandal from being exposed further. The Internet company that hosts the King World website reported to King World the following: Your hosting account is the target of a distributed denial of service attack…Computers were attacking your account.”

Steps were taken to protect the website, which is once again up and running.

  1. America is going to rot from the inside from Naked shorting. The SEC and Congress could care less. America is going down. We need to go back to Public Hangings. Maybe Wallstreet would get the point then.


  2. Mark, this is probably the most insightful exposé you’ve ever written on NSS, and probably the bleakest conclusion, too. :/

  3. I don’t care what any of you say.. Someone in a position of Authority, Somewhere is reading all this, seeing all this and is doing or about to do something DRASTIC about it. These Miscreants ( I prefer the word CRIMINALS and Thieves myself) will get their just deserts!!! Thank you Mark , as usual on top of your game.

  4. Thank you Mark for reporting on this slightly different manifestation of naked shorting, this one perhaps at the behest of the US government to disguise the effects of inflation due to the Fed printing press…

    Re: the referenced US gubmint involvement… here’s the link to the March 31 follow on discussion with GATA principles Bill Murphy, Chris Powell and Adrian Douglas. This is a very worthwhile listen. I recommend it after reviewing all the info linked in Mark’s article.

    It is absolutely beyond belief that the mainstream press is continues to ignore actual news in favor of no talent idiots learning how to foxtrot. I bet they’ll cover this epic fraud after the fact though… and claim no one could have foreseen the destruction.

    I’m slowly becoming convinced our national ‘leaders’ have sold us peasants out. And the continuing discovery of well organized, massive scale theft & corruption is confirmation of ongoing orchestrated efforts to destroy & end the economic/political/social fabric of the USA.

    I am sickened by the rampant corruption at all the name-your-alphabet-soup gubmint agencies, private sector job losses, unconstitutional federal power grabs, all seeming to be to facilitate a continual transfer of wealth to the wealthy.

    I’m a sucker for a good conspiracy… So it’s probably just me dreamin’ it all up… But do I hope I wake up from this nightmare soon.

  5. Mark,

    thank you for your very fine work. I’ve been on this naked shorting scene since before Bobo started his blog. I’am 100% convinced that the authorities will never do anything to stop this looting maybe they fear for their families and they should. I have come to the conclusion that what you are giving us is actionable investment advice. Based on this and I’m not always good at interperting this the dollar will eventually crash, Gold and silver should soar temporailly What about ETF’s in Gold and Silver? How do we play this? IF everybody comes to the conclusion that their gold/silver derivitives are worthless then the price will crash, after soaring? I don’t think you need a foriegn entity to do this do you? Why are they special? I think if there is a flaw in your thinking its that the CFTC would just stonewall the grieved parties who asked for delivery. No nation under Gog would ever go public with this becuse they might get their gold delivered on the tip of a 20 megaton nuke that was accidentally unleashed from a trident submarine in a training mishap…it would be a tragic coincidence.God I love this country.

  6. After everything you learn, you start to wonder if the motives behind the many regulators failures to act is about a payoff?

    Maybe it is a much bigger thing then getting a payoff or keeping a job.

    Maybe the stakes are so large now that to interfere is unthinkable. Could it be the payoff is actually living, and they know it, without ever actually hearing those words used?

  7. Sean, no offence to your theory,but… Who? Who has that kind of AUTHORITY? It looks like no one is big enough.If they know this burns the whole house down at this point,and that there is now ‘no practical solution’ as Jim Sinclair states, who can stop it?

    I am afraid a total blow up of the worlds financial system is the only thing that ends it. A Mad Max’s World for us all?

  8. I would be careful with the zerohedge is a totally credible blog. There are definately signs that zerohedge may be…lets just say…empathetic to the creatures deepcapture is intent on exposing. The recent post on Eihnhorn is case in point. There’s plenty more.

  9. Imagine you’re a farmer, fifth in the line of farmers running the same farm, with no goal other than to work hard, feed your neighbors and feed your family.

    Suddenly, the price of your crops drop absurdly below the price it takes to produce those crops and the same people that are selling short crop futures are calling in the loans on your combine. Next thing you know, you’re bankrupt.

    What does it mean when supply and demand is fake because it is supply + fake supply versus demand and trillions are going to the people producing the fake supply?

    There’s a steady sucking sound as small businesses, small farms and the middle class who thought the market was based on supply and demand of the real thing, are robbed, because it is based on supply and demand of paper casino bets that never need to be honored.

    The long term result is obvious and is de-evolutionary. Survival of the corruptest.

    The people that create, invent, produce, manufacture, etc. will go broke as the people that steal for a living become rich and become our kings.

    Good bye family farm, hello Monsanto. Good bye small entrepreneur, hello Walmart. To understand it, you need to understand that Democrats and Republicans report to the same puppetmasters and the problem can’t be solved through politics. When CNN does the next news story titled “America Divided: Some people are mad about this and some people are mad about that”, realize that the story is written to serve the thieves who are our kings. The last thing they want is for Democrats and Republicans to work together to restore ethics and productivity to capitalism.

    It’s a world where we fight wars to ensure the drug money that props up Wall Street is never cut off because liquidity trumps ethics.

    (Scroll down to the picture of the highest paid ever head of the NYSE before it went public, pushing the problems of settlement on the new public shareholders.)

    To fix a problem, you need to understand it and the reality is really, really ugly.

    1. “The last thing they want is for Democrats and Republicans to work together to restore ethics and productivity to capitalism.”

      Exactly! I think we should crash their little party…

  10. Maguire added: “What’s going to happen, if you’re an Asian trader, or a non-Western trader, who has no loyalty, or doesn’t care about homeland security or anything else…..”

    In other words, the problem isn’t just that criminal naked short sellers manipulate the metals market downwards. It is that they have created a condition where a foreign entity can merely demand delivery of real metal…. ”

    Hi Mark –

    I found this slightly offensive.
    The squeezing and manipulating is being done by native born Americans…

    Why don’t you name the traders?

    They were at JP Morgan, and there’s nothing to suggest they were “foreigners”…
    Nor are Loeb, Einhorn, Soros, Paulson, Cohen foreigners.

    Please go to Dissident Voice, a magazine where lots of non-natives or foreign born citizens write. The magazine would have told you much more of what was going on than anything written in the mainstream press.

    Nativism is one reason the population remains so propagandized. Foreign sources, however credible, are always denigrated relative to domestic sources, however lacking in credibility or integrity.

    1. Good points you make. It may be beside the point whether the source of destruction is foreign or domestic if the U. S. government falls anyway. But the nationalistic slant is often relevant to raising popular attention.

  11. Evil is real. We see the results in one area we are focused on here. At the same time we, as aware as we are, don’t want to go deep enough down the rabbit hole to actually see what is ultimately the head, the rulers behind what going on in plain veiw of us all. You can’t understand the real problems unless you are willing to admit what seems unbelievable. I agree we are not part of the power that can stop it. I believe it is only in God’s power to stop it and beleive from what I read in the Bible that that will finally happen. I believe that is true. The Bush’s, the Clinton’s, the Obama’s as well as most in the Washington establishment all are dancing for the same pipers. The so called different political issues are in my opinion smoke screens to keep us sheeple’s focused on things that keep us from ever seeing the real issues of who, what, and why that are being used against all the people of the world. Wars, economic ups and downs,area conflicts are all just tools of evil ones in the unseen background.

    We need to fight in whatever ways we can but I feel the only thing I can do for myself and family is try to prepare for a possible collapse. If able get a place away from population centers. Get the ability to grow your own food. Store things you might need if store cease to exist. Get PM’s, have them where you can go lay your hands on them for trade if it ever comes to that. You see what happens if you depend on anyone else to hold anything for you that they make you think will be kept safe.

    Now I am sure some of you will be sure I am a kook and wearing a ten gallon foil hat, but doing what I can is all I can do. If even that does not save me and mine, at least I have followed what I believe the Bible says I should do. Prepare. In general terms it advises me that anyone unwilling to work to provide for, as well as attempting to protect their own is worse than a infidel. It all may not matter against what seems to be coming, and the massive powers behind it. Faith in God’s help will seem to some of you silly…Doing nothing is a fools game for sure. A man who gives up without trying is no man!

      1. Karl Marx never saw Television – just ask Big Brother. There are more folk who swallow everything they get from the mass media than ever opened a Bible, Koran, etc.

  12. Ron doc, no offence taken. That post was more hope than fact. And if my post is’nt accurate and no one is going to correct this situation, then may the Lord help us ALL!!!!

  13. The crooks spread the story every time that it would be worse for the economy to go after them and take their stolen loot. Each time they get a free pass or a hand slap. Each time the cycle gets shorter and worse. Each time our nation gets closer to the brink of collapse. Each time our Congress and regulators grow increasingly blind to the increasing frauds. Each time we think they will fix the problems. Each time they fail. Each time until the next time…..

  14. In addition to the treasonous nature of gold price manipulation leaving the US Dollar and therefore our entire economic system open to attacks it is critical to appreciate the treasonous nature of how our DTCC-administered clearance and settlement system has been “rigged” in favor of its abusive “co-owners/participants” and their co-conspirators worldwide that willfully refuse to deliver the securities that they sell. It is U.S. corporations that are SELECTIVELY targeted by the entire worldwide abusive short selling community as almost all other nations’ clearance and settlement systems closely adhere to the “delivery versus payment” or “DVP” standard recommended by IOSCO, The World Bank, BIS and the IMF. A case in point woud be the heinous abusive short selling attack on “Force One” a retrofitter of military Humvees making them less susceptible to IED attacks in Iraq and Afghanistan. Thankfully the Department of Homeland Security was included in the 25 agency “Financial Fraud Enforcement Task Force” (FFETF) recently signed into law on 11/17/09 by Executive Order. Right when you thought that Wall Street couldn’t devolve any lower they directly attack those protecting our soldiers already risking their lives. The attack on Dendreon and its prostate cancer treatment Provenge was also a real piece of work!

  15. harveywalbinger –

    No offense intended…
    However, I didn’t say propagandized “natives.”
    I said propagandized population (includes every shade of skin-color and opinion)

    I’ll stand by that.

    I almost think the population can’t be blamed…
    although the media can.
    Propaganda (fraud in opinion-making) is the reason we have fraud on Wall Street.

  16. Lila, Thanks for the comments.

    Having spent much of my adult life overseas, I agree with you completely with regards to the dangers of U.S. nativism and propaganda, but I don’t think Maguire was generalizing about foreigners. Maguire (who is a foreigner, by the way) was stating that specific foreign entities had contacted him, and these entities had expressed a desire to squeeze the market, regardless of the implications for the dollar and U.S. national security. This is an assertion separate from his accusation of JP Morgan. I suggest that there is at least the possibility that loopholes in the clearing and settlement system could be exploited if there were a desire on the part of any foreign entity to do deliberate harm to the U.S. economy. Therefore, precautions are in order. By the same token, I think the U.S. should protect itself from nuclear attack, even if such an attack is unlikely. This is just common sense, not nativism. Of course, most of the stock manipulators I know are American citizens, but their nationality hardly matters.

    1. Now we know why Soros has been buying ETF’s based, purportedly anyway, on physical gold:

      So, when is he, Paulson, Einhorn, Loeb et al., going to drop the other shoe and orchestrate the Mother of All Demands (MOAD)?

      That will effectively enrichen them and decapitate all of the world economies simultaneously.

      Isn’t that what they want — life on an island of their own where they can luxuriate in a tropical clime where SEC and CFTC minions will come scurrying to the cabanas with cool frosties?

      Will it have to go that far before something, anything, is done?

  17. Question: What organization runs the clearing system for the “international gold market”? I understand that US stocks and debt are cleared through the DTCC. Is there a international equivalent for gold and silver?

  18. I think the play for the cockroaches of wallstreet is this:

    1. Long gold.
    2. Short US Treasury bonds.
    3. Inspire additional government spending leading to inflation, increasing the vale of 2, above.
    4. Collude to cause the demand for physical delivery of gold, increasing 1, above.
    5. Foment/collude to destabilize/capsize the euro a la Greece, Portugal, Spain.
    6. Destroy the pound (Soros already knows how to do this).
    7. Continue to manipulate the US stock market.
    8. Leave the world economy in a shambles.

    Have I forgotten anything?


    Cuban Goes After SEC

    The suit, filed in May 2009, was an attempt to force the SEC to turn over documents Cuban had requested under the Freedom of Information Act (FOIA) and the Privacy Act of 1974. Cuban demanded a slew of documents in December 2008, including records relating to investigations of companies he owned and internal investigations of SEC employees. The SEC denied Cuban’s request, and there were a number of subsequent requests, denials, and appeals in the matter.

    Why did Cuban want these documents? He basically says that the SEC pursued their case against him in bad faith, and those documents were going to prove it.

    But the SEC didn’t want to play fair and turn over what they had, citing various exemptions from FOIA. Most people would throw up their hands in disgust, but feel powerless to do anything about it. But Cuban wasn’t going to let them get off so easily.

    Things Get Worse for the SEC

    As if being sued by a guy with a ton of money weren’t enough, now the agency looks even worse. Cuban has filed a motion to compel the SEC to produce more documents. His lawyers say the SEC produced very little documentation — just 199 documents, including many that were originally provided to them by Cuban. They say an additional 602 documents exist for which the SEC is claiming various law enforcement and attorney-client privilege issues.

    The lawyers raise an excellent point: How is Cuban to pursue his claim of bad faith against the SEC if he’s not allowed to see most of the documentation relating to the investigation of him?

    The motion gets even more interesting because it includes emails between SEC employees that show lack of professionalism at best, and bias against Cuban at worst. Cuban also alleges witness tampering by the SEC, for supposedly encouraging a lawyer for not to give Cuban access to a key witness related to the original investigation.

    Cuban goes on to allege that at the time the case was filed against him, the SEC already knew there was no evidence that he agreed to keep information about confidential prior to selling his shares. Ouch.

    1. Cuban is no angel in the case, that’s for sure, but even more illuminating is what this tells you about the SEC’s tender little puppy-teeth.

      Can you imagine them going after Goldman if they can’t handle Cuban and could barely handle Martha Stewart?

      Guess they figured they’d get some splashy press and at least look tough with the Mamma case… Well, guess again!

      Even with just Cuban, the wheel is threatening to pop off the axle.

      Is this the best service the taxpayers’ dollar gets us?

    2. FYI: I believe that Cuban shorted Yahoo stock after he sold his company ( to them. He did this to get around the x month lockout period. While obviously shrewd, it clearly violates the spirit of the law (if not an actual law).
      Just worth noting whenever Cuban is the topic.

  20. Hi Mark a.o.,

    Thanks for sharing this material.
    Nothing new to me though; ‘Wall Street’ is manipulated, so are the oil markets, as exposed by Lindsay, and so yes…the markets for precious metals are just as well manipulated…by American crooks.

    In general: Mark, you may recall me, since we exchanged some e-mails in the past ~> Milberg Weiss, Lindsay Rosenwald etc. etc.

    Mark, I hate to state and ask this: what else have you guys achieved since then, since we had our communications; I mean other achievements than ‘just’ exposing the dirty secrets from ‘Wall Street’?

    Did it all work according to your mutual strategies, via this platform, for a.o. calling for a fix of the rigged systems on Wall Street and Judd’s cosying up with, bribed by ‘Wall Street’, crooked U.S. Congressmen?

    I hate to say this: I guess I was right and you guys were wrong. I have been, after fighting those same crooks as you guys do, taking some distance and it served me very well. I am enjoying life again and although I have less money, I feel a lot better these days.

