Month: May 2012

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Article: Austria extends naked short ban for some financials

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Austria extends naked short ban for some financials

Reuters Staff, 29 May 2012

VIENNA, May 29 (Reuters) – Austria has extended until Oct. 31 its ban on naked short selling of shares in lenders Erste Group Bank and Raiffeisen Bank International and insurers Vienna and Uniqa, the FMA market watchdog said on Tuesday.

The ban had been set to expire on May 31. Only short-term transactions by market makers or specialists are exempt from the ban.

Short sellers sell borrowed shares in the hope they can be bought back at a lower price. Naked short-selling involves selling shares without first borrowing them.

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Article: Heist of the century: Wall Street’s role in the financial crisis

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Heist of the century: Wall Street’s role in the financial crisis

Charles Ferguson, 20 May 2012

Bernard L Madoff ran the biggest Ponzi scheme in history, operating it for 30 years and causing cash losses of $19.5bn. Shortly after the scheme collapsed and Madoff confessed in 2008, evidence began to surface that for years, major banks had suspected he was a fraud. None of them reported their suspicions to the authorities, and several banks decided to make money from him without, of course, risking any of their own funds. Theories about his fraud varied. Some thought he might have access to insider information. But quite a few thought he was running a Ponzi scheme. Goldman Sachs executives paid a visit to Madoff to see if they should recommend him to clients. A partner later recalled: “Madoff refused to let them do any due diligence on the funds and when asked about the firm’s investment strategy they couldn’t understand it. Goldman not only blacklisted Madoff in the asset management division but banned its brokerage from trading with the firm too.” Continue reading “Article: Heist of the century: Wall Street’s role in the financial crisis”

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Article: Lawyers For The Major Banks Accidentally Leaked E-mails About Their Clients Naked Short-Selling Overstock.com

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Lawyers For The Major Banks Accidentally Leaked E-mails About Their Clients Naked Short-Selling Overstock.com

Linette Lopez

Business Insider, 16 May 2012

For years, Overstock.com has been in a legal battle with Goldman Sachs, Bank of America, Merrill Lynch and more. The online retailer accuses the banks of naked short-selling its stock.

Overstock.com lost that battle, but they’re still trying to get the banks to unseal documents that would prove their case.

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Article: Goldman, Merrill E-Mails Show Naked Shorting, Filing Says

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Goldman, Merrill E-Mails Show Naked Shorting, Filing Says

Karen Gullo, 16 May 2012

Goldman Sachs Group Inc. (GS) and Merrill Lynch & Co. employees discussed helping naked short-sales by market-maker clients in e-mails the banks sought to keep secret, including one in which a Merrill official told another to ignore compliance rules, Overstock.com Inc. (OSTK) said in a court filing.

The online retailer accused Merrill, now part of Bank of America Corp., and Goldman Sachs of manipulating its stock from 2005 to 2007, causing its shares to fall. Clearing operations at the banks intentionally failed to locate and deliver borrowed shares for clients shorting stocks, including two traders who were fined and suspended from the industry, Overstock’s attorneys said in court filings earlier this year.

Lawyers for Overstock, whose California state court lawsuit inSan Francisco was dismissed in January, asked a judge to make public e-mails sent in 2005 and 2006 that it said “reflect business decisions to put profits and corporate ambition over compliance” at Goldman Sachs and Merrill. The banks’ decisions to intentionally fail to deliver Overstock shares caused large- scale naked short selling of the company’s stock, according to the filing. Continue reading “Article: Goldman, Merrill E-Mails Show Naked Shorting, Filing Says”

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Article: Accidentally Released – and Incredibly Embarrassing – Documents Show How Goldman et al Engaged in ‘Naked Short Selling’

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Accidentally Released – and Incredibly Embarrassing – Documents Show How Goldman et al Engaged in ‘Naked Short Selling’

Matt Taibbi

Rolling Stone, 15 May 2012

The lawyers for Goldman and Bank of America/Merrill Lynch have been involved in a legal battle for some time – primarily with the retail giant Overstock.com, but also with Rolling Stone, the Economist, Bloomberg, and the New York Times. The banks have been fighting us to keep sealed certain documents that surfaced in the discovery process of an ultimately unsuccessful lawsuit filed by Overstock against the banks.

Last week, in response to an Overstock.com motion to unseal certain documents, the banks’ lawyers, apparently accidentally, filed an unredacted version of Overstock’s motion as an exhibit in their declaration of opposition to that motion. In doing so, they inadvertently entered into the public record a sort of greatest-hits selection of the very material they’ve been fighting for years to keep sealed.

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Article: The Emperor is Naked: David Stockman

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The Emperor is Naked: David Stockman

Karen Roche, JT Long

The Gold Report cited by NASDAQ.com, 4 May 2012

A “paralyzed” Federal Reserve Bank, in its “final days,” held hostage by Wall Street “robots” trading in markets that are “artificially medicated” are just a few of the bleak observations shared by David Stockman, former Republican U.S. Congressman and director of the Office of Management and Budget. He is also a founding partner of Heartland Industrial Partners and the author of The Triumph of Politics: Why Reagan’s Revolution Failed and the soon-to-be released The Great Deformation: How Crony Capitalism Corrupts Free Markets and Democracy.The Gold Report caught up with Stockman for this exclusive interview at the recent Recovery Reality Check conference.

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