Foreign Collusion, Naked Shorting (Counterfeiting) & Money Laundering — All Illicit Wealth
SEC seeks to curb naked ambition
Helen Avery
EuroMoney, 27 March 2005
The SEC has amended legislation in a belated effort to clamp down on naked short selling. But it remains under pressure from a lobby group that ranges from senators to lawyers, and management to shareholders, who believe the new rules are having little effect
Naked shorting: The curious incident of the shares that didn’t exist
Peter Koh, Helen Avery
EuroMoney, 27 March 2005
Shareholders and executives in some of the US’s smallest listed companies believe their share prices have been forced down by illegal naked shorting. This has led to a number of lawsuits, claiming unscrupulous behaviour by brokers and market-makers exploiting loopholes in the central clearing system. Those implicated dismiss the allegations as rubbish. What’s going on?
The Naked Truth on Illegal Shorting
Karl Thiel
The Motley Fool cited by RGM Communications via Wayback, 24 March 2005
It’s amazing how the word “naked” can liven up a discussion. Take naked short selling, for instance. The addition of this saucy little word turns the mundane act of borrowing and selling shares of stock in hopes of buying them back later at a lower price into a raging controversy fraught with conspiracy, secret identities, public recriminations, foreign intrigue, sports team owners, and now some of the top regulators in the land.
How can one word cause so much trouble? While legal short sellers must borrow the shares they sell, naked short sellers sell shares of stock they haven’t borrowed, have no intention of borrowing, and that may not even exist. Not surprisingly, this activity is illegal and has been since the Securities and Exchange Act of 1934. But for a number of reasons, regulators have overlooked it in the past.
NASDAQ Threshold Securities: Outstanding Shorts as Share of Public Float
Robert Shapiro
Sonecon, 24 February 2005
This memo reports Sonecon’s findings after reviewing NASDAQ’s list of threshold securities from 11 February 2005.
PDF (2 pages): NASDAQ Threshold Securities: Outstanding Shorts as Share of Public Float
SEC v Tonino Labella, et al.
United States District Court for the District of New Jersey, 15 February 2005
This securities law enforcement action concerns a fraudulent scheme that Labella and Serubo orchestrated to sell more than $16.8 million of unregistered Eagletech Communications, Inc. (“Eagletech”) and Select Media Communications, Inc. (“Select Media”) stock through unregistered offerings to the investing public.
PDF (26 pages: SEC v Tonino Labella, et al.
U.S. Stock Market Commentary by Samex Capital
Samex Capital via RGM Communications via Wayback, 7 February 2005
It seems the U.S. Chamber of Commerce’s Institute For Legal Reform has publicly stated their petition of William Donaldson, the chairman of the SEC, asking for an investigation into whether short sellers and the law firm of Milberg Weiss (“MW”) had engaged in securities fraud. MW represented a class action suit led by an investment company that was also shorting the stock of the company targeted by the class action. MW is best known for their role in pursuing class action suits against publicly traded companies.
PDF (2 pages): U.S. Stock Market Commentary by Samex Capital
Christopher Byron
New York Post cited by RGM Communications via Wayback, 10 January 2005
Investors with money in the large and well- capitalized companies of the Dow Jones industrial average certainly felt blue last week, as the first five trading days of the new year brought a 180-point, or 2 percent, drop on well-placed fears that the Federal Reserve intends to keep raising interest rates until the economy stalls out.
But to any of the growing legions of investors lucky, nervy, or foolish enough to have been slumming instead last week in the investing world’s seediest dive of them all – the penny stock market – Wall Street definitely looked pretty in pink.
CIBC division fined $700,000 over trades
PAUL WALDIE, 22 December 2004
The brokerage arm of Canadian Imperial Bank of Commerce has agreed to pay a $700,000 fine and change the way it supervises clients who have direct market access accounts. The agreement is part of a settlement approved yesterday between CIBC World Markets Inc. and Market Regulation Services Inc., or RS, over allegations the brokerage failed to stop alleged manipulative trading by a pair of clients. Two Toronto-based CIBC World Markets employees, Scott Mortimer and Carl Irizawa, also agreed to pay fines of $50,000 and $20,000 respectively. The firm and the two individuals will also pay an additional $115,000 to cover the costs of the investigation.