    So dear Mark, Judd and Patrick: please accept the crystal clear facts?
    1. Around 99,9999% of the Americans are nothing but clueless and or just don’t seem to care about what is going on on ‘Wall Street’, so why invest your time?
    2. I offered you, here on this platform, my help to fight the crooks – as you know: I did a thorough research on which crooks to fight – and you guys did not respond or even seem to care for a basic presentation of my thoughts. IMHO, such a lack of interest doesn’t need any further introduction.

    My prediction, when talking about causing a or just even any effect: this blog will have just as much effect on the sleazy crooks on Wall Street, as my attempts in the past.

    Hopefully for you guys reality starts to sink in soon. Mark, exposing the crooks and rigged financial markets isn’t, by any means, comparable to fighting those crooks. As soon as you start to comprehend the latter, you´ll see that your mutual efforts will never start to be of any visible effect.

    Sincerely and all the best,

    Dirk Raat.

    the Netherlands, E.U.

  21. Hi Dirk from the Netherlands,

    In Mark’s defense we have to keep in mind that “DeepCapture” is first and foremost centered on investigative journalistic efforts and they are without peer especially in the abusive short selling sector. I do see your point though. In parallel with these efforts to educate a group of us branched off a while back and concentrated on how to “Do good (financially) while doing good”. The methodology we use is to identify victimized corporations that are trading at perhaps 5% to 10% of their “book value” but have not been forced into bankruptcy. Getting back to 100% of book value is an absolute freebie for certain qualifying corporations. We like to find them comatose with a very faint pulse.

    Regardless of a corporation’s merits the “bad guys” can easily strip away 95% of a corporation’s share price and market capitalization but they often have trouble “finishing off” feisty corporations that really do “have the goods” but were MISDIAGNOSED as a “scam” or a “pump and dump”. We come in and educate management as to how abusive short selling works and then go through the steps needed to get their share price back into equilibrium with an unmanipulated “supply” variable interacting with an unmanipulated “demand” variable to “discover” an unmanipulated share price via the “price discovery” process.

    The gist of it is to learn the exact mechanisms that the DTCC and the LBMA do to steal from us and then turn it 180-degrees. There are a lot more “good guys” out there that just need to get organized than there are “bad guys”. I personally think that due to the recent CFTC meeting revelations about the pandemic nature of gold and silver price suppression the best victimized issuers are in the junior mineral exploration sector. The whole world is about to demand delivery of the “paper” gold and silver they have been accumulating under the misrepresentation that somebody at the LBMA or the GLD or the SLV was taking their money and buying bullion with it. In a recent class action case against Morgan Stanley 2,200 victims sued for being charged for insurance and storage fees when the silver they bought never existed. The defense made was that “everybody was doing it”. By far and away the 2 most targeted sectors for abusive short selling “bear raids” are the junior mineral explorers and the junior biotechs and there is no lack of victimized companies and victimized shareholders to help rescue. Do you get it: “Doing good while doing good”. I too got tired of writing “comment letters” to the SEC to absolutely no avail.

    1. Hi Jim,

      Thanks for the discussion.
      I agree that DeepCapture is about investigative journalism covering the ´naked shorting´ issues. However, I can recall times in the past, not that long ago as a matter of fact, wherein a.o. Patrick Byrne had a far more aggressive stance toward the subject of abusive – manipulative shortselling. And I am missing, to my regret, that zealous stance these days.

      So yes, there´s nothing wrong about keeping a special issue blog alive, but where´s the real action these days? For me personally, I am well informed about the rigged U.S. Financial Markets, I myself have been doing a thorough inquiry lasting well over six years, so what´s for me the purpose of seeing more dirt exposed. IMHO, I bet you´ll agree, bringing sleazy short selling schemes to the daylight, via either this blog or any other media platform, is not going to make a difference and will not bring any ´real change´ or whatsoever.

      Just face the facts…Mark´s former employer, the WSJ, has printed, mostly after the particular crooks had been indicted by the SEC or FBI, 1000´s of stories regarding fraudsters in the Financial Markets. But did it have any effect? The Financial Markets are still rigged, probably more than ever before, thus IMHO ´just´ sole exposure of all kinds of sleazy manipulative short selling schemes won´t make any difference.

      Similar counts IMHO for your helping hands, albeit strongly admiring your energy and efforts put in, to companies that seem to be subject of manipulative short sell schemes. However, its interesting to read about this “Do good (financially) while doing good” strategy. If that works well, I can vividly see the added value, your motivation will be secured.

      `Getting back to 100% of book value is an absolute freebie for certain qualifying corporations. We like to find them comatose with a very faint pulse.`
      Uhhh…very well…Jim…,but IMHO such factually does imply that you guys must be rather pleased with the existence of sleazy short sell schemes in the Markets. Or am I missing something?

      ´There are a lot more “good guys” out there that just need to get organized than there are “bad guys”.´
      I agree, but would very much welcome any steps to get into a more organized situation. I was merely hoping, had this thought in the past, that the guys between DeepCapture would carry such a ambition, as only a broader and more powerfull organization will be able to have any impact on Congress etc. etc.

      ´In a recent class action case against Morgan Stanley 2,200 victims sued for being charged for insurance and storage fees when the silver they bought never existed.´
      That´s what I like to see! I was not yet aware of this lawsuit.

      ´By far and away the 2 most targeted sectors for abusive short selling “bear raids” are the junior mineral explorers and the junior biotechs and there is no lack of victimized companies and victimized shareholders to help rescue. Do you get it: “Doing good while doing good”.´

      I agree full 100 percent!
      Regarding the junior biotech sector…I´ve been doing a very thorough inquiry into the criminal enterprise lead by ´Biotech King´ Lindsay Rosenwald. That guy, acgtually his entire gang of clinical fraudsters, start themselves doomed to fail biotech companies and defraud investors by applying long/short strategies on their own Biotech ventures. Rosenwald is one of America´s biggest swindlers. One just needs to know.

      `I too got tired of writing “comment letters” to the SEC to absolutely no avail.`
      I have a similar vision. The SEC is factually protecting the bigger criminals and is not at all interested in chasing criminals or whatsoever.


  22. ACK……….This is the best article I’ve yet read about this gold “Ponzimonium” case. It’s funny too! (that’s funny “Ha-ha” AND funny “queer”). This guy is a great writer. This manipulation story is getting hotter by the day. Where the heck are the police with the info on the hit-n-run driver???? I need to buy gold tomorrow…………

    1. “…and this story strikes me as no more credible…”

      That’s the problem with many skeptics. They write articles written on gut feeling, without any effort to look at the evidence.

      In answer to the question, I think there’s two separate answers. Gold custody fraud occurs at the gold warehouses. They just issue receipts for gold that doesn’t exist. Where the trading settles depends on the nature of the contract and in some cases, the answer would be the DTCC.

      The privately owned central banks are in on it and it isn’t just naked shorting. They can sell their gold with a contract to buy it back in the future, the gold being to depress the price of gold, which is seen as competition to fiat currencies.

  23. Meantime AIG’s (and the MAFIA’s?) Cassano walks scott free because the Federal boys and girls can’t summon the nerve to stick the charges to him.


    1. MNKD of course, is legitimate, so I wouldn’t draw too many parallels, except for the shorting, naked and otherwise.

      However, I will be watching this closely, as I’m sure you will, Sean.

  24. Not discussing legitamacy here Jim, just the corrupt SEC and regulators. I could care less about the company. I want the SEC to pay for their wrong doings to all investors, PERIOD.

  25. Mark –

    That one comment by Maguire is just plain fishy..I keep going back to it. It sounds cooked up. I don’t understand some of the other contentions made at zerohedge either.

    You might want to consider this criticism I saw posted at itulip. You have to be wary of set ups like the Penson video…where something unlikely is mixed in with facts:

    1. “Illegal naked short selling” is a phenomenon of the stock market, not the futures market. Most contracts sold in the futures market are “naked,” that is, the seller doesn’t own the underlying, and this is perfectly normal. It is the intended functioning of the market. There is nothing illegal going on. No conspiracy. No fraud.
    2. Contrary to GATA’s allegations, Jeff Christian’s testimony to CFTC was not an admission of anything. He merely stated several obvious, well-known facts about the futures market. There is no fraud, no cover up, and no conspiracy revealed by his 100:1 comment.
    3. GATA’s assertions about selling contracts without owning the underlying as amounting to fraud or default are ludicrous and exhibit an extraordinary ignorance on the part of GATA principals of how the market operates. Contracts held past first notice date and then not delivered are a form of default, but that’s not what’s in question here. GATA is working for an entirely legitimate cause—to end the very real downward manipulation of silver and gold markets by JP Morgan—but their leadership has demonstrated categorical incompetence beyond any doubt. GATA leadership should step down now and make room for competent people who actually understand commodities markets to take over and fight this very important cause.
    4. Andrew Maguire’s motives should be scrutinized closely. The GATA people may just be ignorant, but someone with Maguire’s experience in futures trading couldn’t possibly be so incompetent as to have supported the statements made in the King World News interview. He says rich Asians are bugging him, waiting for the green light to squeeze the shorts in silver. I have to wonder whether he’s actually trying to meet those rich Asians for the first time to suck them into a massive pump and dump scheme. His boy scout whistle blower story is extremely compelling at first glance, but to anyone who actually trades futures for a living they just don’t hold up to close scrutiny.
    5. The attempted assassination story is also highly suspect. JPM would only be adding credibility to his futures manipulation story by trying something so stupid. I have to wonder if he himself staged it as a way to generate media attention.
    6. Ron Kirby is not credible. Wise investors will ignore 100% of everything he says or writes about any subject for the rest of eternity. His recent piece on Zerohedge was an embarrassment to ZH, and is full of factual inaccuracies. This guy just plain doesn’t understand how futures markets function and prefers to flaunt his ignorance publicly rather than educate himself. It’s shameful that he’s getting so much coverage.
    7. The problem is not the “100:1” nonsense being trumped by the ignorant people at GATA. The real issue is the concentrated short and associated downside manipulation in silver. GATA has damning evidence in their possession but is trumping up the wrong issue because they are ignorant about how the futures market works. Their leadership should step down immediately! The organizations’ cause is certainly legit but the individuals involved are ill informed. I predict their numerous inaccurate statements in the KWN interview will be used to discredit them in a future public hearing.

    1. It’s important to separate the “verb” of selling something you don’t own which is a trading strategy, from the “noun” of custody backed by air.

      Custodians understand breach of trust. The passive crime, legitimized by repurchase agreements, swap agreements, etc. is way worse than any trading strategy could ever be. They pledge YOUR assets, borrow money, then gamble with a heads they win, tails you lose strategy.

      If I pay a custodian to own something on my behalf and they lie to me and send me a statement that implies that my asset is “segregated” and in “safekeeping”, but in reality it doesn’t exist, then that is fraud, mail fraud and an arrestable offense.

      If only the thieves weren’t above the law…

      Those that steal a loaf of bread get arrested, but those that steal trillions become our kings and decide which candidates we can choose from to run our “democracy”.

  26. Anon your last post rang very true to me and others I am sure. Now it looks like the SEC is finally get some media exposure that this new Administration deserves..

    SEC faces setbacks, skepticism in trying to reform its enforcement image

    By Zachary A. Goldfarb
    Washington Post Staff Writer
    Tuesday, April 6, 2010; A08

    A year-long effort by the Securities and Exchange Commission to overhaul its enforcement of laws against corporate crime has run into courtroom setbacks and internal skepticism, underlining how difficult it is for the agency to remake itself as a get-tough cop.

    Top SEC officials have undertaken what they describe as the most significant reform of the agency’s enforcement operations in nearly 40 years, pledging to bring big cases as never before. SEC Chairman Mary Schapiro and her hand-picked enforcement director, Robert Khuzami, have trumpeted measures designed to rapidly file major cases, send more lawyers to the front lines of investigations and set up teams specializing in specific areas of financial crime. The actions are in response to years of criticism by former officials and investor advocates that the SEC took too light a touch with Wall Street.

    But now, some senior SEC officials question whether the new measures will yield the kind of results that Schapiro and Khuzami are promising. “I’m looking to see whether or not all of the new initiatives are actually resulting in improved sanctions,” said SEC Commissioner Luis A. Aguilar. “I don’t yet see the empirical evidence.”

    Last year, after long getting beat by other law enforcement agencies, SEC investigators decided to race ahead on one of the most high-profile cases of alleged wrongdoing to come out of the financial crisis. The SEC abruptly broke off its teamwork with the New York attorney general’s office, going it alone to reach a deal with Bank of America, forcing it to pay $33 million in fines for allegedly lying to investors.

    But a judge threw out the settlement, ruling it was flimsy, and dealt an embarrassing setback to the SEC’s efforts to energize its enforcement activities.

    In pursuing the case, the SEC had differed with New York Attorney General Andrew M. Cuomo over strategy, according to an official familiar with the disagreement. Cuomo wanted to take more time to build a case against individual executives at the company. The SEC, which had been widely criticized for regulatory failures that contributed to the financial crisis, wanted to bring fast action against a major bank.

    U.S. District Judge Jed S. Rakoff, however, called the SEC deal at odds with the “most elementary notions of justice and morality.” He faulted it for providing almost no accounting of the bank’s conduct and allowing the company’s executives to escape punishment. The SEC later added new charges, provided more details of its investigation and nearly quintupled the fine, winning the judge’s approval.

    The SEC is Wall Street’s top regulator, charged with ensuring that brokerages, mutual funds, hedge funds, money managers and other financial firms treat their customers fairly and don’t break the law. The agency also is supposed to make sure that public companies give investors honest information. The enforcement division is expected to investigate allegations of wrongdoing and file suits when it finds violations, seek to bar individuals from the industry, fine executives and companies, and stop bad conduct.

    Yielding results

    But for the past several years, penalties have declined and the enforcement division’s reputation has suffered, culminating in revelations that the division repeatedly failed to stop Bernard L. Madoff’s Ponzi scheme. Schapiro, who was named by President Obama, and Khuzami wanted to restore the agency’s reputation.

    “I wanted to do whatever I could do to strip out the inefficiencies and delays,” said Khuzami, who as a federal prosecutor had sent terrorists as well as white-collar criminals to jail. “A large part of the deterrent impact of our actions has to do with the immediacy of our actions.”

    Khuzami cites statistics and cases showing that the agency’s efforts are yielding results. In 2009, the agency opened nearly 500 investigations, more than double the 2008 level, and ordered companies to pay 35 percent more in fines and repay 170 percent more in ill-gotten gains.

    The agency has filed cases in new, complex areas, such as insider trading involving exotic financial instruments known as derivatives, and reached high-profile settlements, such as forcing General Electric to pay $50 million to settle charges it misled investors about its accounting.

    But the agency also has faced setbacks. In addition to the Bank of America misstep, a judge rejected the agency’s case against Cohmad Securities, which was a major supplier of business for Madoff. The judge called some of the SEC’s allegations “speculatively and flimsy.” Although the SEC had accused Cohmad of fraud, the judge said the agency did not present any evidence to support the allegation.

    Other major cases brought by the SEC are proceeding, but it could be months, or even years, before the agency learns whether it has prevailed. “Once the case gets filed, the timeline is out of our control,” Khuzami said.

    More than nine months ago, the agency filed a complaint against Angelo Mozilo, former chief executive of major subprime mortgage lender Countrywide Financial, for fraud and insider trading, but the case is still in its initial stage. The agency is also pressing ahead with civil charges against the former managers of two Bear Stearns hedge funds that imploded at the start of the credit crisis in mid-2008. The managers have been acquitted of criminal charges brought by the Justice Department.

    To help build stronger cases, Khuzami announced earlier this year that the SEC would use cooperation agreements with potential witnesses. The agency would offer immunity to executives who were aware of wrongdoing and even involved in it if they came forward and testified. Khuzami has called this new approach a “game changer.”

