Extend the story. That’s how scams usually stay alive. A Press Release. A law suit. Those are the easiest ways to keep a story alive. They give the scammers something to point to and say”see, I told you so. It’sa real issue”. In reality anyone can put out a press release or file a law suit. The fact that they are thereis what matters. Whether or not they have any basis is usually meaningless.
Another way to keep a scam alive is to get a politician involved. For some reason, rather than thinking it taints a situation, as I would, some seem to think it makes a scam stronger.
I dont know what it is about Utah Senators, but they always seem to be victimized to extend scams. In this case, my email inbox, and the blog comments, are being filled with “See I told you so. It’s real because Sen. Bennett of Utah says its real.”
Here are the comments from Sen Bennet as referenced in Dow Jones Newswires.
Donaldson fielded complaints from Sen. Robert Bennett, R-Utah, who said new SEC rules to combat short-selling abuses aren’t working. Short-selling, which involves the sale of borrowed stock, is legal, the SEC chief noted. But Bennett said it appears the SEC has failed to stop abusive “naked” short sales, in which sellers don’t borrow stock and have no intention of borrowing it. He also raised concerns about stock-option accounting.
Call me a cynic, but is it just a coincedence that Sen Bennett and Overstock.com’s resident Naked Short Crusader CEO Patrick Byrne are all officed in the same city and state?
I won’t jump to any conclusions, I will let the facts come out. I will however add that just because a Senator asks a question, particularly a Senator from Utah, doesn’t give the topic any validity.
As I said above, to me it makes the argument more suspect.The smell gets worse. The harder someone tries to convince me the sky is falling down, the more I smell a scam. The Naked Short Crusaders are trying way to hard to convince me and anyone who will listen. The volume of “if you were only on our side, we would have a voice” emails is way too loud.
My scamdar is pretty good, and its vibrating loud and clear on this issue.
The good news is, that where there is scamming going on, there is money to be made on the other side. I thinkI will start in Utah to look for companies that letworrying about Naked Shorts take time away from running their businesses.
Get out of here you NCANS frauds,we are well aware of your lies from ragingbull’s jagh and other fraud tout boards claiming ‘naked shorting’ to conceal pump and dump and overseas money laundering.If the SEC were awake your fraudulent securities psyops would have been closed long ago and your master Janmes Dale Davidson(O’Brien,dirtydirtdeeds,etc.) would have been disgorged of all his offshore accounts and put in jail where he belongs.
However we know Mr.Davidson is a Beltway man an insider fraud cynically using his Washington,D.C. connection as founder of National Taxpayers Union etc. to do his ‘dirty deeds’.
NCANS IS NAANSS and you can read of one defrauided individual who pointed out the use of Davidson’s ‘naked short scam’ for pump and dump fraud and money launderinng long ago.Go back to yahoo’s nfi or ostk board and tout for the scamster Patrick Byrne who has shown how low he is willing to go by aligning himself with you skkkum.
BY THE WAY I LOST 100% OF MY ‘INVESTMENT’ IN ENDOVASC SCAM FROM JAMES DALE DAVIDSON’S ‘NAANSS’ SKKKAM.INCLUDING THE ADDED ANGLE OF THE SCAM THAT CONNED INVESTORS AFTER THE PUMP AND DUMP TO BUY ‘CERTS’ FROM THAT FRAUDULENT ‘TRANSFER AGENT’ TO THE OFFSHORES,ALEXANDER WALKER,AND HIS CRIMINAL NEVADA AGENCY AND TRUST CO.. I NOTED YOU WERE ALSO ADDING THE ‘CERT’ ANGLE TO YOUR NEW NAKED SHORT SCAM.YOU SCUM.
And to show you were exposed long ago here’s the comment re sho and complaint re naans or ‘National Association Against Naked Short Selling’.NCANS IS NAANS:
http://www.sec.gov/rules/proposed/s72303/tryals121603.htm
Comment by Tony Ryals -
I suspect there is more going on than meets the eye. If I was running a company that was being hit by naked short selling, then I would have the company start buying all of those shares that are being sold. Then demand production of the shares. Those naked short sellers would be driven out of business and possibly into jail when the settlements don’t match. Further, if I’m not mistaken, doesn’t DTC or whoever it is, if the stock isn’t delivered, liable for refund of the price paid for the stock if it wasn’t delivered within the 3-day period?
Or even better, since the company’s stock is falling it’s attractive for the company to start buying its stock, which also should make the problem worse for those doing naked short sales, because you can’t prop down a stock forever if you can’t get settlement of your short sales.
Of course if I was going to go that way I’d find out what the rules are regarding the requirement for settlements to make sure the depository company is liable if they don’t get settlement within 3 days, or whatever it is.
From what I remember hearing back in the 1960s and 1970s, Seems like whenever companies tried this sort of thing – naked short selling – against companies having real assets, the naked short sellers ended losing their shirts big time because they could not cover their sales and the stock price went up drastically as those who had the stock refused to sell, making it impossible to cover the shorts until the price rose enough to make a big profit for those who had the shares necessary to allow the short sellers to clear settlement.
Sounds like it’s a non-issue except with companies with other things of a more serious issue, like lack of real assets.
I also note that it sounds like a number of people here read what Mr. Cuban had to say and misunderstood him.
Comment by Paul Robinson -
2 wrongs don’t make a right apparently wasn’t taught in every household. Apparently naked short selling is OK because the company did death spiral financing first or some other act deemed to be appropriately bad to be naked shorted. hmmmmm. I won’t waste my and your time with all the obvious analogies we could draw from that in our everyday life. Oh what the heck, cannot resist. George Bush Sr. lies to the american public, re: “read my lips no new taxes”. Law says it’s illegal to slap the sh*t out of him when I see him. However, many posters here believe that since he lied first, I can break the law to punish him… he earned it?
Must be great to live in that world.
Comment by David Booker -
The dwjtv URL of the NCANS video they must have produced,(and that I posted above), was removed from their website. But the website of the company itself,at least,is up and dirtydirtydeeds,’O’Brien’,or whoever,has now put it on ‘ncans.net’ website.
http://www.dwjtv.com
This link below should go to the ncans video:
tinyurl. com/6l3z7
I decided to add these comments from dirtydirtydeeds and larry_walterbird from the yahoo nfi board.As it is their own writing it speaks for itself.Personally,the surprise for me was that Mary Campbell of the video who claims to be an investor who lost everything to ‘naked shorting’,while having a brain damaged relative to care for,is in fact Mary
Helburn of NCANS fame who wrote the letter to the editor suggesting the SEC employees should commit mass suicide a la disgraced ‘japanese’,(in her mind),and on and on.
I wish this were all just a nightmare.Oh what a tangled web we weave,can’t say it enough.
Video still being viewed constantly
by: dirtydirtydeeds (43/M/Cyberspace)
Long-Term Sentiment: Strong Buy 03/26/05 11:05 am
Msg: 285784 of 285894
By all kinds of folks, apparently.
The server is working overtime. That’s why I had to get a high speed server to host it.
You note that the bashers are going frigging nuts over it? They don’t like the video. Not one bit. I don’t blame them.
They attempt to paint it as filled with falsehoods. There aren’t any. The names used by all the participants are legal names. Except my pseudonym, and that is disclosed. Especially interesting to me is that membership in NCANS is now considered to be something bad, or that needs to be disclosed to one and all. How does the turd know that it wasn’t and just wound up on the cutting room floor due to time constraints? He doesn’t. He’s just trying to discredit it.
I’m off to my first plane today, but I encourage eveyone to post the link early and often – maybe the link to the blog where there’s commentary as well as the link –
tinyurl. com/6l3z7
To the Sanity Check blog and the offending video.
Drives the bashers frigging nuts. Wonder why that is?
(yahoo nfi board)
Re: DDD’s Video – Very Impressive
by: larry_walterbyrd (100/M) 03/25/05 04:30 pm
Msg: 285497 of 285912
Of course your propaganda piece was selling something. Don’t act stupid “Bob”.
Does an ad for Parkay tell you to send them money? Ask you to run down right now and buy some butter substitute?
Of course not, because selling Parkay in a commericial usually is trying to sell an idea (Parkay is like butter, yum, yum, you’ll like it) as opposed to simply a crass request for money.
An infomercial is a lengthy ad disguised to be a regular TV show. Your propaganda piece obviously isn’t an infomercial but it does share the characteristic of decepitevly appearing to be a news piece while actually having been produced by Herr “DirtyDirty” Goebbel’s propaganda team.
What you are selling is an image, dirty naked short sellers destroying the poor idiot investors of the world like Mary Campbell Helburn.
If protecting investors had been the goal it would have been much more useful to warn investors not to fall into the trap that Mary Campbell Helburn did buying too much of a single stock that was heavily pumped by dirtydirty stock promoters.
Did they really raise your voice “Bob”? It sounded pretty natural, next time have them garble it like they do when one of those dirtydirty Mafia informants gets interviewed.
For your next production you’ll also want to have Patrick drop the Steve Jobs/Steven Segal look. He looks like a giant dork stuck in some freak suit. They just weren’t the right closes for a large guy like Patrick.
Posted as a reply to: Msg 285473 by dirtydirtydeeds
Re: Mary Campbell Helburn
by: larry_walterbyrd (100/M) 03/25/05 03:59 pm
Msg: 285474 of 285909
Why would Mary use “Mary Helburn” here and on the dirtydirty website and “Mary Campbell” on the video?
That seems deceptive.
But then again being deceptive is par for the course with dirtydirty people.
Posted as a reply to: Msg 285467 by putthegeniebackinthebottle
Why the deception Mary?
by: larry_walterbyrd (100/M) 03/26/05 04:30 pm
Msg: 285910 of 285918
Why did you alter your name in the video?
Why did you pretend to just be some average Jane instead of disclosing that you were associated with NCANSS and actually played a part in the production of the infomercial?
Why didn’t you disclose that it was your own mismanagement of Matthew the houseplant’s fund that led to it getting cut in half?
Why didn’t you disclose that you actually don’t have the slightest bit of evidence to support your false claim that illegal naked shorting led to your portfolio losing 1/2 it’s value?
Why didn’t you disclose your personal relationship with “Bob”?
Posted as a reply to: Msg 285892 by mhelburn
Comment by Tony Ryals -
can I SALE my neighbors tools just because I borrowed them first? Naked shorting is STEALING!
Comment by C Griffith -
Name calling, and defamation, well tony you have brought this blog to an all time low. Do you read what you post? If you did you would…..not post…..
Comment by Troy Wine -
dirtydirtydeeds or ‘O’Brien’ responds on yahoo’s nfi board to my comments re the ‘securites psyops’ or naked shorting propaganda film whose link I posted above.:
Re: OSTK’s Byrne and ‘O’Brien’ ncans pro
By: dirtydirtydeeds
Date: 03/25/05 02:21 am
Huh.
So you feel that the true account of someone who got their portfolio cut in half by naked short selling is a propaganda film?
And I suppose that the folks from Georgetown and congress are also engaged in some sort of propaganda?
What are they selling, by the way?
I mean, other than enforce the law – what’s the scam?
Oh, that’s right, there isn’t one.
But don’t let that stop you – I mean, you’ve been paid well to clog every board you can find with your drivel about NAAANSS seeming somewhat like NCANS.
BTW, I was sent something that looked surprisingly like that from a station in Oaklahoma today in my email – I guess they’re in on it all, huh?
Here’s the facts: The news piece you are referring to is 100% accurate, unbiased reporting for which you and your cronies, involved no doubt in the illegal naked shortselling it exposes, seem to be hemmoraging. What’s next? Another Carol Remond hatchet job? Gonna trot Floyd out and feed him more gibberish? Maybe Weil can garble 80% of the story for you?
If the walls seem like they are closing in, it’s because they are.
Did you happen to catch the Motley Fool piece today on naked shorting? Oh – they must be in on it too. What about the rumored Dateline piece? That must be my propaganda too.
Who knew that so many people were involved in something as insidious as “enforce the law” and “bring transparency to the system.”
Thanks for finding a link to the piece. I’ll make sure it goes up on the site tomorrow morning so that everyone can see it, if they miss it on their television. And please do repost the link every 6 messages or so – you can’t buy advertising like that…
ddd,still afraid rocker or greenberg
by: biodog0 03/25/05 02:45 am
Msg: 285268 of 285268
ddd,still afraid rocker or greenberg
or Carol Remond or whoever is gonna put a horsehead in your bed ? how about marvin bush ? i heard he was into hedge funds.
haa haa heee heee
no the professor at george washington u or whatever is way off what’s going on with the ‘naked short lie’ to cover insider share manipulation that’s for sure.he basically has not studied or experienced the pump dump reality.has he heard of the Beltway’s James Dale Davidson and the fraud he perpetrated on investors in pump and dump while lyingly calling it(his share dumping) ‘naked shorting’ ? no it’s all a comedy of errors and too funny James Dale Davidson’s skkkum Agoracom cyberfraud which is a fraudulent penny tout dump piece of trash in ‘cyberspace’ also advertises in the Washington Post and for allowing that kind of fraudulent penny stock tout cyberfraud to reach their viewers without any disclosure, journalistic investigation,or warning – or better yet removal from Post advertising all together,THEY DO NOT HAVE MY RESPECT AT THIS TIME EITHER.
Posted as a reply to: Msg 285266 by dirtydirtydeeds
Comment by Tony Ryals -
OSTK’s Byrne and ‘O’Brien’ ncans propaganda film (link below):
Interesting ‘naked short lie’propaganda film in my opinion. Note,no mention is made of all that money lost by investors going ‘long’ on penny stocks due to fraudulent claims of FinancialWire,’Dave Patch’s ‘investigatethesec. com’,and now ‘O’Brien’s ‘www. ncans . com’and other scam sites(copycat?) that have sprang up after that and since ‘Byrne-O’Brien’ put the ad-letter to President W Bush in the Washington Post’.
No mention is made of James Dale Davidson’s ‘National Association Against Naked Short Selling’ or ‘naanss’ that was ran out of the same Blaine,Washington office that he and his asociates touted Genemax shares,and dumped those shares, possibly through LOM’s Schwab,etc. accounts in 2002-2003 period.All the while Davidson cried ‘naked shorting’.
‘O’Brien’, as you will see in this ‘securities psy-ops’ film, has his face shadowed to hide his identity and possbly his voice altered.Then again anyone could have filled in that spot and played ‘O’Brien’.Yes this is a propaganda film purposely meant to mislead to fulfill the agenda and bias of its makers.
And the reason for the ‘securities psy-ops’ in the first place is to distract the ‘investor-sucker’ from what is really going on.
And,as in the past with the use of ‘the famed trial attorney O’Quinn’ who was supposed to take on the evil ‘naked shorters’,the purpose in great part is to convince investors to ‘go long’ on questionable ‘securities’ as insiders pump and dump and manipulate them out of their ‘investment’.
All the while pretending to be a regular small investors like their ‘marks’ and using fear of Social Security,which is popular at the momment,to manipulate small or medium size investors to do the wrong thing.Nothing could be more cynical or more James Dale Davidson-like if they tried.
http://www.dwjtv.com/clips/windowsmedia/preview/ncans2_nj_7.asx
Comment by Tony Ryals -
Dear SEC,
I made my complaint re endovasc and Charles Schwab,AND JAMES DALE DAVIDSON(O’BRIEN’?) long ago and upon receiving from Schwab the ‘shareholder agreement’ for the ‘select clints'(LOM?) to deposit ‘up to 30 million apparently free shares in May 2002, TWO MONTHS BEFORE SUPPOSED ‘REVERSE SPLIT’ THAT SHOULD HAVE LEFT THAN 3 MILLION SHARES EXISTING ACCORDING TO PRS !!! And I already informed you long ago of the acknowledgeement by Belladorgroup of Kuala Lumpur of strange activities in that Moslem region(not that I discriminate against Moslems only to say a very suspect region of the world to dump and manipulate U.S. stocks from and where the shares could have laundered money and outrageous that you have not investigated for that reason alone in this ‘post 911’ era.)
Nonetheless if you do a google search of ‘schwab lom’ you will find my ripoffreport that had disappeared from internet along with Carol Remond’s May 2004 article on that subject and a KYC inspired The Royal Gazette article.My ripoffreport has returned but you will see on that search my query another site,’wHERE dO gOOGLE sEARCHES GO wHEN tHEY dIE ?’ Anyway my Schwab,LOM,Davidson ripoffreport is now back online.It is really just an expansion,still unfinished,of my SEC sho complaint found under google search of ‘naanss’,thank you for that .
