Foreign Collusion, Naked Shorting (Counterfeiting) & Money Laundering — All Illicit Wealth
Circle Group Zeroes In on Naked Shorts
ThinkAdvisor, 2 May 2006
”Any wrongdoers will be taken to the mat,” said the chairman and chief executive of Circle Group Holdings Inc., Gregory J. Halpern, in a salvo issued in a statement Monday (April 17). “We’ve come to fight and we believe that by joining forces with John O’Quinn, his team of lawyers and A-list experts, we will prevail.”
The Stock Market Is Patently Unfair
Arne Alsin
TheStreet, 26 April 2006
In a fair market, the property of investors is secure and protected, the playing field is level, and rules are uniformly enforced.
Unfortunately for investors, that does not describe the current condition of the stock market. The current stock market is patently unfair.
Arne Alsin’s Article on Fails-To-Deliver
Bud Burrell, Arne Alsin
RealMoney cited by Sanity Check via Wayback, 17 April 2006
There is a systemic problem in the equity market, but the magnitude of the problem is impossible to gauge because the parties involved refuse to answer a simple question: Why?
My mutual fund purchased five blocks of stock in Overstock (OSTK:Nasdaq) during the first quarter. There was a failure to deliver shares in four out of the five purchases, with delays for delivery lasting as long as three weeks. Nobody can tell me why shares were not delivered within the requisite three-day settlement period — the so-called T+3 requirement.
Short-Sellers Are Burned by Novastar
Roddy Boyd
New York Post, 16 April 2006
One Midwestern financial company, long a target of short-sellers, has deployed an infrequently used tactic to inflict pain on its naysayers: Its management has put in place a strategy that consistently makes money.
The stock of Novastar Financial, a Kansas City, Mo.-based home-equity real estate investment trust, has been a battleground between long-term holders in love with its juicy dividends and short-sellers who suspect that the company has massive default risk with those loans.
The Geese Are Beginning to Be Slaughtered
Bud Burrell, Chris Clair
HedgeWorld cited by Sanity Check via Wayback, 12 April 2006
U.S. defined benefit pension plans have been upping their allocations to alternative investments, including hedge funds, in recent years, helping boost hedge fund assets to above the $1 trillion mark.
But defined benefit plans, particularly in the corporate world, are facing big problems. They are almost universally underfunded, they face a future with more retirees than ever thanks to longer life expectancies and younger retirement ages, and those retirees are receiving better benefits than in the past. A number of companies, including IBM Corp., Verizon Communications Inc., Motorola Inc., and Lockheed Martin Corp., have announced they are freezing their defined benefit plans, the first step toward eliminating them altogether.
Suit Against Prime Brokers for Phony Stock Borrow Charges Filed
Bud Burrell, Chad Bray
Dow Jones Newswires cited by Sanity Check via Wayback, 12 April 2006
An antitrust lawsuit was filed Wednesday against the securities industry’s largest brokerage firms over fees charged as a result of “naked short selling.”
The lawsuit filed in federal court in Manhattan by Electronic Trading Group LLC alleges that the major broker-dealers charged unearned fees, commissions or interest on short sales where those broker-dealers failed to borrow or deliver the stock to back a short position.
Jane Sassen
Bloomberg, 10 April 2006
Sitting in a conference room in a Manhattan office, the researcher explains how he digs up financial information, often of the damning variety, for hedge funds and other big investors. His clients need the intelligence because they frequently sell short, meaning they bet on shares falling. “Look at the Web as a giant fish pond,” he says, on the condition that he not be quoted by name. “We try to develop bait that will hook someone who knows more than anyone else.”
The Coming Sentencing of Anthony Elgindy, What he is and what he deserves.
Bud Burrell
Sanity Check via Wayback, 9 April 2006
On May 2nd, Anthony Elgindy is to be sentenced for his activities as a short selling syndicate operator. Over the course of several years, he attacked a couple of thousand companies, in the process putting many of them out of business. If he had been a killer or rapist, his crimes would have been collectively viewed as being “serial” in nature.
We continue to forget that Elgindy is a previously convicted felon for insurance fraud. He has now been convicted of six counts of another form of financial fraud. These counts clearly demonstrate that he engaged in operation of a criminal syndicate to manipulate markets for securities by counterfeiting (a Class B Federal Felony) those same securities, a Class A felony according to the US CJS (Criminal Code) for syndicalism, an act of insurrection and sedition, treason to its core.
Criminals, Prosecutors, Financial Manipulators, and Their Incestuous Relationships.
Bud Burrell
Sanity Check via Wayback, 3 April 2006
After the great hoopla of the the Bermuda Short Sting Case, which produced a conviction rate of about 88% of indictees, the silence from the Government on related collateral indictments in pending cases, some more than four years old, is literally deafening.
