Category: Article – Media

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Article: Goldman Targeted by Investor Complaints of Naked Short-Selling

Article - Media

Goldman Targeted by Investor Complaints of Naked Short-Selling

Pierre Paulden, Caroline  Salas

Bloomberg, 17 November 2008

Investors in the $591 billion high-yield, high-risk loan market are accusing Goldman Sachs Group Inc. of naked short selling to profit from record price declines.

At least two fund managers complained verbally to officials of the Loan Syndications and Trading Association, saying they believe Goldman helped drive down prices by using the technique, according to people with knowledge of the objections. New York- based Goldman is acting against its clients by trying to profit at their expense, the investors said.

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Article: Naked Shorting Under Scrutiny

Article - Media

Naked Shorting Under Scrutiny

Traders Magazine, 11 November 2008

Regulators are clamping down on broker-dealers that violate naked short-sale rules. Both New York Stock Exchange Regulation and the Financial Industry Regulatory Authority are making it a point to closely scrutinize brokers’ stock-loan practices. If they find brokers are not complying with rules targeting failures to deliver, they are penalizing them.

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Article: Fed Defies Transparency Aim in Refusal to Disclose

Article - Media

Fed Defies Transparency Aim in Refusal to Disclose

Mark Pittman, Bob  Ivry, Alison Fitzgerald

Bloomberg cited by Yonkers Tribune

The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.

Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn’t require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.

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Article: Overstock and Patrick Byrne Continue Naked Short Selling Jihad

Article - Media, Publications

Overstock and Patrick Byrne Continue Naked Short Selling Jihad

Thomas J. Catino, 08 November 2008

Overstock.com (Nasdaq: OSTK) President, Dr. Patrick Byrne, has continued to up the ante in his vocal public battle against a coordinated campaign of short sellers who have allegedly targeted his company’s shares. After appearing over the summer on a CNBC Street Signs segment with anchor Ron Insana, Byrne continued to emphasize that “what’s at stake here is innovation and entrepreneurship in America.” With strong words, Byrne said that his “company has been attacked and I’m not going to take this lying down.” Continue reading “Article: Overstock and Patrick Byrne Continue Naked Short Selling Jihad”

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Article: The SEC bans naked short selling

Article - Media

The SEC bans naked short selling

Daniel Dex, Tom Hameki

McMillian LLP, 5 November 2008

September’s upheaval in the financial markets prompted international securities regulators, led by the United States Securities and Exchange Commission (SEC), to adopt emergency restrictions on short selling of certain financial stocks. The SEC also enacted emergency measures that effectively banned “naked” short-selling of all equity securities. In support of the SEC’s measures and to avoid regulatory arbitrage, the United Kingdom’s Financial Services Authority and some Canadian regulators also implemented emergency restrictions on short selling of certain financial stocks. In October, the U.S. and Canadian emergency measures against short sales of financial stocks were allowed to expire, but the SEC took further action to extend its restrictions against naked short sales.

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Article: AtriCure, Inc. Announces Investigation by the Department of Justice

Article - Media, Publications

AtriCure, Inc. Announces Investigation by the Department of Justice

BioSpace, 03 November 2008

WEST CHESTER, Ohio–(BUSINESS WIRE)–AtriCure, Inc. (Nasdaq: ATRC – News), received a letter on October 27, 2008 from the U.S. Department of Justice-Civil Division (the “DOJ”) informing the Company that the DOJ is conducting an investigation for potential False Claims Act and common law violations relating to the Company’s surgical ablation devices. Specifically, the letter states that the DOJ is investigating the Company’s marketing practices utilized in connection with its surgical ablation system to treat atrial fibrillation, a specific use outside the Federal Food and Drug Administration’s 510(k) clearance. The letter also states that the DOJ is investigating whether AtriCure instructed hospitals to bill Medicare for surgical ablation using incorrect billing codes.

The Company understands that the DOJ is in the process of compiling a document request. The Company intends to cooperate with the DOJ in its investigation and operate its business in the ordinary course during the investigation.
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Article: SEC Focuses on Efforts by Hedge Fund Managers to Conceal Poor Performance

Article - Media, Publications

SEC Focuses on Efforts by Hedge Fund Managers to Conceal Poor Performance

Caryn Mazin Schechtman; Perrie M. Weiner,  02 November 2008

The SEC has charged a San Francisco investment adviser, MedCap Management and Research LLC (MMR), and its principal, Charles Toney, Jr., with falsely inflating the price of a thinly-traded portfolio security to enhance fund asset values at the end of a reporting period so that it could avoid reporting a 40 percent loss and stave off a rash of investor redemptions. This practice, which the SEC calls “portfolio pumping,” is alleged by the SEC to violate the antifraud provisions of the Investment Advisers Act of 1940. The charges were filed October 16.

