Testimony: Mary Schapiro’s Testimony Concerning the State of the Financial Crisis


Testimony Concerning the State of the Financial Crisis

Mary L. Schapiro

SEC, 14 January 2010

I believe the work of the Financial Crisis Inquiry Commission (FCIC) is essential to helping policymakers and the public better understand the causes of the recent financial crisis and build a better regulatory structure. Indeed, just over seventy-five years ago, a similar Congressional committee was tasked with investigating the causes of the stock market crash of 1929. The hearings of that committee led by Ferdinand Pecora uncovered widespread fraud and abuse on Wall Street, including self-dealing and market manipulation among investment banks and their securities affiliates. The public airing of this abuse galvanized support for legislation that created the Securities and Exchange Commission in July 1934. Based on lessons learned from the Pecora investigation, Congress passed laws premised on the need to protect investors by requiring disclosure of material information and outlawing deceptive practices in the sale of securities.

PDF (29 pages): Testimony Concerning the State of the Financial Crisis

Article: Shooting the Naked Messengers

Article - Media

Shooting the Naked Messengers

Max Abelson

Observer, 13 January 2010

Last year, a 38-year-old named Judd Bagley found himself on Facebook, looking at the friend lists of reporters from The New York TimesThe Wall Street Journal, Bloomberg, Barron’s and Reuters, and of wildly important hedge fund managers like Dan Loeb and David Einhorn.

Eventually creating a fake account, one person led to another. These people were all friends, he saw, and their friends were friends, too. A new chapter of a crusade was born.

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Article: Former Merrill Lynch official settles Enron allegations

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Former Merrill Lynch official settles Enron allegations

Nick Snow

OGJ, 11 January 2010

Daniel H. Bayly, Merrill Lynch & Co.’s (ML) former global head of investment banking, settled civil charges of aiding and abetting the Enron Corp. fraud, the US Securities and Exchange Commission announced.

SEC said US District Court in Houston entered a final judgment on Dec. 31, 2009, ordering Bayly, who neither admitted nor denied SEC’s allegations, to pay $301,000 for deposit in the commission’s Enron Fair Fund and to not serve as an officer or director of a publicly traded company for 5 years. He also was enjoined from violating federal antifraud provisions and from aiding and abetting violations of the periodic reporting, books-and-records, and internal control provisions, SEC said.

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Filing: CMKM Diamonds Lawsuit Against the SEC


These Defendants, acting in the course and scope of their employment by the United States of America as duly authorized Commissioners of the Securities and Exchange Commission, a federal agency, through their acts and omissions knowingly, consciously, wrongly, without compensation and without due process of law have effected a taking of property from each of the named Plaintiffs and all who are similarly situated.

PDF (18 Pages): CMKM Lawsuit Against the SEC 9 January 2010

Article: New Evidence Raises Questions About Kingsford Capital

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New Evidence Raises Questions About Kingsford Capital – Links To TheStreet.com Inc., Others

Mark Mitchell

Market Rap, 7 January 2010

A blog published by the University of North Carolina School of Journalism reported recently that Steve Cohen of hedge fund SAC Capital managed to kill a story by Reuters reporter Matt Goldstein. It seems that Goldstein was going to shed some light on allegations that Cohen engaged in insider trading. Cohen didn’t like that, and got in touch with Goldstein’s superiors.

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Article: Credit Suisse Hit with $24 Billion Fraud Lawsuit

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Credit Suisse Hit with $24 Billion Fraud Lawsuit

Toby Tobin

GoToby, 7 January 2010

January 6, 2010 – Credit Suisse Bank and real estate service firm Cushman & Wakefield defrauded developers and property owners at four luxury resorts; Ginn sur Mer (Grand Bahama Island in the Bahamas), Lake Las Vegas, Tamarack (Tamarac/Donnelly, Idaho), and Yellowstone Club (Montana), according to a lawsuit filed Sunday in the U.S. District Court for the District of Idaho. Plaintiffs, led by L.J. Gibson and Beau Blixseth seek $24 billion, including $16 billion in punitive damages.

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Book: Sold Short in America

Amazon Page

This book is a non-fiction, painfully true account of an American whistle blower whose silencing was attempted by conflicted and vengeful bureaucrats. This work presents oversights within the regulatory Securities and Exchange Commission (SEC), The U.S. Justice Department, and The Bureau of Prisons penal systems (BOP); as an innocent former US Marine and 60 year old grandfather is actually placed in high security solitary confinement for trying to warn the country of the impending financial crisis (now current, admitted, acknowledged, and publicized) and how it could have been prevented.

Continue reading “Book: Sold Short in America”

Article: Credit Suisse Is Accused of Defrauding Investors in 4 Resorts

Article - Media

Credit Suisse Is Accused of Defrauding Investors in 4 Resorts

Jim Robbins

New York Times, 4 January 2010

Investors at four high-end resorts have filed a class-action lawsuit against Credit Suisse and the real estate services company Cushman & Wakefield, contending that they conspired to inflate the value of the properties so they could take them over.

The suit, outlined in an 84-page complaint filed Sunday in federal court in Boise, Idaho, details what it calls a sweeping loan-to-own scheme. Credit Suisse, according to the complaint, raked in huge fees on loans against the properties, which it syndicated and sold to hedge fund managers. If the resorts could not pay back the hundreds of millions of dollars in loans, based on the inflated values, Credit Suisse could either assume ownership as the agent for the creditors or sell the resorts.

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Article: $24 billion lawsuit filed against Credit Suisse

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$24 billion lawsuit filed against Credit Suisse

Rebecca Boone

The Seattle Times, 4 January 2010

Property owners at four struggling and bankrupt resorts in Idaho, Montana, Nevada and the Bahamas have filed a $24 billion federal lawsuit against Credit Suisse Group, saying the banking giant gave predatory loans to the resorts’ investors as part of a scheme to take over the properties.

Property owners at Idaho’s Tamarack Resort, the Yellowstone Club in Montana, Nevada’s Lake Las Vegas resort and the Ginn Sur Mer Resort in the Bahamas contend that Credit Suisse set up a branch in the Cayman Islands to skirt U.S. federal bank regulations and appraised the resorts at artificially inflated values as part of a plan to foreclose.

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Article: Naked short sales and fails-to-deliver An overview of clearing and settlement procedures for stock trades in the USA

Article - Academic

Naked short sales and fails-to-deliver: An overview of clearing and settlement procedures for stock trades in the USA

Tālis Putniņš

Journal of Securities Operations & Custody, 1 January 2010

This paper outlines the process of clearing and settlement for stock trades in the USA. It pays particular attention to what happens when the seller of a stock fails to deliver that stock at settlement and describes the mechanisms to resolve delivery failures. Fails-to-deliver can occur for a number of reasons, such as human error, administrative delays and the controversial practice of naked short selling. This paper helps understand the implications of naked short selling for trade counterparties and, more generally, the effects of naked short selling on the clearing and settlement system.

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