Now if you do a google search of ‘bush james dale davidson’ you’ll see blogmaverick posts,spitzer2006 posts,and kyc or offshorebusiness posts.Refering to the anonymous letter in Washington Post and similarities to J.D.Davidson’s ‘work’.An example of what I am saying is below from spitzer2006 and I wonder if Senator Bennett knows Davidson from Washington ,D.C. and why I think this naked short scam of ‘O’Brien’ may be the ‘work’ of Davidson ? And thus paradoxically although beamed
through ‘cyberspace’, a word Davidson is fond of,it’s real origen in the form of Davidson’s criminal brain,thus Washington,D.C. And the ‘national’ in naanss and ncaps and National Taxpayers Union coincidentally that he founded and many Washington insiders have been involved with I hope does not hinder an inquiry into who this is who tries to influence President Bush and Senator Bennett anonymously to the detriment of investors defrauded by pump and dump by the likes of Davidson,NOT ‘NAKED SHORTING’ !!!
Also I am sending you an email I sent to Endovasc ‘management’ tonight complaining about their insider touts who post on ragingbull…………your litigation re Davidson NEVER even mentioned ‘naked shorting’.Hello ??? …. I ‘invested’ yes stupidly in U.S. MARKET BUT YOU ALL KNOW WHAT’S GOING ON DON’T YOU ? And I did believe the fraudulent lies of the prs,and no,they have not matched SEC filings.
Meanwhile if y’all see J.D.Davidson in Washington,D.C. SAY HELLO FOR ME.
SINCERELY
Tony Ryals
Subject: Endovasc Fraud
To: robjohnson@endovasc.com
MR.ROBERT JOHNSON,DWIGHT CANTRELL,ET.AL.,
IT WOULD BE NICE IF YOU GOT YOUR TOUTS DIFFERENTDRUMMER AND KINGOFSCHMUCKS OFF RAGINGBULL..WHY DID YOU LIE ABOUT ‘PROPORTIONATE PERCENTAGE OWNERSHIP’ AT TIME OF REVERSE SPLIT AND FRAUDULENTLY CLAIM YOU WERE NAKED SHORTED AFTER JAMES DALE DAVIDSON’S PUMP AND DUMP OF LATE 2003 ? WHY HAVEN’T YOU EXPLAINED EVSC’S INVOLVEMENT WITH BELLADOR BOILER ROOM OF KUALA LUUMPUR AFTER ALL THESE YEARS ?
AND WHAT IS THE STATUS OF THE STANFORD PATENTS ?
YES I WAS DECEIVED TO THINK YOU WERE EDUCATED DECENT PEOPLE NOT PUMP AND DUMP SCAMSTERS.
AND DID J.D.DAVIDSON REALLY SALE YOU A PATENT AS HE CLAIMED AND IF SO WHERE IS THIS IN SEC FILINGS ? I STILL HOLD THE SCAM ‘CERT’ ‘DR.’ SUMMERS CONNED ME INTO BUYING IN LATE 2002 AFTER DAVIDSON’S TOUT AND DUMP.I STILL PLAN TO GET ANSWERS ABOUT THE SHAREHOLDER AGREEMENT TO DEPOSIT MILLIONS OF SHARES IN SCHWAB ACCOUNT FOR TOUT DUMP OF 2002.WHAT DID WALKER RECEIVE $ 200,000 IN FREELY DUMPABLE SHARES AS AN INSIDER FOR ?
I WOULD SURE APPRECIATE SOME ANSWERS AFTER ALL THESE YEARS RATHER THAN THE LIES OF INSIDER TOUTERS ON RB. I WILL CALL IF NECCESSARY TO GET THEM.YOU KNOW BY NOW I AM OWED SOME ANSWERS AND COMPENSATION.
YES I WAS DECEIVED TO THINK YOU WERE EDUCATED DECENT PEOPLE NOT PUMP AND DUMP SCAMSTERS.
SINCERELY
TONY RYALS
biodog0@yahoo.com
CC:STANFORD UNIVERSITY
SEC
Comment by Tony Ryals -
But…. FinancialWire,’investigatethethesec’,the ‘ Faulking Truth’,and James Dales Davidson’s ‘NAANSS’ before that and now ‘NCANS’are,and have always have,used the accusation of ‘naked shorting’ for fraud to hide insider tout and dump of their clients.
These frauds AND their transfer agents would be better to investigate BEFORE bothering with DTCC.
So even if ‘naked shorting’,particularly during a bull market or perhaps of a stock with higher demand than float occurs,your bs about ‘naked shorting’ would not help but hurt investors because for penny frauds like jagh, evsc,gmxx,glce or whatever the initials of the one Senator Bennett touts and virtually all other penny stock scams that use it are frauds dumping shares.
O’Brien like James Dale Davidson uses half truths to build a complete lie.
And yes your bs continues to be used by jagh,evsc,cmkx and on and on and on………
Comment by Tony Ryals -
If you don’t have enought time to understand the problem of naked short selling than you should refrain from commenting. That Regulation SHO exists provides proof that shares are not delivered. They are not delivered because they are not in existence. To dismissivly call it a scam is irresponsible. My scamdar wonders why you have even taken a stance without due dilligence. Shame on you if you are doing someone a favor and in the process defleacing retirees.
Comment by Alan -
A semi newbie investor here, but found this blog very intersting for several reasons.
Suprised after garnering more info from reading thru the thread at Mark’s initial comments. They seem overly coy and uninformed. Smelling a sham due to the senator hailing from Utah? A tad bizarre way to identify shams, come on back to the tollway Mark and play ball with the common folks again. Hopefully, being a billionaire and getting a new group of friends that go with that money hasn’t dimmed you to the real issues that “normal folk” deal with.
Came in nuetral on Naked shorting. I don’t invest in pennies where it seems most prevalent, but thought Bob Brian outclassed easily his opponent in this argument. Fundamentally, if it’s legally wrong, you shouldn’t defend doing it, the bad company (toxic finacing, etc.) argument doesn’t excuse the wrong. And simply, if that was the only cause of investor losses in these scams, why is their regulation SHO? I guess I will leave with that indelible thought in my mind.
Lastly, if it’s true that the DTC simply listing the fails and showing the world, it’s a “buncha baloeny” claim by folks upset over losing money would end this…. why don’t they simply do that?
Show the books, laugh at the folks who ballyhooed the claim and let’s move on.
Or is the circa 2000 Baseball commissioner saying “we have no steroids problem” refusing to show accurate testing results and implement fixes, only to be embarassed in front of Congress and have them make a mockery of the great game because he didn’t/couldn’t fix it on his watch.
I know one thing… if I invested in pennies and felt like some greased up 30 sumthin’ guy dipping in the Bahama’s was defrauding me… A winsome post on an internet board telling me there was no problem, or that my company was the ONLY problem would not suffice.
I see this coming to a head via Congress, unless the SEC get’s on the ball. That response by the SEC chairman linked above was very telling.
All my thoughts.
Comment by David booker -
How long has ‘O’Brien’,(or James Dale Davidson ?),sponsored Dave Patch and investigatethesec.com ?
Sponsored by
RGM Communications Inc.
NFI-Info.net
Comment by Tony Ryals -
troy whiner,where does davidson i mean dirtydeeds i mean o’brien find skkkum like you ? and where is night_raider i mean gadfly i mean mako i mean Dave Patch lately ? Guess he isn’t posting much on rb or spitzer2006 lately is he ?
Are you part of the Daily Reckoning message board con men to all this ongoing securities fraud ? Yes Davidson does appear connected to that cyberfraud board as well doesn’t he ? I am deeply saddened to be taken by death spiral skkkum you represent(and call it ‘naked shorting’).
Comment by Tony Ryals -
It is obvious that Tony has an agenda to clog the blog. A paid bashers tool to lessen the effect of truth by takeing good sources of info and inserting Dribble and un related seudo facts to confuze the people,little does he know ,we can see through the BS..
Comment by Troy Wine -
Golly Tony, since every rant of yours contains an off-topic diatribe about Davidson, you’ll have to excuse me if I don’t read many of them anymore. They are all pretty much one incoherent sentence, and then a cut and paste of some obscure off-point article.
But I did read this one, shame on me. I never heard of NAANSS before I created NCANS. I also hadn’t heard of the nursing association by the same name. I’m not Davidson, as numerous folks who have met me have attested to. This has all been asked and answered.
All of which you have ignored, and then simply continued to post your weird harangues.
So why is that? Are you really out of your mind? Is that truly it? Just stark raving nuts?
Or do you have a specific agenda to attempt to confuse the issues as you attempt to in your latest magnum opus? Again, for the really slow kids: Pump and Dump is a problem, and bad. Naked shorting is a different problem, and also bad. One being really bad does not make the other any less bad. Denying that one exists in the face of overwhelming evidence to the contrary doesn’t make the other exist more or make it any more valid. They are separate things. Oil and vinegar. Night and day. One of these is not like the other.
Think of it as being akin to crime. You have robbery. You have counterfeiting. You can argue that robbery hurts more people, or that it is inherently more violent, but that has nothing whatsoever to do with stamping out counterfeiting. You seem to believe otherwise. That is nonsense, and irrational.
And that is why everyone thinks you are out of your mind. Or being paid to be annoying. Or both. But not neither.
Comment by Bob O'Brien -
O’Brien anyone other than those you deceive know pump dump,from places such as B.V.I. coincidentally,FAR exceed ‘naked shorting’ in terms of fraudulent theft from investors.Naked Shorting’ is temporary, dilution is forever.
I explained to you the example of Endovasc of Montgomery,Texas incorpoated in the fraud promotimng state of Nevada.The ‘reverse split’
left less than 3 million shares in ‘theory’.
Yet after Davidson’s pimp and dump there were many millions dumped and Alexander Walker the ‘natco’ transfer agent was bribed with at least $200,000 in freely dumpable shares for aiding and abetting the cover-up.
When Endovasc and ‘famed trial attorney O’Quinn’ announced Schwab,Ameritrade, Refco,etc. were naked shorting in late 2002 after Davidson’s tout and dump,through his many official and unofficial Agora websites and tout fraud mailings etc.,the claim was approximately 1 million shares were involved in the ‘naked short’ or ‘oversold’estimate.
Yet now they acknowledge they themselves and J.D.Davidson and the Belladorgroup boiler room of Kuala Lumpur.et.al. have dumped nearly 100 million since the ‘reverse split’.You tell me which did most damage to share value,the estimated 1 million ‘naked short’ shares that, at most would be temporary, or the nearly 100,000,000 dumped by Davidson and other indsiders since the ‘reverse split’ ?
You say,’Poor Tony. I guess in the land of the dim, the idea that two organizations would use the word National in their title is as wild and unbelievable that they would also use terms like naked shorting.’
I was asking if you had ever heard of ‘National Association Against Naked Short Selling’ BEFORE you created ‘NCANS’.HOW ABOUT A SIMPLE YES OR NO ?
Comment by Tony Ryals -
Poor Tony. I guess in the land of the dim, the idea that two organizations would use the word National in their title is as wild and unbelievable that they would also use terms like naked shorting.
Especially given that the problem I am attempting to address is the national problem of naked short selling. Could I call it the Regional coalition? Not really accurate. American? There’s more than just Americans in the coalition. Universal? Too big. Global? Too unspecific.
Tony, deal with the problem you are having – you are either demented, or you are deliberately trying to clog every board where this issue comes up, pretending to be demented.
Either way the end result is the same.
As to James and such, the fundamental problem he and his little entourage are having is that there are two separate issues. They want it to just be one. Really really want to commingle the two. Because if you commingle them, you get an absence of clarity, and they seek opacity, from what I can tell.
Again, two separate points: Is there a national problem with failure to deliver/naked shorting, as evidenced by the Reg SHO threshold list and cases like the Compudyne case?
That’s a yes or a no. Not a “but the companies are blah blah blah.” Yes, or no. No, The Compudyne case doesn’t exist, nor does the Reg SHO list, nor does the Bear Stearns counsel testimony, etc. etc., or yes, there’s a problem.
Once past that, we can then discuss point two: Are there unscrupulous operators who pump and dump to scam investors? I say, sure. Of course. For every Elgindy, who naked shorted and put together stock manipulations to destroy companies, there are also scam artists who foist garbage off on investors. Is that bad? Yes. Does it make the polar opposite of what they are doing, namely naked shorting, less bad that they are bad? No. They are bad on a stand-alone basis. Just as naked shorting is real and bad on a stand-alone basis.
There is no need for confusing moral relativism wherein because you suspect some companies may be bad, that excuses the bad behavior of another class of criminals. They are both bad.
But again, I understand that they are two points. Not one, as so few have tried so hard to make them.
Then again, I also am seeking clarity, rather than confusion. I tend to break things down into algorithms, or equations. 2+2=4. Not who cares what 2+2 equals because a lot of accountants are crooks blah blah blah. That doesn’t clarify anything, but rather is a dimwitted argument. I’m interested in what 2+@ equals first. Then we can go on to the tangental issue of whether accountants are crooks, or some are, or the majority are.
But then again, that’s just me.
Comment by Bob O'Brien -
O’Brien what are the mathematical odds two individuals would create two separate sites devoted to conning investors to believe they were being ‘naked shorted’ to mask pump dump ops with ‘national’ in their titles just as Davidson’s and Forbes National Taxpayers Union DOES,coincidentally ?
And you even deny ever hearing of James Dale Davidson’s ‘naans’ fraud website ?
Comment by Tony Ryals -
Dave Patch is part of naked short fraud called ‘investigatethesec’out of Vancouver who should be in jail by now and if he posts more of his bs on Spitzer’s website he just might get there yet.Dave do you buy your penny shares retail from ETrade or do you get free or pennies on the penny for touting your frauds ?Also when will you return to tout jagh on rb where you predicted ‘O’Brien’s’ fraud Washington Post ad before the fact ? Do you agree that O’Brien should be allowed to tout fraudulent stocks and appeals to Bush for help with his U.S.stock frauds should remain anonymous in this post 911 era ? Maybe it had a secret message to aid terrorism ? Regardless all Americans with stock investments should have a right to know who is trying to influence Bush with expensive ads to manipulate the stock market.
Comment by Tony Ryals -
Jeff,
There is NO DOUBT scam companies are using naked shorting as thei rvenue to Pump and Dump. NO DOUBT. The problem is, the SEC and NASD both know and admit that naked shorting also harms some companies. Without proper disclosures, forced settlements, and enforcement by regulators investors are left to guess who is telling the truth and who is not.
The simpliest solution to stop the fraud – FROM BOTH SIDES – would be to merely enforce present securities laws pertaining to short selling and settlements. In an electronic age, 3-day settlement should be the standard with LIMITED exemption. Those exemptions and failures should be clearly supported with documentation as to why a buy-in should not be immediate. Do that any the rigged games become very fair markets.
Market Makers, they should not be given any more than 13 days to come clean with “Bona Fide Market Making” short sales. That also means wash trades to pass thru the fail would not be legal.
Are corrupt companies jumping on this band wagon to defraud – Damn Straight. Is Wall Street guilty of aiding and abetting naked shorting manipulation Damn Straight. The simple answer – Settle trades!!
Comment by Dave Patch -
Bob wrote: ‘I am able to make distinctions. One of the distinctions is “are there millions of unauthorized, unregistered shares in the form of fails flooding the system for Global Links?” is unrelated to “is Global Links a bad company with bad managers?”‘
Therein lies your problem. As Tony and others keep pointing out to you, very often the two *are* related. It’s that relationship, that marginalizes your cause. Worse, as Tony has also been vainly trying to point out to you, your efforts are providing a convenient alibi for scam companies, thus allowing them to more easily fleece their flock. If you don’t believe me, check out Lee Web’s articles on Stockwatch on CMKM (e.g. http://www.siliconinvestor.com/readmsg.aspx?msgid=21140413). If you wish to persist that these sorts of things are not your problem because you only care about ideology, then I strongly suggest you confine yourself to an ivory tower until someone else has figured out a way to rid the patient of cancer before you attempt to treat their lethargy.
Comment by Jeff Mitchell -
Uh, Tony, back on your meds, hmmm ‘kay?
I never ever indicated that I had any interest in, or support for, Global Links. I certainly never said that they should be a poster child for naked shorting. So that is a lie. You do that a lot. Lie, I mean. You lie about me being Davidson, you lie about me being a fraudster, you lie about NCANS being related to some other vaguely similar organization…A lot of lying going on in your area there, Tony.
Here’s a clarification:
1) Bennett should immediately require the DTCC/NSCC to disclose the number of failed shares for Global Links. That will end any speculations.
2) Global links should address the wheres and whys of the 2.7 million shares apparently issued since Feb.1. The questions are were any laws violated, and do they have the right to issue more shares without doing a filing?
That’s it. Simple. One question is unrelated to the other. I’ve always maintained that the company could be a complete POS or Mother Teresa, and question number one still applies and is the central question, as far as that company goes, regardless of which.