    But without similar guarantees from the Justice Department, defense lawyers who represent those potential witnesses are skeptical that they’d sign up.

    “To make yourself attractive as a witness, you have to be able to deliver the goods and to deliver a true, compelling story of something that’s quite unlawful,” said Charles J. Clark, a securities lawyer at Kirkland & Ellis and former top enforcement lawyer at the SEC. “We won’t want to do that without minimizing the risk of our clients being charged criminally.”

    Khuzami said this shouldn’t be an issue in most SEC cases because typically there are not parallel criminal prosecutions.

    A restructuring

    Khuzami has begun to rearrange his division, reassigning mid-level managers known as bureau chiefs and redeploying many of them as investigators on the front lines. But the union representing SEC employees said the impact is limited because some of those branch chiefs must be promoted to oversee others who become investigators. “We do not anticipate the ‘management restructuring’ component of the reorganization will result in a significant increase in frontline investigators,” the union said last month in a bulletin. “Nor have we seen any real evidence that the Division intends to change the basic management model that it has employed over the past decade.”

    The union also minimized the significance of Khuzami’s initiative, which is just now underway, to set up teams specializing in different aspects of financial crime. The units, which make up about one-fifth of the enforcement division’s staff, will focus on wrongdoing in asset management, structured and new financial products, municipal securities and public pensions, as well as foreign bribery and market manipulation. “Specialized units are essentially a formalization and consolidation of the working group models that have existed in the Division for years,” the union said in its bulletin.

    Khuzami, however, said the specialized units are a major improvement. “They have real structure, with heads and deputies who have authority,” he said. “They are very much stand-alone, concrete, formalized prosecution units designed to be forward-looking.”

    Some observers of the SEC say that whatever the impact of these changes proves to be, the reform agenda at the agency has already bolstered its image.

    When Schapiro began her tenure early last year, “there was a feeling that the SEC was a failed agency. There was talk of carving up the SEC and dividing its functions,” said John Olson, a securities lawyer at Gibson, Dunn & Crutcher and a longtime observer of the agency. Schapiro “listened to the criticism and responded. A major part of that was showing that the SEC could bring in a tough former prosecutor in Rob Khuzami who could change the management style.”

    1. Still, the SEC must be scrapped in favor of forensic accountants and the Justice Dept or FBI. Perhaps even the CIA, given the treason occurring.

    2. “The SEC, which had been widely criticized for regulatory failures that contributed to the financial crisis, wanted to bring fast action against a major bank.”

      The SEC just aimed a quick settlement, against favourable conditions, so the crooks could go on defrauding.

      What is needed to get the honest and hard working Americans into the streets and loudly demanding a total clean-up of Wall Street?

      Hello Americans wake-up and watch your backpockets!

  27. I think that in the long run the chances are that abusive short selling issues will not be addressed necessarily by any new and improved SEC although Khuzami needs to be given his shot at it. More likely the definitive addressing of this scourge will be by either the much less conflicted judiciary or the new “Financial Fraud Enforcement Task Force” (FFETF) consisting of 25 different agencies.
    Due to the smoke screen the proponents of abusive short selling have effectively put up in regards to all of this theoretically beneficial “injection of liquidity” these would be “shareholder advocates” provide the issue will not center on the benefits of short selling versus its abuses but more so on the rights of prospective investors to gain access to the exact amount of share price depressing “security entitlements” resulting from failures to deliver that are currently invisibly poisoning the share structure of a corporation they are contemplating an investment in.
    The 1933 Securities Act (the “Disclosure Act”) specifically mandates the “disclosure” of all information of a “material” nature that affects the prognosis for the success of an investment. There is nothing more “material” to the prognosis for success of a corporation than knowing about the existence of an astronomic amount of share price depressing “security entitlements”. All day long U.S. investors are buying shares in development stage corporations previously targeted for destruction that have all but been preordained to die an early death. The greater the amount of unaddressed FTDs present the lower the share price will be and the greater the perceived bargain will appear. The irony is that those regulators and SROs with the congressional mandate to enforce the 7 “Securities Acts” are the very parties in possession of this information that refuse to disclose it. Figure that one out!

  28. Is it me or did someone turn up the heat in here? I think the pressure might be on to get these people to do their jobs or leave. Well we can only hope.

  29. Alan Greenspan Testifying Today…

    Thank you Mark for placing addition light upon the continuing crimes being committed against the people of American and the World by the rich and powerful Wall Streeters using the weapon of Naked Shorting to steal the wealth of others. Please keep up the good work.

    Today, Alan Greenspan is scheduled to testify before the Financial Crisis Inquiry Commission:
    ( The hearing will be webcast live at )

    It seems to me that Alan Greenspan’s guiding principle during his many years as former Chairman of the Federal Reserve was and is the major contributor, if not the major contributor itself, of the present worldwide financial crisis.

    And what was his guiding principle?

    …Fraud in the banking industry does NOT need to be regulated, because the market will take care of the market…

    This guiding principle of Alan Greenspan was revealed by Greenspan himself during his meeting with Brooksley Born in the 1990s when she was the chair of the US Commodity Futures Trading Commission (CFTC). The meeting occurred after Brooksley Born declared that she was going to write regulations to regulate derivatives.

    Alan Greenspan opposed regulating derivatives and during his meeting with Brooksley Born stated HIS GUIDING PRINCIPLE to explain WHY he opposed the regulation of derivatives:

    …Fraud in the banking industry does NOT need to be regulated, because the market will take care of the market…

    Naked Counterfeit Shorting, in all its forms, has become the Cash Cow for the Criminal Wall Streeters. And Alan Greenspan’s guiding principle (…Fraud in the banking industry does NOT need to be regulated, because the market will take care of the market…) all the financial markets in American – either there is no regulation, or where there is some regulation, the regulators have found a way to make Naked Counterfeit Shorting legal for the rich and powerful Wall Streeters.

    It will be interesting to see today if Brooksley Born, who is a commission, will ask Alan Greenspan about this guiding principle of NOT regulating fraud in the banking industry.

    Here is a news story about today’s meeting and an analysis of the FINANCIAL CRISIS INQUIRY COMMISSION impossible task as it has been UNFUNDED and has been given TOO LITTLE TIME:

    Congress wants to give the American people and others the IMPRESSION that it wants to know what caused the Worldwide Financial Meltdown – but the ACTIONS of Congress (UNFUNDING and giving TOO LITTLE TIME to the commmission), I think, tells us the true intent of Congress – they DO NOT what the American people to know the true causes.

    And I should mention that the Senate is not even interested in giving the impression to the American people that it wants to know the causes of the Worldwide Financial Meltdown, as it has NOT setup any commission to uncover the truth.

  30. CORRECTION – Word “PERMEATES” is Missing – Should Read as follows:

    Naked Counterfeit Shorting, in all its forms, has become the Cash Cow for the Criminal Wall Streeters. And Alan Greenspan’s guiding principle (…Fraud in the banking industry does NOT need to be regulated, because the market will take care of the market…) PERMEATES all the financial markets in American – either there is no regulation, or where there is some regulation, the regulators have found a way to make Naked Counterfeit Shorting legal for the rich and powerful Wall Streeters.

  31. Does anyone know what happened to Patchie, Mary and Bobo the Easter Bunny?

    Are they lurking? Or have they given up?

    What happened to this guy?

    We lost him to CMKX and got milk?

    It’s a bit discouraging to find fighters for justice going back to the 1880’s, who eventually give up to the corruption of the Wallstreet overlords.

    I’d like to think the internet makes it different, but Joe and Jane Sixpack don’t seem to give a crap that they are being ripped off.

    As long as the 1% credit card offers and home equity loan deals come in the mail, the average person thinks they are rich and they don’t worry about the thievery or possibly embrace it because they are going to buy a 3D TV they couldn’t afford if the rest of the world wasn’t being rooked by Wallstreet as they were given easy credit.

    1. Musing about Corruption,

      You wrote: “I’d like to think the internet makes it different, but Joe and Jane Sixpack don’t seem to give a crap that they are being ripped off.”

      That’s a fact and I wrote something similar above.

      As a matter of fact the people on and behind DeepCapture don’t seem to give a d*mn either. They don’t want to fight it either ~> its all just journalism what strikes here.

      Others like Jim DeCosta would like to see the corruption to stay where it is, because they know how to make money out of it.

      In the past I have offered my help, in the fight against the peverted corruption on Wall Street, to the guys behind DeepCapture. They were apparently not interested.

      FYI: I’ve been investigating the sleazy contacts between ex-partners of the Milberg Weiss lawfirm and criminal hedge fund managers. My investigation lasted well over six years and I have invested 1000’s of hours in that probe. In 2007, as a result, I was contacted by former Milber Weiss partners and they offered me a job as a inhouse detective; ergo: I am not a blowhard or a moron;-) I know my stuff.

      This blog, as you will know by now, is just serving entertainment purposes. Dismal.

      1. Dirk, that you would question Dr. Decosta’s dedication to fighting corruption on Wall Street says much more about you than him. He’s forgotten more about abuses of the clearing and settlement system than you or I will ever learn. I don’t care what you say about me or, but in the future, I suggest you be prepared to back up ridiculous statements like the one you just made about Dr. Decosta, or keep them to yourself.

        1. Hi Judd,

          You wrote: “Dirk, that you would question Dr. Decosta’s dedication to fighting corruption on Wall Street says much more about you than him.”

          Judd, I guess when you scroll upwards…it was Jim DeCosta himself, on April 4th., who wrote following: “In parallel with these efforts to educate a group of us branched off a while back and concentrated on how to “Do good (financially) while doing good”. The methodology we use is to identify victimized corporations that are trading at perhaps 5% to 10% of their “book value” but have not been forced into bankruptcy. Getting back to 100% of book value is an absolute freebie for certain qualifying corporations. We like to find them comatose with a very faint pulse.”

          I guess this means a contrary trading strategy compared to classical legal shortselling when a stock is overbought. If you choose to designate such a strategy as a way of fighting corruption…? Please…?
          I call it a not so very ethical way of engaging the issue, simply because I have no sight of how the money made via such a strategy is being used in the fight against corruption on Wall Street.

          Judd, I am fair enough: if one would make $1 million via such a strategy and re-invests at least $100,000 in the fight against corruption…I will endorse such a move.

          However: I raised a clear ethical point of view and asked Jim DeCosta if I was missing something. I don’t think he has missed my question, so I most likely served him a too hot to handle potatoe…??

          Look Judd: I myself got very badly screwd by the crooks on Wall Street and exactly the guys that screwd me most…were those that repeatedly claimed to be chasing the criminal shortselling hedge fund managers a.o. And yes: I have a ton of proof which shows me I am correct on the issue. When people claim ‘I make money by chasing the crooks on Wall Street’, I just want to see the verifiable facts.

          So when people claim: I am fighting the crooks on Wall Street…I say: show me the proof and I am your partner!
          What DeCosta and his group are doing is IMHO nothing but telling people: ‘Sir, there’s a burglar in your house and for $500 I will help you out to get rid of the burglar.’

          Regarding following: “He’s forgotten more about abuses of the clearing and settlement system than you or I will ever learn.”

          If that’s your opinion about me? And who are you exactly? Oh I remember…you are the guy who, outhere on DC, loudly endorsed a Congressman’s proposal for a new bill. So you’ve probably never checked of who exactly are the main sponsors of those type of Congressmen? FYI: they are sponsored by Wall Street’s biggest crooks.

          The best of luck with your efforts.

          1. Dirk, why don’t you post what you have on your own site to make it public?

            We need to work together rather than fight amongst ourselves.

          2. Hi Anonymous,

            Thanks for the discussion and raised issues.
            You’re making some good points.

            1. I had my material online for years and it was public for a long time. Though as I mentioned: I was chased and tampered by some of the most expensive attorneys one can possibly hire. I received letters of a.o. the same attorney which Microsoft used to hire in their fight against software pirates a.o.

            I countered these efforts by claiming I would have a solid case, civil RICO lawsuit, against those elite attorneys upon evidence of witness tampering. I.e. I was the witness, exposed the crime ring and they were attempting to silence me.

            So as they managed to impress my ISP and which took my website offline, I had to step up my efforts and had to invest more money to keep the material available on the internet. One Dutch based ISP has still some principles regarding ‘disputed material’ and is willingly to withstand pressure from all sorts of attorneys. Though this ISP is very expensive. I had to pay monthly at least 20 times as much in comparison to other ISPs in order to keep my material online. I paid for it as it was well worth it. It served my interests and that of the ordinary U.S. retail investors. Bear in mind: I had to pay some $60 a month, while I was on social security and not able to work.

            So at some point I had to ask myself: why should I be paying $60 a month to keep the website online, whilst being on social security, so not being able to buy proper food etc. etc. And yes, whilst there are simultaneously guys like Judd Bagley and Patrick Byrne and blogs like the Bob O’Brien’s sanitycheck, that are fighting exactly the same criminals and for which my material would be IMHO very valuable.

            For instance THE Harry Markopolos visited my website, downloaded some of my pdf files and in the case of a U.S. $125 million insider trading case, committed by NYC based hedge fund owner Lindsay Rosenwald, Mr. Markopolos wrote me an e-mail and factually endorsed my findings!

            No imagine this: if I possess such type of unique material, invested that much time in researching it, withstood serious threats and going trough personal hardship…

            Over the years I have a.o. contacted numerous U.S. based journalists, courts, Law Enforcement Agencies, bloggers like Bob O’Brien, DeepCapture etc. etc. and most of those parties did not even provided me with a single short answer.

            I have to admitt that DeepCapture’s Mark Mitchell reviewed some of my material, showed a genuine interest and was willingly to publish it. I am grateful for that.

            However, just as anyone: I have to make a living. And as my health problems have become managable these days: my personal situation is improving day by day.

            So what would motivate me, to allocate once more again…a lot of time in a cooperation with Mark Mitchell to ‘just’ get the sh*t published here on DC?

            Sorry, but I just don’t see the added value. I have for myself set a standard when people approach me for helping them out. I can only help people out that are at least themselves willingly to invest time and personal efforts.

            I simply cannot afford to allocate a lot of my personal time these days when I witness the poor and outright laughable attempts of Judd and Patrick to fight the crooks on Wall Street.

            Just click on top of this page at DC ‘The Movie’…? Is that something of which Patrick can be proud of? Yes he invested efforts and time…but hey come on: why not investing a few hundred bucks and hire a guy with a good camera in order to obtain some real footage.

            So yes, let me be fair: Judd, Mark and Patrick are good guys and working on a good cause…but d*mn how extremely poor it all is being executed. The American public is currently suffering from the worst kind of financial crisis imaginable and its is just so d*mn easy to portray Patrick as the ‘Dirt Harry ~ Clint Eastwood’ who’s single handed, kind of bare knuckled, going after the crooks on Wall Street.

            How about this: Patrick Byrne is not a movie character nor a blowhard, but a honest guy that confronts and withstands the most dangerous dark powers of Wall Street. Whilst the elite is currently looting America and Wall Street continues to be a cess pool of fraud, there’s at least one brave man out in the storm: Americans can seriously count on Patrick Byrne!

            Does Patrick have a good marketing adviser? Because I am really wondering.

            So yes, I agree: it will be a matter of working together. However: I just don’t see ‘them’ working yet. DC is IMHO a joke at this stage. If you want to fight an enemy, you must have the utmost dedication to destroy your enemy. You can’t do such by a 50% effort or a soft ‘so so’ attitude. That’s my point of view and thus I am not inclined to invest any serious efforts at this stage.

