Tag: SEC

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Web: Stockgate Report – Investrend Article on Targeting of DTCC by NASAA members for Subpoenas

Web

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.

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Web: Who Caused the SEC to Enter an Amicus Brief on behalf of DTCC in the Nanopierce Case?

Web

Who Caused the SEC to Enter an Amicus Brief on behalf of DTCC in the Nanopierce Case?

Bud Burrell

Sanity Check via Wayback, 5 February 2006

It was my understanding, and that of many I know, that the SEC had told Counsel for the victims a year ago in a special purpose meeting, that they would NOT be filing an Amicus brief for DTCC in the matter of Nanopierce.

So what happened to change that position, and Why? Who got to the SEC on this issue, causing a change of mind and position? The only units able to put this kind of pressure on the SEC is either our Congress, or the Senate. So which was it.

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Article: JPMorgan faces $2.2B Fraud Lawsuit over Bonds

Article - Media

JPMorgan faces $2.2B Fraud Lawsuit over Bonds

Reuters cited by RGM Communications via Wayback, 3 February 2006

JPMorgan Chase faces a civil lawsuit accusing the No. 3 U.S. bank of defrauding bond investors and others out of at least $2.2 billion over more than 20 years.

The lawsuit, filed Tuesday with the U.S. District Court in Brooklyn, seeks class-action status.

It accuses New York-based JPMorgan and its predecessors of deleting records for $46.8 billion of bonds that investors had not cashed in, covering up its errors, refusing to pay back bondholders, and collecting fees it did not deserve.

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Web: The Death of a Thousand Cuts

Web

The Death of a Thousand Cuts

Bud Burrell

Sanity Check via Wayback, 2 February 2006

During my undergraduate studies, I read of an historical method of execution known as the Death of a Thousand Cuts. I have come to see that as a metaphor for how guerrilla wars (like ours) are won and lost.

Whether any of us have fully realized it or not, we have been engaged by an insidious enemy whose sole desire was to steal what was not theirs from others they viewed as their inferiors, rather than earn it legitimately. When a person was executed by the infliction of a thousand small cuts, the pain was enormous, eventually killing the subject by shock and loss of blood, but very, very slowly.

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Article: Strategic Delivery Failures in U.S. Equity Markets

Academic

Strategic Delivery Failures in U.S. Equity Markets

Leslie Boni

Journal of Financial Markets, 1 February 2006

Sellers of U.S. equities who have not provided shares by the third day after the transaction are said to have “failed-to-deliver” shares. Using a unique data set of the entire cross-section of U.S. equities, we document the pervasiveness of delivery failures and evidence consistent with the hypothesis that market makers strategically fail to deliver shares when borrowing costs are high. We then show that many firms that allow others to fail to deliver to them are themselves responsible for fails-to-deliver in other stocks. Finally, we discuss the implications of these findings for short-sale constraints, short interest, liquidity, and options listings in the context of the recently adopted SEC Regulation SHO.

PDF (40 pages): Strategic Delivery Failures in U.S. Equity Markets

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Web: Who is responsible for the Current Market Counterfeiting Crisis?

Web

Who is RESPONSIBLE for the Current Market Counterfeiting Crisis?

Bud Burrell

Sanity Check via Wayback, 31 January 2006

Besides transfer agents, our legislature have only one agency of significance that reports directly to them outside the Cabinet system. It is the Securities and Exchange Commission. The power the SEC has is granted it by legislative acts (called laws, not rules) of the Congress and the Senate.

When the SEC fails to discharge its duties authorized to it by Congress, they may fail to discharge a delegated authority, but the responsibility remains squarely on the shoulders of its enabling Branch, the bi-cameral legislature of the US Government. If the responsibility for the performance of agencies under the Executive branch sits on the shoulders of the US President, so does the performance of the SEC, good or bad, go to the credit or discredit of the Legislative Branch. If the SEC doesn’t get the funding it needs to discharge its duties, Congress and the Senate are to blame.

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Release: DTCC Corrects Misrepresentation on Naked Short Selling Litigation

Release

DTCC Corrects Misrepresentation on Naked Short Selling Litigation

27 January 2006

The Depository Trust & Clearing Corporation today announced its intention to correct the continuing misrepresentation being put out by third parties on DTCC and naked short selling litigation.

To date, 14 suits have been brought against DTCC or its subsidiaries involving naked short selling. Of these 14 cases, 9 were either dismissed by the courts or withdrawn by the plaintiffs. In 4 cases, suits were filed, but DTCC and its subsidiaries were never served.

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Web: Criminal Syndicalism a Class A Federal Felony, Viewed at Insurrection and Sedition (that’s Treason for the Non-Law Types)

Web

Criminal Syndicalism a Class A Federal Felony, Viewed at Insurrection and Sedition (that’s Treason for the Non-Law Types)

Bud Burrell

Sanity Check via Wayback, January 18 2006

I was prompted to search Federal Criminal Code for references to how manipulative criminal syndicates were viewed under the Law of the United States. This search led me to two pages in Eustace Mullins’ controversial book, “The World Order”, published in 1985. On page 214, I found that according to his research, prior case law going back to the mid-1800’s viewed “combinations of capitalist and financiers for the purpose of manipulating from a large capital foundation/source to be directly chargeable as “Insurrection and Sedition”. That’s Treason for you non-lawyers out there.