I am able to make distinctions. One of the distinctions is “are there millions of unauthorized, unregistered shares in the form of fails flooding the system for Global Links?” is unrelated to “is Global Links a bad company with bad managers?”
See? One deals with systemic abuse, and the other is whether the company is a bunch of crooks.
Get it? A) Systemic abuse by DTCC/NSCC/trading desks/non-NSC? B) Company good or bad people?
I tried to break this down in as simple a manner as possible for you. Hopefully it will penetrate the haze and make its way through to your processing area. Or not. I am not hopeful.
Comment by Bob O'Brien -
Mr.’O’Brien’,
‘James’ has never been the victim of a ‘naked short scam’ but I have,so it is beyond me that you are posting here but ignore queries of one defrauded in such a scam.
Your own colleague(below)questions your selection of Global Links Corp. AS A MODEL OF ‘NAKED SHORTING’.Even if you were not mainly out to defraud Americans for your peers and clients,you would have to acknowledge that the ‘naked short scam’ has been used for at least several years to do just that.Have you investigated James Dale Davidson’s fraudulent ‘naans’ or ‘national association against naked short selling’and the history,at least since 2002,of using the ‘naked short fraud’ to deceive investors to go long on penny stock pump and dumps ? Don’t you wish to expose the use of ‘naked shorting’ for fraud in order to lend credibility to ‘real naked shorting’ when and if it occurs ?
Endovasc,for instance,had a 40 for 1 reverse split under Davidson’s involvement.Then he touted with lies(even claiming to a patent that does not exist) in his ‘Vantage Point’ cyberfraud publication.The reverse split left under 3 million shares in ‘theory’ but of course there must be some reason to pay a transfer agent $200,000 as an ‘insider’, wouldn’t you say ? Now since the ‘reverse split’the shares outstanding are near 100 million and they still claim to be victims of naked shorting.(I have a pdf file of a ‘shareholder agreement’ Schwab sent me over a year after the fact that shows,while they were promoting the ‘reverse split’ that would have left less than 3 million shares in existence they were filling a Schwab(LOM?) account with ‘up to 30 million shares for a pump and dump a month before the ‘reverse split’ !!!
The evsc insider tout ‘different_drummer0’ who hangs out lying on rb’s evsc still claims evsc a victim of ‘naked shorting’ and posts your website daily to tout that lie ? Are you proud ? Are you going to use your self-appointed position as foremost expert on ‘naked shorting’ to correct him and ask he stop using your website for fraud ?
Letter to the SEC
by: marionpolk2000 03/20/05 10:15 am
Msg: 283144 of 283184
In a March 15 “Letter to our Shareholders” appearing on the company web site, Frank J. Dobrucki, President/CEO of Global Links Corp. (GLKCE) stated that “our issued and outstanding common is 4,028,362”. On Feb. 28, 2005, the outstanding shares were listed as 1,158,064.
Sometime between Feb. 28 and March 15, the company apparently issued 2,870,298 additional shares. I find no registration statement or other document on file to indicate the issuance of these shares, or any statement anywhere disclosing the consideration paid for these shares.
Since the company has no current financial statements filed, and pulled their former financial statements for rectification by a new CPA, I find it difficult to understand how a prior registration statement (if one ever existed) would still be valid.
In addition, the company has recently undergone two 350:1 reverse stock splits. The company has not disclosed any similar reverse stock split of the 15 million unregistered “B” shares held by company insiders. These shares purport to carry 20 common votes with each “B” share, and conversion rights to 10 common shares for each “B” share converted. If conversion rights, voting rights, or number of “B” shares were not subject to the same reverse split, then public holders rights have seen a diminishment by a factor of 122,500. Prior company filings indicate that common holders were never asked or permitted to vote on these “reverse-splits”, and the substantial elimination of public holders rights was accomplished solely by the vote of Mr. Dobrucki’s “B” shares.
GLKCE is a very actively traded stock. Immediate investigation and action by the SEC is required to protect the investing public.
To quote from the same March 15 “Letter to our Shareholders”, “Global Links Corp. is not the common penny stock company. We actually have millions of dollars in real estate assets.”
Comment by Tony Ryals -
Ahh, James, James, James.
Back to the tried and true, huh? Ignore the facts, ignore the Compudyne case, ignore the companies like NFI that have been perennially depressed and forced to issue secondaries at depressed prices…and make up in volume what you lack in substance.
You just go right back to repeating your baseless take. No new info. No illumination. Just declarations that we are all idiots or crazy because we won’t just accept at face value your allegations, and further ignore all the data that says you are full of it.
How dare we.
Hint: The old technique of repeating a lie over and over until it becomes the truth is a little harder on the Web, where you will be called on it. You conveniently ignore any data you don’t like, and instead repeat ad nauseum your dross – “it’s the company’s fault.”
We get it. You have an agenda to do so. You can’t admit that there are systematic failures being used as a manipulative technique even when you are directed to a research document by Professor Boni, or testimony from Bear Stearns’ counsel, or the SEC’s own statements, or the Compudyne NASD matter, or the reality that is the Reg SHO list. Those things don’t exist in your lexicon.
In short, you aren’t engaged in a discussion – you are filibustering and ranting.
I understand the difference.
And so does anyone still reading this.
I don’t know which is more annoying, your obstinate refusal to acknowledge facts that directly contradict your position, or Tony’s obviously disturbed cut and pasting sessions every night of irrelevancies and lunacy.
At the end of the day, you will likely still be saying the same stuff when the cuffs are going on the hedge fund perps.
You are welcome to your views, no matter how obviously incorrect they are.
Enjoy that.
Comment by Bob O'Brien -
‘Your authors have seen to our own satisfaction that higher than 20% returns are possible.Our colleagues at Lines Overseas Management in Bermuda earned triple-digit returns averaging 226 percent per annum,during the years in which we were writing this book.Their experience underscores what the spreadsheet suggests,that for many high income earners and owners of capital ,predaory taxation imposes a lifetime cost equivalent to a large fortune.
‘An individual with high earnings capacity paying taxes at Hong Kong rates could end up with a thousand times more wealth than someone with the same pretax performance paying taxes at North American or European rates.To subject your capital to recurring invasion by a high tax jurisdiction is like running in a race and having someone shoot you every time you take a stride.If you could enter the same race with proper protection and not unhobbled you would obviously go much farther,more quickly.
‘The Soveriegn Individuals of the future will take advantage of the transient inclinations that so offend Christopher Lasch and other critics of the information elite,and they will shop for the most profitable jurisdictions in which to domicile.While this is contrary to the logic of nationalism it accords with a compelling economic logic….’
James Dale Davidson,Founder of National Taxpayers Union,’The Sovereign Individual’
Comment by Tony Ryals -
To Create Your Wealth Offshore
For investment in sums in excess of $100,000 contact Lines Overseas Management.Headquartered in Bermuda with offices in multiple offshore jurisdictions.Lines Overseas Management provides a full range of brokerage and investment banking banking services.For information contact LOM’s head office at 73 Front Street,Hamilton HM 12 Bermuda;phone 441-295-5808.Or visit the LOM page on the World Wide Web at http://www.oceanis.com.
For offshore money management available to Americans as well as other nationalities,contact Strategic Advisors Overseas at PO Box HM 3053,Hamilton,Bermuda.Phone 441-295-1989 or toll free from the United States,800-678-0785.You can also reach Strategic Advisors Overseas at http://www.sao.com.
from :’Soveriegn Individual’ by James Dale Davidson & Lord William Rees-Mogg 1989
Comment by Tony Ryals -
‘I would like to ax everyone at the SEC since they have failed. I would like a prosecutor-type to come in with a scythe and cut off heads. In Japan, this kind of failure would call for suicide. Is there anyone that has the integrity to pull this off?
‘Your article was so good and so deep! Thank you.
Thanks again for taking a lead role in exposing a huge and important issue.’
Mary Helburn
Executive Director
National Coalition Against Shorting
Cleveland, Ohio – USA
Comment by Tony Ryals -
Go to rb’s jagh message board and you will find a couple weeks ago Dave Patch’s colleague ‘dokilers’ began moaning about this denial of vote thing by brokers.Funny they NEVER find any fault with jagh ‘management’.
I have no idea what that variation on their ‘naked short scam’ is but truly it’s the same ol same same ol,just like the German stock scam.Funny only a couple years ago all these penny fraud companies Patch represents were bragging about being on the market in Germany then just as quickly they were saying it was a conspiracy.
And the ‘cert’ thing is coming back.This scam got me,EVSC put ads or prs out claiming,(after James Dale Davidson’s tout and dump and consequent rise and collapse of ‘share value’ that Schwab my broker was ‘naked shorting’ me so I must buy a ‘cert’ from transfer agent Alexander Walker a former SEC employee and with years of un-prosecute fraud under his belt,he received $200,000 in freely dumpable shares as an ‘insider’ a year later.
I know the critics here besides me, humor ‘O’Brien’ and Dave Patch as themselves defrauded or deceived ‘investors’.This in my opinion could not be further from the truth.
I am sure that,just like J.D.Davidson they get free shares for promoting these frauds.IT IS SUCKERS LIKE ME WHO ARE DEFRAUDED.I truly believed in a Stanford patent,yet even Stanford’s professors benefitted from the pump and dump assiosted by touting their patents.Where are ethics ?
No,Patch and O’Brien are deceiving you if you believe they really pay Charles Schwab, Ameritrade,et.al.,retail prices for their shares.Isn’t this correct Dave Patch and O’Brien ? Do your shares come from buying through ETRADE et.al. on the ‘open’ ‘retail’ market or do you get discounts ?
Comment by Tony Ryals -
Gee James, why didn’t I think of that. Oh yea been there done that. Complaints to ETRADE and NASD – As in FORMAL Complaints.
Response from ETRADE – you can sell them from your account.
Response from NASD – The Broker settled with you in “book entry” and they carry the liabilities for the settlement failure not you. You can see your shares at any time.
Now you wonder why we have a problem?
BTW James, I guess you totally missed the fact that ETRADE admitted IN WRITING that they would not allow my Proxy vote on shares held in safe keeping. Why do you ignore all issues pertaining to facts.
Hilary Shane – 975 consecutive trades w/fails and not one forced buy-in. No Affirmative Determintaion, and delivery being made only after a convert in the PIPE. A convert off the sale of unregistered securities. Wanna explain that one?
Comment by Dave Patch -
Patch, Request delivery of the shares in certificate form. What’s so hard about that?
Here is your chance to demonstrate that E*Trade is really failing to settle your trade and you can put the whole paper trail on your investigatethesec.com wastesite to bolster your claims. Send them the request, in writing, to register and ship your shares. When they fail to register and ship your shares, write, do not call but WRITE, the NASD with your complaint. Keep copies of both sides of the correspondence.
Here’s your chance to do something besides make baseless allegations about what E*Trade is doing with your securities held in street name. I can’t help but wonder, though, given your intentions of demonstrating that settlement failures are rampant. Why haven’t you done this already?
Comment by James Brownfield -
O’Brien, What doesn’t “jive” is the allegation that “naked short selling” is bankrupting companies (it doesn’t), that it keeps companies from raising capital (it doesn’t), that it is artificially depressing share prices (it doesn’t), and that it is hurting ordinary investors (it doesn’t). At the root of the entire movement to demonize “naked short selling” is the idea that “naked short selling” is doing damage. Clearly, there is damage taking place in so many of these companies. Jag Media, Sedona, Global Links, Eagletech, Nanopierce, and any other company that gets named by these dimwits have clearly been damaged, but the damage is not happening at the hands of “naked short sellers”.
It really doesn’t take any more than a pedestrian analysis to see who is doing the damage to these companies and how they’re doing it. It’s what makes people like you and Patch so fun to watch. You don’t have to be Warren Buffett to look at an income statement and identify a management team that is milking their company’s working capital dry. You don’t have to be Peter Lynch to look at their balance sheet to see millions of dollars of capital raised and consequently burned away by these shysters. It doesn’t take a Jack Bogle to pull up their annual report to see how the executive suites of these slum dwellers are raking in the big bucks while their shareholders all get taken out and shot in the head.
There is no wriggling here and there are no contortions. It is all in black and white and available to anyone with a brain in their head to download and read. I can’t help it that you and Patch can’t see the foolishness of putting gasoline in a line of cars that have all been totaled. That you guys insist it’s a reasonable thing to do with investment capital is funny in a bizarre sort of way, but it loses some of its comedic appeal when you find out that there are inexperienced investors out there who think you guys know what you’re talking about.
Comment by James Brownfield -
Here is an E-Trade Document for you regarding the recent Proxy Vote.
They allowed me to Vote Proxy on XXXXX shares that were not held in safe keepng but did not let me vote the shares in safe keeping. That means they allowed me to vote the shares they did not settle under “custody only” but restricted me from voting on the PHYSICAL SHARES they held in their name for the benefit of me. These shares I voted were the ones I purchased in August 2004 that they had failed to settle. The vote was January 2005.
Dear Mr. Patch,
After researching your inquiry, our Corporate Actions Department have responded that you were only eligible to vote on XXXXX shares because the remainder of your shares are in ‘safekeeping.’ The shares that are in the legal status of “safekeeping” are not eligible to be included in the proxy vote. If you have father questions, please contact our customer service at 1-800-786-2575 with case reference# XXXXXX
Your satisfaction is very important to us. Please let us know if our response to your email was helpful by clicking the link below and taking this 30 second evaluation.
http://www.surveymk.com/s.asp?u=14518877022
For further assistance, please use our E*TRADE FINANCIAL Help center at https://us.etrade.com/e/t/estation/helpcenter, or call us at 1-800-ETRADE-1 or (916) 636-2510 if outside the US.
Sincerely,
Zoua Xiong
Monday-Friday 6:00-3:00 pm,pst
(916) 858-5000 x5543
Comment by Dave Patch -
James,
you are daft. Please tell us all how the buyer – in any of the executed trades by shane – were notifiecd that the trade failed settlement.
The Buyer originally receives a trade confirmation via electronic or snail mail identifying that the trade was executed, how much money was debited from your account and… Now get this, the settlement date.
Since I have evidence that my broker never settled some of my trades, I went back on the documents they sent me over time and I never… never… received any secondary notice informing me that the statement that identified a settlement date was in error. Without this statement, how am I supposed to know?
So your contra-party BS and force buy in is garbage. In fact, in August 2004 I purchased some Jag Media through Etrade. In November it became clear that the trades had not settled as they toyed with my account. I called them on why they had not settled these trades and why no buy-ins were initiated. I also requested immediate buy-in on the fail.
Etrade never properly responded to my claim and teold me “they are journalled in your account so you can sell them anytime you want”. They did “Book-Entry” settlement.
Compliants to ETRADE and the NASD never created that buy-in I so adamately demanded for several months.
So… How does all this theory you keep spouting work in reality – It doesn’t.
Comment by Dave Patch -
James is in a tough position. He wants to frame everything as the fault of the bad, bad company, and yet he is faced with the material reality of a NASD action wherein a hedge fund (gasp) sold over a third of the float short, naked, in 975 actions.
So on the one hand he wants to contend that it’s the company’s fault, and on the other he encounters the harsh evidence that in that particular case, it wasn’t.
Instead, he does some pedestrian analysis of their current business situation, ignoring that the abuse occurred almost 5 years ago, and further refuses to acknowledge that indeed, this is data that proves that in that case it WASN’T the fault of the company – they were victims of illegal manipulation.
But that doesn’t jive with his agenda.
Hence the wriggling and the contortions to avoid what is pretty plain to even the dimmest at this point.
Is it worth continuing to drive home the obvious? Is there anyone that is confused as to what our good friend Jim is here to accomplish? The good news is that reason always triumphs over deceit, if you stay rigorous in your application of logic.
To whit:
Contention by Jim – it is always the victim’s fault. Secondary contention: there is no fails problem negatively impacting companies. Embedded assumption: the companies that are heavily naked shorted deserve it, as their business plans/management/economics are the real problem.
Actual hard data: Compudyne case where predatory hedge fund violated the law in order to destroy share value, company clearly not at fault. Reg SHO list is list of chronic settlement problems (there would be no list if there weren’t settlement failures). NFI on list, just posts 4th straight year of stellar earnings, thus example of solid fundamental company with huge settlement failures materially harmed by naked shorting – trading at 65% discount to peers, and thus having to do secondaries at reduced valuations.
I could go on, but it seems pointless. A large part of the fails problem is that one of the two parties in the transaction isn’t demanding the buy in mandated by the rules. In fact, the DTCC/NSCC makes a fortune by facilitating fails and carrying them on the books, charging fees. The trading desks are reluctant to force a buy in, as they probably have their own fails with the contra party and don’t want to start a war. The brokers own the exchanges that own the DTCC, so they have no incentive to kill their golden goose and make their lives more restrictive and less profitable. And the regulators are co-opted and clearly not enforcing the laws – Cutler recently said he’s not going to soften up, and yet he can’t find one naked short when he has a list of hundreds and hundreds of companies naked shorted.
