C. Austin (Bud) Burrell is a corporate finance generalist with over 30 years of Wall Street and related experience. He was a senior derivatives specialist and development stage company investment banker for more than 35 years on Wall Street.He is a 1968 Graduate of the U.S. Military Academy and a graduate of the Army’s Finance Officer Advanced Course.
Financial Wire, 5 August 2010
This week, an important online news service released an article that should send shockwaves into our public markets. In very curt form, the article chronicles the many abuses of U.S. public companies by short selling manipulators, particularly through naked short selling and regular and derivative based synthetic shorting. By implication, the article recites the sheer embarrassing ineffectiveness of our regulators, who are engaged in a pattern of systematic conflicts of interest with revolving doors that are a major disgrace to our own government.
These Defendants, acting in the course and scope of their employment by the United States of America as duly authorized Commissioners of the Securities and Exchange Commission, a federal agency, through their acts and omissions knowingly, consciously, wrongly, without compensation and without due process of law have effected a taking of property from each of the named Plaintiffs and all who are similarly situated.
PDF (18 Pages): CMKM Lawsuit Against the SEC 9 January 2010
Sanity Check via Wayback, 15 July 2008
What we are seeing is the US markets relentlessly melting down, as even the bulge bracket firms, and the “too big to fail” entities, are victimized by unbridled, unconstrained naked short selling. Exactly as used to be the case in the 1920’s. Exactly in the manner that resulted in the SEC being formed, and the uptick rule (discarded just a few short months back as an anachronism), and requirements for timely clearing and delivery. All of which the SEC has basically ignored, very deliberately.
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.”
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.
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.
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.