Foreign Collusion, Naked Shorting (Counterfeiting) & Money Laundering — All Illicit Wealth
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.
The Story of Deep Capture
By Mark Mitchell, with reporting by the Deep Capture Team
The Columbia School of Journalism is our nation’s finest. They grant the Pulitzer Prize, and their journal, The Columbia Journalism Review, is the profession’s gold standard. CJR reporters are high priests of a decaying temple, tending a flame in a land going dark. In 2006 a CJR editor (a seasoned journalist formerly with Time magazine in Asia, The Wall Street Journal Europe, and The Far Eastern Economic Review) called me to discuss suspicions he was forming about the US financial media. I gave him leads but warned, “Chasing this will take you down a rabbit hole with no bottom.” For months he pursued his story against pressure and threats he once described as, “something out of a Hollywood B movie, but unlike the movies, the evil corporations fighting the journalist are not thugs burying toxic waste, they are Wall Street and the financial media itself.” His exposé reveals a circle of corruption enclosing venerable Wall Street banks, shady offshore financiers, and suspiciously compliant reporters at The Wall Street Journal, Fortune, CNBC, and The New York Times. If you ever wonder how reporters react when a journalist investigates them (answer: like white-collar crooks they dodge interviews, lie, and hide behind lawyers), or if financial corruption interests you, then this is for you. It makes Grisham read like a book of bedtime stories, and exposes a scandal that may make Enron look like an afternoon tea.
Introduction By Patrick M. Byrne, Deep Capture Reporter
PDF (69 Pages): Deep Capture Story
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
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.
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.
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.
Roddy Boyd
New York Post cited by RGM Communications via Wayback, 16 February 2006
Two state securities regulators have issued subpoenas to get at the trading records of Wall Street’s largest firms in a quest to stamp out the controversial practice of naked short-selling, sources said.
Naked shorting — the tactic of selling shares short without properly borrowing them first in order to bet on a stock’s fall — has been a concern of state securities regulators during the past year.
Stockgate Report: Investrend Article on Targeting of DTCC by NASAA members for Subpoenas
Bud Burrell
FinancialWire cited by Sanity Check via Wayback, 14 February 2006
FinancialWire has learned from a highly-placed informed source that the Depository Trust and Clearing Corp. appears to be a target of an enforcement action by the multi-state task force formed by the North American Securities Administrators Association.
If so, this would explain a recent flurry of posts and press releases by the DTCC denying any complicity in the exploding national illegal manipulative trading scandal known as StockGate, embroiling Netflix (NASDAQ: NFLX), Overstock (NASDAQ: OSTK), Krispy Kreme Donuts (NYSE: KKD) and Martha Stewart OmniLiving (NYSE: MSO), as well as provide a measure of validation to rampant rumors that the clearing house, jointly owned by the NASD and the New York Stock Exchange has received subpoenas.
Steven Syre
The Boston Globe cited by RGM Communications via Wayback, 31 January 2006
American Business Financial Services Inc. was a big business with serious problems long before it ended up on the bankruptcy liquidation scrap heap. The company’s line on its own slow-motion demise relied heavily on stock market conspiracy theories.
The Philadelphia subprime lender has filed several lawsuits claiming illegal market manipulation by investors trying to profit on the company’s woes. The latest version was filed last month in federal court in Delaware by its bankruptcy trustee against Boston Partners Asset Management.
DTCC Chief Spokesperson Denies Existence of Lawsuit
Financial Wire cited by RGM Communications via Wayback, 11 May 2004
FinancialWire received a confidential email between a reporter and Stuart Z. Goldstein, Managing Director of Corporate Communications for the Depository Trust and Clearing Corp. in which Goldstein was represented as denying that a lawsuit filed by Nanopierce Technologies (OTCBB: NPCT) exists.
The chief spokesperson for the DTCC, whose board of directors represent a who’s who of financial entities, including Lehman Brothers (NYSE: LEH), Citigroup / Solomon Smith Barney’s Corporate Investment Bank (NYSE: C), and Morgan Stanley (NYSE: MWD), was quoted as stating that the “lawsuit” did not exist and was simply “charges being leveled by internet crackpots.”
SEC’s IPO probe expands to include Morgan Stanley
Investment Executive, 26 February 2003
“The Securities and Exchange Commission, expanding a probe into alleged IPO abuses, has signaled to Morgan Stanley that it may file civil charges alleging the securities firm doled out shares to investors based partly on their commitments to buy additional stock after trading began, people familiar with the matter say,” writes Randall Smith in today’s Wall Street Journal.
“The SEC staff has informally indicated to Morgan Stanley that it plans to send a so-called Wells notice notifying the firm of the planned charges, the people said. The development suggests the SEC’s investigation into such “laddering” of stock sold in initial public offerings could be heating up. The probe is one of the last major regulatory crackdowns on Wall Street excesses that characterized the 1990s stock-market bubble.”
Foul Play Among the UAL Shorts?
Gene Marcial
Bloomberg, 8 October 2002
The shorts have crowded in on UAL in a big way, helping to push the parent of financially troubled United Airlines much closer to bankruptcy. The stock has nosedived from $20 a year ago to $2 on Oct. 8. Right after US Airways filed for bankruptcy protection on Aug. 11, UAL (UAL ) announced that it, too, might have to resort to Chapter 11 bankruptcy protection. UAL shares were then trading at $4.
30 Firms to Pay $900 Million In Investor Suit
David Barboza
New York Times, 25 December 1997
Thirty brokerage firms, including some of the biggest and most trusted names on Wall Street, agreed yesterday to pay about $900 million to end a civil suit contending they schemed with one another for years to fix prices on the Nasdaq stock market.
Lawyers for the plaintiffs in the class-action lawsuit, which represented tens of thousands of investors, called it the biggest settlement ever of a price-fixing lawsuit.
THE DOLLAR HAS NO INTRINSIC VALUE : DO YOUR ASSETS?