Go read Professor Boni’s paper for the SEC on strategic failures to deliver, and the 69+K times that in one case it happened, and of the 86 buy ins: “Evans, Geczy, Musto, and Reed (2003) provide evidence that buy-ins may be rarely requested. Using fails and buy-in data from one major options market maker for the period 1998-1999, they find that the market maker failed-to-deliver all or at least a portion of the shares in 69,063 transactions. The market maker was bought-in on only 86 of these positions.”
The full paper can be found at the http://www.ncans.net site under the links section.
Then, after reading all of this, if you still have an interest in entertaining James’ line of “reasoning”, you are entightled to whatever enlightenment that you can find contained therein.
Comment by Bob O'Brien -
mfv, No, I am not saying it’s ok. And I have already explained how to correct a settlement failure if you are experiencing one.
Has a contra party failed to deliver Compudyne stock that you’ve bought? If so, let me know. I will gladly walk you through the steps again.
Comment by James Brownfield -
James, on the topic of Compudyne, you’re still not answering the question, namely: How is it that “975 separate acts of failing to deliver involving 475,000 shares, and not one of them flagged or stopped or bought in.” happen with Compudyne? Whether you believe excess supply in an open market drives down prices or not, the fact is that someone criminally circumvented the system and got away it. Are you saying that’s ok?
Comment by mfv -
Here are the hard facts about Compudyne, available to anyone with a web browser and 8th grade math skills:
Compudyne has a market cap of $50 million.
Compudyne has net tangible assets of $20 million. (Is a company whose shares trade for two and a half times book value “artificially depressed”?)
Compudyne has been experiencing revenue contraction over the past year. Meanwhile, their general and administrative expenses have actually increased. (Are the “naked short sellers” the ones driving these expenditures?)
In the past, Compudyne’s fourth quarter has tended to be its strongest quarter. This year, Compudyne expects to post a loss for the fourth quarter of 2004 and expects to lose money in the first quarter of 2005.
These are the hard facts. You can find them at the EDGAR site. This company that now can’t earn money, with $20 million worth of net tangibles, is in the midst of managerial turmoil. Yet this company has a $50 million market cap.
This is not a company victimized by “naked short sellers”. This is a company whose management lost touch with the marketplace. If you have problems with the way the market is valuing their shares, let me know. I have a $20 bill that I will sell to you for $50.
Heck, I’ve got thousands of them. Come get them.
Comment by James Brownfield -
Your comments: Jim:
And in order to make that fanciful notion stick, all that is required is to completely ignore the Reg SHO list, cases like Compudyne where the hedge fund failed 975 trades and sold over a third of the float short, testimony by guys like Bear Stearns’ General Counsel, by the SEC themselves, etc. etc. etc.
Do you really wonder why I have a problem with your agenda? Those are a lot of hard facts I’ve thrown out, and what you’ve responded with are repetitions of your agenda position, effectively ignoring the inconvenient facts and just pretending they aren’t there.
Don’t you find that dishonest? And please, spare us all the retort of “dishonest like the bad management blah blah blah…”
It is wearing awfully thin…
Comment by Bob O'Brien -
No wonder why wolfblitzzer0 was sued
by: bashersuit
Long-Term Sentiment: Strong Buy 03/02/05 06:41 pm
Msg: 5483 of 5745
even the lowest of the scumbag bashers like coolwateraro, who should have been shot, hates this scum
By: coolwateraro
01 Mar 2005, 09:26 PM EST
Msg. 52532 of 52568
(This msg. is a reply to 52530 by wolfblitzzer0.)
wolfblitzzer0…………
the one that reads that you are a jerk that is in deire need of a life; that is the one that is most believable.
Posted as a reply to: Msg 5467 by bashersuit
(from yahoo’s yakc message board.)
Comment by Tony Ryals -
Blitzering the wrong Wolf
Prof. Volokh points us to this post by Overlawyered’s Ted Frank about a plaintiff upset over entries on an electric bulletin board by “one anonymous poster, who has the especially credible username of Wolfblitzzer0 [sic]. So, [the plaintiff] has sued … CNN and the real-life Wolf Blitzer!”
I rarely find myself disagreeing with Prof. Volokh, but I certainly disagree in part with this reaction:
Sounds like a sure loser of a case to me, perhaps even sanctionable (though that’s a tougher call).
“Tougher call”? Nuh-uh. Not tough at all.
A lawyer who sues someone whom the lawyer knew, or clearly should have known (with an exercise of even minimal common sense, much less reasonable investigation), was the absolutely wrong defendant is begging for sanctions under Rule 11 of the Federal Rules of Civil Procedure. Even if a lawyer is in a huge rush to get his lawsuit on file — e.g., to beat a short statute of limitations (and indeed defamation actions generally are subject to short limitations periods, typically one year) — one can use a “John Doe” placeholder and then diligently crank up the discovery processes to try to find the correct warm body to add in an amended pleading.
Were I a federal judge considering this particular filing, I’d set a Rule 11 hearing sua sponte, whereupon the exchange would go something like:
JUDGE BELDAR: Counsel, look me in the eye and tell me on the record every reasonable basis that you had to believe, after diligent investigation, that CNN’s Wolf Blitzer and “Wolfblitzzer0” on this bulletin board were one and the same. And your answer better not contain the words “might,” “guessed,” “similar,” or “publicity.”
COUNSEL: Uh, well, Judge, I, uh, well, you see — say, how about those Dolphins? Do you think they’ll get a decent RB to replace Rickie Williams?
Seriously, unless the lawyer had some incredibly sound explanation (I can’t even imagine what it would be, but that’s why one holds a hearing), he’d be paying Mr. Real-Wolf Blitzer’s legal fees and expenses, plus a nice-sized fine, plus watching me refer him to his state bar association and my own federal district’s admission-to-practice gurus with a blistering recommendation that they consider further sanctions (like a license suspension).
Friday, February 18, 2005
Comment by Tony Ryals -
O’Brien, I do not contend that defrauding people is not a problem. I contend that the people actually doing the defrauding are the scum managements that run companies like Jag Media, Eagletech, Global Links, Nanopierce, Viragen, and every other company that has centered their attention upon “naked short sellers” instead of where their attention should be focused. (Uh, that would be on operations. You know, generating sales. Profitable sales, that is. Sales that exceed marginal cost plus overhead. That sort of thing where, if you do it often enough you generate something very special, and rare, in this breed of companies. It’s called a “profit”.)
But who needs to generate profits if there’s a new batch of shareholders to rip off?
Comment by James Brownfield -
O’Brien,When you tout penny scams and lie about ‘naked shorting’ of NFI because you have no proof,how do you live with your lieing self ? How many in Washington,D.C. know about the frauds you have perpetrated with your cyberfraud ?
Will your Beltway pals cover up your fraud or tell us who sends anonymous messages to Bush that threatens investor security and the right to know the identity of one who wishes to unduly influence the U.S. President ?
Comment by Tony Ryals -
James.
So when NFI has to issue a secondary for $20 less per share than they could have absent the naked shorting, they and their shareholders haven’t been hurt?
Interesting.
It sure will be fun to see the DTCC’s records, along with the CNF and trading desk records, to get an accurate idea as to the level of damage created by this illegal practice. My hunch is that this theft – that’s what it is when you take money and never deliver the goods – is pervasive.
Now I know that you contend that defrauding people isn’t a problem – taking their cash and not delivering the merchandise – and I can appreciate that agenda is one you have to stick with. After all, you won’t even acknowledge that something that is universally agreed is illegal actually is illegal, nor that it is real (even though there’s a list of companies that have been abusively naked shorted), so why would you admit that people are being harmed?
Comment by Bob O'Brien -
But the fraud perpetrated using ‘naked shorting’ and hiding of float with corrupt transfer agents has cost a small fortune since the scam began.The fact that ‘O’Brien’,et.al., revived it is in itself a tribute to past success of their ‘naked short fraud.’
Comment by Tony Ryals -
Patch,
Unlike Senator Bennett, the AG of New York probably spent some time researcing the subject. It doesn’t take more than a couple of minutes at the EDGAR site to see that “naked short selling” hasn’t cost anyone a cent.
Comment by James Brownfield -
Interesting points, it all comes down to the need to do our own homework in the face of potential threats to our investments.
Comment by peter -
Tony, while you have no shred of fact to anything you post, I do notice that Tony Ryals does not appear to be your real name. You being “wolfblitzer0” on the message boards. carol remond? You mean the reporter with all the “in-contacts” to the convicted or alledged criminals. Executives of Pacific International, Phil Gurian, Anthony Elgindy, Holger Timm, Canaccord, etc…
You are clearly a nut case that could use some help at the local clinic.
Obtain Default Judgment and Mandatory Permanent Injunction
Wednesday March 9, 11:32 am ET
Court Issues Mandatory Permanent Injunction, and Warning of Potential Criminal/Civil Contempt for Violations
MIAMI, FL–(MARKET WIRE)–Mar 9, 2005 — Universal Communication Systems Inc. (OTC BB:UCSY.OB – News) and Subsidiary AirWater Corporation and company Chairman and President Michael J. Zwebner obtained a FINAL DEFAULT JUDGMENT, which includes a MANDATORY PERMANENT INJUNCTION, against Pedro Dembovich and Roberto Villasenor, (including all aliases, past, present and future).
Michael J. Zwebner makes the following statement: “This ruling, will now finally put a stop to the unending evil, malicious and false postings that have besmirched and slandered my name, my family and the good name of the company(ies) I have worked with for the past 5 years. We will continue to monitor the Internet web sites, and will absolutely and without any hesitation, take to court and report all alleged and actual violations of the court ordered Mandatory & Permanent Injunction, and immediately seek of the court, both civil and criminal contempt orders with demands for financial sanctions.”
Comment by Dave Patch -
SIRIUS is one Ragingbull.com aliases associated with Dave Patch’s various aliases(nite_raider,gadfly,etc.),as well as proscan,and others who touted James Dale Davidson’s(of National Association Against Naked Short Selling’)genemax(gmxx) pump and dump in the past and called it a victim of ‘naked shorting’ as well.Since the end of gmxx ‘naked short pump and dump’they have tended to concentrate on touting jag notes or jag media holdings on rb for whatever reason.
This is one reason I conclude there is a James Dale Davidson connection to Dave Patch who now ‘publishes’ his updated ‘naked short’ scam toutings or ravings on ‘O’Brien’s’ ‘National Coaltion Against Naked Shorting’ website.
Maybe O’Brien is unaware of Dave Patch’s use of ‘naked shorting’ to run a pump and dump at gmxx.Maybe someone should let him know.
Coincidence ? Below is from Davidson’s nemesis Carol Remond of DJ who ‘O’Brien’coincidentally is a bit standoffish with as well :
IN THE MONEY:Lawsuit Calls Into Question GeneMax Float
By Carol S. Remond and Steve D. Jones
14 March 2003
Dow Jones News
A Dow Jones Newswires Column
VANCOUVER, Wash. (Dow Jones)- When it comes to trading in GeneMax Corp. (GMXX), it’s all about supply and demand.
Pooling agreements and insider selling restrictions have tied up all but 3%
of GeneMax’s 15.2 million outstanding shares. A switch to certificate-only trading in July and lawsuits against selected brokerages used by short sellers tightened trading even further.
Last fall, officials of the biotech company said only 265,000 shares were free to trade. That number rose to 367,000 in December after an option exercise.
But as it turns out, there may be more shares in GeneMax’s float than the company and its marketing firm Investor Communications International Inc. have said.
A lawsuit filed recently in the Superior Court for the State of Washington indicates that ICI sold at least 300,000 GeneMax options to a third party as early as last June.
That contradicts statements made by GeneMax director Grant Atkins to Dow Jones Newswires last fall. In an October interview, Atkins said that ICI had not sold or excercised any of its options.
Atkins, who is an ICI consultant, confirmed that ICI held 1 million options in GeneMax that were freely tradeable. He said that ICI had not sold, exchanged or shorted any shares against the options. He repeated a claim he
had made in July that only 265,000 GeneMax shares were free to trade.
The Washington suit, filed by ICI and an offshore entity called Newport Capital Corp., shows that GeneMax shareholder Garth Braun bought shares from ICI in June. The suit then alleges Braun and companies he controls reneged on an agreement not to sell those shares without the approval of ICI
officers. The suit doesn’t make clear whether Braun purchased options or shares from ICI.
While the suit doesn’t specify many details of the transaction, it does make clear that ICI was dealing in large blocks of GeneMax stock at a time when ICI representatives were telling the public otherwise.
ICI’s attorney Steven Childress wouldn’t comment on details of the transaction, the number of shares sold in the deal or statements by Atkins. He said that the intent of the suit was to prevent Braun from selling any shares.
“My understanding is that the defendants actually have the stock,” Childress
said. “Whether it got to (the defendants) as options and they later exercised them, or they received stock, I don’t know. But the defendants have stock in their possession.”
Childress referred other questions about the suit to ICI representative Marcus Johnson. Johnson refused to comment.
Braun also declined to comment.
ICI is a marketing company that led a recapitalization of GeneMax in early
2002. It brought GeneMax public on the Nasdaq Bulletin Board market through
a reverse merger into a Nevada software company called Eduverse. Both ICI
and GeneMax are headquartered at the same address in Blaine, Washington.
According to SEC filings, British Columbia resident Brent Pierce, who in 1993 was banned from serving as an officer or director of a public company in British Columbia, is president of both ICI and Newport Capital. A
February 2001 filing by Vega Atlantic Corp. (VATL) identified Pierce, as the president, secretary and director of Newport Capital. Meanwhile, a December 2002 document filed with the SEC by Petrogen Corp. (PTGC) identified Pierce as president of ICI. Both Vega and Petrogen are represented by ICI.
Pierce declined to comment.
The suit alleges that Braun and two companies he controls, Seraph Capital AG of Germany, and MultiMillion Investments Ltd. of Vancouver, B.C., have sold, or are attempting to sell shares in violation of the agreement with ICI. The suit seeks unspecified damages and asks the court for an injunction to prevent the sale of Braun’s shares.
The suit says that on June 3, ICI and Braun on behalf of his company Seraph, entered into an agreement “regarding the sale of certain shares of GeneMax.”
The suit also says they executed a “share purchase and pooling agreement” covering two groups of 300,000 shares each of GeneMax. The suit doesn’t specify at what price the shares were sold. It also doesn’t specify which
company controlled which group of shares, just that the groups contained
equal numbers of shares.
A third group of shares in the pooling agreement covered 77,500 shares,
including 34,000 shares paid to MultiMillion Investments in exchange for unspecified services. Overall, the pooling agreement covered 677,500 shares owned by both ICI and Newport Capital and Braun and his companies.
According to the suit, Braun notified ICI and Newport Capital in January that Seraph and MultiMillion Investments “would no longer recognize” the pooling agreement.
The suit asks for an injunction imposing a “stop transfer” order on any stock transfer agent that might handle sale of shares for Braun or his companies.
This is not the first time that Braun’s name comes up in litigation involving shares of GeneMax.
In September, Braun filed a lawsuit against Octagon Capital Corp., a Toronto stock brokerage, because the brokerage firm was unable to deliver certificates for 29,500 shares of GeneMax Braun had purchased. The purchases were made between July 23 and Aug. 2. Octagon later delivered a total of
29,500 shares of GeneMax in certificated form to Braun.
Although the pooling agreement between ICI and Braun predates Braun’s purchase of those 29,500 shares of GeneMax, the Washington state lawsuit alleges that Braun is not free to trade those shares without ICI approval.
By Carol S. Remond, 201 938-2074; and Steven D. Jones, 360 253-5400;
Dow Jones Newswires
Comment by Tony Ryals -
Dave Patch re ‘naked shorting’from spitzer2006.com ‘Civil Service Test Modernization’ discussion board:
Wall Street Fraud
While Eliot has certainly made his reputation recently by going after Wall Street fraud, the fines imposed have been far less than a deterrent in future fraudulant activities. The 1.4 Billion fine was the “cost of doing business” to an industry making trillions each year.
Why has Mr. Spitzer and his office refused to delve into the naked shorting issues we see and hear about (and know his office has been brought up to speed on) when the magnitude of the fraud is at $1 Trillion or more? The safety of the entire investing public (trading through a NY Based infrastructure) is damaging the safety of us all across this entire nation.
Naked shorting is illegal and the State AG of NY is aware of it and has elected to stay away. Why!