            Best regards,


  32. Dirk,
    Ok, I’ll bite. It would appear all you have been doing is investigating yourself. How has that worked out for changing the corrupt system? What is it you have done to end these crimes? How many corrupt people have you managed to get the SEC, CIA, FBI, FINRA or any other agency to ACT on? How many are behind bars as a result of your investigations?

    1. Hi anonymous,

      Thanks for the discussion.

      What have I done to fight the crooks on Wall Street?

      I invested 1000’s of hours of my private time.
      [After I got screwd, I obtained serious health issues so I could not accept a job…thus I was doing almost nothing else daily…than turning Google and numerous public U.S. databases inside out. I literaly went trough thousands of SEC filings a.o.]

      I had already uncovered crystal clear evidence of ties between criminal hedge funds, short sellers, analysts, journalists and the Milber Weiss gang before Patrick Byrne published his ‘Miscreants Ball’.

      I have been in touch and factually exchanged e-mails with the U.S. Law Enforcement investigators that were probing the Milberg Weiss gang.

      I can show SOLID PROOF that the criminal probe against the Milberg Weiss gang was flawed and rigged.

      I’ve been repeatedly writing letters to the SEC, printed out complete packages of evidence and invested serious money in shipping costs.

      I’ve been approached, based upon my unique research efforts a.o., by former Milberg Weiss partners to work for them as a detective.

      One Manhattan based attorney wrote me: I have never witnessed any case with more dirt per square inch compared to yours i.e. Milberg Weiss and criminal ties to a hedge fund owner.

      I have been chased and tampered by $750 p/h. attorneys of the Covington & Burling lawfirm and did not buckle under their threats.

      Me and my family have received very serious threats, My enemies went even as far as to send people over to my city, overhere in Europe, and to let them hang around my condo!

      Ohh…and talking about the achieved results?
      I you consider Judd Bagley to be successful, than I am for sure very very succesful.

      The only issue left: a corrupted SEC, U.S. Courts and some Law Enforcement Agencies.

      1. Ok Dirk,
        Just as I thought. You have been at it for a long time and have come up empty yourself getting anything done to change the corruption. So you have investigative material…so does just about anyone who has been been looking at these issues. Nice to see crime fighters but don’t toot your own horn. Looks like Harry Marcopolos had 10 years of no intervention by the regulators until Madoff himself turned himself in and the SEC were caught with egg on their face. We can not be vigilante cops and if no one will listen, what do you suggest since your years of investigation apparently has produced no white collar criminal indictments?

  33. An observation: Wall Street securities intermediaries entrusted to serve as the “legal custodian” of the financial assets of Main Street investors just do not have it in their power to keep their hands off of the financial assets of others when there’s a dollar to be made illegally renting these assets out. This is true whether it be gold bullion at the LBMA or in a “bullion bank” like JPM, HSBC or Goldman or securities held in the “legal custody” of the DTC subdivision of the DTCC.
    As long as they leave enough of these assets alone so that they can service the day to day requests demanding delivery of these assets to their purchasers they’ll be able to “earn/steal” an absolute fortune. Who’s going to ever notice the missing financial assets as long as these secrecy-obsessed crooks are allowed to operate in the dark? The result is the illegal conversion of the “legal custody” system into a “fractional reserve” system. Since these “stolen” assets are typically rented out to short sellers then the second criminal act of these crooks involves facilitating the artificial price manipulation of these assets downwards which is 180-degrees antipodal to the financial interests of the purchasers of these financial assets that entrusted these “legal custodians” to ACT IN GOOD FAITH.
    In the case of gold, corrupt politicians worldwide trying to get re-elected cannot reveal that their gross overspending of “pork dollars” done to get re-elected has damaged the value of their fiat currencies. Thus it becomes incumbent upon them to do everything in their power to suppress the price of the ultimate benchmark to measure the value of their individual fiat currencies i.e. gold. When the financial interests of corrupt politicians aligns with corrupt “legal custodians” on Wall Street look out!

  34. Judd, Dr. Decosta I think these clowns just come hear to rattle cages and read what they themselves have written. Now here is something that is back on topic and shold be discussed seriously in my opinion.

    Citigroup Fined In Stock Borrow Program; Washington Holdings Buys St. Regis Monarch Beach Resort From Citigroup Affiliate – Update
    Wednesday April 07, 2010 12:19:00 EDT
    (RTTNews) – Independent securities regulator Financial Industry Regulatory Authority, in its first enforcement action involving a broker-dealer stock borrow program, fined Citigroup Global Markets, Inc., the brokerage and securities arm of financial services provider Citigroup Inc. (C), $650 thousand for disclosure and supervisory violations with regard to the operation of its Direct Borrow Program.

    According to the Financial Industry Regulatory Authority, or FINRA, investigation, it was found that between January 1, 2005 and November 30, 2008 Citigroup’s Direct Borrow Program, or DBP, borrowed fully paid hard-to-borrow securities owned by its customers, who were in large part retail customers.

    FINRA said the borrowed securities went into a pool of securities used, among other things, to facilitate Citigroup’s clients’ short-selling strategies. The DBP arranged for over four thousand loans involving more than 770 different securities borrowed from over 2,300 customers. The average annual value of outstanding loans from customers was noted to be about $301 million.

    FINRA noted that Citigroup failed to disclose, or to adequately disclose, certain material information to customers participating in the program. The investigation found the DBP operated without a system or procedures specifically designed to supervise the activities of the program staff and the firm’s brokers and to adequately monitor the accounts of customers who participated in the program.

    FINRA executive vice president and executive director of enforcement James Shorris said, “Before offering a product to customers, brokerage firms must reasonably ensure that the customers are aware of all of the potential risks associated with the transaction. In this case, Citigroup failed to maintain a supervisory system that ensured that such disclosures were made to customers by the firm’s registered representatives and in the firm’s marketing materials.”

    FINRA also found Citigroup distributed three versions of marketing materials to the public related to the DBP which were not fair and balanced, and did not provide a sound basis for evaluating the facts with regard to the DBP. It was indicated that the marketing materials contained misleading statements that there was very little risk associated with the DBP and that no customers suffered any losses and that the firm tried to avoid interest rate changes as much as possible.

    On November 30, 2008, Citigroup suspended all new borrows through the DBP and returned all shares to customers who had lent through the program, as of date of the settlement. As a conclusion to the settlement, FINRA said Citigroup neither admitted nor denied the charges, but consented to the entry of the FINRA findings.

    In a separate development, private real estate investor Seattle-based Washington Real Estate Holdings LLC yesterday said it acquired St. Regis Monarch Beach Resort in the upscale Southern California coastal community of Dana Point from an affiliate of Citigroup. Washington Holdings purchased Citigroup’s remaining equity stake in the 400-room luxury seaside resort.


  35. When you get a mortgage, you effectively leave the deed to your house in trust with the bank.

    Can you imagine if your bank sold your house while you were on vacation, hoping to buy you a similar house cheaper if you ever asked for your deed back?

    The analogy’s not perfect, but it shows how ridiculous it is for the brokerage industry to sell or rent their clients assets which they are supposed to hold in trust.

    Segregated, retirement account, etc. means nothing. At the level of the clearing organizations, it’s a fungible mass and they sell and rent everything they can get their hands on.

    This is different than naked shorting. It’s more like “failure to hold in trust” and it doesn’t show up as a delivery failure as they do repurchase agreements.

    If custodian A sells to custodian B with an agreement to repurchase the shares in thirty days, then both custodians are long (one owns the stock and one has a call on the stock). No delivery failure here, folks…

  36. Wall St.-D.C. Bigwigs “Buried Our Country … They Sold Us Down the River”…………..

    NOTE: Here is a MUST SEE VIDEO Interview with Davidowitz – He tells it exactly the way it was and is today!!!!!!!

    Davidowitz: Wall St.-D.C. Bigwigs “Buried Our Country … They Sold Us Down the River”

    Posted Apr 08, 2010 03:31pm EDT by Peter Gorenstein in Newsmakers, Banking

    The Financial Crisis Inquiry Commission is trying to turn this week’s hearings into a financial crisis blame game. Unfortunately, those that helped create the crisis are reluctant to come clean.

    Former Citigroup CEO Chuck Prince did say he is “deeply sorry” but former Citi adviser Robert Rubin passed the buck, telling the commission he was largely unaware of Citi’s troubled CDO portfolio before September 2007. Alan Greenspan took a similar approach of denial in Wednesday’s hearing.

    Most former top regulators and Wall Street chiefs won’t admit mistakes because “they’re still part of the Washington scene,” says Howard Davidowitz of Davidowitz and Associates.

    It’s a scene that is too closely linked to Wall Street, Davidowitz says. It also means, in his view, the country will not see meaningful reform until those in control before, during and immediately after the crisis are out of power and the revolving door between Wall Street and Washington is stopped.

    “They buried our country, they sold us down the river,” he tells Aaron and Henry in the accompanying clip. “They allowed Wall Street and the banks to run wild with our money and take unconscionable risks with our money. And now that it’s hit the fan they don’t know what happened? It’s preposterous.”

    (…-they-sold-us-down-the-river%22-463509.html?tickers=c,xlf,jpm,gs,ms,^gspc,^dji&sec=topStories&pos=8&asset=&ccode= )

  37. Dirk:

    I sympathize with your efforts over the years. But you’re not being fair.

    Reporters who expose corruption are doing it as part of their job. Their salaries aren’t high and few would suggest that they take up the job to make money. Or they might be in it out of ambition.

    So when volunteers and activists who often spend far more time to track down the dirt try to make some money from what they’re doing, what’s so wrong? They have to live too. So long as the money’s not the main motivation, and so long as there are no perverse incentives at work, it’s not a problem.

    I also don’t have a problem with legit short-sellers making money off their analyses. Good for them.

    Point two.

    Even if “nothing” comes out of any of this, I think it’s worth exposing the truth, so people come to see how the system really works. If nothing else, it discredits it and they learn to protect themselves better. That’s a good thing, isn’t it?

    Point three. We don’t know how our actions affect people in the future, or elsewhere. Who knows what train of events is set off that has a momentous result a decade from now…

    Point four. Truth is a value in itself. The factual record is important. Keeping an honest set of intellectual books is a contribution to improving the economy.

    Point five. The fact that some people here are still fighting the establishment version of events gives some comfort to outsiders/the masses who might otherwise think that everyone in the media was corrupt.


    1. Hi Lila,

      Thanks for the discussion.
      As you wrote some valuable comments, I’ll give you a response,
      However: as I am extremely busy these days, I have to keep it short.
      You may also scroll upwards as I left earlyer today a more lenghty comment.

      1. Thanks for the moral support; always welcome.

      2. There’s nothing wrong when people make money in fighting corruption. However: when I look of how pover the fight of Patrick, Judd, Mark, Jim and others is being presented via DC, I have to wonder myself: if they claim to make good money in fighting the corrupted Wall Street Banks/Brokers…why do I not see something like a proper movie/documentary? If a investment of a few hundred bucks, in order to rent a proper cameraman, is already too much, I have to raise questions. Fair enough.

      >> Patrick a.o. could for instance get in touch with Alex Jones, as he knows how to make documentaries…, has a distribution channel at and a massive audience. Do you get my point? DC is at this stage just amateurism and will IMHO achieve nothing when it goes on like the current modus.

      3. Its for sure always a good cause to reveal the truth. I spent some 6 years of my life on it. I would like to help you guys, but what I need to see is a dedicated spirit to win. For now its just all too soft and lacking any professional approach. My position: if you want to fight, than please fight.

      4. “Point three. We don’t know how our actions affect people in the future, or elsewhere. Who knows what train of events is set off that has a momentous result a decade from now…”

      Well, if all goes as it goes right now: anyone who will raise critical questions in the future may very well be arrested, tasered and locked-up in FEMA camps. Now is the time to raise your voices?

      5. “Truth is a value in itself. The factual record is important. Keeping an honest set of intellectual books is a contribution to improving the economy.”

      Well said and I fully agree! However: if you want to spread the word of truth, one better figures out of how to do so?

      6. “The fact that some people here are still fighting the establishment version of events gives some comfort to outsiders/the masses who might otherwise think that everyone in the media was corrupt.”

      Very well again. I am among those people and will continue to raise my voice.

      And yes the mass media is corrupted till the bone. Though its a pleasure to see that many large media companies, newspapers especially, are in a serious struggle to survive. I don’t feel sorry for those 1000’s of cowardish journalist in case they get sacked.

      OK, thats it for now. Got to do some work now.

      Best regards,


      1. Dirk, do you have your own website? If so, post the link as I’m curious to see the background to your story,

        We all have different ways of fighting corruption and if all the methods are used at once, we are most likely to be successful.

        There is an advantage to not joining together and fighting this scourge in many ways, from many websites. If you think Alex Jones is the answer, why don’t you reach out to him? Don’t be surprised to find that he might be a fake opposition, paid for by the same people you are fighting, though.

        One thing I can say for Deepcapture is the people here are real, they care and they are doing their best at great personal sacrifice to make the world a better place.

        1. Hi Anonymous,

          Thanks for the shown interest.

          I no longer have a website running these days.

          I do have, regarding my case, some easy to comprehend and easy to read material available. Including the evidence of a $125 million insider trading scam; this case has been reviewed by the well known Harry Markopolos.

          You can contact me at: dirkraat(at)
          Looking forward to share some material;-)

          Best regards,


  38. Sean,

    Another great presentation about the part the Federal Reserve under the leadership of Alan Greenspan, a.k.a the God Father, played in the recent worldwide financial meltdown along with the help of our elected officials in Washington DC!

  39. I pulled this off of investorsvillage..

    JPM’s Dimon Annual Letter to Shareholders, Page 32: “we support strong controls on so-called “naked short selling”” !!!!
    I had problems opening the link below unless I right-clicked and specified “Open in New Window”. But maybe it’s just Windows 7 !?!?

    Jamie Dimon makes this comment on Page 32 of his letter under the heading: “Closing Comments on Regulation”. It’s the 6th and final bullet point.

    Where are all those “crazies” who laughed at Patrick Byrne for his audacity to claim that:

    1) Naked Shorting existed and was being used as a profitable trading/attack strategy by morally-deficient (sleazy?) hedge funds,

    2) It posed a systemic (sp?) risk to the whole financial system (in addition to being a ‘serial company killer’).

    So, the CEO of one of the nations biggest banks agrees with Patrick Byrne, Dave Patch, Bob O’Brien, etc. that something needs to be done !!!

    Hey Mary Shaprio – is your “hair on fire” ? You made this statement (about the urgency of the SEC acting) back in February of 2009. How many years will it take for the SEC to protect the investing public ?!?!? Just wondering . . .

    1. This is PR bullshit with no other purpose but to appease the masses. It is truly ironic when you consider how many now allege JPM is by far the largest naked short in the silver & gold PM markets. JPMs sole purpose in this endeavor being to apply downward pricing pressure… allegedly at the behest of the US government in perpetual efforts to disguise the effects of inflation on all fiat currencies. One might argue the point of this is to continue & soon complete the transfer of all wealth to the uber-wealthy. I say allege & allegedly because many continue to deny the obvious.

      In The Matrix, when Neo is offered the choice between the blue pill (appeasement) & the red pill (the ugly truth) he did not hesitate. But in reality, most struggle with that decision. Many in our country are struggling with this choice today. When one’s belief system is shaken to the core, for many it can be too painful to accept that most of what we’ve been taught while growing up was not intended to promote critical thinking, but rather to train us to mindlessly chant a mantra along the lines of: ‘America is free!’ or ‘America loves freedom!’, while at the same time political whores are working to strip away our liberties ‘for our own protection’. Acknowledge there are forces of evil actively pursuing the limitation & elimination of your freedoms and then consider the mantras that have been seared into your brain since childhood…

      Dimon, Blankfein, Shapiro, Hamburg(FDA), Panetta, Geithner, Bernanke, etc… The common thread between them: all are agents of government control.

