Foreign Collusion, Naked Shorting (Counterfeiting) & Money Laundering — All Illicit Wealth
German regulator issues naked short-selling ban
NDTV, 25 November 2011
Germany’s market regulator announced a ban on Tuesday on so-called naked short-selling of eurozone government debt and shares of major financial companies, a move that came as European officials seek to strengthen control of markets.
Financial Finger-Pointing Turns to Regulators
Louise Story, Gretchen Morgenson
New York Times, 22 November 2011
In the whodunit of the financial crisis, Wall Street executives have pointed the blame at all kinds of parties — consumers who lied on their mortgage applications, investors who demanded access to risky mortgage bonds, and policy makers who kept interest rates low and failed to predict a housing market collapse.
But a new defense has been mounted by a bank executive: my regulator told me to do it.
European Bailout Fund For Greek Money Laundering And Fraud
Wolf Richter, 18 November 2011
The ink wasn’t even dry yet on the European bailout fund, the EFSF when it paid $1.3 billion to bail out Proton Bank in Greece. Turns out, Proton had siphoned off $1 billion in a scheme of fraud, embezzlement, money laundering, and offshore front companies, according to the Süddeutsche Zeitung. And then a bomb exploded.
The bomb, fabricated of dynamite, demolished four cars in front of a building in Halandri, a suburb of Athens. Not a coincidence: in the building lived a senior employee of the Bank of Greece, whose meticulous investigation of Proton Bank had exposed the massive criminal scheme. According to the police, the bomb was intended as a warning to those who attempt to shed light on these kinds of machinations. Continue reading “Article: European Bailout Fund For Greek Money Laundering And Fraud”
PRNewswire, 16 November 2011
Overstock.com, Inc. (NASDAQ: OSTK), today announced that its CEO and Chairman Dr. Patrick M. Byrne, was named the Ernst & Young National Entrepreneur Of The Year® 2011 Retail and Consumer Products Award winner. He was honored at the Entrepreneur of the Year Awards gala, the culminating event of the Ernst & Young Strategic Growth Forum® held in Palm Springs, California on November 12, 2011. Continue reading “Article: Overstock.com CEO Dr. Patrick M. Byrne Named Ernst & Young National Entrepreneur of the Year® 2011 Retail and Consumer Products Award Winner”
UBS will pay $12M over naked shorts
dcubberley, 27 October 2011
UBS AG, Switzerland’s biggest bank, will pay $12 million to resolve Financial Industry Regulatory Authority claims that a brokerage unit allowed millions of short-sale orders to be placed without reasonable grounds to believe that the securities could be delivered. Continue reading “Article: UBS will pay $12M over naked shorts”
UBS comes up short; fined $12 million by Finra for ‘systemic supervisory failure’
Finextra, 26 October 2011
The Financial Industry Regulatory Authority (Finra) has fined UBS Securities $12 million for failing to properly supervise short sales of securities.
The Swiss bank’s US brokerage unit violated Regulation SHO, which requires a broker-dealer to have reasonable grounds to believe that the security could be borrowed and available for delivery before accepting or effecting a short sale order, says Finra.
The rules require firms to obtain and document this “locate” information before the short sale occurs to help cut the number of potential failures to deliver.
Continue reading “Article: UBS comes up short; fined $12 million by Finra for ‘systemic supervisory failure’”
UBS fined in U.S. over improper short sales
Jonathan Stempel, 25 October 2011
In the largest penalty of its type, Swiss bank UBS AG was fined $12 million by a U.S. brokerage regulator over its “systemic” failure to properly handle millions of short-sale orders.
The Financial Industry Regulatory Authority said violations by the bank’s UBS Securities LLC broker-dealer unit caused the orders to be mismarked or filled without reasonable grounds to believe the underlying securities could be located.
In short sales, investors sell securities they do not own, hoping the prices will fall so they can repurchase the securities later at the lower price, repay the lender and pocket the difference as profit. Regulators fear that abuses can distort markets, and accelerate declines in share prices. Continue reading “Article: UBS fined in U.S. over improper short sales”
FINRA v UBS
24 October 2011
As set forth below, the Firm failed to comply with certain requirements of Reg SHO, FINRA Rules, NASD Rules and federal securities laws during the period covering, in whole or in part, January 3, 2005 through March 2010, with several violations continuing through December 31, 2010 (the “Relevant Period”), The Firm’s violations existed for various periods of time throughout the Relevant Period and are summarized below.
PDF (26 pages): FINRA v UBS
ETFs and the Present Danger to Capital Formation
Prepared Testimony by Harold Bradley and Robert E. Litan
Before the United States Senate Committee on Banking, Housing, and Urban Affairs Subcommittee on Securities, Insurance, and Investments
ETFs have increasingly distorted the role of equities
markets in capital formation, while posing systemic risks from potential
settlement failures.
