Foreign Collusion, Naked Shorting (Counterfeiting) & Money Laundering — All Illicit Wealth
Press Release
December 8, 2009 at 5:34 PM EST
Rocker Pays $5 Million to Overstock.com to Settle Lawsuit
‘A fine victory for Overstock, a triumph for the cause of cleaning up US capital markets’ says CEO Patrick Byrne.
Full text below the fold.
Continue reading “Press Release: Rocker Pays $5 Million to Overstock.com to Settle Lawsuit”
Major Investor in Russia Sees Wide Fraud Scheme
Andrew E. Kramer, 31 July 2009
William F. Browder, once the largest foreign investor in the Russian stock market, filed court documents in New York this week contending that other Western investors in Russia had colluded with the authorities to steal hundreds of millions of dollars through tax refunds and then laundered the money through New York banks. Continue reading “Article: Major Investor in Russia Sees Wide Fraud Scheme”
Fed Defies Transparency Aim in Refusal to Disclose
Mark Pittman, Bob Ivry, Alison Fitzgerald
Bloomberg cited by Yonkers Tribune
The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.
Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn’t require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.
Did It Help to Curb Short Sales?
Floyd Norris
The New York Times, 12 August 2008
A rule that made it harder to short some financial stocks and that may have helped raise prices and reduce the volume of shorting in those stocks expired Tuesday, as the Securities and Exchange Commission considers whether to tighten the rules on all short selling.
It may be a coincidence, but the announcement of the rule on July 15 coincided with the bottom of the bear market for financial stocks, which leaped that day and are now well above where they were. And the final day proved to be a very bad day for those shares.
Bringing Down Bear Began as $1.7 Million of Options
Gary Matsumoto
Bloomberg cited by RGM Communications via Wayback, 11 August 2008
On March 11, the day the Federal Reserve attempted to shore up confidence in the credit markets with a $200 billion lending program that for the first time monetized Wall Street’s devalued collateral, somebody else decided Bear Stearns Cos. was going to collapse.
In a gambit with such low odds of success that traders question its legitimacy, someone wagered $1.7 million that Bear Stearns shares would suffer an unprecedented decline within days. Options specialists are convinced that the buyer, or buyers, made a concerted effort to drive the fifth-biggest U.S. securities firm out of business and, in the process, reap a profit of more than $270 million.
Bryan Burrough
Vanity Fair, 30 June 2008
On Monday, March 10, the rumor started: Bear Stearns was having liquidity problems. In fact, the maverick investment bank had around $18 billion in cash reserves. But soon the speculation created its own reality, and the race was on to keep Bear’s crisis from ravaging Wall Street. With the blow-by-blow from insiders, Bryan Burrough follows the players—Bear’s stunned executives, trigger-happy reporters at CNBC, a nervous Fed, a shadowy group of short-sellers—in what some believe was the greatest financial scandal in history.
The ‘Phantom Shares’ Menace
John W. Welborn
Securities & Exchange, 24 April 2008
In 1985, the National Association of Securities Dealers (nasd) commissioned Irving M. Pollack, a securities law expert and former Securities and Exchange commissioner, to conduct a comprehensive review of short selling in nasdaq securities. The nasd sought to determine what, if any, additional short selling regulation was needed for the nasdaq market. The result was the now-famous “Pollack Study,” which described the short selling landscape of the day and made important recommendations regarding the disclosure, reporting, and settlement of short sales.
PDF (10 pages): The ‘Phantom Shares’ Menace
Overstock attempts to uncover malicious naked shorts
Keith Hahn
Dealbreaker, 25 April 2007
Patrick Byrne, the CEO of Overstock.com, is seeking $3.5bn in damages from 10 prime brokers for intentionally manipulating Overstock’s share price through naked shorting. The big names charged are Bear Stearns, Citigroup, Credit Suisse, Goldman Sachs, Merrill Lynch, and Morgan Stanley.
Article: SEC is Looking at Stock Trading
Jenny Anderson
New York Times, 6 February 2007
The Securities and Exchange Commission has begun a broad examination into whether Wall Street bank employees are leaking information about big trades to favored clients, like hedge funds, in an effort to curry favor with those clients, executives at Wall Street banks said.
The inquiry, these people said, seems aimed at determining how pervasive insider trading, or the illegal use of market-moving nonpublic information, may be on Wall Street. Knowledge about a large trade, like the sale of a big block of stock by the mutual fund giant Fidelity, would tell a trader which way the stock would move.
Naked Short Victim Strikes Back
Liz Moyer
Forbes, 2 February 2007
Overstock.com filed a $3.5 billion lawsuit in California state court Friday accusing 10 of the largest U.S. securities firms of participating in a “massive, illegal stock market manipulation scheme” to distort its stock.
Liz Moyer
Forbes, 13 September 2006
The U.S. Securities and Exchange Commission has received a deluge of requests to amend short-selling rules it enacted just two years ago as the New York Stock Exchange continues its efforts to enforce existing regulations.
JPMorgan Chase has become the fifth bank to be censured and fined by the NYSE’s regulatory division for violations of trading rules meant to curb abusive short-selling.
NYSE fines five firms for rule violations
James Langton
Investment Executive, 13 September 2006
NYSE Regulation announced that it has disciplined five firms for a variety of rule violations.
J.P. Morgan Securities Inc. was disciplined for violation of SEC rules on short sales, NYSE order rules and supervisory violations. It consented without admitting or denying guilt to findings of operational deficiencies concerning Regulation SHO, violating NYSE order rules, and books and records and supervisory violations.
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.
Liz Moyer
Forbes cited by RGM Communications via Wayback, 28 July 2006
Toronto-based Fairfax Financial Holdings filed a $5 billion lawsuit against SAC Capital, Rocker Partners and a number of other hedge funds, claiming they manipulated the insurance company’s stock, shearing its market cap by one-third.
Earlier this week, the regulatory arm of NYSE Group, fined Daiwa Securities America, Goldman Sachs Execution & Clearing, Credit Suisse Securities, and Citigroup Global Markets $1.25 million for violations of Regulation SHO–a rule put in place in January 2005 to clamp down on abuses–related to how they handle and monitor short-sale transactions by hedge funds and other clients.
Lawsuits Accuse “Prime Brokers” of Securities Fraud
Wayne Jett
San Gabriel Valley Tribune cited by RGM Communications via Wayback, 19 July 2006
Two class-action lawsuits filed in Manhattan federal court in April allege fraud by the world’s largest “prime brokers” in securities lending practices.
Goldman Sachs, Bear Stearns, Lehman Brothers, Morgan Stanley, Merrill Lynch, Citigroup, Banc of America Securities, Credit Suisse, Deutsche Bank Securities, UBS Financial and Bank of New York allegedly charge high fees to lend securities for short selling, but fail to deliver the securities sold short by hedge funds.
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