MedCap Partners L.P. (MedCap), a fund managed by Toney and MMR, was plagued by poor performance and investor redemptions in 2006. According to the SEC, facing mounting losses in the third quarter of the year, Toney and MMR allegedly placed numerous buy orders during the last few days of the quarter in a thinly traded over-the-counter security heavily owned by MedCap through another MMR-controlled fund. The SEC alleges that this purchasing activity caused the portfolio security to quadruple and fraudulently increased MedCap’s value for the third quarter of 2006 by $29 million; both the stock price of the underlying security and MedCap’s value subsequently declined back to their previous levels. Continue reading “Article: SEC Focuses on Efforts by Hedge Fund Managers to Conceal Poor Performance”

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Article: Crisis of Convenience for Roiling SEC

Article - Media

Crisis of Convenience for Roiling SEC

David Patch

InvestigateTheSEC.com via Wayback, 30 October 2008

To say that support for the Securities and Exchange Commission is at an all time low would be an understatement. With Congressional Investigations into the agencies handling of critical investigations and recent reports out of the Office of Inspector General, investors are left guessing as to what exactly the agency is doing to police our markets. Heck, even a presidential candidate has suggested that the SEC Chairman should be fired and it was his party that hired him.

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Article: Japan Cracks Down on Naked Short Selling

Article - Media

Japan Cracks Down on Naked Short Selling

Takashi Nakamichi, Ayai Tomisawa

The Wall Street Journal, 28 October 2008

Japan moved Tuesday imposed new restrictions on so-called “naked” short selling of stocks, stepping up its efforts to arrest the tumble in domestic share prices.

The Tokyo Stock Exchange has asked member brokers to stop accepting naked short-sell orders, TSE President Atsushi Saito told a news conference.

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Article: Sad Money: The Backlash Against Jim Cramer

Article - Media, Publications

Sad Money: The Backlash Against Jim Cramer

Brendan Collins, 24 Cctober 2008

“Mad Money” host Jim Cramer, that chrome-domed hero of trashy TV addicts and armchair-finance junkies alike, has fallen on hard times. He appeared on “The Today Show” on October 6th, imploring viewers: “Whatever money you may need for the next five years, please take it out of the stock market. Right now.” To say this statement fanned the flames of the Wall Street crisis is an understatement. A more apt analogy would be to say that Cramer dumped rocket fuel on a

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Article: Deutsche Bank Sold Massive Amounts of Phantom Stock

Article - Media

Deutsche Bank Sold Massive Amounts of Phantom Stock

Mark Mitchell

DeepCapture, 14 October 2008

A couple of days before Lehman fell and all hell broke loose on Wall Street, Floyd Norris, the chief business correspondent of The New York Times, published a blog (headline: “Short Sale Conspiracies”) wherein he implied that I was mentally insane for suggesting that Deutsche Bank Securities had been caught selling “massive amounts of phantom stock.”

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Article: Dick Fuld’s Vendetta Against Short-Sellers—and Goldman Sachs

Article - Media

Dick Fuld’s Vendetta Against Short-Sellers—and Goldman Sachs

Heidi N. Moore

Wall Street Journal, 7 October 2008

Fuld didn’t let up on his hatred for short-sellers–primarily David Einhorn–even after his company filed for bankruptcy last month, and he believed the shorts were part of a cabal driven by Goldman Sachs Group.

In April, Fuld reported back to general counsel Thomas Russo about a dinner with Treasury Secretary Hank Paulson that Lehman had a “huge brand with treasury,” which “loved our capital raise” and, in perhaps an oblique reference to short-sellers, that Treasury “want to kill the bad HFnds + heavily regulate the rest.”

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Article: Cox’s SEC Censors Report on Bear Stearns Collapse

Article - Media

Cox’s SEC Censors Report on Bear Stearns Collapse

Mark Pittman, Elliot Blair Smith, Jesse Westbrook

Bloomberg cited by RGM Communications via Wayback, 7 October 2008

U.S. Securities and Exchange Commission Chairman Christopher Cox’s regulators stood by as shrinking capital ratios and growing subprime holdings led to the collapse of Bear Stearns Cos., according to an unedited version of a study by the agency’s inspector general.

The report, by Inspector General H. David Kotz, was requested by Senator Charles Grassley to examine the role of regulators prior to the firm’s collapse in March. Before it was released to the public on Sept. 26, Kotz deleted 136 references, many detailing SEC memos, meetings or comments, at the request of the agency’s Division of Trading and Markets that oversees investment banks.

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Article: SEC Gave “Preferential Treatment” to Wall Street CEO

Article - Media

SEC Gave “Preferential Treatment” to Wall Street CEO

Brian Ross, Rhonda Schwartz

abc News, 6 October 2008

The SEC gave “preferential treatment” to Wall Street executive John Mack during an insider trading investigation three years ago because Mack was about to become CEO of the Morgan Stanley investment banking firm, the SEC’s inspector general concluded in a report obtained by ABC News.

The report recommended disciplinary action against the SEC’s chief of enforcement, Linda Thomson, and said the firing of an SEC lawyer was “connected” to his persistent attempts to take Mack’s testimony. Read the report’s conclusion and recommendations here.

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Article: Fuld says Lehman victim of short sellers

Article - Media

Fuld says Lehman victim of short sellers

Stephanie Kirchgaessner and Greg Farrell

Financial Times, 2 October 2008

Dick Fuld, Lehman Brothers’ chief executive, broke his silence on the collapse of his bank by telling a congressional committee on Monday that he would go to his grave wondering why the US government opted to save AIG but allowed Lehman to fail.

Three weeks after the 158-year-old firm sought bankruptcy protection – the largest such filing in US history – Mr Fuld blamed Lehman’s collapse on a plague of naked short selling, and said in response to a question that he had no idea why US regulators would judge his company unworthy of a federal bail-out.

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