      When he started his ANSS crusade, I doubt Patrick Byrne expected his work would be a catalyst to help set about revealing the seedy underbelly of the beast of a conflicted US economic/financial/government racketeering system (with no help from MSM I would add), and that ANSS would turn out to be only one of the tools from the toolbox of an absolutely corrupt, manipulative system of control.

      1. As a matter of fact: since the 1920’s or so, JPM has been the most malignant type of cancer in the international financial markets.

  40. You’re welcome Kevin, but as I said I pilfered it from Investorsvillage OSTK board, but I thought you guys might want to see/read it.

  41. Sad.. VERY SAD!!!

    Why Are 25 Hedge Fund Managers Worth 658,000 Teachers?

    In 2009, the worst economic year for working people since the Great Depression, the top 25 hedge fund managers walked off with an average of $1 billion each. With the money those 25 people “earned,” we could have hired 658,000 entry level teachers. (They make about $38,000 a year, including benefits.) Those educators could have brought along over 13 million young people, assuming a class size of 20. That’s some value.

    Apparently the 25 hedge managers did something that is even more valued in our society. But how valuable was it, really? To assess that, we need to answer a few basic questions:

    1. What do hedge managers do?
    They run funds into which very rich people put money to make even more money. Hedge fund managers move the money around in very risky ways to get the most enormous yields possible. (Wealthy investors believe they are entitled to double digit and even triple digit returns.)

    Because hedge funds are considered playthings for the rich, who presumably are fully aware of all the risks, they are exempt from most financial regulations. (We’ll soon see if the financial reform bill now moving through the Senate changes this in any substantial way.)

    The wealthy will have placed an estimated $2 trillion into hedge funds by the end of this year. (That’s about $6,500 for every man, woman and child in the U.S.)

    2. Where does all that hedge fund money come from?
    It’s mostly excess cash the super-rich have in hand now that their tax rates have dramatically declined. In the 1970s the marginal rate on those with incomes above $3 million (in today’s dollars) was 70 percent. Today, the effective rate on the 400 richest Americans is 16 percent, according to the most recent IRS data.

    The wonderful thing about putting your money in a hedge fund (or managing one) is that the income you get from it is not taxed as income (say, officially at the rate of 35 percent). Instead, it is treated as a business investment, something that’s good for the economy and that we need to encourage through a low tax — a “capital gain.” The tax rate on capital gains is 15 percent. This is one reason that Warren Buffett can say that he pays a smaller percentage in taxes than his secretary.

    3. How do hedge funds make money?
    Some hedge fund managers use computerized modeling to decide where to invest or to make investments automatically. Other managers claim they just make good judgment calls. They also make enormous bets using lots of leverage and deploy an arsenal of derivatives.

    It’s a dicey business, but it’s not supposed to put the larger system at risk… until it does. In the late 1990s, the hedge fund known as Long Term Capital Management, run by the brightest bulbs in the financial universe (including a couple of Nobel laureates), found itself with over $100 billion in assets but only $4 billion in capital. When that upside down pyramid began to crumble, the effect was systemic. So systemic that the Federal Reserve, fearing a major meltdown of the financial markets, forced Wall Street banks and investment houses to bail out the fund’s investors. Some economists argue that risky gambling by hedge funds did not cause the current crisis. But no one has conducted an impartial investigation into that question.

    The $1 billion each those 25 hedge fund managers netted (for themselves) was impressive — but doing it in the year 2009 was also slap in the face of struggling Americans. That’s because hedge funds would have earned little or no money at all in 2009 had the government not bailed out the financial sector with trillions in loans, asset guarantees and other forms of financial assistance. It was, in effect, a generous gift from we the taxpayers. Much of that money was “earned” by betting that the government would not let the financial sector collapse. Smart bet.

    In principle hedge funds would do little harm if they were not implicitly backstopped by the taxpayer in this way. Here’s how one sage financial expert put it to me recently:

    Personally, I do not care whether hedge funds and other pools of unregulated funds gamble in opaque derivatives rated by incompetent ratings agencies. But I do want them to fail when their bets go bad. Nor do I want them to be rescued in the event of a run to liquidity. If they are leveraged and cannot come up with cash, they should fail. It will be painful for their creditors. So be it, the more pain, the better. That is the downside to private property. Greed is good, but must be balanced by the fear of failure. Without failure there is no fear.

    On the other hand, I want to have a protected and closely regulated portion of the financial sector for those who do not want to take excessive risks. And any institution that bets with “house money”–that is, that has access to the Fed in the case of a liquidity problem and to the Treasury in the case of insolvency–must be constrained. That is the direction that true reform ought to take.

    4. Do hedge funds create real value that is essential for our economy and our society?
    Here’s a test: Imagine what would happen if they disappeared entirely. People working at the 8,000 or so hedge funds — a relatively small number of people — would lose their jobs. But it’s unlikely that the national or world economy would suffer at all. The wealthy would simply move their money to other investments. They might even decide to make longer term investments that would be used to produce real goods and services.

    But wait, aren’t these piles of money a valuable source of funds for investment in the real economy? Don’t hedge funds make our markets work more efficiently? By betting against overvalued currencies and bogus balance sheets of toxic-chocked banks, don’t hedge funds police the bad guys? Aren’t they the essential glue for rebuilding America?

    If any of those good things happen, they’re an accidental byproduct. The real job of hedge funds is to allow very rich people to make more money as quickly as possible, preferably without tying up the cash for too long. Use hedge fund money for a leveraged buyout that can be flipped quickly for big profits? Sure. Use it to speculate on the value of currency or to make a quick dash in and out of a credit default swap? You betcha.

    If we step back and look at the big game, we can see that hedge funds are hard at work skimming profits from the financial sector, which in turn is living off the largess of the American taxpayer. It’s all part of the great financialization of the U.S. economy that began in earnest when the financial sector was deregulated in the late 1970s. Over the years, financial sector profits have risen to nearly 40 percent of all corporate profits. And sadly, it’s not because financial firms helped our economy grow. It’s because they figured out how to run a very profitable casino for the wealthy. And then hedge funds came along and figured out how to skim the skim from those casinos.

    5. So how can 25 hedge fund managers be “worth” $658,000 new teachers?
    They aren’t. And I bet the leading hedge managers themselves would admit it.

    But our economic system isn’t rewarding real value. While the hedge fund 25 are living large, teachers everywhere are getting the axe. Why the layoffs? Because state and local governments aren’t collecting enough taxes — not since Wall Street investors crashed the economy.

    In our New Jersey town, we are laying off 85 teachers. Instead we ought to be hiring 85 more to reduce class size and improve support programs for those students who desperately need them. It’s obscene that we’re shoveling money to the super-rich even as we force teachers to join the ranks of the unemployed. Already 29 million Americans are without work or forced to work only part-time.

    How to tame these runaway paydays? Just institute a financial transaction tax or a windfall profits tax. The fix is technically simple but politically complex. It’s going to take a lot of political will — over a long period of time — to reorder our most basic economic values.

    In the meantime, try explaining to your kids why school programs are being cut while 25 shrewd gamblers are living like Pharaohs.

    Les Leopold is the author of The Looting of America: How Wall Street’s Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It Chelsea Green Publishing, June 2009.

  42. Dirk. Have to give you some support for the truth is IF they wanted to do more they could. It’s my opinion and only and opninion that we reached the point MONTHS AGO where time and distance caused many to do the ok we know the problem but we can’t go too deep for too many were directly involved or complicit. Thus the strategy of let’s put it behind us and move foward.

    Make no mistake I give huge kudos to Patrick and others. They were ahead of the crowd and on top of it. But the moment of victory passed back a bit and for reasons not known to me but Dr Decosta is correct. Those with the skills can exploit the opportunities given and in fact have been. One only has to taka broad glance at JPM/WYNN/BAC/LVS/WFC/CREE and many others to see where going LONG LEAPS off the bottoms would make one very wealthy.

    So what’s coming? Oh there will be some changes. MOST of it will be seen in attitude as reporters who once dissed the existance of NSS now use it as if it always was. And those in place who were part of it WITHOUT the intention of destroying this financial system are now cognizant of the danger they participated. However, the thugs who were intent on destroying this great nation will continue that desire and at some point will regroup for the next attack.

    In the meantime, the truth shall set you free. Even if it nearly costs you your life, your health and other. Hang in there.

    1. Hi anonymous,

      Thanks for the endorsement; highy appreciated!

      Sure, just like you, I know very well that Patrick stood in the storm and faced tons of ridicule a.o., whilst he fought against the perpetrators. At that time the majority of the Americans were still convinced that Bankers & Brokers were mostly honest people etc. etc. So yes, I do have respect for Patrick.

      However: I am convinced he and his affiliated persons could achieve a lot more…IF they would make the decision to do so.
      For now I say: outright dismal.

      I agree that most reporters and journalists will show a different attitude towards the naked shorting scam. They must be suffered a blow too; regarding the value of their personal assets a.o.

      Regarding: “However, the thugs who were intent on destroying this great nation will continue that desire and at some point will regroup for the next attack.”

      Correct, the thugs are still active.
      Let me give you my prediction and vision. Those thughs had the plan to screw you and your country in 2009. They did not as they faced serious pressure and anger from the Chinese government. The latter is keeping your country alive.

      The Chinese are right now, as we speak, buying assets all over the world and particularly in Africa. They pay with U.S. dollars, which they currently hold in reserve!

      Bear this in mind: the long expected knock-out for the U.S. financial markets and the National currency, i.e. U.S. Dollar, will be made effective as soon as the Chinese have bought enough fixed assets for their huge pile of U.S. dollar reserve; close to U.S.$ two trillion!

      I have some proof for that thesis; I can back my prediction with some evidence.

      You can bet the farm on it, that the Banker thugs will be, around that time, going massively short on your National currency!

      Thanks for the discussion 🙂


      1. By saying Deep Capture could achieve a lot more if they chose to, you either:

        A.) Are trying to elicit information;
        B.) Are conducting some type of information operation;
        C.) Don’t know what you are talking about.

        Either way, your opinion is noted; now please take your complaining about Mark, Patrick, et al, somewhere else.

        1. “Either way, your opinion is noted; now please take your complaining about Mark, Patrick, et al, somewhere else.”

          As you wish.

  43. Sean,

    In regards to your stats on hedge fund managers’ incomes and how to make any sense out of it. #1: hedge fund managers typically charge a seemingly onerous “2 and 20” up to “4 and 40”. “2 and 20” means 2% of funds under management and 20% of all profits. The question arises as to why in the world would an already wealthy hedge fund investor pay such usurious fees? Don’t the already ultra-wealthy typically get “volume discounts”? The answer lies in the fact that these seemingly usurious fees gain an investor access to a special short selling “playing field” tipped drastically in the favor of the hedge fund managers and their clients.

    How did the field get so tipped? It gets tipped because the hedge fund community directs approximately $11 billion annually in fees and order flow to the NSCC “participating” market makers and clearing firms willing to break the greatest amount of securities laws on behalf of the financial interests of the hedge fund manager.

    Abusive MMs will typically ILLEGALLY access the bona fide MM exemption from making “pre-borrows” and/or “locates” before short sales. Abusive clearing firms will typically ILLEGALLY enter into “Ex-clearing arrangements” designed to stall the need to ever deliver that which a short seller sold. The result in the market making and clearing firm arena is the “survival of the corruptest”. Thus these fees are not so onerous after all. Another key is to save some of the money stolen from the Main Street “long” investors to aim in the direction of the lobbyists paid to make sure that the regulators never change the corrupt status quo. One thing we wouldn’t want to do is to do anything that might jeopardize this wonderful flow of “liquidity” provied by these would be do gooders.

  44. So, this is most likely being done utilizing ICE Clear (as in InterContinental Exchange, where Goldman Sachs and Morgan Stanley did all those wash sales back and forth to pump up the prices of oil and commodities)?

    Assuming JPMorgan Chase, Goldman Sachs and Morgan Stanley — the Usual Suspects?

    With ICE Futures, ICE Clear, and other ICE flavors, as well as Swaps Wire, ELX Futures, DTCC, Climate Exchange, and the other exchanges, they can pretty much rig anything and everything any which way they want?

  45. Sean,

    You’re right in regards to the macro scene for addressing abusive short selling. My epiphany was the SEC’s Inspector General Audit No. 450. It showed that of over 5,000 formal complaints made to the SEC in regards to abusive short selling NOT ONE resulted in an “enforcement action”. Equally aberrant was that of over 900 recommendations to the SEC for enforcement ations made by FINRA NOT ONE was related to abusive short selling.

    Then and there I changed my focus from trying to effect changes on the macro scene to focusing on the micro scene and help out one victimized corporation and one group of shareholders at a time. It is much more rewarding from a “doing some good” point of view. It’s tough to appreciate the potential energy encased in a solid development stage corporation misdiagnosed as bing a “scam” that really does “have the goods” but has lost 98% of its share price and market cap but still has a gazillion unaddressed FTDs still on the books. It can be amazing. Don’t give up the fight this CFTC revelation was a true godsend!

  46. Dr. DeCosta, may I speak with you? We have spoken in the past thru a mutual aquaintance hint (Stockenter) Jim. I have some pertinent info to your last post. Thank you very much.

    DCN, as usual right on target, could’nt have said it better myself. Thank you for putting this poster in his place, which is out of here.

    1. Sean,

      You wrote following: “DCN, as usual right on target, could’nt have said it better myself. Thank you for putting this poster in his place, which is out of here.”

      Deep Capture’s about page gives following disclosure:
      “Deep Capture is not just media. It is a movement.”

      Attempts to silence critical voices and to expel people with a differen opinion means: DC is not a movement but shows clear signs that it is a cult.

      To say it once more again: I would love to be part of the movement, but will stay aside and refrain from becoming a member of the cult.

      Good luck to all of you!

  47. Dr Decosta. Anytime you want to pass along those firms you are educating and helping so that they can survive and rise then there are probably a few here that would appreciate knowing there’s a few gattling guns under in a few wagons. SMILE.. I concur, once you realized that certain regulatory agencies were NOT going to do as they should then the strategy became run with the big dogs. I’ve a few that have been quitely being accumulated and will soon be seen on the board of leaders for months to come.

  48. Dirk, our posts were not trying to silence your opinion as you put it but to silence your rude comments about the patrons of this website. If you don’t think they are doing enough an email (which is readily availabe) would have been the appropriate way to commnicate such. Not the brash rude way you interjected yourself and opinion of the good men trying to overcome this great evil. You were rude and insensitive and an apology (no less) is due to these our patrons. “It is better to be silent and thought of as a fool than to open your mouth and prove it”. There will be no more of my bandwith toward your comments. Back on Topic.

    1. Sean, fair enough, I see your point of view.

      Mine is once more again: I know already that Wall Street is corrupted and don’t need another 50 or so articles which reveal the ongoing dirt.

      If the owners/sponsors claim to be heading ‘a movement’, than I’m simply asking: where’s the evidence of such? Where’s the action?

      If DC is a movement, I guess I’m Yogi Bear?

      1. ‘Movement’ implies some form of reader participation, which has been addressed here:

        Your opinion has been made, and your suggestions (a few hundred dollars to make a movie, and for Patrick to go on the Alex Jones show) have been found wanting.

        If you want to provide your information then send it to Judd; if you think DC lacks a “dedicated spirit to win” and “is at this stage just amateurism”, then don’t. Period.

        Nobody here is going to cater to your wants and opinions.

        You are not special. You are not a beautiful or unique snowflake.