David Patch
03/17/2005 at
10:38:00 AM
Comment by Tony Ryals -
Below was posted by Dave Patch on spitzer2006 website and I didn’t resist adding my commentary below his:
Is Eliot placating the Investing Public
When Eliot took on Wall Street and settled for $1.4 Billion in fines the investing public thought they had the “white knight”. Unfortunately, the $1.4 Bln was mere “cost of doing business” to corporations paying their top executives tens of millions each year in a multi-trillion industry.
Has Eliot merely placated the investing public with “window dressing” fines while he has really allowed the criminals to walk away with the cash?
David Patch
03/17/2005 at
10:56:06 AM
Post 2
Patch’s ‘investigatethesec.com’ is located in
Vancouver,Canada ? Why ? It seemed to appear or gain prominence in 2003 about the time James Dale Davidson,who claimed,’The SEC lies’,shut his ‘naanss’ or,’national association against naked short selling’, website down.
And now ‘National Coalition Against Naked Short Selling’ or ‘ncans’ appears with fraudulent letter to Bush cynically using Social Security fear to push a stock scam,’naked shorting’,to mask insider stock manipulation and pump and dump.Actually they stole my retirement funds with their ‘naked short scam’ pump and dump fraud.
Yet in many ways the ‘naked short scam’ was and is a Beltway penny stock scam and in many ways one might say those taken by it subsidised James Dale Davidson’s political scams such as promoting that Clinton killed Vince Foster or that Clinton killed Davidson’s own employee,former CIA Chief Colby !!!,neither of which I believe and am sorry to have contributred to by ‘investing’ in Endovasc.
Below,a post from ragingbull.com’s Endovasc(evsc)message board :
By: wolfblitzzer0
16 Mar 2005, 10:36 PM EST
Msg. 11912 of 11932
(This msg. is a reply to 11911 by different_drummer0.)
Jump to msg. #
dave patch touted davidson’s gmxx that fraudulently claimed ‘naked shorting’ as they dumped,remember ?
sorta like here,no ?
Tony Ryals
03/17/2005 at
7:34:34 PM
Comment by Tony Ryals -
The previously registered but unissued shares were NOT diluted by the split. That is entirely the point.
Comment by James Brownfield -
Jeff:
“No, but you obviously have refused to acknowledge the SEC S-8 filings made *prior* to it that registered shares that were deemed immune to any reverse split. Was that intentional or are those filings kept in that other parallel universe you mentioned? ”
What does the dilution of prior registered shares have to do with the topic – namely, 100’s of millions of shares traded in a company with 4 million outstanding shares? And please point me to where I refuse to acknowledge any such thing. Otherwise, I’d think you were lying…
Comment by Bob O'Brien -
(1) I know what the question was. Implicit in asking that question, and especially asking it first, is that one ought to know. There is no need to know nor is there a need to care. Activities in the third market have no bearing upon a company’s financial performance.
(2) Nope. Not wrong. A number of companies fell off of the SHO list in January after they updated their shares outstanding. Companies that are diluting their common shareholders don’t rush out to make news of it. There remain plenty of stale shares outstanding counts, Global Links will be the best example of such a company when it becomes known how many shares they really have outstanding.
(3) The point of showing the ease with which an identical position as a “naked short” can be created by anyone, easily and legally, was to demonstrate the folly of blaming “naked short selling” for the failures of so many of these scam companies.
(4) The “naked short seller” is the straw man. The real problem is, and has always been, companies that were run into the ground by incompetent or corrupt managements.
(5) Reg SHO does not forgive prior fails. It doesn’t report them. If you have an account with a settlement failure in it that occurred prior to January 7, 2005, please let me know and I will walk you through the steps to rectify it.
(6) I know exactly how stupid some of these readers are. The “naked short seller” argument is very insidious. Not only does it make these scum managements appear to be “victims”, but in many cases it excuses the investor who took neither the time nor the trouble to do thorough due diligence on the company’s financials.
(7) Then perhaps your crusade should be geared towards getting parties to failed transactions to force settlement of their securities purchases? With the tools that are already in place to correct settlement failures, it would be a lot easier and wouldn’t require the scamming of a U.S. Senator.
(8) The Reg SHO list does make for an interesting tool precisely because companies that draw the interest of short sellers tend to have fundamental flaws that warrant concern. However, there is no place on the 11810 Buy-In form that asks whether the Buy-In is being performed for a stock that appears on the Reg SHO list. When it comes to securities settlements, they are afforded the same rights as any other company.
(9) There is nothing felonious in what these companies’ managements are doing. However, there is plenty of proof for how they play their game. That proof, if you take the time to read an SEC filing, is in their income statement. Examine the financials of so many of these companies claiming to be victimized by “naked short sellers” and you find company after company with no profits, little to no revenue, and dwindling common equity. Look more closely at the income statement and you find most if not all of them have general and administrative expenses that are completely out of line with what they generate in gross revenues or what they spend on R&D (if they’re a “startup”). Find one of their annual reports and you’ll see the salaries being drawn down by their executive suites. An SEC filing can be a wonderful tool in helping you track the dollars that come out of shareholders’ pockets and make their way into management’s pocket, if you can find someone to read it to you.
Which “naked short selling” victim would you like to check out first? Jag Media? Sedona? Eagletech? Global Links? Nanopierce?
You’ll find the same thing on all of them: capital raised, capital gone, fat and happy management.
(10) There is a line of causality that you still don’t get, which is why no fund has to worry about being found guilty of damaging a company targeted by “naked short sellers”. Short selling is not a cause, it’s an effect. When it becomes known that a company and its management is not going to deliver value to its shareholders, short sellers congregate to profit. All it takes to burn short sellers is a good management team.
(11) Then get after those retail buyers, if that’s really the problem.
(12) Any suit you file would work for me. There would be nothing more comical than seeing an inept investor file suit against a public official. I’m sure you’d have an army of inept investors behind you, supporting the cause, and urging you to fight the good fight.
It would add even more humor to the words, “Case dismissed.”
Comment by James Brownfield -
“Bob” wrote: “Uh, did I miss the memo where the company can be shown to have actually issued more shares the day after the split, enabling tens of millions to trade?”
No, but you obviously have refused to acknowledge the SEC S-8 filings made *prior* to it that registered shares that were deemed immune to any reverse split. Was that intentional or are those filings kept in that other parallel universe you mentioned?
– Jeff
Comment by Jeff Mitchell -
>
Uh, did I miss the memo where the company can be shown to have actually issued more shares the day after the split, enabling tens of millions to trade? Or is that another conjecture based on an absence of information – sort of a non-disprovable fiction being used to attempt to explain the naked shorting? The fact is that in their filing Feb. 1, the company clearly articulates what the outstanding shares are. And a guy bought them all that day. Now, you hypothesize that the company “could” be issuing more, or that existing shareholders “could” be converting their preferred to common and selling it like mad – of course, the only thing lacking is proof. But don’t let that stop you. Hey, I know, we “could” have all slipped through a wormhole into a parallel universe where there are infinite possibilities, and in that universe the company “could” be engaging in felonious activity on a daily basis. Just replace each “could” with “isn’t” and the statements are equally valid and non-disprovable.
The fact is that either: A) The company is up to no good, and trading should be halted and the company should be shut down immediately for their trading chicanery; or B) The system is up to no good and the naked shorting should be stopped; or C) Millions of shares are flooding the market from the preferred shareholders converting, in which case the company should answer the direct question posed. I can eliminate number 3 from the mix with this letter from the company, and most likely number 1 as well:
A Letter to our Shareholders
“On February 1, 2005, the Company implemented a one for 350 reverse split of its authorized and outstanding shares of common stock. The number of authorized and outstanding shares of the Company’s common stock following the February 1, 2005 reverse split is 5,428,571 and 1,158,064, respectively.” (Released on Business Wire February 2, 2005)
What happened the first week of February, 2005 really took us by surprise. Our trading volume for the first (4) days of February was 143,463,600 shares. We only had 1,158,064 shares in the “float” and of these shares; the Depository Trust only had 929,277 shares.
4-Feb-05
22,471,600
3-Feb-05
37,044,600
2-Feb-05
35,993,100
1-Feb-05
47,954,300
What was particularly alarming was the way our stock plummeted from an opening price of $0.10 on February 1, 2005 to a low of $0.0008 in a matter of hours. It became very clear that we had no control of the volume or price of our stock in anyway. Outside forces were now manipulating our stock.
I made a decision to stop any additional stock being sold by the company at this time until we had a better picture of what was happening. We closed the month of February, 2005 – maintaining our outstanding shares at 1,158,064, and a total stock volume of approximately 208 million shares.
During this time, I received many phone calls and email messages from stockholders asking why the company is not issuing any shares and why they cannot get delivery of their stock. I received several email messages from shareholders, which were sent by their brokers indicating that share certificates could not be issued at this time because (a) the company is going through a reorganization and that the “company” was not issuing shares at this time; (b) the transfer agent was not issuing shares at this time; and (c) that the company is in a “chill” mode and that shares cannot be issued at this time. None of these answers are true.
If you purchased shares in Global Links Corp., you have the right to demand delivery of your shares. If the shares simply do not exist, then the problem of Naked Short Selling will come to the surface. The broker that sold you the shares has to provide delivery of your shares. Exchange Act, Rule 10a-2 requires delivery of shares sold to our stockholders.
Global Links Corp. was placed on the SHO list as of Friday, February 11, 2005 and has remained there since that date.
The company and its shareholders have the right to expect a fair playing field. When illegal trading occurs, the company cannot meet its goals, and shareholder equity is diluted so that brokers can line their pockets with illegal cash. I cannot tell you how long this has been going on. If we had not completed the reverse of both our authorized and outstanding shares on February 1, 2005, we may never have discovered how blatantly out stock was being abused.
Global Links Corp. is not the common penny stock company. We actually have millions of dollars in real estate assets. We are not going to fall apart because we didn’t trade any stock for an entire month. Our goals may be postponed, but our future is solid. Many companies would have collapsed when their stock price drops so sharply and the number of shares being traded is so staggeringly high. I feel very fortunate that we were able to discover what has been hurting our stock price, and now, we will have a chance to correct this imbalance.
As of today’s date (March 15, 2005), our authorized still stands at 5,428,571 and our issued and outstanding common is 4,028,362. No preferred shares have been converted in common shares and no officers are selling any stock. This is not possible because our authorized would have to be sharply increased to accomplish any conversion.
I cannot tell you how may shares have been sold or how many stockholders have demanded delivery of their shares. I believe that this number is much higher than the stock we have available. I strongly encourage our stockholders to demand delivery of their shares. If you would kindly forward a copy of any such requests to pdonahoo@globallinkscorp.com, this would give us a better picture of what is really happening with our stock.
Thank you for your concern and loyalty to our company.
Comment by Bob O'Brien -
Here’s that link: http://www.opensecrets.org/indivs/search.asp?NumOfThou=0&txtName=Byrne&txtState=UT&txtZip=&txtEmploy=&txtCand=&txt2004=Y&txt2002=Y&txt2000=Y&Order=N
Comment by Cory Johnson -
I hate to shoot down conspiracy theories, but at least part of this one is wrong. Overstock’s CEO Patrick Byrne hasn’t given an dime to Utah Senators, and, rather, has give $42,000 to Democrats since 2000.
Check it out:
Byrne’s Political Contributions
Comment by Cory Johnson -
Jim:
Your responses are telling in their dishonesty. I have a few minutes, so I’ll be happy to demonstrate how. Let’s go down the list:
“(1) I neither know nor care. It has no bearing upon a company’s operations or their financial performance.” – The question is not whether you care – it is whether you know. You are one of the “this isn’t a problem” crowd, and I was hoping you had some factual basis for your lack of concern. Apparently that was misplaced. You don’t know. And yet you pretend that it isn’t a problem. Argument from ignorance.
“(2) In most cases, it remains a secret because many of the companies themselves are not being open or honest about their outstanding share counts.” Wrong. The question is how many fail to delivers are there for companies on the SHO list. The answer is I don’t know, and the reason I don’t know is because the only people with that info – the DTCC – aren’t telling. You have tried to answer a question that wasn’t asked, and build in some agenda-based tripe that assumes everyone is guilty of something – again, with no basis in fact. So two for two.
“3) Is naked shorting illegal for everyone besides market makers?” You go on to discuss private deals, and ignore the one that is being discussed – selling shares you don’t own on the open market to manipulate a stock’s price down, like in the Compudyne case where 975 separate transactions were used to sell over a third of the float short naked. That’s the one I am asking about. Not some convenient side deal – open market fails to deliver, like in Compudyne. Answer: They are illegal. You know it. I know it. You just don’t want to answer the question being asked. Dishonest, but in keeping with the rest of your responses.
“(4) Private securities transactions have always been exempt from regulatory oversight.” Except we weren’t discussing private transactions – you introduced that to duck the actual question. It’s called a straw man. No one reading this is stupid enough to fall for it. Besides, perhaps, you, since you are the one trying it.
“(5) They haven’t been pardoned. If you have a fail to deliver in a securities account, you may still force settlement by the means that have been discussed before. (See NASD Rule 11810.) Reg SHO is a reporting mechanism only, it does not excuse the consequences of prior settlement failures.” Wrong. All fails prior to January 7 have been spared the rules and regs that SHO mandates. So they are not subject to the forced buy ins that SHO defines as mandatory. Given Professor Boni’s paper, which highlights where out of 68K failed transactions only 85 or so were bought in, or Compudyne, where not one of 975 were bought in, saying that Reg SHO doesn’t apply to all those is a grandfathering. There is no buying in occurring on those, and they are being allowed to fail indefinitely.
“(6) I am not defending illegal activity. I am objecting to the practice of diverting blame for the demise of so many companies away from management (where it rightfully belongs) to a group of people who have no role in a company’s operations or their financial performance. What is most objectionable about this activity of yours is its use as a tool to sell worthless shares to misinformed investors.” You are in fact diverting your ducking of the actual questions and the replacement of those with more easily answered questions of your own – which is a rhetorical dishonesty that should be abundantly clear now, to anyone reading this. Again, how stupid do you believe the readers are? You are refusing to acknowledge the illegality of the behavior being questioned by pretending that we are discussing a different behavior of your choosing. Nice try. At least you are consistent. Do you work with Mark?
“(7) They don’t. Parties to a settlement failure can enforce a buy-in any time they choose.” Can. But don’t. Like in Compudyne’s case. Or Professor Boni’s paper. Thus they are getting away with illegal behavior.
“8) Protection from settlement failure is uniform. The procedures for an 11810 Buy-In apply to all securities regardless of the underlying financial condition of the company whose securities have not been delivered.” And yet settlement failures for those on the SHO list aren’t bought in, as evidenced by their presence on the list. And according to you, they are mostly scams and shams – it’s their fault, they deserve it. So the logical conclusion is that the companies on the list – who are ostensibly shams – aren’t afforded the same rights as “legit” companies. That’s why they are on the list. They aren’t legit. Circular, but your logic.
“(9) In most cases, the company’s management. It’s a red herring they can point to instead of addressing the flaws in their business plan. It enables them to dump more shares upon an unsuspecting public to raise money which, in turn, finds their way into managements’ pockets when they run their next payroll.” A baldfaced lie. Presumes the companies are engaging in felonious behavior without any proof offered. Burden of proof of outrageous claims is upon the claimant. You offer none, and then blame the victim, as though by declaration you can make it true. You can’t, and it isn’t, no matter how many times you say it is. Sorry.
“(10) You can sue anyone you want, but ultimately anything you stand to win in a lawsuit must be tied to the value destroyed by these funds.” Correct. And if your aforementioned declaratory assumptions that they are all shams turns out to be, well, to put it charitably, poop, the funds will be out a ton of money for their illegal naked shorting. At least this one you answered truthfully, the filibustering thereafter notwithstanding.
“(11) If you have a settlement failure and your broker/dealer acted as principal, you have the name. It would be your broker/dealer. If you have a settlement failure and your broker/dealer acted as agent, they would have the name of the culprit. They would be the party named in the 11810 to force the Buy-In.” 99.999% of the time the retail buyer doesn’t realize that they own a fail – the broker doesn’t tell them. That’s how it works. The DTCC lends the seller the shares to be given to the buyer’s broker, and the fail stays on the NSCC’s books in their sub C account, collateralized by the cash in the sub D account. But you are correct that there is a contingent liability that still exists for the seller’s broker.
“(12) Blaming a government official for your ineptitude in the stock market is a really novel idea, but I don’t think it will fly.” How about suing an individual at the SEC who can be shown to have full knowledge of the size and scope of the settlement problem, and who has acted to conceal the issue, for the benefit of those who violated the law, and against the interests of the public? Would that suit work for you?
Most of your answers don’t address the actual questions asked, or assume a different set of facts than those known to be true. That is the art of the con artist, albeit a relatively crude level con. Either that, or you merely are unusually susceptible to logical fallacies, and don’t even realize you are guilty of them.
