Letter: Pink Sheets LLC Letter to SEC Regarding Proposed New Regulation SHO

Letter

Pink Sheets LLC Letter to SEC Regarding Proposed New Regulation SHO

9 June 2004

Pink Sheets LLC (“Pink Sheets”) provides the following comments on
proposed new Regulation SHO under the Securities Exchange Act of 1934
(the “Exchange Act”), which would replace Rules 3b-3, 10a-1, and 10a-2.
Pink Sheets is the leading provider of pricing and financial information for the
over-the-counter (OTC) securities markets and, among other things, operates
an Internet-based, real-time quotation service for OTC equities and bonds for
market makers and other broker-dealers registered under the Exchange Act.

PDF (5 pages): Pink Sheets Short Sale Comment

Article: DTCC Chief Spokesperson Denies Existence of Lawsuit

Article - Media

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.”

Access archived page.

Paper: Without a Trace: The Importance of Information in Markets

Paper

Without a Trace: The Importance of Information in Markets

Susanne Trimbath

Milken Institute Working Paper, January  2004

Economists and practitioners alike would agree that information plays an important role in capital markets. But the practical job of gathering, organizing and disseminating information in markets is too often left to chance. This paper dramatizes the difficulties that can occur when that happens by using the high yield market as an example. The transition from rapid expansion in the 1980s to stable growth in the 1990s was not without its informational road-bumps. The main point of the paper is to emphasize the importance of the informational role being played by industry organizations such as the Loan Syndication and Trading Association (LSTA) in the U.S.

PDF (14 pages): Without a Trace: The Importance of Information in Markets

Article: Don’t Force The Shorts To Get Dressed

Article - Media

Don’t Force The Shorts To Get Dressed

Gary Weiss

Business Week cited by RGM Communications via Wayback, 8 December 2003

At a time when the stock market is in a state of chronic schizophrenia, with a year’s worth of gains being chipped away, one corner of the market has withstood the recent travails far better than any other: small-cap stocks. The Russell 2000 Index of such stocks is up 37% so far this year — double the gain in the Standard & Poor’s 500-stock index.

And in October, trading volume in the very smallest stocks, which are listed on the OTC Bulletin Board, climbed 400% over a year ago. Good news — but only up to a point. Regulators have long warned that such stocks are notoriously prone to manipulation and hype.

Access archived page.

Notice: The Depository Trust Company Rulemaking Order Granting Approval of a Proposed Rule Change Concerning Requests for Withdrawal of Certificates by Issuers

Notice

The Depository Trust Company Rulemaking Order Granting Approval of a Proposed Rule Change Concerning Requests for Withdrawal of Certificates by Issuers

Securities and Exchange Commission, 4 June 2003

On February 3, 2003, The Depository Trust Company filed with the Securities and Exchange Commission (“Commission”) and on February 11, 2003, amended proposed rule change SR-DTC-2003-02 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”).1 Notice of the proposal was published in the Federal Register on February 22, 2003.2 Eighty-nine comment letters were received.3 For the reasons discussed below, the Commission is granting approval of the proposed rule change.

Read full notice.

Article: Offshore Banking: The Secret Threat to America (Dissent Magazine)

Article - Media

Offshore Banking: The Secret Threat to America

Lucy Komisar

Dissent Magazine, Spring 2003

In November 1932, deputy Fabien Albertin took the floor of the National Assembly in Paris to denounce tax evasion by eminent French personalities-politicians, judges, industrialists, church dignitaries, and directors of newspapers-who were hiding their money in Switzerland.

“The minister of finance knows very well that for ten years, the concern of all his predecessors has been to track down this fraud . . . ” he declared. “However, till now, the information one has gotten has been extremely vague. When documents arrive, they are formless notebooks in which holders of accounts are represented only as numbers. Employees of the banks don’t know the names of account holders. These names are known only to the director of the bank, who the clients forbid to correspond with them, so anxious are they to preserve anonymity.”

Read full article.

Article: SEC’s IPO probe expands to include Morgan Stanley

Article - Media

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.”

Read full article.

Paper: High Yield Financing and Efficiency-Enhancing Takeovers

Paper

High Yield Financing and Efficiency-Enhancing Takeovers

Susanne Trimbath

Milken Institute Policy Brief No. 22, 27 November 2000

This study analyzes the determinants of the risk of takeover from 1981 to 1997 based on a sample of 896 Fortune 500 firms using sophisticated methodology. The measure of firm efficiency includes both production costs and overhead expenses. If relatively inefficient firms are chosen as the targets in takeovers and the new owners reduce the costs of these inefficiencies, then the potential for gains from takeovers for the US economy exists. Because firm-level costs are adjusted for the industry median, the study is able to capture the inefficiency implications of firms where it is clear that other firms in the same general product line are better controlling their costs. Indeed, high total cost per unit of revenue is a powerful determinant of the risk of takeover throughout the period under study. The impact of size on the risk of takeover, however, changed across time.

PDF (29 pages): High Yield Financing and Efficiency-Enhancing Takeovers

Article: N.Y. Grand Jury Probes Stock Loan Practices

Article - Media

N.Y. Grand Jury Probes Stock Loan Practices

Steve Coll and David Vise

Washington Post, 21 July 1989

NEW YORK, JULY 20 — The Manhattan U.S. attorney is conducting a criminal investigation of Wall Street’s lucrative securities lending business, focusing on an official of Shearson Lehman Hutton Inc., according to documents and sources familiar with the case.

Subpoenas issued as part of the grand jury investigation, while not stating the precise target of the probe, have requested witnesses to provide records about investments, transactions and accounts involving Dennis Palmeri, who supervises all of Shearson’s stock loan operations.

Read full article.