Author: Contributor

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Web: Federal Regulators Continue to Deny Scope and Implications of Counterfeiting

Web

Federal Regulators Continue to Deny Scope and Implications of Counterfeiting

Bud Burrell

Sanity Check via Wayback, 10 January 2006

Over the past three years, Federal Regulators have continued to systematically deny the evidence of the existence of massive fails to deliver from numerous sources, many of which have gotten credible exposure on numerous levels from highly informed parties that these regulators can not dismiss out of hand. The implications are many, but the most serious are those connected to a massive counterfeiting conspiracy, conducted by a very sophisticated coterie of parties who have been affiliated with one another for literally decades through varying sides of the securities industry, both buy and sell side.

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Paper: The Concentration of Undelivered Shares Among Threshold Securities: Prospects of Stock Manipulation Using Naked Short Sales

Paper

The Concentration of Undelivered Shares Among Threshold Securities:
Prospects of Stock Manipulation Using Naked Short Sales

Robert J.  Shapiro

Sonecon, 14 November 2005

American public companies and their shareholders face a significant threat. Last year, researchers determined that naked short sales – short sales in which the shares are credited to buyer, but the short seller fails to borrow and deliver those shares – occur on a large scale, often extending for months at a time. New data now suggest that these “failures to deliver” or “fails” are concentrated in a relative handful of companies. This raises the prospect of naked short sales being used to manipulate some companies’ stock prices. The enormous extent of naked shorting and its likely use in stock manipulation could threaten the integrity of our financial markets and international confidence in them.

PDF (13 pages): The Concentration of Undelivered Shares Among Threshold Securities: Prospects of Stock Manipulation Using Naked Short Sales

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Article: Overstock’s phantom menace

Article - Media

Overstock’s phantom menace

Bethany McLean

CNN Money, 1 November 2005

Patrick Byrne, the 42-year-old CEO of online retail liquidator Overstock.com, is under growing pressure to deliver numbers that prove his business will make money.

Certainly the third-quarter results, announced on Friday, Oct. 28, did not help his cause. Once again Overstock.com (Research) lost far more than analysts were expecting.

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Article: Overgrown Hedges

Article - Media

Overgrown Hedges

Christopher Byron

New York Post cited by RGM Communications via Wayback, 26 September 2005

One of the first things any new chairman of the Securities and Exchange Commission does after getting the job is to clear his throat, put on his best “I mean business” scowl, and announce to the world just how tough he intends to be on the miscreants of Wall Street.

Normally, this harmless ritual lets the man taking on Washington’s most thankless job preen a bit in public before getting smacked to the canvas by a system that basically doesn’t want him to be tough at all.

But these are not normal times — and the one thing this country needs more than anything is a government that knows what it is doing and that deserves to be taken seriously by its citizens.

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Article: Congress Sells America Short

Article - Media

Congress Sells America Short

Mark Faulk

FaulkingTruth.com cited by RGM Communications via Wayback, 20 September 2005

In yet another twist in the stock market scandal known as Stockgate, the Faulking Truth has learned that Senator Richard Shelby (R-AL), Chairman of the Senate Banking Committee, has shelved a planned Senate Subcommittee Hearing investigating the issue. Originally scheduled for February of this year, and then postponed several times, the hearing, which has been advocated by Senator Robert Bennett (R-UT), has been cancelled indefinitely.

According to a reliable source inside of the planned investigation, “The authority and the responsibility to take the necessary steps to deal with the issue of naked short selling lies squarely at the feet of Senator Shelby, and he has chosen not to allow the planned Senate Banking Subcommittee hearing to go forward.” In an earlier interview with the same source, we were told that “Senator Shelby tends to grab things like this for his own purposes, and his own purposes don’t always mesh with what’s best for the public.”

