Article: Two Camden County Residents Charged with Conspiracy to Defraud Victims of More Than $1.4 Million in Coronavirus Relief Fraud Scheme

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Two Camden County Residents Charged with Conspiracy to Defraud Victims of More Than $1.4 Million in Coronavirus Relief Fraud Scheme

Department of Justice, 20 May 2021

CAMDEN, N.J. – Two Camden County, New Jersey, residents were charged for their role in fraudulently obtaining federal Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL) totaling $1.4 million, Acting U.S. Attorney Rachael A. Honig announced today.

Stephen Bennett, 45, of Berlin, New Jersey, and Rhonda Thomas, 36, of Sicklerville, New Jersey, are each charged by complaint with one count of conspiracy to commit wire fraud and bank fraud, one count of bank fraud, and one count of conspiracy to commit money laundering. Bennett and Thomas are scheduled to appear by videoconference today before U.S. Magistrate Judge Karen M. Williams. Continue reading “Article: Two Camden County Residents Charged with Conspiracy to Defraud Victims of More Than $1.4 Million in Coronavirus Relief Fraud Scheme”

Official: Robert Foster Bennett

Official, People

Robert Foster Bennett (September 18, 1933 – May 4, 2016) was an American politician and businessman. He was a United States Senator from Utah as a member of the Republican Party. Bennett held chairmanships and senior positions on a number of key Senate committees, including the Banking, Housing and Urban Affairs Committee; Appropriations Committee; Rules and Administration Committee; Energy and Natural Resources Committee; and Joint Economic Committee..

Bennett was a popular and reliably conservative senator for most of his tenure, earning high ratings from conservative activist groups such as the National Rifle Association, U.S. Chamber of Commerce, and American Conservative Union. Continue reading “Official: Robert Foster Bennett”

Article: Harsh fraud sentencing trend continues – a clear message of deterrence

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Harsh fraud sentencing trend continues – a clear message of deterrence

Louise Bennett, 17 February 2017

Two City traders convicted over £141m banking fraud, LNB News 26/01/2017 150. [Subscription]

Two City traders have been convicted of conspiring to defraud a Russian bank of more than £141m in a series of complex frauds. Georgy Urumov was convicted of two counts of conspiracy to defraud, two counts of conspiracy to commit fraud by false representation and one count of conspiracy to commit money laundering. Vladimir Gersamia was convicted of two counts of conspiracy to defraud and one count of conspiracy to commit money laundering. The pair will be sentenced on 27 January 2017. Continue reading “Article: Harsh fraud sentencing trend continues – a clear message of deterrence”

Article: Credit Suisse Fined $1.75M for Short-Selling System Failures

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Credit Suisse Fined $1.75M for Short-Selling System Failures

Financial Planning, 28 December 2011

Credit Suisse Securities has been fined $1.75 million by the Financial Industry Regulatory Authority for failing to properly supervise short-selling activity.

From June 1, 2006 through December 2010, Credit Suisse Securities failed to comply with the locate and marking requirements of Regulation SHO as well as FINRA rules, NASD rules and federal securities laws, according to FINRA.

Specifically, FINRA fined Credit Suisse for Reg SHO violations and for failing to properly supervise short sales and the marking of sale orders. As a result, the financial services firm entered millions of short sales without reasonable grounds to believe that the securities could be borrowed and delivered and mismarked thousands of sales orders, FINRA charges. Continue reading “Article: Credit Suisse Fined $1.75M for Short-Selling System Failures”

Article: Credit Suisse Fined $1.75 Million for Breaking ‘Naked’ Short-Selling Rules

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Credit Suisse Fined $1.75 Million for Breaking ‘Naked’ Short-Selling Rules

Eleazar David Meléndez, 27 December 2011

The Financial Industry Regulatory Authority (FINRA) said Monday it was fining the American brokerage unit of Swiss banking giant Credit Suisse $1.75 million for violating rules regarding the controversial market-making practice known as “naked” short-selling.