The Government’s various agencies really have an “NIH” (Not Invented Here) attitude towards grass root developed cases coming up to them not as a direct result of their own investigative initiative. I am aware of case after case taken to various agencies of the Government with substantive evidence attached, which were ignored, black-holed, or thrown back at the victims.
Comprehensive and Controversial Summary of the History of Central Banking Globally
Bud Burrell, Rodney E. Young
Sanity Check via Wayback, 20 March 2006
The success of the central banking scheme developed into a far-reaching plan described by President Clinton’s mentor, Georgetown Professor Carroll Quigley, “to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. Each central bank….sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the levels of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world.”
Bud Burrell
Sanity Check via Wayback, 20 March 2006
In the original concept of our brokerage, exchange, custody and settlement systems, there was never any confusion about whose assets were the basis of their activities as agents. The assets were those of the clients, who came to the broker and related parties necessary to the transaction to act as an “honest agent” in the purchase and sale of securities. Today, this entire relationship is blurred by conflicts of interest, and outright conversion of assets.
Hedge Fund Shells Out in Shorting Probe
Bud Burrell, Matthew Goldstein
TheStreet cited by Sanity Check via Wayback, 14 March 2006
A New York hedge fund manager will pay $16 million to settle allegations arising out of a two-year-old investigation into manipulative trading in the market for private placements by small-cap companies.
The penalty agreed to by Jeffrey Thorp is the largest settlement assessed to date by the Securities and Exchange Commission in the investigation into trading abuses in the $18 billion-a-year market for PIPEs, or private investment in public equity.
The Golden Rule of Professional Shorting: Never Short a Company Without an Inside Rat
Bud Burrell
Sanity Check via Wayback, 9 March 2006
There is one genuinely “Golden Rule” for professional short seller/raiders.
You never short a stock without an insider to leak manageable information to you. That insider might be an officer, director, control person, investor, analyst, inside legal counsel, outside legal counsel, or even a lowly disgruntled non-executive employee.
In working on some hundred plus companies directly since 1995, I have never once seen this rule broken. Many times the CEO’s of these companies have resisted this idea, but in NO INSTANCE have I seen even one exception to this rule when they were finally forced to look in on their own operations.
There is a process for looking for raider attacks on companies, but many are flawed strategically, because they are only looking out, and not in. I have been challenged by a number of clients on this, but when they would spend the money to use competent investigators, they always found the connection of an insider to the raiders. Moreover, they found the miscreant in ways admissable in Court, in phone records, emails, and more. This is not dissimilar to what Overstock’s investigator found outside the Company.
If you want a broadly known example, simply look at the Nabisco deal and KKR. The number three operating guy at RJR/Nabisco told them where all the bodies were buried, and ended up running the operations of the Company for them when they won the takeover battle.
Officers and Directors have a duty to insure that sensitive inside information about their company is not being leaked to anyone, unless it is someone doing so for ethical reasons. I have seen more than once the use of such informants by the SEC, NASD, and others. This is a more complex issue if discovered. No matter what, such a person must be quarantined until appropriate third party investigation can determine the foundation for such actions. Many times it is based on weak premises, but not always. You only have to look at Enron, Worldcomm, Global Crossing and more to see good outcomes from such behavior.
For your consideration.
Chris Byron
New York Times cited by RGM Communications via Wayback, 6 March 2006
It’s good to see that the U.S. Securities and Exchange Commission has come to its senses and that – at least for the time being – it won’t be enforcing the media subpoenas that have gotten the press so riled up.
But before anyone breaks out the pom-poms for SEC Chairman Christopher Cox, let’s remember that these wrong-headed subpoenas were 100 percent the responsibility of Cox’s own agency in the first place – and until the SEC develops better, more focused leadership, problems like those caused by these subpoenas are going to keep occurring.
Global Client Elgindy Slammed by US Attorney
Bud Burrell, Lee M. Webb
Street Wire cited by Sanity Check via Wayback, 4 March 2006
Amr (Anthony) Elgindy, a short selling fraudster who conducted many of his trades through Vancouver-based Global Securities Corp., deserves “a very substantial term of imprisonment,” according to Assistant United States Attorney John Nathanson. In fact, the U.S. government thinks Mr. Elgindy should be locked up for life.
Mr. Elgindy was arrested in May of 2002 and convicted on 11 counts of a 32-count indictment for racketeering, securities fraud and extortion last January. He is now scheduled to be sentenced on March 22.
THE DOLLAR HAS NO INTRINSIC VALUE : DO YOUR ASSETS?