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Article: Naked Truth Dressed to Baffle

Article - Media

Naked Truth Dressed to Baffle

Kevin Kelleher

TheStreet, 29 August 2005

It all started when the company completed a 350-to-1 reverse stock split — an unusual step in itself, but one that paled alongside what came next. With 5.43 million shares outstanding and a float of 1.15 million shares, Global Links saw trading volume of 143.5 million shares in the first four sessions of February, driving the stock as low as 8/100ths of a penny.

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Article: Faulty Regulator

Article - Media

Faulty Regulator

Christopher Byron

New York Post cited by RGM Communications via Wayback, 27 June 2005

On Thursday the Securities and Exchange Commission’s departing chairman, William Donaldson, will step down from his two-and-a-half year stint as Wall Street’s top regulator, vacating the most thankless and difficult job in the administration to make way for President Bush’s third nominee.

Though Donaldson is widely credited with having been an effective and activist-oriented SEC chairman who — among other things — pursued more high-profile corporate-fraud cases than any chairman before him, he actually initiated only one major SEC fraud probe that has led to litigation against a defendant.

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Release: Former FBI Agent Pleads Guilty to Obstruction of Justice

Article - Media

Former FBI Agent Pleads Guilty to Obstruction of Justice

Robert Nardoza

United States Attorney’s Office, 23 June 2005

ROSLYNN R. MAUSKOPF, United States Attorney for the Eastern District of New York, and JOHN A. KLOCHAN, Acting Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office, announced that LYNN WINGATE, a former Special Agent of Federal Bureau of Investigation, pleaded guilty this afternoon to obstruction of justice in connection with her role in interfering with a grand jury’s investigation relating to Amr “Anthony” Elgindy and former FBI Agent Jeffrey A. Royer by accessing the FBI’s confidential law enforcement computer system and then relaying pertinent confidential information to Royer, who was one of the subjects of the investigation.

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Release: NASD Charges Pennsylvania’s Scott W. Ryan, Ryan & Company with Impermissible Short Selling Scheme for Hedge Fund Clients

Release

NASD Charges Pennsylvania’s Scott W. Ryan, Ryan & Company with Impermissible Short Selling Scheme for Hedge Fund Clients

13 June 2005

NASD announced today that it has charged Scott W. Ryan of Bryn Mawr, PA, and Ryan & Company, LP (RYCO) of West Conshohocken, PA, with engaging in a long-term, widespread scheme of impermissible short selling activity on behalf of three hedge fund clients.

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Article: Short Selling, Death Spiral Convertibles, and the Profitability of Stock Manipulation

Article - Academic

Short Selling, Death Spiral Convertibles, and the Profitability of Stock Manipulation

John D. Finnerty

Fordham University, 31 March 2005

The SEC recently adopted Regulation SHO to tighten restrictions on short selling and curb abusive short sales, including naked shorting masquerading as routine fails to deliver. This paper models market equilibrium when short selling is permitted and contrasts the equilibrium with and without manipulators among the short sellers. I explain how naked short selling can routinely occur within the securities clearing system in the United States and characterize its potentially severe market impact. I show how a recent securities innovation called floating-price convertible securities can resolve the unraveling problem and enable manipulative short selling to intensify.

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Release: DTCC Announces Effort to Correct Record on Its Stock Borrow Program & Naked Short Selling

Release

DTCC Announces Effort to Correct Record on Its Stock Borrow Program & Naked Short Selling

Business Wire, 30 March 2005

The Depository Trust & Clearing Corporation (DTCC) has provided its bank and broker customers with a detailed explanation of its Stock Borrow program and the issue of naked short selling in an effort counter a widespread campaign of distortions and misleading information.

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Article: Who’s Behind Naked Shorting?

Article - Media

Who’s Behind Naked Shorting?

Karl Thiel

The Motley Fool, 30 March 2005

The subject of naked short selling has gained some momentum with the introduction of Reg SHO early this year and a rising tide of complaint from companies like Overstock.com (NASDAQ:OSTK) and others. But in addition to this general attention, 12 separate lawsuits have accused the DTCC itself of engineering naked short-selling schemes. Nine of these, according to Thompson, have been dismissed or withdrawn, while three are still pending.

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