Author: Editor

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Paper: Choking the Recovery: Why New Growth Companies Aren’t Going Public and Unrecognized Risks of Future Market Disruptions

Paper

Choking the Recovery: Why New Growth Companies Aren’t Going Public and Unrecognized Risks of Future Market Disruptions

Harold S. Bradley and Robert E. Litan

Kauffman Foundation, 8 November 2010

We show here that ETFs are radically changing the markets, to the point where they, and not the trading of the underlying securities, are effectively setting the prices of stocks of smaller capitalization companies, or the potential new growth companies of the future. In the process, ETFs that once were an important low-cost way for investors to assemble diversified stock holdings are now undermining the traditional price discovery role of exchanges and, in turn, discouraging new companies from wanting to be listed on U.S. exchanges.

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Book: Griftopia–Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America by Matt Taibbi

Book
Amazon Page

Review by Robert David Steele

5.0 out of 5 stars 6 Star Game Changer….Maybe

November 2, 2010

This is an extraordinary book, combining gifted insights and turns of phrase with serious research that has a point worth fighting for: Wall Street led by Goldman Sachs has ripped off the entire US economy, and they still have most people thinking that politics matters.

Continue reading “Book: Griftopia–Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America by Matt Taibbi”

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Book: The Sellout: How Three Decades of Wall Street Greed and Government Mismanagement Destroyed the Global Financial System

Book

The ongoing tumult in financial markets and the global economy began when some of our most esteemed financial institutions, our government, and even average citizens abdicated their collective responsibilities, eventually selling out investors and selling off the American Dream itself.

From critically acclaimed investigative journalist and CNBC personality Charles Gasparino comes a sweeping examination of the most volatile, anxiety-ridden era in our nation’s socioeconomic history. The winner of the 2009 Investigative Reporters and Editors Award for Books, The Sellout traces the recent implosion of the financial services business back to its roots in the late 1970s, when Wall Street embraced a new business model predicated on enormous risk.

Continue reading “Book: The Sellout: How Three Decades of Wall Street Greed and Government Mismanagement Destroyed the Global Financial System”

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Article: Short selling – legitimate trading or market abuse?

Article - Media

Short selling – legitimate trading or market abuse?

Kevin Terhaar, CFA Institute

Financial Times, 1 August 2010

Naked shorting runs afoul of rules and regulations in most jurisdictions, and for good reason. It can undermine investor confidence because uninformed buyers are deprived of the basic benefits of ownership, such as voting and dividends, when naked short sellers fail to deliver shares or deliver unauthorised shares. In essence, naked shorting is a fraud perpetrated on buyers because sellers may have no ability (and indeed no intention) to fulfil their end of the deal.

Paywall Access to the Article.

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Article: Europe plans ban on naked short selling

Article - Media

Europe plans ban on naked short selling

Steve Johnson and Baptiste Aboulian

Financial Times, 23 May 2010

European politicians have proposed a complete ban on naked short selling, significantly widening the scope of the clampdown implemented last week by Angela Merkel, the German chancellor.

Naked shorting is already banned in the US, Hong Kong, Australia and Brazil, but the idea of a complete European-wide ban is likely to provoke controversy in some quarters.

Paywall Access to Article

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Filing: CMKM Diamonds Lawsuit Against the SEC

Filing

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

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Book: Sold Short in America

Book
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.

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Article: Was John O’Quinn Murdered by Wall Street?

Article - Media

Authorities will look into O’Quinn’s speed in fatal crash

Force uprooted tree

Investigators said it appeared the SUV veered to the left in the 1900 block of Allen Parkway, jumped a curb and careened over a grassy median, crossed the eastbound traffic lanes and hopped another curb onto a second median before smashing into the tree on the south side of the road. Tire marks across the first median show the path of the hurtling Suburban.

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Paper: Regulation of Naked Short Selling by Congressional Research Service

Paper

Regulation of Naked Short Selling

Name Redacted

Congressional Research Service, 31 July 2009

Until the current financial crisis, the SEC did not view short selling of large, blue-chip stocks as a problem. In July 2008, however, the SEC temporarily banned naked short sales of the stock of Fannie Mae, Freddie Mac, and 17 other large financial institutions. On September 18, 2008, the SEC banned all short selling of the shares of more than 700 financial companies in an emergency action that expired on October 8, 2008. On October 1, 2008, the SEC adopted an interim rule requiring short sellers’ brokers to actually borrow shares to deliver to buyers, within one day after the expiration the normal three-day settlement time frame. The rule was made permanent on July 27, 2009, and it applies to all stocks. This report will be updated as events warrant.

Full Text Online with Links

PDF (10 Pages): Paper CRS Regulation on Naked Short Selling

 

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Report: SEC IG Practices Related to Naked Short Selling Complaints and Referrals

Report

Editor: bottom line up front: SEC does not “do” complaints and considers naked short selling to be legal and generally contributing to “liquidity,”

Practices Related to Naked Short Selling Complaints and Referrals

Naked short selling has been a controversial practice for several years and, while not illegal per se, abusive or manipulative naked short selling (e.g., intentionally failing to borrow and deliver shares sold short in order to drive down the stock price) violates the federal securities laws.

The prior GAO audit found that Enforcement’s system for receiving and tracking referrals from the Self-Regulatory Organizations (SRO) needed improvements and recommended enhancements that would facilitate the monitoring and analysis of trend information and case activities.

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Article: In Pursuit of the Naked Short by Alexis Stokes

Article - Academic

In Pursuit of the Naked Short

Alexis Stokes, Texas State University

Journal of Law and Business 5/1 (Spring 2009)

This article explores the origins of naked short-selling litigation; considers
the failures of significant naked short-selling lawsuits in federal court;
surveys the obstacles erected collectively by constitutional standing requirements, the Federal Rules of Civil Procedure, the Private Securities Litigation Reform Act, brokerage firms, death spiral financiers, and the Depository Trust and Clearing Corporation; examines the efficacy of Regulation SHO, SEC rule 10b-21, and new FINRA rules; discusses recent state legislation and state court litigation; and identifies non-litigation options to curb naked short-selling. Ultimately, this article seeks to answer the question: If manipulative naked short-selling is more than a mythological scapegoat for
small cap failure, what remedies are, or should be, available?

PDF (62 Pages): Article In Pursuit of the Naked Short

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