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Web: Rod Young, Eagletech CEO’s Open Letter on the Shorting Scandal, a Classic

Web

Rod Young, Eagletech CEO’s Open Letter on the Shorting Scandal, a Classic

Bud Burrell, Rod Young

Sanity Check via Wayback, 17 January 2006

Today, more than one month later, the records have not been forthcoming as ordered by the court. Instead, as First Deputy General Counsel for the DTCC, I believe you have undertaken a campaign to disseminate misinformation, lies, and half-truths when confronted with facts made public by your detractors.On March 5, 2005 one day after the announcement of the aforementioned court ruling, your interview @dtcc.com, entitled “Naked Short Selling and the Stock Borrow Program”, stated: “One of these companies has been cited for failing to file financial statements since 2001.” Congratulations! You did get one right. On February 15, 2005, the Securities and Exchange Commission deemed it necessary for the protection of investors to institute proceedings pursuant to Section 12(j) of the Securities Exchange Act of 1934 In the Matter of Eagletech Communications, Inc., Respondent.

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Web: Federal Regulators Continue to Deny Scope and Implications of Counterfeiting

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Federal Regulators Continue to Deny Scope and Implications of Counterfeiting

Bud Burrell

Sanity Check via Wayback, 10 January 2006

Over the past three years, Federal Regulators have continued to systematically deny the evidence of the existence of massive fails to deliver from numerous sources, many of which have gotten credible exposure on numerous levels from highly informed parties that these regulators can not dismiss out of hand. The implications are many, but the most serious are those connected to a massive counterfeiting conspiracy, conducted by a very sophisticated coterie of parties who have been affiliated with one another for literally decades through varying sides of the securities industry, both buy and sell side.

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Paper: The Concentration of Undelivered Shares Among Threshold Securities: Prospects of Stock Manipulation Using Naked Short Sales

Paper

The Concentration of Undelivered Shares Among Threshold Securities:
Prospects of Stock Manipulation Using Naked Short Sales

Robert J.  Shapiro

Sonecon, 14 November 2005

American public companies and their shareholders face a significant threat. Last year, researchers determined that naked short sales – short sales in which the shares are credited to buyer, but the short seller fails to borrow and deliver those shares – occur on a large scale, often extending for months at a time. New data now suggest that these “failures to deliver” or “fails” are concentrated in a relative handful of companies. This raises the prospect of naked short sales being used to manipulate some companies’ stock prices. The enormous extent of naked shorting and its likely use in stock manipulation could threaten the integrity of our financial markets and international confidence in them.

PDF (13 pages): The Concentration of Undelivered Shares Among Threshold Securities: Prospects of Stock Manipulation Using Naked Short Sales

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Article: Overgrown Hedges

Article - Media

Overgrown Hedges

Christopher Byron

New York Post cited by RGM Communications via Wayback, 26 September 2005

One of the first things any new chairman of the Securities and Exchange Commission does after getting the job is to clear his throat, put on his best “I mean business” scowl, and announce to the world just how tough he intends to be on the miscreants of Wall Street.

Normally, this harmless ritual lets the man taking on Washington’s most thankless job preen a bit in public before getting smacked to the canvas by a system that basically doesn’t want him to be tough at all.

But these are not normal times — and the one thing this country needs more than anything is a government that knows what it is doing and that deserves to be taken seriously by its citizens.

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Article: Congress Sells America Short

Article - Media

Congress Sells America Short

Mark Faulk

FaulkingTruth.com cited by RGM Communications via Wayback, 20 September 2005

In yet another twist in the stock market scandal known as Stockgate, the Faulking Truth has learned that Senator Richard Shelby (R-AL), Chairman of the Senate Banking Committee, has shelved a planned Senate Subcommittee Hearing investigating the issue. Originally scheduled for February of this year, and then postponed several times, the hearing, which has been advocated by Senator Robert Bennett (R-UT), has been cancelled indefinitely.

According to a reliable source inside of the planned investigation, “The authority and the responsibility to take the necessary steps to deal with the issue of naked short selling lies squarely at the feet of Senator Shelby, and he has chosen not to allow the planned Senate Banking Subcommittee hearing to go forward.” In an earlier interview with the same source, we were told that “Senator Shelby tends to grab things like this for his own purposes, and his own purposes don’t always mesh with what’s best for the public.”

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Article: Faulty Regulator

Article - Media

Faulty Regulator

Christopher Byron

New York Post cited by RGM Communications via Wayback, 27 June 2005

On Thursday the Securities and Exchange Commission’s departing chairman, William Donaldson, will step down from his two-and-a-half year stint as Wall Street’s top regulator, vacating the most thankless and difficult job in the administration to make way for President Bush’s third nominee.

Though Donaldson is widely credited with having been an effective and activist-oriented SEC chairman who — among other things — pursued more high-profile corporate-fraud cases than any chairman before him, he actually initiated only one major SEC fraud probe that has led to litigation against a defendant.

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Article: Short Selling, Death Spiral Convertibles, and the Profitability of Stock Manipulation

Article - Academic

Short Selling, Death Spiral Convertibles, and the Profitability of Stock Manipulation

John D. Finnerty

Fordham University, 31 March 2005

The SEC recently adopted Regulation SHO to tighten restrictions on short selling and curb abusive short sales, including naked shorting masquerading as routine fails to deliver. This paper models market equilibrium when short selling is permitted and contrasts the equilibrium with and without manipulators among the short sellers. I explain how naked short selling can routinely occur within the securities clearing system in the United States and characterize its potentially severe market impact. I show how a recent securities innovation called floating-price convertible securities can resolve the unraveling problem and enable manipulative short selling to intensify.

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THE DOLLAR HAS NO INTRINSIC VALUE : DO YOUR ASSETS?