Continue reading “Article: CIBC division fined $700,000 over trades”
CIBC Mellon stock scam probe linked to Angels
KAREN HOWLETT, 09 December 2004
A former executive of the securities custody firm co-owned by Canadian Imperial Bank of Commerce is under RCMP investigation over his alleged involvement in a penny stock scam police allege is linked to the Hell’s Angels biker gang. Alnoor Jiwan, former manager of CIBC Mellon Global Securities Services Co.’s Vancouver office, is under investigation for allegedly taking bribes in 1999 to issue bogus stock certificates and pocketing ill-gotten gains in a so-called pump-and-dump scheme involving defunct telecom firm Pay Pop Inc. Bill Majcher, head of the RCMP’s Integrated Market Enforcement Team in Vancouver, said his office has recommended to Crown prosecutors that charges be laid in connection with the scam. He also said individuals behind the scam have ties to organized crime.
Continue reading “Article: CIBC Mellon stock scam probe linked to Angels”
FBI Agent Fed Stock Guru Risky Information
New York Post cited by RGM Communications via Wayback, 5 November 2004
A corrupt FBI agent in cahoots with inside traders revealed a steady stream of sensitive information — including one corporate executive’s alleged ties to the Russian mob and an undercover agent’s presence at another firm, according to court testimony yesterday.
The companies’ negative information was posted on the Web site of San Diego financial analyst and self-styled stock guru Amr “Anthony” Elgindy, who profited when their stock went down, a former Elgindy associate testified in federal court in Brooklyn.
Boni Analysis of Failures-to-Deliver
Robert Shapiro
Sonecon, November 2004
A new study documents that significant failures to promptly deliver shares sold short (“fails” or “failures”) are not, as many market participants assume, rare, brief and inadvertent, but rather pervasive, extended and deliberate. The analysis was done by Dr. Leslie Boni, recently a visiting financial economist at the SEC and now economics professor at the University of New Mexico. Boni’s data show that failures-to-deliver affect almost all public companies and usually last several weeks. On any day, there are 180 million-to-300 million shares involving more than 10 percent of public companies that have gone undelivered for at least two months. Failures of these dimensions can seriously distort the normal economic operations of U.S. equity markets.
PDF (2 pages): Boni Analysis of Failures-to-Deliver
DIANE LEVICK, 20 October 2004
Connecticut stepped up its own probe of insurance misconduct Tuesday as Attorney General Richard Blumenthal, convinced that there is bid-rigging and other fraud here, issued at least 20 subpoenas to insurance companies and brokers.
Blumenthal’s latest move follows a lawsuit last week and arrests by the New York attorney general’s office, which is investigating manipulation of bids and questionable payment practices involving insurance brokers and companies. Continue reading “Article: STATE PRESSES FRAUD PROBE”
Robert Shapiro to SEC on Regulation SHO
Robert Shapiro
31 August 2004
I am Robert J. Shapiro, chairman of Sonecon, LLC, an economic advisory firm in Washington, D.C., and a long-time observer and analyst of U.S. and global financial markets. I served as Under Secretary of Commerce for Economic Affairs from 1998 to 2001, Vice President and co-founder of the Progressive Policy Institute from 1989 to 1998, and principal economic advisor to Governor William J. Clinton in the 1992 presidential campaign. I hold a Ph.D. from Harvard University and have been a Fellow of the National Bureau of Economic Research, the Brookings Institution, and Harvard University. I want to convey my serious concerns about the impact of the final version of Regulation SHO regarding short sales, as issued by the Securities and Exchange Commission (SEC) on July 30, 2004 1 , on the fairness and transparency of our equity markets.
PDF (4 pages): Letter to SEC on Reg SHO – Robert Shapiro – August 31 2004
Short Sales; Final Rule and Notice
Federal Register, 6 August 2004
The Securities and Exchange Commission (‘‘Commission’’) is adopting new Regulation SHO, under the Securities Exchange Act of 1934 (‘‘Exchange Act’’).
PDF (25 pages): Short Sales; Final Rule and Notice
Who’s Looking Out For You?: SEC Critics Seeking Investigation
Mark Faulk
FaulkingTruth cited by RGM Communications via Wayback, 27 June 2004
The mission statement of the SEC is clearly worded and easy to understand: “The primary mission of the U.S. Securities and Exchange Commission (SEC) is to protect investors and maintain the integrity of the securities market.”
Last Wednesday, they adopted new rules concerning short-selling that accomplished neither goal. Instead, they passed a watered-down version of their earlier proposed regulation SHO, a version that did absolutely nothing to “protect investors and maintain the integrity of the securities market”. And unlike their mission statement, the new rules are neither clearly worded nor easy to understand. In fact, the only clear message was the “subliminal” one that the SEC sent to investors, which was, simply stated: “We don’t care”.
THE DOLLAR HAS NO INTRINSIC VALUE : DO YOUR ASSETS?
