Article: How phantom shares on Wall Street threaten U.S. companies and investors

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How phantom shares on Wall Street threaten U.S. companies and investors

Lucy Komisar

The Komisar Scoop, 26 March 2020

As stocks are in free fall, a scam run by the big banks/broker-dealers for the benefit of themselves and their hedge fund clients threatens to worsen the situation of large and small American companies and investors.

It’s when the bank/broker-dealers buy stocks, pocket the money and fail to deliver to clients the shares they are supposed to settle through the national stock clearing house. In another industry that might be called embezzling.

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Article: Part 6 Illegal Naked Shorting: The SEC’s Regulation SHO is Intended to Prevent Illegal Naked Shorting, But is Ineffective

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Part 6 Illegal Naked Shorting: The SEC’s Regulation SHO is Intended to Prevent Illegal Naked Shorting, But is Ineffective

Larry Smith

Smith On Stock, 22 May 2019

In previous blogs I traced the history of stock trading from the 1960s when stock certificates and cash were physically exchanged to settle trades to the paper free, totally electronic system that exists today. Instead of owning stock certificates, we now own digital entries located somewhere in the vaults of the inscrutable Depository Trust and Clearing Corporation (DTCC). This electronic system is absolutely critical to the functioning of our capital markets and our strong economic system. However, the DTCC and the prime brokers who own it have made the clearing and settlement system virtually non-transparent. This enables the routine manipulation of primarily but not exclusively, small stocks through illegal naked shorting.

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Article: David Dayen Series on Naked Short Selling

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David Dayen, a persistent chronicler of how oligarchs exploit the financial system to enrich themselves at the expense of others, writes about Chris DiIorio, a stock analyst who for 10 years has obsessively investigated how exactly he came to lose $1 million on one penny stock. A remarkable story ensues.  All article in The Intercept.

The Money is Gone (22 September 2016)

Big Players, Little Stocks, and Naked Shorts (23 September 2016)

Naked Shorts Can’t Stay Naked Forever (24 September 2016)

Calling the SEC (25 September 2016)

Turning Up Like A Bad Penny (26 September 2016)

Were Paper Losses the Goal All Along (27 September 2016)

The Half Billion Glitch (28 September 2016)

 

 

Article: Is The Federal Reserve Using Money-Laundering Techniques To Cleanse Banks’ Balance Sheets?

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Is The Federal Reserve Using Money-Laundering Techniques To Cleanse Banks’ Balance Sheets?

Lawrence Hunter

Forbes, 29 October  2012

Drug lords, terrorists and shadow-government operators (but I repeat myself) use third party intermediaries to cool off and sanitize hot, dirty, and therefore useless money into pristine-clean and productive money that can be used in legitimate commerce. It’s called money laundering.

Characters operating in the shadows also use a form of reverse money laundering to defile clean money or redirect dirty money while masquerading its source so it can be siphoned away, re-channeled and put to use financing illicit activities such as terrorism and off-the-books, shadow-government operations (but I repeat myself, again) that Congress won’t authorize or fund. Think of it as repatriating dirty money and expatriating clean money.

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Article: SEC under Schapiro struggles to turn around amid political, financial head winds

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SEC under Schapiro struggles to turn around amid political, financial head winds

David S. Hilzenrath

Washington Post, 7 October 2011

Mary L. Schapiro took over a discredited SEC in early 2009 and vowed to rebuild it.

She promised tougher enforcement — “war without quarter” on financial fraud. Modernized rules to keep up with Wall Street. And a new, more effective organization.

Her tenure at the federal agency responsible for protecting investors and policing markets offers a Washington lesson: Even when epic crises create a sense of urgency, it is tough to tighten the reins on powerful industries. Dramatic results can prove elusive.

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Article: Whistle. Then Worry and Wait.

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Whistle. Then Worry and Wait.

Edward Wyatt

New York Times, 9 October 2010

Sitting in a Minneapolis mansion and listening to a charismatic investment manager describe a currency trading system that kept earning handsome returns year after year, Arthur F. Schlobohm IV was certain he had stumbled onto a Ponzi scheme.

A longtime trader who started running tickets on the floor of the New York Stock Exchange as a teenager, Mr. Schlobohm, known as Ty, knew that Minneapolis, his home for nine years, was too small a town for a $4.4 billion investment fund to have escaped his notice.

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Web: Byrne: SEC Enforcement Division Takes Orders From Short-Sellers

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Byrne: SEC Enforcement Division Takes Orders From Short-Sellers

Gary Weiss

gary-weiss.com, 19 September 2009

Patrick Byrne has a new conspiracy theory to explain why his corporate crime petri dish Overstock.com is under investigation by the SEC. Seems that short sellers, in addition to having a fax machine at CNBC, also have a hotline to the SEC, in which they bark out orders to start investigations against innocent CEOs like Byrne.

Byrne made that comment on Fox Business News, where he is trotted out as an “internet retailing expert,” no doubt because of the skill at which he has eased Overstock into negative shareholder equity. He was brought out this time for a ritual denunciation of new bank compensation rules.

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Article: Watchdog Alleges Insider Trading At SEC

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Watchdog Alleges Insider Trading At SEC

Liz Moyer

Forbes, 15 May 2009

The Securities and Exchange Commission is back under fire after the agency’s own watchdog alleged suspicious trading activity and possible insider trading by two staff attorneys.

SEC Inspector General David Kotz says he’s referred his findings to the Department of Justice, which he says is investigating along with the Federal Bureau of Investigation. As is its standard practice, the DOJ would neither confirm nor deny they are looking into the matter.

The report, dated March 3, details a two-year investigation of two SEC enforcement staff attorneys who may have traded on non-public information or engaging in insider trading in stocks of companies under investigation by the agency.

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Article: Our Watchdogs and the Financial Scandal of the Century

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Our Watchdogs and the Financial Scandal of the Century

Mark Mitchell

Deep Capture, 3 April 2009

“Accountability – Integrity – Reliability”

That’s the motto of the Government Accountability Office, and it almost makes you believe that there really is a functioning watchdog – somebody, aside from us Internet loons, to investigate and report on the incompetence and malfeasance that pervade our public institutions.

Certainly, there were high hopes when the GAO began investigating the Securities and Exchange Commission’s oversight of the Depository Trust and Clearing Corporation (DTCC), a black box Wall Street outfit that is at the center of one of the great financial scandals of our era.

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