Month: January 2009

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Web: Remember How Naked Short Selling Wasn’t a Big Deal?

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Remember How Naked Short Selling Wasn’t a Big Deal?

Bob O’Brien

Sanity Check via Wayback, 28 January 2009

Bernie Madoff’s brokerage owed $600 million in stock to its clients, that it, well, didn’t actually have on hand, as in the shares were either never delivered to the brokerage, or far more likely, it just, “Desked the trades” – meaning that it took the client cash, represented the securities as having been bought in the market and delivered (via the brokerage statement the client got every month), but never bothered with buying the shares.

Also known as one type of naked short selling.

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Article: Strange Occurrences, and a Story about Naked Short Selling

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Strange Occurrences, and a Story about Naked Short Selling

27 January 2009

Mark Mitchell

DeepCapture, 27 January 2009

Evidence suggests that Bernard Madoff, the “prominent” Wall Street operator and former chairman of the NASDAQ stock market, had ties to the Russian Mafia, Moscow-based oligarchs, and the Genovese organized crime family.

And, as reported by Deep Capture and Reuters, Madoff did not just orchestrate a $50 billion Ponzi scheme. He was also the principal architect of SEC rules that made it easier for “naked” short sellers to manufacture phantom stock and destroy public companies – a factor in the near total collapse of the American financial system.

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Web: Merrill Pays $15 Billion in Compensation After Taking $10 Billion in TARP Funds

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Merrill Pays $15 Billion in Compensation After Taking $10 Billion in TARP Funds

Bob O’Brien

Sanity Check via Wayback, 23 January 2009

After all, the logic, or rather the gun to the head of the taxpayer by Hank Paulson, was that the economy would vaporize if we didn’t take taxpayer money and give it to Wall Street banks and insurance companies, to, er, lend, or to relieve them of the burden of having to carry the toxic paper they created on their books any longer.

At the time, I said that was clearly a lie, and all this would be is a redistribution from the Treasury, to the Wall Street buddies of Paulson’s who got us into the mess in the first place.

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Article: Bernard Madoff, the Mafia, and Naked Short Selling

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Bernard Madoff, the Mafia, and Naked Short Selling

Mark Mitchell

DeepCapture, 19 January 2009

Bernard L. Madoff was once the chairman of the NASDAQ stock exchange. He was one of the most important market makers on Wall Street. And he managed what was, by some estimates, the largest hedge fund on the planet.

Yes, Bernard Madoff was an impressive man. That much was clear even before we learned that his $50 billion Ponzi scheme may have been orchestrated in cahoots with the most powerful, sophisticated, and indiscriminately murderous organized crime syndicate the world has ever known.

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Article: Geithner – Treasury Nominee Failed to Halt Bond Scam

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Geithner – Treasury Nominee Failed to Halt Bond Scam

Lucy Komisar

The Komisar Scoop, 19 January 2009

U.S. Senators at Timothy Geithner’s confirmation hearing for Treasury Secretary Wednesday may want to ask him about a failure to act that is costing the U.S. a lot more than the amount he evaded on taxes.

The Federal Reserve Bank of New York, which he has led since 2003, conducts the operations on Wall Street of the Federal Reserve in Washington, the country’s central bank.

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Web: Goldman Sachs and Madoff – Mr. Paulson Shocked To Learn There’s Gambling Going On In There!!!

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Goldman Sachs and Madoff – Mr. Paulson Shocked To Learn There’s Gambling Going On In There!!!

Bob O’Brien

Sanity Check via Wayback, 11 January 2009

Apparently, Goldman knew that Madoff was a fraud almost a decade ago. As this article in the Telegraph points out, there was a company-wide ban against doing anything with his firm after they did diligence on him:
“More than a decade ago bankers from Goldman Sachs’ asset management division were despatched to Bernard Madoff Investment Securities to discover how the legendary fund manager maintained such consistently good returns.

The American banking giant prided itself on managing funds in-house but if it could get a better deal for its clients at Madoff, Goldman would gracefully admit it and allocate some funds.

One former Goldman partner said: “I remember the guys came back baffled. Madoff refused to let them do any due diligence on the funds and when they asked about the firm’s investment strategy they couldn’t understand it. Goldman not only black-listed Madoff in the asset management division but banned the brokering side from trading with the firm too.”

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Web: Will the Justice Department and the SEC Go After Blatantly Illegal RICO Activity by the Nation’s Most Prominent Hedge Funds?

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Will the Justice Department and the SEC Go After Blatantly Illegal RICO Activity by the Nation’s Most Prominent Hedge Funds?

Bob O’Brien

Sanity Check via Wayback, 3 January 2009

Apparently hedge funds like Kynikos, and SAC, have a secret for their outsize performance.

Racketeering, and illegal frontrunning, if my read is correct.

That’s the only conclusion one can draw from the stunningly simple and obvious analysis of email records that Judd Bagley, over at the Deepcapture site, has compiled.

You have Jim Chanos, who is all over the airwaves as the advocate and public face of the hedge fund world, who argues against any and all regulation or oversight for hedge funds or short sellers, apparently actively frontrunning information illegally obtained from stock analysts, who eagerly shared their analysis and spreadsheets with him in advance of publishing negative smear pieces subsequently shown by time to have been nothing more than hatchet jobs.

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