  49. One concept that’s becoming clearer in this CFTC gold and silver price suppression scheme is the concept of “Custodial Corruption”. If you don’t demand the delivery of the financial asset you purchased whether it be gold or a security then you are going to be appointed a “surrogate legal custodian” to represent your financial interests and “safeguard” that which you purchased.
    Picture your custodian looking at a room full of gold bullion at the LBMA or a room full of paper-certificated securities at the DTC. Eventually the thought process will be who’s going to miss a brick or two of gold or a couple of million shares of securities if we rent those financial assets to short sellers. As long as the purchasers of all of those assets don’t get organized and launch a “run on the bank” nobody would ever know the difference. The result is a “fractional reserve” custody system.
    Later the thought process becomes since we’re running a “fractional reserve” custody system and making a ton of rental income on the side who in the heck would ever know if that which they purchased ever got delivered in the first place or not. What investors are unknowingly purchasing is not gold or legitimate shares of a corporation but instead they’re receiving an “entitlement” to sell that which they purchased EVEN IF THAT WHICH THEY PURCHASED NEVER EXISTED.
    In the securities arena the culprit is the wording used in UCC Article-8. Since there are indeed reasons for legitimate ultra-short termed “delays” in the delivery of securities sold the authors of UCC-8 had to accommodate these legitimate delivery “delays” by “entitling” the purchasers of undelivered shares to sell them anyways. After all they were fully paid for and delivery was deemed to be imminent. The problem was there was no timeframe dictated in which a legitimate delivery “delay” became an intentional delivery “refusal”. Thus a legitimate delivery “delay” of 24 hours could easily become a 24-month delivery “refusal”. Until UCC-8 is amended it’s probably not a good idea to allow others on Wall Street to act as your “surrogate legal custodian”.
    At the NSCC subdivision of the DTCC you do not have to deliver that which you sold in order to gain access to the funds of the purchaser that bought the nonexistent securities that you sold. You only need to portray your delivery “refusal” to be a delivery “delay” UNTIL T+4 when the NSCC will with 100% certainty pretend to be “powerless” to do what is necessary to address the intentional delivery “refusal” i.e. “buy-in” the delivery “refusal” so that the purchaser can finally get delivery of that which he paid for.


      “Naked short selling in size is a cancer in the financial markets. And the way in which the Banks are obstinately fighting against any and all reforms that attempt to limit naked short selling shows the objective observer that they are firmly committed to a status quo that is designed to distort the markets and the real economy for their short term advantage.

      Let’s be clear about this: naked short selling in size is not a trading strategy, it is a means to a fraud.

      This may be the Madoff ponzi scheme writ large, the heart of the darkness in the financial fraud that is the US financial system. The crowning achievement of the financial engineers at the Fed, who have built a Ponzi economy and an empire of fraud.”

  50. Anon article said:

    “This may be the Madoff ponzi scheme writ large, the heart of the darkness in the financial fraud that is the US financial system.”

    And Social Security is another Ponzi Bugger !!!

  51. Dirk,

    I am bit confused. Please read the”about deepcapture” from their website:

    The Deep Capture website was created to bypass the “captured” institutions that mediate our nation’s discourse. It was initially funded by Patrick Byrne, CEO of, but it is not part of Overstock. It functions as a separate, limited liability media company, whose co-owners and managers are Judd Bagley, Evren Karpak, and Mark Mitchell.

    Public choice theory describes a phenomenon whereby industries take control of, or “capture”, regulators who are supposed to oversee them. The claim of this website is that powerful actors have been able to influence or take control of not just the regulators, but also law enforcement, elected officials, national media, and the intellectual establishment.

    It is our mission to expose this “deep capture.”

    So to expose it, they keep writing about it, as promised. Mr. byrne appears on television and radio, and I’m sure that deepcapture ideas have been expressed to elected officails and regulators. They have sued in court (and won a settlement) and are preparing for court in another.

    So in a sense, I am confused as to how someone who is doing exactly as they said is “failing”? They created deepcapture to expose through their writings what they see the true story, and continue to do so.

    I ask you, and I ask repectfully, what have youdone with all the research you have done? My guess from your writings is that you did exactly what you set out to do, and research where and how the problem exists.

    1. Hi Sam,

      A quick attempt to make my point clear: DC has been established – yes it is – during an era wherein Patrick a.o. were seen as disgruntled CEOs and or outright conspiracy theorists i.e. talking about something incomprehensible as ‘naked shorts’.

      So as these days the Fox Network, NYT and WAPO a.o. are also openly reporting about the widespread wrongdoings at Wall Street, where’s the unicity of DC?
      Just check this threat alone? How many links are posted here to other websites of all kinds of financial / fraudulent sh*t and scams?

      So I repeat: what makes DC at this stage so unique?
      I just don’t see it and I consider the efforts, in contrary to the claims, and achievements as dismal.

      Patrick WAS the guy who fought on his own and DID achieve something. However: where’s the man right now…where’s the action? Just spending a few bucks on a blog? Thanks, but that’s not a fight and neither has it to do with idealism or whatsoever.

      Does it make a change on Wall Street if some 500 more articles will be published about all sorts of sleazy scams?

      All the best;-)
      Thats my point.

      1. Dirk of Netherlands,

        Since your first post above, you have given me the impression that you are ANGRY that those within did NOT agree to accept you as a Deep Capture insider.

        And out of this anger, you apparently decided to come to to criticize Patrick, Mark, Judd and even Dr. Jim DeCosta at every opportunity you could find.

        Just to make yourself feel better?

        It seems to that every time you come to and do your “criticism dance” you are cutting off more and more of your feet.

        So now Dirk of Netherlands, instead of fighting the Wall Street Criminals, has taken up a new mission – to attack those who are trying to expose the Wall Street Criminals.

        Dirk of Netherlands, I suggest you take hold of your emotions and decide whether your mission is to fight the Wall Street Criminals or those trying to expose the Wall Street Criminals.

        1. Hi iStandUp,

          In contrary to your claims, thoughts and as a matter of fact: I have been in touch with and exchanged some of my material with Mark Mitchell. If you drop him a mail, I guess he will acknowledge such.
          He also offered to get my story published here on DC.

          I can a.o. show proof that the Milberg Weiss gang was on some sort of payroll at a NYC based Hedge Fund. Proof which shows that those crooks reaped excessive benifits in excess of ten´s of U.S.$ millions. Those documents would suit Patrick very well IMHO regarding his ´Miscreants Ball´. My documents are, regarding the criminal Milber Weiss attorneys and their alleged ties to criminal hedge fund managers a kind of a missing link.
          How did I get a hand on such papers and what kind of documents am I talking about? I can tell you this: as I had my website online, I was from time to time very surprised of what kind of insiders contacted me. As I told you guys already: Harry Markopolos was among these people. So I really do possess some interesting documents, I am willing to publish them but I can´t reveal my various sources.

          So what went wrong between me and Mark Mitchell? Nothing at all. He kindly offered his help and I wrote him back that I would let the offer to sink in for a while. That was my last email to him.

          Why didn´t I follow up? I have a developed a personal point of view, call it a principle, regarding giving aid or to help someone when a request is made.
          This is my personal Philosophy: I can and will only help people out, who themselves have already tried and or show at least some genuine efforts.

          Face the facts: if or when I had decided to get my story published by Mark, I myself would also have invested some 100 hours of work. So I´ve asked myself: why should I invest some 100 hours, to get my story published, when 99.99% of the Americans are not interested, your Congress has been bribed by Wall Street and the owners of DC themselves are lacking an attitude to fight, i.e. are no longer that zealous.

          I am not going to invest 100 hours of my time to get once more a zero point zero result. Well, yes, I would have my story out on DC. But I will say: so what?

          I agree to anyone who will say that things can´t be changed overnight. I agree. But I will also state: a DC at stage isn´t going to get things changed either. DC is IMHO at this stage a kind of a beefburger which is lacking the beef.

          So when on DC it is claimed that DC is a movement…? So where exactly are things moving and who´s the driving force? Let me say it with a French saying: Noblesse oblige. Or translated: those that can make a difference should make the difference.

          Do I feel better? No not at all. But I am disappointed about the dismal efforts that people show here themselves. I am not inclined to work 100 hours just for saturating your curiousity for a day or so. Face the facts± I have invested 1000´s of hours and paid serious money to achieve what I have achieved.

          I am satisfied with the personal endorsement of people like Harry Markopolos a.o. and I couldn´t care less to read donzens of posts from all kinds of anonymous readers: ´Great finds Dirk! Keep up the good work!´

          DC is at this stage just a self proclaimed movement where nothing is moving. That´s dismal IMHO.

          Hope this helps=

          All the best,


          1. “All right, if the applicant is young, tell him he’s too young. Old, too old. Fat, too fat. If the applicant then waits for three days without food, shelter, or encouragement he may then enter and begin his training.” – Tyler Durden

          2. DCN,

            Its because of people like you that make me convinced to have made the right observations regarding the cult called DC. Thus me myself will not invest any time and effort at this stage.

            Sitting on your lazy *** and just waiting till someone feeds you another interesting story, DCN…?

            And oh boy, the grapes are sour once someone holds up a mirror and tells you the truth.

            The beefburger is lacking the beef and that’s what it is.

          3. Dirk,

            I too have provided investigative material to DC; like with you, this was work that I had invested a great deal of time in. I spoke with Mark, he said your info looked good but was not related to the story he was working on at the time.

            My experience with Mark, other journalists, and investigative authorities has been that it can unfortunately take months or years for them to review and vet the material. But that is the nature of the beast for investigations of large scale and scope. You CANNOT take this personally, otherwise it will tear you up inside.

            From your rambling it is evident that you are frustrated and do not know what it is exactly that you want – perhaps it is attention or a sense of direction? Your behavior has been that of a child, and not of the seasoned investigator that you are. So you will have to excuse me when I thought you were attempting to elicit information or conducting some form of information operation.

            Please consider exactly what it is you wish to achieve with your conduct here, and clearly articulate it instead of nonsensical trolling.


          4. DCN,

            I apologize.

            You spoke with Mark about my info and he admitted it looked good? It is good and Mark has not even seen the details. That’s what I mean with: in order to get the whole story out, I myself would have to invest some 100 hours as well. I know, since I possess some journalistic skills too, that writing a broad, in-depth and sensemaking article requires a lot of time and research.

            So please don’t get me wrong: I don’t take anything personal. You do, more or less, seem to presume that I am angry on Mark and that’s a very wrong perception! I for sure was pleased with Mark’s genuine interest and am happy to see that he endorses my claim. So yes: I do have something and I am certainly NOT angry on Mark. As I wrote before: I decided not to follow-up and such solely upon personal motivations.

            Is it evident that I’m frustrated? Oh yes, and I don’t mind to admitt such. I think and am convinced that the guys behind DC have been and are making some strategic mistakes and seem to be clueless about how to make the general public, the average Joe a.o. aware of what is going on.

            For instance Judd wrote on March 9: “What’s been missing is educated criticism based on the hard facts presented in the video. And believe it or not, this has bothered me, because it suggests that not enough smart people are paying attention.”

            Aha! It has bothered Judd that not enough smart people had paid attention so far. Guess what? Isn’t such a result of a major flaw at DC? The guys behind DC have a great and easy story to sell, but seem to lack the skills to gain, among the public, broader awareness and a intelligent discours.

            I was a self-made millionaire and after I got fleeced by Wall Street, I spend some 6 years of my life chasing the crooks involved. And as my enemies were willing to hire elite lawfirms with U.S.$ 750 p/h attorneys, all in order to silence me, I guess I was worth all the money it costed them.

            So you’ve got to ask yourself: when was the last time DC got harrased by U.S.$ 750 p/h attorneys, issuing threats to take the website offline a.o.?

            Look DCN, I don’t mind to work for a month on a revealing story together with Mark or no matter which journalist or whatsoever. Such will cost me $1500 in lost wages…which I actually can’t afford.

            Okay…and now we have Judd and Patrick who actually CAN rather easily fford to lose U.S. $1500, who ignored my public offer to helping them out with DC and who now are apparently bothered by the fact that a insufficient amount of intelligent people did not want to have a discours with them!

            And that’s simply what bothers me most: fighting the enemies of the American public and attempts to root-out the cancer of the Financial Markets have absolutely nothing to do with an intelligent discours. This is simply a total war with very sleazy aspects!

            And regarding your final question: “Please consider exactly what it is you wish to achieve with your conduct here…”

            I guess I made my points above and I provided you with an adequate answer?

            All the best,


          5. Dirk,

            You have the freedom to choose whether you work with Mark or anyone else.

            You have the freedom to choose whether you want to spend 100 hours helping Mark write a story or not.

            My impressions stated above may or may not be accurate, as I do not know you and have never spoken with you – I have only read what you have written here.

            Dirk, you stated—-

            “Why didn´t I follow up? I have a developed a personal point of view, call it a principle, regarding giving aid or to help someone when a request is made. This is my personal Philosophy: I can and will only help people out, who themselves have already tried and or show at least some genuine efforts.”

            You have the freedom to have any personal Philosophy or personal point of view you want.

            Dirk, you stated—

            “I agree to anyone who will say that things can´t be changed overnight. I agree. But I will also state: a DC at stage isn´t going to get things changed either.”

            I am not sure where you read that DC claims they will “get things changed”. I do not remember reading any such claim, and I have NOT expected DC to “get things changed”. does NOT have any regulatory power, nor prosecutorial power. So I have no expectation that DC will “get things changed”.

            What does have is the freedom to speak, freedom to write, freedom to educate, freedom to reveal the illegal activities on Wall Street. With these freedoms and the dedication of its reporters to reveal the misdeeds committed on Wall Street, I expect to assist, as it has already, in educating the American people and the people of the world about the Wall Street Criminals. My expectations are that play an important part in the whole process of getting things changed.

            Since you apparently now think that is a useless endeavor and that the many 1000s of hours Patrick, Judd, and Mark have spent trying to educate the world about the Wall Street Criminals is/was a waste of time, why do you want to spend any more time posting here?

            Finally Dirk, what are you going to do with all the information you have about the Wall Street Criminals?

            Are you going to bury them in your back yard? Burn them? Or what?

            Dirk, good luck to you in your journey of life as you try to figure out who is going to “get things changed.”

          6. IStandUp,

            Sorry for lacking the time to give you a more in-depth reply. I have to catch some sleep as I have to work tomorrow.

            Just accept the facts as they are outright verifiable:
            DC claims: this is movement not just a blog.
            Judd claims: bothered about not much of intelligent people respond to his video.
            Result: DC doesn’t meet its ambitions due to a failed strategy.

            I can honestly claim: I knew this failure already for a while, i.e. I saw this coming and that’s why I did not invest my precious time.

            So let this annoying Dutch bastard / *sshole tell you this: once DC starts to fight the bastards, I can assure you: both the intelligent people and the masses will gather here. Judd will get his discours!

            No fighting means no results and it will all turn out to be just a waste of time and efforts.

            Accept the facts and don’t stay in denial.

            All the best,


          7. Dirk,

            I accept facts when I see them.

            Your comments do not show me any facts.

            So without facts, I have NO Facts to accept.

            To paraphrase you – where’s the beef?

            In other words – show me the facts you claim exists, since I do not see them.

  52. I just got a call from a securities attorney with a good question. He asked why the number of “security entitlements” resulting from these intentional delivery “refusals” which were portrayed as mere ultra-short term delivery “delays” that exist over and above the number of legitimate shares held at the DTCC don’t show up during their audits. The answer is “what audits”?

    A “corrupt custodian” that has illegally converted the clearance and settlement system it administers to a “fractional reserve” type of system cannot allow there to be audits. The audits would reveal the vast disparity between the number of paper-certificated legitimate “shares” it holds in its “legal custody” at the DTC depository and the number of “securities held long” that its participants “imply” they are “holding long” on their monthly brokerage statements. Recall that a “security entitlement” denoting a “delivery refusal” is technically a “security” since it represents an “evidence of indebtedness”.