Take your pick. Gotta run, but I’m always available to help promote understanding, even among those who seem closed to any possibility other than the one their agenda mandates.
That would be you, BTW, unless you can actually answer the hard questions as framed, and not as re-framed by your preferences to avoid the truth.
Your choice.
Comment by Bob O'Brien -
James, excellent answers. Now, if I may, one more Q&A:
Q. Naked Shorting – Is a politician being used?
A. Since not even “Bob” himself has chosen to continue making Global Link a poster child for the anti naked shorting movement (as was obviously intended by the manner in which an attempt was made to exploit it in the press, hence the subject of this blog), nor even tried to dispute the post reverse split survivability of the S-8 shares, the clear answer is “Yes.”
Comment by Jeff Mitchell -
O’Brien,
(1) I neither know nor care. It has no bearing upon a company’s operations or their financial performance.
(2) In most cases, it remains a secret because many of the companies themselves are not being open or honest about their outstanding share counts.
(3) Your flavor of “naked short selling” is not so much illegal as it is a minor procedural violation. The tools to correct a failed delivery of securities against a contra party have been around for years. If you have a failed delivery in a stock, let me know and I will show you how to correct it. As far as “naked short selling” for “everyone besides market makers”, it is simple activity to perform and very legal. Find someone stupid enough to want to buy and hold shares in one of these scam companies and offer them a discount from the current market price to hold a futures contract for delivery at a later date. Or, you could engage them in a private repo. Or, you could sell them a Euro style call option with a miniscule strike price. There are plenty of legal means for all investors to create positions that mimic the these “naked short selling” positions.
(4) Private securities transactions have always been exempt from regulatory oversight.
(5) They haven’t been pardoned. If you have a fail to deliver in a securities account, you may still force settlement by the means that have been discussed before. (See NASD Rule 11810.) Reg SHO is a reporting mechanism only, it does not excuse the consequences of prior settlement failures.
(6) I am not defending illegal activity. I am objecting to the practice of diverting blame for the demise of so many companies away from management (where it rightfully belongs) to a group of people who have no role in a company’s operations or their financial performance. What is most objectionable about this activity of yours is its use as a tool to sell worthless shares to misinformed investors.
(7) They don’t. Parties to a settlement failure can enforce a buy-in any time they choose.
(8) Protection from settlement failure is uniform. The procedures for an 11810 Buy-In apply to all securities regardless of the underlying financial condition of the company whose securities have not been delivered.
(9) In most cases, the company’s management. It’s a red herring they can point to instead of addressing the flaws in their business plan. It enables them to dump more shares upon an unsuspecting public to raise money which, in turn, finds their way into managements’ pockets when they run their next payroll.
(10) You can sue anyone you want, but ultimately anything you stand to win in a lawsuit must be tied to the value destroyed by these funds. You don’t get Lincoln Continental money if someone runs into your Ford Pinto. With every company that has ever cried about “naked short selling”, you look at their SEC filings and you find companies that have little to no value. In every case I have seen, their market cap has far exceeded the value that any reasonable person with a financial background would assign to such a company.
That a hedge fund can make money while you lose money doesn’t mean that the fund is responsible for destroying value or that they’ve stolen anything from you. Generally, it would signal that you don’t know a thing about investing and they do. Our judicial system is not in place to repatriate capital away from parties who can read financials and know how to allocate capital properly to give it back to dimwits who won’t do research and think the stock market is nothing more than a glorified gumball machine.
(11) If you have a settlement failure and your broker/dealer acted as principal, you have the name. It would be your broker/dealer. If you have a settlement failure and your broker/dealer acted as agent, they would have the name of the culprit. They would be the party named in the 11810 to force the Buy-In.
(12) Blaming a government official for your ineptitude in the stock market is a really novel idea, but I don’t think it will fly.
Comment by James Brownfield -
Still here, Jim?
Let’s try to stay on point. Here’s my list of questiongs still awaiting your response – Simple questions, jimbo:
1) What is the extent of the fails for the companies on the SHO list?
2) Why is it a secret? Why should it be?
3) Is naked shorting illegal for everyone besides market makers?
4) Hasn’t it been for 71 years?
5) Why were the fails prior to January 7 pardoned?
6) Why are you defending illegal activity?
7) Why should those perpetrating the illegal activity get away with it?
8) Why should some companies be protected by the law, and others not be?
9) Who benefits from the fails being kept secret?
10) Should I be able to sue the funds that naked shorted my investment to a fraction of its value? If not, why not?
11) Should I be able to find out the identities of those breaking the rules? If not, why not?
12) Should I be able to sue Government officials who have harmed me through their actions, by lying and covering up for their cronies on Wall Street? You can with the IRS. Should I be able to do so with the SEC?
I’ll look forward to your answers to these questions.
Comment by Bob O'Brien -
Patch, I am not particularly obsessed with Jag Media. It is what it is, which happens to be a trainwreck. However, it’s been rumored that you’ve sunk nearly a million into that trainwreck and when it comes to poster children of companies that have been ruined by their management, few fill that role better than Jag Media.
Mark Valentine’s attempts to short sell Jag Media had no impact upon Jag Media’s financials and what Jag Media management did to that company. They raised over $40 million and then wasted it all. Mark Valentine is not responsible for the toxic funding package that Jag Media got from Cornell Capital. And Mark Valentine has nothing to do with their “get us out of DTCC”, “wait, no, get us back into DTCC” fiasco. Jag Media is nothing more than a Chinese firedrill that scams gullible investors out of their money. It’s a shame to see you take such a large hit to your personal net worth, but I can’t think of anyone more deserving.
Eagletech’s “technology” can be valued by the revenues they generated during the years they were solvent: zero. Eagletech exemplifies the problem with so many of these scam companies. They tout a wonderful product in their investment literature, but they can’t get customers to perform that one task that makes a business profitable: buy their products.
Sedona? That great development stage company? Back in 2000 and 2001, when they were still solvent, they spent eight to nine times more on general and administrative expenses than they spent on research and development. Sedona wasn’t built to do R&D; Sedona was built to enrich her management. You can tell us all how these wonderful incubator companies are leading the way in R&D spending in the pursuit of new technologies but their SEC filings demonstrate that you and their managements are all a bunch of liars.
Comment by James Brownfield -
From the worldstock.com pages:
Since 1983 I have spent a fair bit of my life in China, Thailand, Cambodia, Vietnam, and the Levant. Like many visiting such places, I was overwhelmed by the destitution I saw there. Perhaps as a result, my graduate studies centered on philosophy and development theory, yet over time I grew skeptical of the advice the West has offered the world’s poor for the past fifty years, and of the bromides of the World Bank, the IMF, NGOs, and charities.
Years after I left such academic matters behind me to become an investor, the opportunity arose to create an Internet outlet store. From the start we designed Overstock with one mission: to create an e-retailer optimized for liquidation: that is, to work within fractured supply channels of numerous, scattered vendors, scooping up products in lots too small to be moved efficiently through mass retail.
In 2001 I took a break from Overstock to visit India and Southeast Asia. Unlike an earlier visit to Cambodia in the 1980s, this time I was able to travel widely by motorcycle. As I went from village to village, I came across small groups of artisans making first-rate silver and woodwork, table settings, silks, and home décor products. Some of these cooperatives included the disabled, many of whom had lost limbs to landmines, or women with no legitimate job opportunities at all. One afternoon I crashed my motorcycle on a dirt path and lay tolerably banged up in the tropical sun, watching farmers work their fields. Some children took me to their village, and that night, sitting on a cot in the dark, perhaps under the influence of too much of their painkiller, I reflected on what I had seen. I remembered a Hanoi nail factory I had visited in 1988, staffed and managed almost entirely by the blind (to this day, one of the most incredible things I ever witnessed). I thought about the famous Grameen Bank of Bangladesh, a pioneer in micro-credit for village entrepreneurs (often women) who take loans to buy small capital goods, such as sewing machines, to support themselves. I thought about similar small cooperatives of artisans in Lebanon, Palestine, and Peru, which I had either seen or read about.
I lay there speculating from the economic and business perspectives I lacked as a youth, and saw a common thread running through these communities, a thread I had previously missed. They have in common, of course, their poverty, coupled with a desire for work, self-respect, and the chance to provide for their families. Yet beyond their disabilities, obstacles, and lack of capital, a larger problem confronts them all: their output comes into the world through highly fractured supply channels of numerous, scattered producers, in lots too small to be moved efficiently through the mechanisms of mass retail.
Finally it was too obvious even for me to miss! The central problem of artisan production and liquidation are indistinguishable: How does one marry scattered small-lot production to mass demand? Because their central problem is the same, the structure of the liquidation market is precisely that of the market for artisans’ goods. And by one of those weird coincidences that seem to govern my life, I had spent two years building the most effective mechanism ever created for marrying scattered supply to mass demand: Overstock.com.
Internet Retailing Meets Artisans: Missions and Dilemmas
Upon returning to the States from Cambodia, I formulated plans for Worldstock, a store within Overstock devoted solely to carrying the works of artisans, especially disadvantaged artisans, and selling them as inexpensively as possible so as to maximize the amount of return for them. The first questions that needed to be addressed were, of course, ethical.
One obvious question concerns child labor. The essence of trade is that it is conducted by free and rational agents, yet children are not “free and rational” in any relevant sense. Children working in factories cannot meaningfully choose the condition of their employment, and so their output is morally tainted. (I decided, however, that children might legitimately help their parents in informal, cottage-industry settings, if their work were limited and they go to school.)
Beyond this, however, I found that I was stepping onto a battlefield strewn with landmines. For example, how can an American liquidator negotiate fairly with a supplier from a poor country in a context of asymmetric power, information, and capital? Would providing new economic opportunities to traditional cultures reinforce entrenched patterns of the oppression of women? Should trade be conducted with people working in countries whose governments are guilty of human rights violations, or would that support tyranny?
Over time I arrived at the best set of principles I could formulate, based on my own personal observations, education, and experience. I chose them by reflecting on the products with which I hope to build Worldstock: goods whose purchase would support women, disabled people, and traditional artisans such as Native Americans, or other disadvantaged people, goods produced through micro-credit, and goods whose production or consumption is carried out in an environmentally sound manner. The common denominator of all our Worldstock products, I decided, would be sustainability: the businesses we will support are those that sustain rather than use up people, cultures, and natural resources.
Economic Sustainability
One way goods can be socially responsible is by offering sustainable livelihoods to disadvantaged people: for example, casualties of war (such as land-mine victims and widows); aboriginals and traditional peoples bypassed by over-centralized development; and women with no viable job opportunities who have fallen on hard times. Through trade we seek to provide stable employment which is healthful enough that it does not “use up” workers in the short term, and with which people can build a life for themselves in the long term. By purchasing their products, our customers are in effect bypassing a top-heavy, hand-out approach to poverty, opting instead for an organic approach that nurtures local cultures and practices.
Cultural Sustainability
Development often causes massive cultural dislocations. For example, efforts to stimulate job creation in cities can lead to increasing urban unemployment as stimulatory effects get washed out by waves of workers forsaking traditional crafts for urban jobs. By buying the products of artisans working in traditional settings, we aim to support traditional practices while ameliorating the cultural disruptions that often accompany development.
Environmental Sustainability
Goods can contribute to environmental sustainability. For example, organizations such as the Worldwatch Institute and One World Products, Inc., aim to save the Brazilian rain forest by researching and selling replenishable products from it rather than burning it for pasture. Moreover, some goods are surrogates for commercial goods, but are produced in nonindustrial, eco-friendly ways.
Worldstock Adoptive Principles
Corporations are often accused of disingenuousness concerning the socially responsible practices of which they boast, so suspicion haunts any firm making claims such as those outlined above. Consequently, along with the foregoing principles governing what products we acquire, we are also committed to the following principles governing our pricing, negotiations, and disclosure.
Razor-thin margin pricing
Some retailers buy goods that contribute to economic, cultural, or environmental sustainability, but then mark them up 300 or more, with the result that only a small fraction of the sales proceeds actually gets to the producers. We have decided on a radically different course. While a small profit is necessary to afford the ever larger inventories that growth requires, my dream is to price our Worldstock goods inexpensively so a
Comment by mfv -
‘National Association Against Naked Short Selling’or ‘naanss’,ICI,AND THE PUMP AND DUMP ‘GENEMAX'(GMXX),all conveniently located in one Blaine,Washington office. Why ?
I presume the fraudulent ‘naked short’ claim was unfortunately too profitable both as a tout mechanism and for conning many to go longer on their penny stock scams than they otherwise would.Otherise it would not have reincarnated as ‘National Coalition Against Naked Shorting’,or ‘NCANS’,now would it ?
But tell me is this a scam originating from the ‘Beltway’ ? Shame.
Ten Stix Announces Alliance With ICI
Business Wire, Nov 5, 2002
Save a personal copy of this article and quickly find it again with Furl.net. Get started now. (It’s free.)
Business Editors
GOLDEN, Colo.–(BUSINESS WIRE)–Nov. 5, 2002
Ten Stix, Inc. (OTCBB:TNTI) today announced that it has entered into an agreement to retain ICI, based in Blaine, Washington, to launch public relations efforts as well as to assist in certificated trading compliance with the market makers and clearing houses in TNTI.
ICI is a consulting and investor relations firm that has recently enjoyed great success with Genemax Corp. (OTCBB:GMXX) in curtailing illegal short selling.
“We are excited to be a part of the ICI family; it fits perfectly in our long-term business plan of creating shareholder value through internal growth and legitimate trading of our shares,” says Tony Cranford, Director of Ten Stix, Inc.
Ten Stix, Inc. is a pre-eminent developer and supplier of Casino Products and Table Games including the “ProShuffle” deck shuffler and “Bonus 6” Poker table game. For more information go to: http://www.tenstix.com.
This news release may include forward-looking statements within the meaning of section 27A of the United States Securities Act of 1933, as amended, and section 21E of the United States Securities and Exchange Act of 1934, as amended, with respect to achieving corporate objectives, developing additional project interests, the company’s analysis of opportunities in the acquisition and development of various project interests and certain other matters. These statements are made under the “Safe Harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements contained herein.
COPYRIGHT 2002 Business Wire
COPYRIGHT 2002 Gale Group
Comment by Tony Ryals -
Hey Tony. Is your purpose to clog every blog where any meaningful debate is taking place on naked shorting? I note with amusement that your specialty is the classic paid basher’s technique of cutting and pasting large chunks of irrelevant information in an effort to clog the thread with as little genuine creativity as possible.
Having been censored repeatedly by our good friend and enabler Mr. Cuban, I note with amusement the dross you are allowed to post, with no apparent restrictions on length nor libelous content (for instance that I or NCANS are in any way connected to an organization you know is not connected in any way but is guilty of it sounding vaguely like, or that I am Davidson, which credible eye witnesses have indicated I’m not). You are either a clogger whose sole intent is to render threads unreadable due to your drivel, or are genuinely bugfuck crazy, which while I will admit based upon your free form and incoherent rambles it is tempting to believe is the case, I am reluctant to give you credit for, as your clogging seems far too systematic for a genuine loon.
So that leaves clogger with an agenda.
Wonder why anyone would pay a guy to clog disparate threads all over the Internet whenever substantiative discussions about naked shorting pop up?
Anyone’s “scamdar” going off yet? No? How uniquely and usefully selective.
What a surprise.
Comment by Bob O'Brien -
GeneMax Corp. (Formerly Eduverse.Com) (GMXX) Announces Update On Naked Short Selling Evidence
BLAINE, Wash., Oct. 23 /PRNewswire-FirstCall/ — GENEMAX CORP. (“the Company”) (OTC Bulletin Board: GMXX) (Frankfurt: GX1) announces the following update information regarding naked shorting selling of the Company’s common shares:
GeneMax is a “certificate only” or “custody only” issuer requiring physical certification of Company ownership for all share transfers. Furthermore, no valid or legally enforceable transfer of GMXX stock can be made through Depository Trust Corporation (“DTC”) and/or Canadian Depository For Securities Limited (“CDS”) or their nominees. Both DTC and CDS have voluntarily cooperated with the Company to remove GMXX stock from electronic eligibility.
On August 2, 2002 the Company’s transfer agent confirmed that there were only 265,654 trading common shares of GeneMax Corp. Notwithstanding this fact, the Company’s proxy agent has confirmed that there were 400,820 reported shareholdings of record listed as held by broker dealers and clearing agents. This represents a discrepancy of 247,347 shares that were not delivered by naked short sellers. Therefore, based on the available information, as of August 2, 2002, the trading float was oversold by 151%.
