Law360 (April 14, 2021, 9:05 PM EDT) — Ponzi king Bernie Madoff’s jailhouse death was all but guaranteed the moment he was sentenced. Before a packed federal courtroom in Manhattan — after the lawyers, victims and Madoff himself had spoken — Judge Denny Chin decided what punishment fit the financial crime of the century: 150 years, the maximum sentence available.
Michael Roddan and Jonathan Shapiro, 08 March 2021
Sophisticated British criminals exploited vulnerabilities in Australia’s search engine and cryptocurrency infrastructure to dupe small investors, lured by the promise of high-yield funds badged by some of the finance world’s most trusted brands.
The problem with the modern economy, Byrne says, is that it rests on the whims of our government and our big banks, that each has the power to create money that’s backed by nothing but themselves. Thanks to what’s called fractional reserve banking, a bank can take in $10 in deposits, but then loan out $100. The government can make more dollars at any time, instantly reducing the currency’s value. Eventually, he says, laying down a classic libertarian metaphor, this “magic money tree” will come crashing down.
“Second, Mr. Cohodes has never engaged in naked short selling (that is, he trades through brokers who find shares for him to borrow and he pays high interest fees to maintain his short positions). He was never part of any concerted illegal campaign to target MiMedx; his actions were his own.”
Comment: The above statement by a lawyer is easily challenged in court with evidence. Mr. Cohodes appears to be panicking. This time around it will cost him 10X to 100X what he was forced to pay Patrick Byrne. We have it all. The matter of compromised judges and DOJ and SCC as a RICO organization are also on the table. DTCC will not survive a Special Prosecutor.
A New Jersey federal judge on Tuesday dashed a securities trader’s hopes of receiving home confinement, sentencing him to 18 months behind bars based on his plea agreement with the government over charges he orchestrated a market manipulation scheme that reaped more than $17 million in illicit profits.
Robert J. Shapiro (born 1953) is the cofounder and chairman of Sonecon, LLC, a United States private consultancy for economic and security-related issues that has built a reputation on a range of policy matters, including climate change, intellectual property, securities fraud, healthcare reform, demographics, the resilience of the electric grid to cyberattacks, and blockchain technologies.
Beyond Dr. Shapiro’s responsibilities and leadership at Sonecon, he is also currently a Senior Fellow of the McDonough School of Business at Georgetown University, a board member of the Medici Venture Fund, and a member of the advisory boards of Gilead Sciences and Cote Capital.
Naked short selling, or naked shorting, is the practice of short-selling a tradable asset of any kind without first borrowing the security or ensuring that the security can be borrowed, as is conventionally done in a short sale. When the seller does not obtain the shares within the required time frame, the result is known as a “failure to deliver” (“FTD”). The transaction generally remains open until the shares are acquired by the seller, or the seller’s broker settles the trade.
Years before the financial collapse of 2008, Greenwich writer-director Kristina Leigh Copeland was digging into Wall Street irregularities that she believed could have a devastating impact on the economy.
Along the way, however, her fictional screenplay, “Blue Chip,” evolved into the new documentary “Wall Street Conspiracy,” which Copeland sees as the first in a series of muckraking nonfiction movies about issues with global impact.
This week, an important online news service released an article that should send shockwaves into our public markets. In very curt form, the article chronicles the many abuses of U.S. public companies by short selling manipulators, particularly through naked short selling and regular and derivative based synthetic shorting. By implication, the article recites the sheer embarrassing ineffectiveness of our regulators, who are engaged in a pattern of systematic conflicts of interest with revolving doors that are a major disgrace to our own government.
This article explores the origins of naked short-selling litigation; considers
the failures of significant naked short-selling lawsuits in federal court;
surveys the obstacles erected collectively by constitutional standing requirements, the Federal Rules of Civil Procedure, the Private Securities Litigation Reform Act, brokerage firms, death spiral financiers, and the Depository Trust and Clearing Corporation; examines the efficacy of Regulation SHO, SEC rule 10b-21, and new FINRA rules; discusses recent state legislation and state court litigation; and identifies non-litigation options to curb naked short-selling. Ultimately, this article seeks to answer the question: If manipulative naked short-selling is more than a mythological scapegoat for
small cap failure, what remedies are, or should be, available?
Recent concerns about short-selling have culminated in a regulatory flurry of emergency orders and amendments. What should be of concern, however, is not short-selling per se: As its devotees frequently remind us, short-selling is a vital and legitimate market activity. What should be of concern are specific types of stock manipulation that cloak themselves within legitimate activities such as shorting, and which, in one way or another, rely upon loopholes in our nation’s system of stock settlement.
“Settlement” is the moment in a stock trade when the seller receives money and the buyer receives stock. Our settlement system has gaping loopholes that allow sellers to sell shares but fail to deliver them. In such cases, the system creates IOUs for shares, and lets those “stock IOUs” circulate in the expectation the seller will soon correct his error. This is harmless–as long as the IOUs are inadvertent, temporary and few.