    Instead of allowing audits the NSCC runs a “continuous net settlement” (CNS) system. The “continuous” part of the title is synonymous with “no audits allowed”. Picture “X” amount of paper-certificated shares and “Y” amount of mere “security entitlements” resulting from “delivery refusals” circling around “X” amount of chairs in a quadrillion dollar game of “musical chairs”. “Continuous” means that the music is never allowed to stop lest the disparity and the corrupt nature of the custodian be revealed.

    “Surrogate legal custodians” like the DTC are mandated to “safeguard” the securities of their purchasers not facilitate the essential “counterfeiting” of them to aid short sellers in depressing share prices. By definition a “surrogate legal custodian” cannot legally operate a “fractional reserve” based clearance and settlement system that serves as an artifice to defraud the purchasers of securities when it knows or would be grossly negligent in not knowing that many of these implied ultra-short term delivery “delays” are indeed long term “delivery refusals” that the NSCC pretends to be “powerless” to buy-in.

    Note the key to this whole fraud. UCC-8 gave the NSCC the right to credit readily sellable “security entitlements” over and above the number of “shares” already “outstanding” to the accounts of those that bought yet to be delivered shares. BY THE TIME THE NSCC CAN DETERMINE IF A DELIVERY FAILURE WAS ASSOCIATED WITH A LEGITIMATE ULTRA-SHORT TERM “DELAY” OR A FRAUDULENT LONG TERM “REFUSAL” THEY CLAIM THAT THEY’RE “POWERLESS” TO DO ANYTHING ABOUT IT i.e. buy it in. Now how clever is that?

    In essence the “default presumption” in the NSCC’s CNS system is that ALL delivery failures are related to innocent short term delivery “delays” UNTIL PROVEN OTHERWISE. Then they claim that by the time one can prove “otherwise” i.e. still no delivery by perhaps T+5 or so it’s too late to do anything about it. That’s kind of a dirty trick when you keep in mind that the investment funds being stolen from the Main Street “long” investors is going into the wallet of either the short selling owners of the NSCC (its “participants”) or to the abusive hedge funds directing fees and order flow to these owners.

    1. Part of the answer was disclosed in DTC and NSCC filings with the Bank for International Settlements.

      They said that from their point of view, the beneficial owner is the DTC participant (typically a clearing brokerage) and the trade is the single trade that occurs for each stock at the end of the day in the continuous net settlement system.

      I have no doubt that the NSCC reports this trade data accurately and the DTC reports the beneficial holdings of the clearing brokerages accurately, without disclosing that the real problem is 98 x 98 = 9604 times larger because of 98% netting at both the CNS and Clearing Brokerage systems.

      And that doesn’t include x-clearing.


    “The March 25 meeting was a “sham,” filled with deception and half-truths and with the “liars and thieves behaving like cornered rats,” according to several of those present. In what might have been a harbinger of things to come, CFTC announced a week before the hearing that they had had a fire in the room where its gold and silver records are held.”

    “Then during the six-hour hearing, the only time the live video feed went down was from one minute before Bill Murphy spoke until one minute afterward. Next, when he was finally asked a question by the panel, the audio mysteriously went out until right at the end of his answer.”

    He predicted manipulation (sounds like Judd’s prediction, deja vu):

    “It would not be possible to predict such a market move unless the market was manipulated.”

    “Douglas was able to introduce arguments that the London Bullion Market Association (LBMA) over-the-counter gold market is nothing but a massive “paper gold” ponzi scheme. What was then astonishing is that the bullion bank apologist, Jeffery Christian, of CPM Group, who has always been staunchly against GATA, actually endorsed the Douglas comments as being “exactly right” and went on to confirm that the LBMA trades over 100 times the amount of gold it actually has to back the trades.”


  54. Soros Says U.S. Bank ‘Oligopoly’ Should Be Broken Up

    April 13 (Bloomberg) — Billionaire investor George Soros said the “oligopoly” formed by the four biggest U.S. banks “does need to be broken up.”

    Soros, speaking today at an event in London organized by the Economist magazine, also said he is “in favor” of the so- called Volcker rule, a U.S. proposal to block banks from engaging in proprietary trading and owning hedge funds or private-equity operations.

    Financials accounted for 6.6 percent of Soros Fund Management LLC’s U.S. stock holdings during the fourth quarter, according to a regulatory filing. Citigroup Inc. was the hedge fund’s fifth-largest stake as of Dec. 31, with 94.7 million shares. The U.S. Senate’s banking panel in March approved Senator Christopher Dodd’s financial-rules overhaul, advancing the Obama administration’s bid for the biggest restructuring of Wall Street oversight in seven decades. The bill proposed by Dodd, a Democrat from Connecticut, would create a consumer protection bureau at the Federal Reserve. It also would set up a mechanism that enables the government to dismantle failed firms that threaten the financial system, and implement the Volcker rule, named for former Fed Chairman Paul Volcker.

    Soros Fund Management, based in New York, oversees about $25 billion.

  55. Hi Anonymous –

    That piece you posted is just a piece from a gold newsletter speculating on what China might do, it’s not anything emanating from China.

    And just off the top of my head, and without casting any aspersions, I wouldn’t pay it too much attention.

    Here’s why.

    I was the blogger who linked the story of Maguire’s accident from GATA first on my blog, not zerohedge. And I linked it to other accidents related to the Madoff ponzi. Some people linked that post anonymously. But others, almost uniformly rushed to the “approved” blog, zerohedge.

    Strange that all the sites zealously avoid linking my original link but go to zerohedge’s link….which contains the remark about Russian traders possibly squeezing the contracts..but nothing about the dozen or more deaths in the Madoff scandal that surely point to a connection between that supposedly solo effort and the larger manipulation of the market.

    So Russians are to blame or Chinese, per these sites…but no connection to Madoff.

    Do you believe that?
    I don’t.
    That’s disinformation at work, if I may say so respectfully, and with full awareness that as a naturalized citizen, my words will carry little weight on this.

    Lila Rajiva

    Lila Rajiva

    1. Lila, I always appreciate your comments. I can tell from your blog & comments you’re very astute on the issues… But I don’t understand why you feel motivated to attack ZH? Perhaps you feel slighted or somehow lacking recognition for something? Fine.

      Atta girl. Good job.


      ZH is one of those few places on the interwebs in which you are afforded the opportunity to read about subjects taboo to MSM. I sometimes feel like the ZH crowd moves as a herd & many over there may not be sympathetic to the crusade against ANSS, but I believe it’s still well worth it to peruse the stories posted over there. If you have a problem with something or someone over there, why not post about it over there? Post your thoughts over there & if it’s controversial I pretty much guarantee you’ll get a chance to debate & defend your issue. It’s a bit “Barry Reitholtz” to bitch about ZH over here. Have your say over there.

      Barry Reitholtz (adjective): cowardly, chickenshit

  56. Dr. DeCosta, what do you think? Any teeth to this?

    New rules for large traders
    By Fawn Johnson


    WASHINGTON (Dow Jones)–The U.S. Securities and Exchange Commission on Wednesday voted 5-0 to propose new rules for large traders that would assign them unique identifiers and require them to report next-day transaction data when requested by regulators. The rules are designed to give the SEC a better handle on high-frequency trading, in which trades are transacted in milliseconds and dispersed among many trading centers. Next-day access to trading data could be used by the SEC to promptly reconstruct market activity and perform other trading analyses, according to a summary of the proposal. The data also could assist in investigators in finding manipulative, abusive, or otherwise-illegal trading activity. The SEC wants to be able to request transaction data from broker-dealers on volatile days, such as those seen in the fall of 2008, to see which traders and what trades may be driving the markets in a particular direction. “The commission’s need to better monitor these entities is heightened by the fact that large traders, including high-frequency traders, appear to be playing an increasingly prominent role in the securities markets,” said SEC Chairman Mary Schapiro. The SEC’s large trader tracking proposal is part of a broader effort to get a handle on lightning-speed, automated trading activities that have emerged in recent years. The agency also has proposed bans on displaying marketable flash orders and on broker-dealers giving customers unfiltered access to exchanges and alternative trading systems. Under the proposed rule, the SEC would assign large traders a unique identifying number. The large traders then would be required to disclose to their broker-dealers their identifying number and highlight all of the accounts held by that broker-dealer through which the large trader trades, the SEC summary said. Broker-dealers would be required to maintain and report data to the SEC largely in the same manner as they do now, with the addition of the unique trader identifier and transaction times. A “large trader” would be defined as a firm or individual whose transactions in exchange-listed securities equal or exceed 2 million shares or $20 million during any calendar day, or 20 million shares or $200 million during any calendar month. The reporting requirement was designed to capture the largest individual traders, those engaged in 1/100th of 1% of average daily trading volume, according to SEC staff. The SEC estimates that the rule would apply to the largest 400 market participants. The implementation costs would be minimal–$33 million to implement and another $17 million annually across the industry. The agency is proposing that large traders self identify to regulators within three months after the rule is finalized. Broker-dealers would be required to comply within six months under the proposal. The new large trader data the SEC anticipates receiving under the rule would complement the regulator’s project to create a consolidated audit trail of trading data. But the audit trail that SEC now is working on wouldn’t identify large traders, and that information would serve as an additional data point for investigators to use in surveying the marketplace. The proposal was supported by all the SEC commissioners, although Commissioner Kathleen Casey cautioned that the proposed rule shouldn’t be viewed as the government’s judgment that large and high-frequency trading is harmful or dangerous, but as a tool to “gather as much empirical data as it can.”

  57. Another great article Mark,

    Over the years these bullion banks caught not only selling but charging insurance and storage fees for NONEXISTENT gold bullion have allegedly been working basically as “agents” of the Federal Reserve and the Treasury. In fact in a New Orleans trial a defense motion made by the defendants was they were indeed acting on behalf of the Fed and the Treasury and thus should have access to immunity. The Fed, the Treasury and the overspending politicians bribing their way into getting re-elected want the price of gold to be kept artificially low so that the US Dollar will appear to have been relatively strong during their watch. This would help hide the fact that the Fed printing presses have been going non-stop partly due to the “pork” the politicians are serving up in their districts in order to get re-elected.

    Over the last couple of decades these corrupt bullion banks have operated in a “safe harbor” provided by this purported acting as “agents” of the Fed, partly due to naïve Americans unaware of abusive short selling practices and the “too big to fail” and “too interconnected to be allowed to fail” mentalities. These crooks have been simply leveraging the ability to operate out of this “safe harbor”. The naked short positions amassed are obviously enormous as we learned in the CFTC hearings and they would be expected to be proportional to the comfort level attained while operating within this “safe harbor”.

    One has to remember that these short positions in gold and silver were amassed BEFORE Americans became both educated as to the nature of abusive short selling frauds as well as fed up with this bailout mentality. Things have drastically changed in this regard yet these short positions in gold and silver are still there. Many were actually inherited by JPM when Bear Stearns collapsed. Several securities and commodity scholars hold that Bear Stearns was forced to collapse before their naked short positions in gold, silver and various securities were forcibly bought-in. Something is going to have to give this time around because the larger bullion investors able to do some real damage are well-educated on these matters. In the commodities arena there isn’t a DTCC willing to put a “chill” on delivering out demanded for certificated shares.

    The questions arise as to what’s going to happen when:

    1) those that bought bullion because it was the one financial asset that has no “counterparty risk” learn that they took on enormous “counterparty risk” involving the fate of a bullion bank that’s astronomically short the bullion it was naked short selling at levels nearly $1,000 below today’s levels? OOPS!
    2) those that bought bullion as a hedge against the “houses of cards” known as fiat currencies learn that they bought into a fiat “house of cards” even taller than that associated with fiat currencies?
    3) all of the vaults are depleted and some sovereign wealth fund or gigantic pension fund demands delivery? A delivery failure or “default” in any one commodity market could affect other commodity markets and the already anemic levels of investor confidence in general.
    4) bullion investors learn that they have been paying insurance fees and storage fees for bullion that doesn’t exist? Note that if the bullion banks did not charge these fees then investors would become suspicious.
    5) bullion investors learn that the “paper” bullion they bought actually drove the price of gold downwards since it increased the “supply” of gold that is readily sellable (paper plus physical gold)? The mere method of bullion investors placing their investment bet drove down the prognosis for the success of their bet. Conversely the manner in which these bullion banks processed these bets increased the prognosis for the success of the naked short position they were assuming i.e. the market is “rigged” to go down and BOTH buy and sell orders for bullion have been programmed to induce bullion price depression. The price of bullion can still rise because not all bullion purchases occur through manipulative bullion banks. The “price discovery” process cannot work efficiently, however, when the “supply” variable is manipulated upwards as the “effective demand” variable is manipulated downwards. The “effective demand” variable is the component of the “demand” variable not muted by naked short selling. When both the “supply” and “demand” variables are simultaneously manipulated then the price “discovered” will be grossly lower than what an unmanipulated “supply” and unmanipulated “demand” variable would “discover”.
    6) American taxpayers learn that those selling fake gold had taxpayers pegged as the backstop should this fraud be exposed and that the actual sellers of fake gold took absolutely zero risk. All they were doing all along was leveraging the presumption of “too big to fail” and “too interconnected to be allowed to fail” not to mention their acting as “agents” of the Fed and Treasury.
    7) Americans learn that Wall Street “banksters” and co-conspiring hedge funds have learned that abusive short selling has allowed them to steal billions of dollars via DESTROYING things whether they be countries, currencies, corporations, the jobs they provide, retirement plans, retirement dreams, etc. These thefts are greatly augmented by the use of “derivatives” like paper gold and “security entitlements” because their use and abuse increase the “supply” of that which is treated as being readily sellable.
    8) Americans learn that the “market makers” in our securities markets play the exact same role that the crooked bullion banks play in the gold fraud. They take absolutely zero risk due to NSCC policies and instead of acting as the agent for the Fed they act as the agent for abusive NSCC “participants” and their co-conspiring hedge fund “guests” that need to gain access to the NSCC “default assumption” that all delivery failures are of a legitimate ultra-short termed nature unless proven otherwise and once proven otherwise it is (theoretically) too late to do anything about it.
    9) The shareholders of the publicly-traded bullion banks learn of these extra undisclosed “contingent liabilities” that by necessity cannot be clearly disclosed to prospective buyers of their securities lest the entire world learn of this fraud. Are there reserves being set aside should the price of gold explode upwards? What was done with the proceeds of these theoretical bullion sales if they did not go into the purchase of bullion?

    All eyes are now on the CFTC to see if they “pull an SEC” and sweep everything under the rug or do the right thing and impose position limits and mandate the covering of these “open positions” that have led to unsustainable systemic risks borne by all Americans whether investors or not. I think that we’re coming up on a very defining moment soon wherein the CFTC’s and the SEC’s either do the right thing or face an investor uproar beyond comprehension. Allowing these Wall Street crooks to use abusive short selling in order to destroy everything in sight whether it be countries, currencies, corporations or whatever via the use of derivatives is getting rather painful for the Main Street masses.

  58. Sean,

    This proposed legislation is just another example of a regulator playing catch-up after approving a new technical innovation (high frequency trading) without knowing how to detect or address abuses therein. We saw the same thing when the ECNs showed up. How pathetic is this line:

    “The SEC wants to be able to request transaction data from broker-dealers on volatile days, such as those seen in the fall of 2008, to see which traders and what trades may be driving the markets in a particular direction.”