Naked short selling has increased in magnitude since the August 16, 2002 press release. As of October 11, 2002, the Company’s transfer agent confirmed that there are only 265,734 trading common shares of GeneMax Corp. Notwithstanding this fact, the Company’s proxy agent has confirmed that there were 714,174 reported shareholdings of record listed as held by broker dealers and clearing agents holding a net deficiency of 592,495 shares that were not delivered by naked short sellers. Therefore, based on the available information, as of October 11, 2002, the trading float has been oversold by at least 268%.
The Company confirms the following facts:
As of the date of this press release no GeneMax share options have been exercised.
A total of 80 shares eligible for sale under Rule 144 have been converted from restricted to trading status from August 2, 2002 to the date of this press release.
As at the date of this news release, the Company has issued and outstanding common shares totaling 15,160,119 with only 265,734 free trading common shares. The Company confirms that of the total 14,894,785 restricted shares issued, 14,871,844 shares have not been, or are ineligible to be pledged, borrowed, or hypothecated or used in any way for any normal short sale coverage.
Notwithstanding the fact that the Company had only 265,734 free trading shares during August and September this year, the official OTCBB website reports trading volume of approximately 1,100,000 GeneMax shares per month during these months. In addition, GeneMax shares trading from October 1-17, 2002, 2002 totaled in excess of 1,800,000 shares with average daily volume of almost 140,000 shares during the first half of October, 2002 (53% of the trading float daily).
The increase in naked short selling has left the Company with no alternative but to increase its litigation efforts to combat unfair and manipulative trading practices.
About Naked Short Selling: Under a naked short sale of stock, short positions are not declared, shares are not borrowed to cover the short sale, and shares are sold without delivering the stock to the purchaser. Real shareholder ownership is being undermined by naked short sales of stock and failed deliveries of real certificates that artificially inflate ownership and devalue the price of securities.
Broker dealers and clearing agents who appear not to have received GeneMax share certificates on behalf of their clients who appear have purchased their shares from naked short sellers are listed below for the record date of October 11, 2002. The Company encourages shareholders to become registered shareholders with the Company by ordering their share certificates for delivery from their broker dealer. This procedure ensures authenticity of shares purchased by the public.
GENEMAX CORP.
Record Date: October 11, 2002 Failed Share Deliveries
Ameritrade Clear (102,114)
Iclearing LLC (83,205)
Merryll Lynch (55,066)
Charles Schwab (40,158)
Octagon Capital (26,408)
Legg Mason Wood (24,100)
Nations Financial (22,220)
Salomon Smith BA (17,110)
Scottrade Inc. (15,925)
National Bank Financial (15,763)
Prudential Secur (14,752)
National Investor Services (14,668)
Pershing/Division (14,393)
Penson Financial (12,755)
First Clearing (10,558)
Brown & Company (9,170)
A.G. Edwards & (8,267)
E*Trade Securities (8,218)
U.S. Clearing (8,154)
TD Waterhouse (8,103)
Emmett A Larkin (7,500)
W.D. Latimer Co. (6,500)
Morgan Stanley (5,572)
Haywood Securities, Inc. (5,180)
BS Warbur LLC (5,050)
Refco Securities (4,000)
Sterne Agee & Leach (4,000)
RBC Dominion Securities, Inc. (3,190)
Bear Stearns Securities (2,540)
American Express (2,308)
Goldman, Sachs (2,150)
Janney Montgomery Scott Inc. (2,000)
Robert W. Baird (2,000)
Yorkton Securities (2,000)
USAA Brokerage S (1,900)
RBC Dain Rauscher (1,886)
CIBC World Market, Inc. (1,634)
Wachovia National (1,500)
Wolverton Securities (1,500)
Stifel Nicolaus (1,400)
BMO Nesbitt Burns Inc. (1,014)
ABN Amro Incorpo (1,000)
H&R Block Financ (1,000)
Instinet Clearin (1,000)
Odlum Brown Limited (1,000)
U.S. Bancorp Inv (1,000)
Raymond James Ltd. (994)
Deutsche Bank Securities, Inc. (956)
Investec Ernst & Company (820)
SWS Securities, Inc. (635)
Fiserv Securities, Inc. (625)
Global Securities (606)
Brwon Brothers (530)
Commerbank Capital (500)
Computer Clearing (500)
Georgia Pacific (500)
Scotia Capital Inc. (500)
Smith, Moore & C (500)
Wells Fargo Inve (500)
Multiple Retirement (490)
Spear, Leeds & Kellogg (407)
Strong Investmen (350)
Baker Boyer Nati (300)
Kirkpatrick Pett (300)
Parker Hunter Inc. (300)
Jefferies & Comp (200)
PNB Financial BA (200)
Scott & Stringfe (200)
J.J.B. Hilliard (168)
Perelman-Carley & Associates, Inc. (150)
Advantage Tradin (100)
J B Oxford & Com (80)
Assante Capital Management (58)
Peoples Security Company (41)
Banc of America Securities LLC (34)
ML Stern & Company, LLC (20)
(592,495)
About GeneMax: GeneMax is a biotechnology company specializing in the discovery and development of immunotherapeutics aimed at the treatment and eradication of cancer, and therapies for infectious diseases, autoimmune disorders and transplant tissue rejection.
SAFE HARBOR STATEMENT
THIS NEWS RELEASE MAY INCLUDE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE UNITED STATES SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED, WITH RESPECT TO ACHIEVING CORPORATE OBJECTIVES, DEVELOPING ADDITIONAL PROJECT INTERESTS, THE COMPANY’S ANALYSIS OF OPPORTUNITIES IN THE ACQUISITION AND DEVELOPMENT OF VARIOUS PROJECT INTERESTS AND CERTAIN OTHER MATTERS. THESE STATEMENTS ARE MADE UNDER THE “SAFE HARBOR” PROVISIONS OF THE UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND INVOLVE RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN.”
Make Your Opinion Count – Click Here
SOURCE GeneMax Corp.
-0- 10/23/2002
/CONTACT: Marcus Johnson of GeneMax Corp., +1-866-872-0077, or +1-360-332-7734, or fax, +1-360-332-1643/
(GMXX)
CO: GeneMax Corp. ST: California IN: MTC BIO HEA OTC SU:
DA-GF — SFW050 — 0254 10/23/200209:30 EDThttp://www.prnewswire.com
Related Companies
GeneMax Corp. (Formerly Eduverse.Com):
Profile , News , Full Q
Comment by Tony Ryals -
Dave Patch if you read my communication to you ABOVE you’d see my abiity to connect some things such as you and SIRIUS touting Davidson’s gmxx in the past.Why ? And what happened to those who went ‘long’ to fight the ‘naked shorting’ oF gmxx that you and SIRIUS claimed at the time ? And why were you touting gmxx at a time when DAVIDSON WAS COINCIDENTALLY INVOLVED AND COINCIDENTALLY PROMOTING IT AS A ‘NAKED SHORTED’ STOCK WHILE A PUMP,THROUGH DAVIDSON’S AGORA OR ‘VANTAGE POINT’ AND DUMP A THROUGH LOM’S SCHWAB ET.AL ACCOUNTS WAS GOING DOWN ?
If you are connected to a Davidson gmxx tout in that way where is your credibility in crying ‘naked short’ agaiin now ? The float and outstanding of gmxx shares in hindsight make plain it WAS NOT ‘NAKED SHORTING’AS YOU CLAIMED AT THE TIME BUT INSIDER,DEATH SPIRAL,DUMPING THAT CRASHED GMXX,RIGHT ?
Comment by Tony Ryals -
james, James, James,
I see your ability to connect is poor.
1. Amazon over the past 3 years has NOTHING to do with their first 7 years of negative financials. Had they merely closed up and died as you say all these others should, where would their “view” and advancement into the e-commerce future be?
2. Airlines. I guess by your analogy, these companies should merely declare bankruptcy, let the naked shorters have their ill-gotten profits on counterfeiting and start over. Airlines fundamentals say that they are a poor business model in a global economy that needs their services. If every poor business model shut it’s doors — what do we have?
3. Only because you seem obsessed to bring up Jag Media. Valentine tried to sell $10 Million of it’s stock to teh FBI when their was less than $10 Mln in market cap. How? Jag had a streaming video concept back when the concept was not being used and would have grown tremendously in the Brokerage Community. They were defrauded from the right to create that business by Valentine and only because they chose to fight back are they remaining in business today. I guess a coward like you would turn tail and run from the ones that stole your business.
4. Finally, Technology Development. You have no clue. Sedona Corp was naked shorted, lost considerable contracts, barely survives yet companies like Fiserv see their values. Eagletech, don’t talk about today, what was their technology before Organized crime manipulated their business into destruction? Hundreds of companies fight to survive as they fight to bring new technologies and developments to market. When manipulated they fight through the chaff of idiots like you and corruption on Wall Street.
Naked shorting is illegal. Clean up naked shorting and those who deserve top die will do so on MERITS not fraud and manipulation.
So James what are you so afraid of? Without the fraud and manipulation you can’t make a buck? Try to do it with honor and integrity for a change.
2.
Comment by Dave Patch -
Patch, While it is fun to bring up Amazon, as they were long an overvalued company and are probably still overvalued, what differentiates Amazon from the deadwood (like Jag Media) that blames their woes upon “naked short sellers” is that they never ran their working capital into the ground and went begging for more cash to make payroll.
It’s not that Amazon didn’t tap the equity markets, but they never permitted their working capital to fall below $1.2 billion over the past three and half years. The deadbeats that you so dearly love (like Jag Media) do not manage their working capital in an efficient manner at all.
The airlines are going to continue to fly, and any bankruptcies that get filed in the coming days will have nothing to do with “naked short selling”. Bankruptcy is the process companies use to rightsize their financial structure to their operating environment. The airline industry in its current form can not support leveraged companies with poor cost structures. Reorganization is the only way for many of them to continue to exist as ongoing entities. “Naked short sellers” aren’t keeping customers from flying more and they aren’t encouraging consumers to seek deep discounts in airfares. The new operating environment simply doesn’t work with the old financial model.
Our technology development is not being advanced by these companies chasing “naked short sellers”. Again, if you examine the financials of these companies doing the complaining (and what better place to start than Eagletech), you will find companies that are supposed to be development stage companies spending ridiculous sums of money on administrative and general expenses. If you ran an R&D section at IBM, Intel, Merck, or duPont, it would cost you your job if you ran the sort of R&D to administrative cost ratios that you see on the income statements of so many of these scammers.
The guy living under the bridge has the same rights as the millionaire when it comes to protection under the law, but he does not have the right to put his hand in my pocket if he wasted his portfolio on garbage like Jag Media, Eagletech, or Global Links.
Comment by James Brownfield -
Simple questions, jimbo:
1) What is the extent of the fails for the companies on the SHO list?
2) Why is it a secret? Why should it be?
3) Is naked shorting illegal for everyone besides market makers?
4) Hasn’t it been for 71 years?
5) Why were the fails prior to January 7 pardoned?
6) Why are you defending illegal activity?
7) Why should those perpetrating the illegal activity get away with it?
8) Why should some companies be protected by the law, and others not be?
9) Who benefits from the fails being kept secret?
10) Should I be able to sue the funds that naked shorted my investment to a fraction of its value? If not, why not?
11) Should I be able to find out the identities of those breaking the rules? If not, why not?
12) Should I be able to sue Government officials who have harmed me through their actions, by lying and covering up for their cronies on Wall Street? You can with the IRS. Should I be able to do so with the SEC?
I’ll look forward to your answers to these questions.
Comment by Bob O'Brien -
Dave Patch why aren’t you posting on rb’s jagh tout board lately,huh ? how long have you known ‘o’brien’ and why did you used to tout on rb’s gmxx message board like your longtime rb colleague-alias ‘SIRIUS’ did ?,huh ? is it a coincidence that James Dale(‘the SEC lies’) Davidson was CEO before resigning from CEO of genemax and a major dumper of gmxx shares while pretending it be be a victim of ‘naked shorting’ through ‘naanss’ or
National Asociation Against Naked Short Selling'(located coincidentally in the same Blaine,Washington office as gmxx) that disappeared from the internet in 2003 about the time your’investigatethesec.com’ appeared coincidentally out of Vancouver ?
Please you are in a position to tell us much about the history of the ‘naked short scam’.
Would you say it perhaps is originally a scam originating out of Washington D.C. just as the Nigerian style scams had their origen or at least their major fruition from Nigeria ? I mean is James Dale Davidson,beltway insider, not the master of this scam ?
As you seem coincidentally as,I explain above, to have connections to both ‘o’brien’ and James Dale Davidson or his gmxx,perhaps you could clue us in to some history of promoting the idea and magnifying the impact of ‘naked shorting’ for fraudulent claims that we would all like to be enlightened about.
Comment by Tony Ryals -
James,
You should look back onto any of my posts on this blog. I make no claims to buy any stock. While I am holding some stocks on the SHO list, you have no idea what they are as I’ve not told you. My ask is simple, stop violating the laws! Why is that so “crazy” to comprehend. They’re doing it, we know they’re doing it, and apparently it’s been going on for quite awhile.
Your stand here reminds of a story that came out during the tsunami events. Apparently, a woman was flailing in a torrent of water and would have surely drowned had a stranger (man) not ccme to her rescue and pulled her to safety. He then proceeds to rape her as she laid there too tired to fight and just happy to be alive. I suppose in his mind, he thought 3 things. 1) She’s lucky too be alive. 2) She owes me for saving her. 3) I can get away with it.
From your writing, I can make the same correlation to a fund naked short selling the crap out of a stock. 1) They’re a crummy company and deserves to be punished. 2) I’m doing the public a favor by exposing their “problems”. 3) I can get away with it.
The problem is, neither the rapist or the fund get’s to rewrite the rules as they see fit. That’s kinda why they’re called rules.
Comment by mfv -
Reading these posts, I’ve changed my mind.
I realize now that it’s not the SEC but naked shorting that keeps the stock market free of shady operators, scam artists, and sham companies.
I sleep better at night knowing now that guys like Rocker and other Hedgies are awake and burning the midnight oil on their yachts off Bermuda trying to figure out more and better ways to protect the private investor.
God bless America!
Comment by Ryan O'Neal -
James…
Penny Stocks finance losing years through sordid financing arrangements. They have to. Larger companies simply float more shares openly on to the markets – a luxury they are afforded.
Now, by your logic,
1. Amazon.com would not exist today (7 years of losses before breaking even).
2. Many Airlines we travel on would no longer exist. While they may be POS companies they make our economy function – Try hitting a Business trip across the country without a plane.
3. Our Technology development would be in the shitter. How many Tech stocks have had losing years over teh past 6 years. I can tell you semiconductor capital equipment has suffered and without their technology you will have a problem with tech growth.
In each of these cases management took HUGE salaries while the business’ suffered. Stock was diluted to cover the losses. Unfortunately companies larger than penny stocks can float shares easier than penny stocks and thus the sacrifices are smaller.
OUR ECONOMY goes through cycles and when it does companies operate on losses (read a few financials now and then). Small start up development and biotech type companies suffer the hardest. Without protections, we will never see the likes of them again as we try to make them extinct through fraud and manipulation.
Remember, the guy living under the bridge has the same rights as the millionaire when it comes to protection under the law.
Comment by Dave Patch -
O’Brien, As it turns out, the Reg SHO list is a great place to look for companies whose managements treat their common stock like toxic waste.
This weekend, someone sent me a copy of a paper called “Go down fighting: Short sellers vs. firms”. It was penned by Owen Lamont, Ph.D., at Yale. Turns out you can easily find it online. Just Google him. In his paper, he demonstrated that companies that made a point of attacking short sellers, instead of concentrating on their core business, tended to see losses of 2% per MONTH on their common stock.
That’s fairly consistent with what we’ve seen so far from the losers on the Reg SHO lists.
Joyce N. did not deserve what she got with her investment with Nanopierce. But Joyce N., at least, deserves to know who is responsible for what happened to her investment. Your diatribe did nothing more than blow smoke up her anal orifice. Anyone who can find, download, read, and understand Nanopierce’s 10KSB knows exactly what happened to Joyce N.
Your rape analogy of Joyce N. is interesting, but fails an important DNA test. Joyce N. did not deserve to be raped, regardless of her inability to read a set of financial statements, but the DNA points in one direction only: to Nanopierce management. The evidence is in the 10KSB.
The biotech and high tech “start up” market is another place where companies allege that “naked short sellers” have unfairly stifled their shares and impeded their ability to raise capital. Here again one look at the financials brings the truth into focus. A company in its development stages should be spending most of its money on research and development. What you find with many of these development stage companies that cry about the “naked short selling” wolf is that inordinate amounts of their expenditures fall within “sales, general and administrative” expenses instead of “research and development”.
In other words, they’re lining their managers’ pockets while the science sits on the shelf.
Comment by James Brownfield -
Hey Jim, a few other thoughts.
How many biotech or high tech startups burned cash they raised in R&D?
How much have some of the more prominent tech plays “burned?”
