Foreign Collusion, Naked Shorting (Counterfeiting) & Money Laundering — All Illicit Wealth
SEC Proposes Teeth for Short-Selling Rules
Judith A. Burns
The Wall Street Journal, 5 March 2008
Securities regulators voted 3-0 to propose a rule intended to crack down on lingering abuses involving so-called naked short sales and failures to deliver shares that have been used in such sales.
SEC proposes tougher “naked” short selling rules
Rachelle Younglai, Richard Chang
Reuters, 4 March 2008
The U.S. Securities and Exchange Commission on Tuesday proposed tougher rules to curb so-called “naked” short-selling abuses and prevent market price manipulation.
SEC Chairman Christopher Cox said regulation SHO, an existing rule partly aimed at short selling abuses, “needs teeth.”
The Simple, Literal Explanation
Patrick Byrne
DeepCapture, 11 February 2008
The “St. Smallcap” example conveyed the dynamics of the manipulation, but it was only a metaphor. This blog will provide an explanation whose truth is more literal.
You and I enter a stock trade. You buy a share of stock from me. You hand over your money, and I hand over the share of stock. That is called, “settlement.”
It may surprise you to learn that there are loopholes in our nation’s regulations that permit some people, when it comes time to settle, to hand over nothing but an IOU. By using one of these loopholes, when the time comes for settlement I can take your money but say, “I’m not delivering you any stock. I’m just giving you an IOU for a share of stock that I will deliver later.”
Nanopierce Technologies, Inc. v. Southridge Capital Management
Find a Case, 29 January 2008
Before the Court are three motions for summary judgment pursuant to Rule 56(c) of the Federal Rules of Civil Procedure. The three motions are addressed in the following order: first, the motion for summary judgment filed by Harvest Court (a co-defendant and subsidiary of Southridge); second, the motion for summary judgment filed by Counterclaim-Plaintiffs Kampmann and Metzinger (Nanopierce executives); and third, the motion for summary judgment filed by H. Glenn Bagwell, Jr. For the reasons stated below, Harvest Court’s motion for summary judgment is granted, Kampman and Metzinger’s motions for summary judgment are denied with respect to Counts 1, 7, 8, and 13, and granted with respect to Count 9. Bagwell’s motion for summary judgment is denied.
I. Background*fn1
In a September 26, 2000, meeting at defendant Southridge’s office, Nanopierce President Paul Metzinger negotiated an agreement with two Southridge employees, Defendants Singer and Pickett.*fn2 The negotiated agreement between Southridge and Nanopierce called for $7.5 million in initial financing in exchange for approximately 4.5 million shares of Nanopierce stock. The agreement also contained a provision providing “reset rights,” which entitled the Southridge to additional shares of common stock in the event the stock price declines. The reset clause included three reset dates (at 65, 130, and 195 days after the closing) at which additional shares would be issued if the stock was trading below the initial purchase price. Finally, the agreement also provided for an additional $7.5 million in financing at a future date, on the condition that Nanopierce’s stock met certain price and volume thresholds. Continue reading “Article: Nanopierce Technologies, Inc. v. Southridge Capital Management”
Review by Robert David Steele
Nobel Prize Material–Final ReviewThis book is a work of genius and integrity, with the potential to catalyze Wall Street into fulfilling the promise of moral capitalism and community ownership.
Continue reading “Book: The Battle for the Soul of Capitalism by John Bogle (RIP)”
Jonathan E. Johnson III
The Washington Times, 21 November 2007
In the late 1800s, American financier Daniel Drew refined the art of selling counterfeit shares. Drew’s biographer wrote, “There is no limit to the amount of blank shares a printing press can turn out. White paper is cheap… printer’s ink is also cheap.” Today, it is possible to counterfeit shares electronically — and it happens with such frightening regularity and impunity that Drew would be proud.
PRNewswire, 02 November 2007
Bloomberg Television’s special report on naked short selling entitled “Phantom Shares” was nominated for an Emmy(R) Award for Business & Financial Reporting by the National Academy of Television Arts & Sciences. The report, which was nominated for outstanding investigative reporting of a business news story – news magazines and long form, featured Overstock.com and its Chairman and CEO, Patrick Byrne, extensively. It examined the strategy and execution of naked short selling, the threat this poses to American entrepreneurship, and the steps regulators are taking to control it.