    This is the SEC’s excuse for not busting anybody in regards to the Bear Stearns and Lehman Brother’s debacle. “High Frequency Trading” (HFT) accounts for over half of our trading volumes and just now the SEC is seeking permission to “request transaction data” in regards to these abuses. The crooks are naked short selling anonymously through what’s referred to as “sponsored access”, “naked access” or “unfiltered access”. They then blitz targeted issuers through HFT which the SEC has the audacity to pretend to be not responsible to monitor.

    All of the recent technical innovations on Wall Street like the “high frequency trading” this proposed legislation deals with give rise to a “lag period” during which even the well-meaning/unconflicted “securities cops” have no idea how to recognize and address abuses associated with these new innovations. Harry Markopolos’s (of Bernie Madoff fame) critique of the SEC is that they’re all securities lawyers and no finance guys that can understand these new financial innovations. Wall Street will posit that these new innovations are necessary to implement in an emergency fashion in order to “inject liquidity” and keep our markets “efficient” and a step ahead of those in other countries. By the time the unconflicted staff members of the SEC and the SROs climb the learning curve associated with these new innovations the associated frauds are well-established and the criminals have devised and implemented efficient cover up methodologies. Nobody on this planet could argue the irrefutable fact that the SEC has been historically “reacting” to already established crimes instead of “proactively” preventing the commission of these crimes.

    Nowhere is this more obvious than in the abusive legal short selling (ALSS) and abusive naked short selling (ANSS) sectors which now find themselves in the midst of one extremely frantic cover up phase. The recent Bear Stearns and Lehman Brothers cases afforded us an opportunity to study the cover-up process in depth. When all of a sudden a 151-fold (15,000%) increase in FTDs as share prices are literally falling off of a cliff needs to be explained away as inconsequential “background noise” and zero of the perpetrators of these frauds have been prosecuted then you’ll know that both the perpetrators of these frauds as well as their facilitators are squarely in an extremely obvious “cover up” mode. Chairman Schapiro was interviewed recently by Maria Bartiromo and she claimed that she wasn’t sure if those that brought down BS and LB utilized improper trading techniques.

    Sean, can you see why I gave up on trying to make a difference on the macro scene and now concentrate on helping one victimized corporation and one group of shareholders at a time?

  59. Jim Iam will to bet 5 bucks that Goldman andEinhorn had something cooking in this Lehman fiasco. But if that is not enough see where elso Goldman has now been implicated.

    U.S. probing Goldman’s Gupta in Galleon case: WSJFont size: A | A | A1:34 AM ET 4/15/10 | Marketwatch
    HONG KONG (MarketWatch) — Federal prosecutors are examining whether Goldman Sachs Group Inc. board member Rajat Gupta gave inside information to Galleon hedge-fund founder Raj Rajaratnam during the financial crisis, The Wall Street Journal reported Thursday.

    The government is examining whether Gupta, currently a director on the investment banking giant’s board and formerly the head of McKinsey & Co., shared inside information about Goldman, the report said, citing people close to the situation.

    Goldman Sachs’ (GS) name turned up in a government letter listing companies in the insider trading case currently under investigation by the U.S. government.

    A letter dated March 22 said the government is looking into trades by Rajaratnam and others in Goldman Sachs shares from June 2008 through October 2008, the report said.

    No criminal charges or other allegations have been filed against Gupta, the report said.

    “Mr. Gupta is unaware of any examination of any such issue and has done nothing wrong,” said his spokesman, according to the report.

  60. The “DeepCapture” deep thought for the day:

    “Quis custodiet ipsos custodes? (Who will watch the watchers?)

  61. Check out unfolding story about Rahm Emmanuel and funding by a hedgie Magnetar, (ceo who is formerly of Citadel) — Magnetar funded worst of Subprime debt and then took short positions on it in a way that was manifestly fraudulent and misled genuine investors –
    It’s at Naked Capitalism and Financial Times..

  62. AMEN!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    U.S. Accuses Goldman Sachs of Fraud

    Brendan McDermid/Reuters
    The new Goldman Sachs global headquarters in Manhattan.
    Published: April 16, 2010
    COMMENTS (50)

    Goldman Sachs, which emerged relatively unscathed from the financial crisis, was accused of securities fraud in a civil suit filed Friday by the Securities and Exchange Commission, which claims the bank created and sold a mortgage investment that was secretly devised to fail.
    Add to Portfolio

    Goldman Sachs Group
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    The move marks the first time that regulators have taken action against a Wall Street deal that helped investors capitalize on the collapse of the housing market. Goldman itself profited by betting against the very mortgage investments that it sold to its customers.

    The suit also named Fabrice Tourre, a vice president at Goldman who helped create and sell the investment.

    The instrument in the S.E.C. case, called Abacus 2007-AC1, was one of 25 deals that Goldman created so the bank and select clients could bet against the housing market. Those deals, which were the subject of an article in The New York Times in December, initially protected Goldman from losses when the mortgage market disintegrated and later yielded profits for the bank.

    As the Abacus deals plunged in value, Goldman and certain hedge funds made money on their negative bets, while the Goldman clients who bought the $10.9 billion in investments lost billions of dollars.

    According to the complaint, Goldman created Abacus 2007-AC1 in February 2007, at the request of John A. Paulson, a prominent hedge fund manager who earned an estimated $3.7 billion in 2007 by correctly wagering that the housing bubble would burst.

    Goldman let Mr. Paulson select mortgage bonds that he wanted to bet against — the ones he believed were most likely to lose value — and packaged those bonds into Abacus 2007-AC1, according to the S.E.C. complaint. Goldman then sold the Abacus deal to investors like foreign banks, pension funds, insurance companies and other hedge funds.

    But the deck was stacked against the Abacus investors, the complaint contends, because the investment was filled with bonds chosen by Mr. Paulson as likely to default. Goldman told investors in Abacus marketing materials reviewed by The Times that the bonds would be chosen by an independent manager.

    Mr. Paulson is not being named in the lawsuit.

    In recent months, Goldman has repeatedly defended its actions in the mortgage market, including its own bets against it. In a letter published last week in Goldman’s annual report, the bank rebutted criticism that it had created, and sold to its clients, mortgage-linked securities that it had little confidence in.

    “We certainly did not know the future of the residential housing market in the first half of 2007 anymore than we can predict the future of markets today,” Goldman wrote. “We also did not know whether the value of the instruments we sold would increase or decrease.”

    The letter continued: “Although Goldman Sachs held various positions in residential mortgage-related products in 2007, our short positions were not a ‘bet against our clients.’ ” Instead, the trades were used to hedge other trading positions, the bank said.

    In a statement provided in December to The Times as it prepared the article on the Abacus deals, Goldman said that it had sold the instruments to sophisticated investors and that these securities “were popular with many investors prior to the financial crisis because they gave investors the ability to work with banks to design tailored securities which met their particular criteria, whether it be ratings, leverage or other aspects of the transaction.”

    Goldman was one of many Wall Street firms that created complex mortgage securities — known as synthetic collateralized debt obligations — as the housing wave was cresting. At the time, traders like Mr. Paulson, as well as those within Goldman, were looking for ways to short the overheated market.

    Such investments consisted of insurance-like policies written on mortgage bonds. If the mortgage market held up and those bonds did well, investors who bought Abacus notes would have made money from the insurance premiums paid by investors like Mr. Paulson, who were negative on housing and had bought insurance on mortgage bonds. Instead, defaults spread and the bonds plunged, generating billion of dollars in losses for Abacus investors and billions in profits for Mr. Paulson.

    For months, S.E.C. officials have been examining mortgage bundles like Abacus that were created across Wall Street. The commission has been interviewing people who structured Goldman mortgage deals about Abacus and other, similar instruments. The S.E.C. advised Goldman that it was likely to face a civil suit in the matter, sending the bank what is known as a Wells notice.


    All U.S. corporations have “snow on their roof” that has the potential to collapse the roof and severely damage the corporation. This “snow” is in the form of the readily sellable “float” of securities that can be sold at any time by their purchasers.

    When abusive short sellers target a U.S. corporation for destruction they sell nonexistent securities which they refuse to delivery on the previously agreed to T+3 timeframe. This results in the crediting of shareholder accounts with readily sellable “security entitlements” that manipulates upwards the “supply” of that which must be treated as being ready sellable which results in share price depression. Think of these readily sellable “security entitlements” over and above the number of shares already “outstanding” in a corporation’s share structure as an extra layer of potentially damaging “snow on the corporate roof”.

    Phase 1 of abusive short selling attacks involves piling up of usually massive amounts of “extra” snow on the roof of corporations targeted for destruction. Once the roof trusses supporting the weight of all of this normal snow plus all of the extra snow start creaking under the immense weight phase 2 usually commences. Phase 2 involves inducing a certain percentage of the purchasers of BOTH legitimate shares and fake shares to sell that which they purchased. This involves the intentional introduction of artificial “triggering” events. Natural triggering events might include the missing of earnings expectations but there is a long list of clever artificial triggering events. There are two things being manipulated in this abusive short selling crime wave. The first is the “supply” of that which must be treated as being readily sellable i.e. the amount of snow on the corporate roof. The second is the “supply” of triggering events that induce the purchasers of BOTH legitimate shares and fake shares to sell that which they purchased. Think of a “triggering event” as a bomb placed on the already stressed roof trusses.

    We just witnessed the single largest event in history to allow the number of “triggering events” to go ballistic. This was associated with the removal of the 74-year old “uptick rule”. Abusive short selling criminals can now “semi-legally” knock out bid after underlying bid supporting the share price of U.S. corporations. This “triggers” the panic selling of a certain percentage of BOTH the legitimate shares purchased as well as the same percentage of fake shares purchased. It often involves the intentional tripping of “stop loss orders” as well as the intentional wiping out of critical support levels. This blowing up of the already stressed roof trusses can lead to the collapse of the corporate roof via inducing the share price of the corporation being placed into a “death spiral” downwards as several different triggering events are deployed over time. Other “triggering events” might include the hiring of Internet bashers, the filing of bogus lawsuits, rumor mongering, various acts of tortious interference, etc. So think of most of these attacks as involving 2 phases. The first is the manipulation upwards of the “supply” of snow on the corporate roof and then triggering the collapse of the supporting roof trusses by manipulating upwards the “supply” of triggering events.

  64. this is a bombshell, IMHO

    It’s quite clear Paulson connived with GS in misrepresenting the abacus deal..of course, GS was the one selling it to IKB, the bank

    “The identity and experience of those involved in the selection of CDO portfolios was an important investment factor for IKB. In late 2006 IKB informed a GS&Co sales representative and Tourre that it was no longer comfortable investing in the liabilities of CDOs that did not utilize a collateral manager, meaning an independent third-party with knowledge of the U.S. housing market and expertise in analyzing RMBS. Tourre and GS&Co knew that ACA was a collateral manager likely to be acceptable to IKB.”

    In February, March and April 2007, GS&Co sent IKB copies of the ABACUS 2007-AC1 term sheet, flip book and offering memorandum, all of which represented that the RMBS portfolio had been selected by ACA and omitted any reference to Paulson, its role in selecting the reference portfolio and its adverse economic interests. Those representations and omissions were materially false and misleading because, unbeknownst to IKB, Paulson played a significant role in the collateral selection process and had financial interests in the transaction directly adverse to IKB. Neither GS&Co nor Tourre informed IKB of Paulson’s participation in the collateral selection process and its adverse economic interests.


    All U.S. corporations have “snow on their roof” that has the potential to collapse the roof and severely damage the corporation. This “snow” is in the form of the readily sellable “float” of securities that can be sold at any time by their purchasers.

    When abusive short sellers target a U.S. corporation for destruction they sell nonexistent securities which they refuse to delivery on the previously agreed to T+3 timeframe. This results in the crediting of shareholder accounts with readily sellable “security entitlements” that manipulates upwards the “supply” of that which must be treated as being ready sellable which results in share price depression. Think of these readily sellable “security entitlements” over and above the number of shares already “outstanding” in a corporation’s share structure as an extra layer of potentially damaging “snow on the corporate roof”.

    Phase 1 of abusive short selling attacks involves piling up of usually massive amounts of “extra” snow on the roof of corporations targeted for destruction. Once the roof trusses supporting the weight of all of this normal snow plus all of the extra snow start creaking under the immense weight phase 2 usually commences. Phase 2 involves inducing a certain percentage of the purchasers of BOTH legitimate shares and fake shares to sell that which they purchased. This involves the intentional introduction of artificial “triggering” events. Natural triggering events might include the missing of earnings expectations but there is a long list of clever artificial triggering events. There are two things being manipulated in this abusive short selling crime wave. The first is the “supply” of that which must be treated as being readily sellable i.e. the amount of snow on the corporate roof. The second is the “supply” of triggering events that induce the purchasers of BOTH legitimate shares and fake shares to sell that which they purchased. Think of a “triggering event” as a bomb placed on the already stressed roof trusses.

    We just witnessed the single largest event in history to allow the number of “triggering events” to go ballistic. This was associated with the removal of the 74-year old “uptick rule”. Abusive short selling criminals can now “semi-legally” knock out bid after underlying bid supporting the share price of U.S. corporations. This “triggers” the panic selling of a certain percentage of BOTH the legitimate shares purchased as well as the same percentage of fake shares purchased. It often involves the intentional tripping of “stop loss orders” as well as the intentional wiping out of critical support levels. This blowing up of the already stressed roof trusses can lead to the collapse of the corporate roof via inducing the share price of the corporation being placed into a “death spiral” downwards as several different triggering events are deployed over time. Other “triggering events” might include the hiring of Internet bashers, the filing of bogus lawsuits, rumor mongering, various acts of tortious interference, etc. So think of most of these attacks as involving 2 phases. The first is the manipulation upwards of the “supply” of snow on the corporate roof and then triggering the collapse of the supporting roof trusses by manipulating upwards the “supply” of triggering events.

  66. Our biggest problem is not the crime itself but rather the consequence of being involved in the crime, which are nothing. What other country would allow treason or breach of security whether financial or military. These countries would rather error on the side of over-reacting than to face the real threat. Our biggest problem is that we have conditioned our populace to believe that politically correct is more important than facing the threat. Call me a butcher or whatever but at one time treason was punishable by death and it was for a good reason, so that other innocent people would not die and suffer. Lets remove our heads from our asses and defend our country from a few greedy people or another country who hates our ass.

  67. The way I look at it…is you can’t realy fix the manipulation that’s occuring “high up” in silence…you can only “be informed” and profit off it. anotherwords profit off the shorts coming home to roost, the comex default…and the lunging prices of Gold-Silver that ensues.

  68. let’s just say this will continue till the bubble burst’s. then what we all gonna be be in deep doo doo. up’s how do u measure up derivatives as the absorbation paper to soak up the the crap we all got dished out.
    and who is gonna be the maintenance guy that has the tool to up plug the drainage from all those sticky dirivaTIVE SOAKED WITH DOODOO

  69. You never know what could happen with the gold price, if the US dollar collapses than the gold for sure will go up big time. Not saying its going to happen tomorrow but just saying

  70. Just for a line of thought. Yesterday on cnbc news they said that the long range forecast is that gold well be in the 1800’s and silver would be 31 dollars an ounze. Now If Goldman Sacks sets the price for gold and silver then how would they know that silver would be 31 when at the present time when they were reporting this silver was at 39 dollars. So the show goes on and well never stop. So no news here just keep moving on. If they run out of silver they are not worried they well just come and get yours by force if they want to. So you own nothing here in the good ole USA. Yall can go back to sleep now and watch more TV.

  71. Today, I went to the beach front with my children. I found a sea shell and
    gave it to my 4 year old daughter and said “You can hear the ocean if you put this to your ear.” She placed the shell to her ear and screamed.

    There was a hermit crab inside and it pinched her ear.
    She never wants to go back! LoL I know this is entirely off topic but I
    had to tell someone!

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