Continue reading “Testimony: Kauffman Foundation on ETFs Danger to Capital Formation”
Why I Respectfully Disagree With David Einhorn About Green Mountain Coffee Roasters
Bill Maurer
SeekingAlpha, 19 October 2011
Shares of coffee giant Green Mountain (NASDAQ:GMCR) were slammed on Monday after hedge fund investor David Einhorn said that the stock should be shorted. I respectfully disagree with Mr. Einhorn and others that are against the stock.
SEC under Schapiro struggles to turn around amid political, financial head winds
David S. Hilzenrath
Washington Post, 7 October 2011
Mary L. Schapiro took over a discredited SEC in early 2009 and vowed to rebuild it.
She promised tougher enforcement — “war without quarter” on financial fraud. Modernized rules to keep up with Wall Street. And a new, more effective organization.
Her tenure at the federal agency responsible for protecting investors and policing markets offers a Washington lesson: Even when epic crises create a sense of urgency, it is tough to tighten the reins on powerful industries. Dramatic results can prove elusive.
Maxwell K. Multer, 01 September 2011
Regulators have addressed market manipulation with Rule 10b-5 since its promulgation under the Securities Exchange Act in 1942. While Section 9 of the Securities Exchange Act addresses manipulation of securities prices, it requires the specific intent “for the purpose of inducing the purchase or sale of such security by others”1 or “for the purpose of creating a false or misleading appearance [of market activity] . . ..”2 It is likely for that reason that prosecutors rarely use Section 9, choosing instead to bring manipulation proceedings under Rule 10b-5.3 But as the tools available for accomplishing market manipulation have evolved, the judicially narrowed contours of Rule 10b-5 may be such that certain new schemes escape liability. With modern advances in trade execution, market platforms and derivatives, it is now possible to accomplish a profitable market manipulation without engaging in any overtly fraudulent or illegal behavior.
Several courts have elected to distinguish between these alleged schemes and schemes which do include illegal behavior, employing a higher level of scrutiny and requiring proof of additional elements in the former situation. Manipulative schemes are referred to as “open market manipulations” when the alleged scheme is accomplished solely through the use of facially legitimate open market transactions. That is, where the manipulator has not engaged in any conduct that is inherently or otherwise illegal, such as fictitious transactions, wash sales or by disseminating false reporting. The transactions are seemingly legitimate, but for their manipulative intent and effect in combination. Continue reading “Article: United States: Open-Market Manipulation Under SEC Rule 10b-5 And Its Analogues: Inappropriate Distinctions, Judicial Disagreement And Case Study: FERC’s Anti- Manipulation Rule”
How the Australian Ban on Short Selling During the GFC Affected Market Quality and Volatility
Thomas Henker, Julia Henker, Uwe Helmes
2012 Financial Markets & Corporate Governance Conference, 30 August 2011
We examine the effects of the short selling ban, imposed by Australian regulators in the wake of the global financial crisis, on trading of financial stocks. Unlike other developed markets, where regulators imposed short-selling restrictions for brief periods of time at the height of the financial crisis, the ban on short selling of financial stocks on the Australian Stock Exchange lasted eight months, including both the tumultuous end of 2008 and the calmer period up to May 2009.
PDF (55 pages): How the Australian Ban on Short Selling During the GFC Affected Market Quality and Volatility
Deutsche Bank charged in South Korea over stock rout
BBC News, 22 August 2011
Deutsche Bank’s South Korean brokerage and four of its employees have been charged with illegally manipulating Seoul’s stock market last year.
Korean prosecutors allege the firm earned more than 45bn won ($41.5m; £25m) in unfair trading on 11 November. In a statement, Deutsche Bank denied the charges and said it would defend itself in court.
Seoul’s benchmark share index fell by 48 points, or 2.7%, in the last 10 minutes of trading on 11 November.
Korea’s Financial Services Commission confirmed that about 2.4tn won in sell orders from foreign investors were processed on that day, most of them through Deutsche Bank’s local securities unit. Continue reading “Article: Deutsche Bank charged in South Korea over stock rout”
4 at Deutsche Bank indicted over stock manipulation
Choi He-suk, 21 August 2011
Four employees of Deutsche Bank AG and Deutsche Securities Korea have been indicted on charges of gaining unlawful profits by manipulating stock prices, the Seoul Central District Prosecutors’ Office said Sunday.
Of the four, three work at Deutsche Bank’s Hong Kong branch including one executive. The other is an executive of Deutsche Securities Korea.
The Hong Kong-based individuals have so far refused to comply with the prosecution’s summons. The prosecutors said that if they do not attend the hearing, it plans to request their extradition and to request Interpol’s cooperation if necessary. Continue reading “Article: 4 at Deutsche Bank indicted over stock manipulation”
THE DOLLAR HAS NO INTRINSIC VALUE : DO YOUR ASSETS?