Credit Suisse Securities (USA) LLC was being fined for violating Regulation SHO, a rule enacted in early 2005 by the Securities Exchange Commission to target prevent market participants from abusing short-selling, according to a statement from the regulatory group,

In a short sale, a market maker sells a security it does not own, later borrowing the instrument from a third-party in order to make good on its transaction. If the price of that security goes down, the short-seller can later buy it back in the open market, returning it to the party from which it borrowed in the first place, and pocketing the difference in prices as profit. Continue reading “Article: Credit Suisse Fined $1.75 Million for Breaking ‘Naked’ Short-Selling Rules”

Article: UBS will pay $12M over naked shorts

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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”

Article: UBS comes up short; fined $12 million by Finra for ‘systemic supervisory failure’

Article - Media, Publications

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’”

Article: UBS fined in U.S. over improper short sales

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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”

Testimony: Bud Burrell Comments on Amendments to Regulation SHO

Testimony

Bud Burrell Comments on Amendments to Regulation SHO

SEC, 13 July 2008

“August 1973 I started on Wall Street in Block Trading for Bache. Worked in all Major firms through the years.Traveled all over the world.

From $6 Billion per day Fails to deliver is now Over $13 1/2 billion per day.

There is More Naked Short shares in the market than there is Outstanding Shares.

We have allowed our Clearing systems to be Gamed, to the point where they are able to manipulate markets.”

Read full testimony.

 

Article: Refco – When Smart Money Isn’t So Smart

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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”).

Read full article.

Article: Naked and Confused

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Naked and Confused

Liz Moyer

Forbes, 12 February 2007

How a tiny software outfit fell victim to an illegal but unrestrained practice known as naked short-selling.

Most investors have never heard of Sedona (otcbb: SDNA.OB news people ) Corp., a piddling Pennsylvania outfit that sells customer relationship management software for small U.S. banks and credit unions. But to a rogue band of short-selling hedge fund managers, Sedona was prime meat.

Article: Naked Short Selling – How Exposed Are Investors?

Article - Academic

Naked Short Selling: How Exposed are Investors?

James W. Christian, Robert Shapiro, John-Paul Whalen

The Houston Law Review, 10 November 2006

Regulation SHO is a start, but in order to guarantee a fair market place, the SEC must close the loopholes in Regulation SHO and institute comprehensive reforms to the clearing and settlement system. Until the SEC makes these necessary reforms and addresses the DTCC’s mismanagement of the Stock Borrow Program, investors will continue to be exposed to the manipulative potential of naked short selling.

PDF (58 Pages):  HLR Naked Short Selling 2006-11-10

Article: Naked [Short Selling] Horror

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Naked Horror

Liz Moyer

Forbes, 25 August 2006

Suspicious trading last year in shares of Global Links, a small Nevada real estate holding company, was far more intense than previously thought.

Data released to Patch earlier this month had shown trade fails of 10 million shares starting in mid-April, a time when 4 million shares of Global Links were issued and outstanding.

Article: Congress Sells America Short

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Congress Sells America Short

Mark Faulk

FaulkingTruth.com cited by RGM Communications via Wayback, 20 September 2005

In yet another twist in the stock market scandal known as Stockgate, the Faulking Truth has learned that Senator Richard Shelby (R-AL), Chairman of the Senate Banking Committee, has shelved a planned Senate Subcommittee Hearing investigating the issue. Originally scheduled for February of this year, and then postponed several times, the hearing, which has been advocated by Senator Robert Bennett (R-UT), has been cancelled indefinitely.

According to a reliable source inside of the planned investigation, “The authority and the responsibility to take the necessary steps to deal with the issue of naked short selling lies squarely at the feet of Senator Shelby, and he has chosen not to allow the planned Senate Banking Subcommittee hearing to go forward.” In an earlier interview with the same source, we were told that “Senator Shelby tends to grab things like this for his own purposes, and his own purposes don’t always mesh with what’s best for the public.”

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Article: The Naked Truth on Illegal Shorting

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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.

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