Patrick Byrne said of the news, “Unsettled trades in our stock settlement system present a serious problem to our capital markets. Bloomberg’s report shed light on the issue and brought it into the mainstream. It is an example of the critical, investigative mindset that is essentially absent within American financial journalism, and I am pleased to see Bloomberg being recognized for its fine work.”
Offshore shell games threaten global financial system
Lucy Komisar
The Komisar Scoop, 17 September 2007
There’s an astonishing article in the Washington Post’s Business Section (“Risk. Now They See It. Now You Don’t.“ Sept 16, 2007)
The Post, which has never, ever, railed against tax havens, is now suggesting that their use to cheat tax authorities and investors threatens the entire global financial system. Of course, it doesn’t put it so starkly, but that’s the gist.
Statement of Robert J. Shapiro: The Economic Costs of Tolerating Equity “Failures to Deliver”
Robert Shapiro
11 September 2007
I am Robert J. Shapiro. I am chairman of Sonecon, an economic advisory firm in Washington, D.C., and former U.S. Under Secretary of Commerce for Economic Affairs under President Clinton. I am also a Senior Policy Fellow at the Georgetown University Center for Business and Public Policy and a Senior Fellow of the Progressive Policy Institute. I have served previously as a fellow of Harvard University, the National Bureau of Economic Research, and the Brookings Institution.
PDF (3 pages): Statement of Robert J. Shapiro: The Economic Costs of Tolerating Equity “Failures to Deliver”
Gribbie , 20 August 2007
The internet is littered with the photo-shopped wit of children and fat lonely men everyday. They call their 4 panel upstanding member of society love/video-game parody/self insertion a “web comic” and fight for the title of internet-famous. Continue reading “Article: The Tim Buckley Scandall.”
Refco: When Smart Money Isn’t So Smart
Matthew Goldstein
Bloomberg, 16 July 2007
The titans of the private equity world fancy themselves smarter, shrewder, and more sophisticated than any one else on Wall Street. Investors have bought into the sentiment as they’ve scooped up the shares of the private equity firms that have gone public recently: Blackstone Group (BX) and Fortress Investment Group (FIG). But a recent report on the spectacular collapse of Refco—the once-dominant commodities broker that was laid waste by a massive accounting fraud—paints an unflattering portrait of the private equity firm that engineered Refco’s August, 2004, leveraged buyout and its initial public offering a year later (see BusinessWeek.com, 7/11/07, “Kill the Private-Equity Tax Break”).
ATSI COMMUNICATIONS INC v. SHAAR FUND LTD RGC LDC
FindLaw, 11 July 2007
ATSI COMMUNICATIONS, INC., a Delaware Corporation, Plaintiff-Appellant, v. The SHAAR FUND, LTD., Shaar Advisory Services, N.V., RGC International Investors, LDC, Rose Glen Capital Management, L.P., Corporate Capital Management, InterCaribbean Services Ltd., Citco Fund Svcs., Luc Hollman, Sam Levinson, Hugo Van Neutegem, Declan Quilligan, Wayne Bloch, Gary Kaminsky, Steve Katznelson, Trimark Securities, Inc., Levinson Capital Management, and W.J. Langeveld, Defendants-Appellees,
Marshall Capital Services, LLC., Jesup & Lamont Structured Finance Group, MG Security Group, Inc., Crown Capital Corporation, John Does 1-50, Kenneth E. Gardiner, Nathan Lihon, and Sei Investment Co., Defendants. ATSI Communications, Inc., a Nevada Corporation, Plaintiff-Appellant, v. Uri Wolfson, Defendant-Appellee, Sam Levinson, Defendant.
John R. Emshwiller, Kara Scannell
The Wall Street Journal, 5 July 2007
Depository Trust & Clearing Corp. is a little-known institution in the nation’s stock markets with a seemingly straightforward job: It is the middleman that helps ensure delivery of shares to buyers and money to sellers.
SEC moves to close loopholes in short-selling rule
James Langton
Investment Executive, 14 June 2007
The U.S. Securities and Exchange Commission has voted to take additional steps that it believes will close loopholes in its short-selling rule, Regulation SHO, further reducing persistent failures to deliver stock within the standard settlement period.
The SEC voted to adopt final amendments to its rules that, it says, will further reduce fails to deliver in certain equity securities. Regulation SHO, which became fully effective in January 2005, provides a regulatory framework governing short sales of securities.
THE DOLLAR HAS NO INTRINSIC VALUE : DO YOUR ASSETS?