Using your “logic”, again, if you “burn” dollars on silly things like R&D or marketing or whatnot, you “deserve” whatever you get.
How much of their shareholder’s money have Amazon and Ebay “wasted?” Or is it only “wasted” and a sign of a scam if they can’t get any follow on funding due to their share price being depressed by naked shorting?
I won’t dispute that there are many lousy business plans and models out there. Many deserve to expire. But not due to illegal activity.
I can make that distinction.
Can you?
Comment by Bob O'Brien -
Golly James. Thanks for clearing all that up.
I guess all those companies on the Reg SHO list are there, well, because they deserve it.
Just like Joyce N deserves it.
Isn’t it kinda funny how everyone deserves it except for the folks that are provably violating the laws? They aren’t mentioned once in your little screed. Neither is the Reg SHO list. Neither is the hedge fund that sold over 33% of the float naked short in the Compudyne case, in 975 failed transactions, not one of which was caught by the system.
You are either: A) The dimmest individual on the planet, and just don’t comprehend the aforementioned facts; or B) Have an agenda that involves denying any facts that counter your agenda, much like Holocaust deniers or Creation Scientists.
I’ll go with B. You don’t strike me as particularly stupid, thus there is more going on.
Let me see if I understand your view: It is OK to violate a host of laws and ignore them if the company is questionable.
Got it.
Who knew that the laws were only intended to be enforced to protect companies that were “good?” Huh. I am rather naive and provincial, so I thought that even bad girls were protected from rape, and even bad companies were protected from illegal predation. Why, I suppose if we take your logic to its ultimate conclusion, we could just shoot individuals that looked guilty of something. That’s the logic. If there is the appearance of impropriety, then anything goes, and the protections go out the window. Did I miss anything?
We are fortunate to have you here to clear that up for us all.
Thank you.
And nice job.
It’s pure ad hominem, actually – attack the victim. “She deserved to be raped – she was dressed provocatively, was in a bar, has had multiple encounters with men in the past – she’s a slut, I tell you!” Or how about “He was sitting on a stoop in an area of town where criminals have been known to congregate, and he looked suspicious, therefore he deserved to be gunned down – what was he doing there dressed like that if he wasn’t up to no good?”
At what point does your logic become so repugnant that even you can’t swallow it any more? Is there any limit?
Comment by Bob O'Brien -
mfv, There are too many other legitimate ways to “naked short sell” a stock for me to sweat “keeping Naked Shorting alive and kicking”. As I mentioned earlier, I can achieve the exact same position as a “naked short sell” in a private transaction that can take the form of a futures contract, a repo, or a Euro style call option with an absurdly low strike price. In fact, it is far preferable to use one of these forms of private transactions as you then do not need to sweat the prospect of a forced buy-in.
My objection to the entire “naked short seller” movement is their using this red herring as a means to scam naive investors. Global Links is as good of a place as any to start. The point of touting Robert C. Simpson’s stake in Global Links is to entice goobers to buy shares to participate in a short squeeze. Never mind that control of Global Links is vested with the insiders who own all the Preferred Shares. Never mind that Global Links diluted their old common by over 90% over the past year and a half prior to their reverse split. And never mind that they have a shelf registration in effect that is unaffected by the split that took place. The Global Links story is built to dump worthless shares on dumb investors.
The “naked short seller” movement is bent upon showing people like “Joyce N”, a subject of one of Bob O’Brien’s articles, as being victims of “a newer type of player in the game”. Unfortunately, “Joyce N” was not victimized by “a newer type of player in the game”. “Joyce N” was victimized by the oldest type of player we see in our financial markets: deadbeat management. In O’Brien’s article, he never once mentioned that the management of Nanopierce had raised $23.8 million worth of equity over the years and that, of that equity raised, $23.1 million worth of it had been burned away.
He never mentions that this company with over 90 million shares outstanding has nearly a third of their assets (as of December 31, 2004) tied up in a joint venture partner that wasn’t even keeping their corporate filings current in their state of incorporation.
He never mentions that, before they wasted all their shareholders’ money, the management team of this wonderful, but unfairly victimized company was taking down salaries as high as $190k a year for the “services” they provided.
“Joyce N” might feel a lot differently about Nanopierce if she knew how to find, download, read, and understand their 10KSB filing.
Comment by James Brownfield -
Kent:
It is with sincere and total humility that I write these words. I have now seen the error of my ways. When I look at the Reg SHO Threshold list of companies for whom fail to delivers are a significant problem, what I was failing to recognize is that all of those companies deserved it. They are all bad. They must be, or they wouldn’t be on the list.
I had been duped into believing that because there are laws on the books against the exact practice the Reg SHO list documents as being real and tangible, that there was hard data available for any who would see. Apparently that is all a clever ruse.
When I read the NASD charges against the hedge fund that naked shorted over a third of the float in 975 separate instances of failing to deliver in the case of Compudyne, I’m just getting it wrong. What they meant was that Compudyne is a bad bad company and deserved it.
When I read the transcript from the Bear Stearns counsel’s conference call admitting that regulators have acknowledged for years that naked shorting was a growing problem, what he meant to say was that there are a lot of bad bad companies out there.
When the SEC’s own personnel indicate on the record that the practice can destroy companies, what they meant to say was that there are a lot of bad bad companies that deserve to be “kilt.”
I apologize again for my stupidity and bullheadedness. It is frankly inexcusable, and I now fully support the DTCC’s right to withhold basic data on trading from the public, the regulators and the companies involved, and in fact now believe that hedge funds and shorts are actually lovable squishy plush-like creatures that help our markets punish the bad bad companies that apparently do not deserve the basic protections afforded everyone else. Like battered women, or disenfranchised minorities, or abused children, these whiners are just out scam the system out of a little sympathy, and if you aren’t careful you too will get sucked into the notion that they didn’t all deserve it – “I wouldn’t have to hit you if you didn’t keep saying the wrong things” and “Daddy drinks and punches you because you cry.”
And so on.
Again, sorry for any misunderstanding. I hope this clears things up.
Really.
Comment by Bob O'Brien -
James, spoken like a true person with a vested interest in keeping Naked Shorting alive and kicking. Because the DTCC doesn’t reveal the precise numbers (even though they know it), there is no proof to how big the problem is (quite frankly, I could careless if the number came out tame; the fact that the mounting evidence suggest otherwise and the DTCC are so tightlipped raises my scamdar) . We know there is a problem since the REG SHO says so. Hard to explain that away I’m afraid.
No matter, clock is ticking. Law suits being filed to open up the DTCC books (they’re quite scrappy aren’t they?). More and more people are becoming aware (I’m on several investor mailing list and seeing more and more talk about Naked Short Selling from places I wouldn’t expect it). Sunlight is pentrating. Carefull not to get too burned dear James.
Comment by mfv -
Kent, The hard data you seek resides in the SEC filings of every company that has ever complained about naked short selling.
Open one of these filings, and each and every time you will find a company that has:
Raised a large sum of capital.
Burnt away most or all of the capital they raised.
Sought to blame a nebulous third party for their problems.
Years ago, one of the “free energy” scammers put together a show where they managed to get an old Dodge with a slant 6 to generate more energy than had been put into it using “Brown’s Gas”. You might still be able to read about it if you can find a newsgroup server that saved messages from the early and mid 1990’s. Of course the “free energy” attributes of “Brown’s Gas” is a scam, but that didn’t stop a bunch of people from being ripped off by the “new science”. The scammers can always put on a nice show and, of course, they know a little bit of science themselves.
The “naked short seller” movement has sought, from day one, to help managements evade responsibility for what they’ve done to their companies. Go back and read some of the early writings that are still quoted. “It’s been called the biggest financial scandal in the history of the world, with incurred losses estimated by some experts at well over $1 trillion dollars. It’s a scandal that involves over 1,200 offshore hedge funds, over 150 US brokers, and has already bankrupted over 7,000 US companies in the past six years.” That’s actual text taken from one of these anti-naked short selling activists.
The fact of the matter is that no company was ever bankrupted by naked short selling and there are no investor losses that anyone has ever been able to connect to them. Even their latest attempt to correlate short selling to investor losses with AremisSoft doesn’t fly. The lawyers stand in line first to receive a third of any proceeds that can be located and secured for plaintiffs. Unfortunately, there’s not $200 million to be found to pay off the court’s award. So naturally, what investors receive will be less than the court award divided by the shares outstanding.
But it won’t have anything to do with naked short selling.
Comment by James Brownfield -
I misquoted, Tony lost 200k+. From Tony’s own hand. I’m sorry you lost this money, but your “fight”, as a result, is misguided.
—-
Dear SEC,
I AM WRITING RE THE ‘SHO’OR NAKED SHORTING ISSUE.BUT MORE SO I AM WRITING TO DOCUMENT THE FRAUD OF NAANSS AND JAMES DALE DAVIDSON TO USE THE NAKED SHORT SCARE TO DEFRAUD INVESTORS TO HOLD LONG WHILE THEY DUMP OFFSHORE ONSHORE DEBENTURES AND ‘PREFERRED SHARES THEY GET FROM THEIR ‘SPECIAL’ RELATIONS WITH CORRUPT PENNY STOCK ‘MANAGEMENT’.I REALLY HAVE NOTHING AGAINST SHORTING AS LONG AS SHARES EXIST FOR THAT PURPOSE ON MARKET BUT NOT SHARES THAT DON’T EXIST.HOWEVER I BELIEVE THIS IS MORE PREVELANT IN BULL MARKETS.RECENTLY THERE HAS BEEN MUCH SAID ABOUT STOPPING NAKED SHORTING AND I BELIEVE THE PRINCIPALS IN THIS ARE DEBENTURE AND PREFERRED SHARE RECIPIENTS IN PENNY STOCKS WORKING WITH CORRUPT PENNY STOCK MANAGEMENT.ENDOVASC IS A PRIME EXAMPLE OF THIS AND THEY WORK WITH JAMES DALE DAVIDSON AND HIS STOP NAKED SHORTING,’NAANSS’ SCAM.
UNFORTUNATELY EVEN ‘FAMED TRIAL LAWYER O’QUINN’ HAS BEEN TAKEN IN OR IS WORKING HAND IN HAND I THE DECECPTION OF NAIVE ‘INVESTORS’SUCH AS MYSELF WHO HAVE LOST VITUALLY EVERYTHING IN THE FRAUD.
YES NAANS IS IS FRONT FOR DEBENTURE DUMPERS AND ‘MMS’SUCH AS SCHWAB CAPITAL KNOW THIS.SCHWAB HAS THREATENED ME WITH THEIR LAWYERS THOUGH THEY HAVE STOLEN EVERYTHING ALREADY WITH THE PIGS THEY PUMPED AND TOOK TO MARKET THAT FELL TO PENNYS.YES I WAS DALING IN PENNY STOCKS WITHIN LESS THAN A YEAR OF BUYING THE FIRST STOCK IN MY LIFE!! AND ALL THOSE $30 OR SO ‘TECH’ STOCKS SAID ‘STRONG BUY’. I KNEW NOTHING.
SO THEY BROKE REG 15 G I THINK IT IS ON MY HEAD.
ANYWAY BELOW IS WHAT I AM WRITING IN RETROSPECT,TOO LATE FOR ME I’M AFRAID,BUT IT SHOULDN’T BE.THEY SHOULD RETURN MY $200,000 +.
I AM NOW WRITING ABOUT THE ‘NAKED SHORT SCAM’ OF DAVIDSON ET.AL.TO POST ON RIPOFFREPORT.COM AS YOU CAN READ BELOW.
SINCERELY,
TONY RYALS
——————-
Comment by mfv -
LOM wins cease-trade fight
Last modified: March 10. 2005 9:44AM
The Royal Gazette
A bid by the British Columbia Securities Commission’s staff to have Bermuda-based Lines Overseas Management Ltd. cease trading on BC exchanges has been rejected by the Commission.
The BCSC ruled on Tuesday that there was no evidence on which to issue a cease-trade order against the brokerage, which is being investigated by US regulators over allegations of fraud and market manipulation.
Commission staff alleged that LOM had been trading on behalf of undisclosed clients through a number of B.C. brokerages.
The National Post reported yesterday that over the past year, LOM traded more than 800 million shares in the Canadian markets totalling about $1.2 billion.
BCSC staff alleged LOM and a number of its subsidiaries failed to provide required information about the individuals on whose behalf the trades were being made.
The regulator wanted to stop LOM from trading until it discloses for whom it was trading.
However, LOM argued that proper information had been provided to the B.C. brokerages through which it made its trades.
On Tuesday, BCSC spokesman Andrew Poon told the National Post that the regulator’s enforcement staff was “considering our position at this point” in wake of the commission’s ruling not to issue a cease-trade order against LOM.
In the United States, the Securities and Exchange Commission has served subpoenas on LOM and Scott Lines, its managing director, as part of investigations into alleged fraud and market manipulation of three public companies.
The SEC alleges it has found “certain individuals” traded extensively in the shares of Sedona Software Solutions Inc., SHEP Technologies Inc. and Hienergy Technologies Inc. “through accounts at LOM in Bermuda, the Bahamas and the Cayman Islands”.
Canadian regulators also have been looking at the trading through LOM accounts – and not just who is behind them, the National Post said.
Since October, 2003, the BCSC has been investigating a series of trades in the shares of San Telmo Energy Inc., a TSX Venture-listed firm, in 2002 and 2003. Many of those trades were made by LOM through B.C.-based brokers, the BCSC alleges.
The trading in San Telmo shares was referred to the BCSC by Market Regulation Services Inc. (RS), which monitors trading on Canada’s major markets.
Among the brokerages which held LOM or LOM-related accounts were Haywood Securities Inc., Raymond James Ltd., Research Capital and Desjardins Securities, according to the BCSC.
RS alleged that trades by LOM accounted for a large part of both sales and purchases of the stock and that LOM was both the buyer and seller in some trades, using accounts at different brokers. Also, RS alleged the LOM trades were “responsible for 20 percent of the upticks in the price of San Telmo shares,” according to a BCSC document.
Earlier this year, the BCSC dismissed an application by staff for enforcement orders against LOM and against other companies and individuals related to Lines Overseas.
In the January 12, 2005 decision, the panel considered the account opening forms for Lines Overseas at some British Columbia dealers.
It said the forms appeared to show that “at least some” of Lines Overseas’ trading “is being done on behalf of undisclosed beneficial owners.”
Noting that Lines Overseas was very active in Canadian markets, the panel went on to ask the parties for submissions to determine whether the commission should order that Lines Overseas cease trading in B.C. until it provided complete information to its dealers.
After considering the parties’ submissions, the panel ruled that it did not have sufficient evidence to make the cease trade order, saying: “Although we still hold the concern we expressed in our January decision, we have no evidence on which to make a cease-trade order . . . against Lines Overseas . . . (T)he onus of establishing that it would be in the public interest to do so rests on the Executive Director. If the Executive Director wishes to pursue the matter, the necessary evidence should be gathered and a notice of hearing issued.”
Comment by Tony Ryals -
Kent:
In physics there’s something called wave/particle duality, where depending upon the way an experiment is framed you can make an observation of matter behaving as a wave, or as a particle. Niels Bohr coined the term complimentarity to address this ontological oddity.
Another oddity is the refusal of some to acknowledge hard data that contradicts their preconceived notions. Instead of addressing the unpleasant truth, they will instead change the discussion to something different, and then assert their own, different flavor of the truth in that new, off-point area. Often, they will make a fallacy of equivocation when they do so, in a sophomoric attempt to make a “like” argument.
Here’s one way it can work – I would say something like: “Even if there is rampant and illegal abuse of the trading and clearing system, and even if there are abundant quotes from authorities and regulators that this same abuse could and does damage companies victimized by it, in the end the only things that REALLY victimize companies is corporate fraud, or governance inadequacies, or poor business execution or planning, etc.” I would then simply ignore the quotes from the NASD and the SEC and professors, and ignore the abundant regulations designed to address what rule makers apparently view as all too real, and then reassert some pedantic folksy wisdom, maybe tarted up with some technical jargon for added gravitas – maybe the odd reference to gauge field theory and quantum electrodynamics to impose a feeling of erudition. Expensive lipstick on a pig, IMO, but then again, what do I know…
See how easy it is? It’s fun to play, really. I could start out by quoting the SEC’s own representatives or site indicating the dangers to be had by naked shorting, or point you to whole papers which address the ownership issues that enter into the mix with shorting, or direct you to sites that copiously document the abuses to be found in the existent system and the resultant damage to the players in that system. Then you can just ignore it all, declare it meaningless with an officious wave of the regal cyber-hand, and indicate that your all-too-savvy skepticism hackles have been raised by the mere possibility of something existing that you don’t understand or agree with – thereby via declaration dismissing it as beneath your consideration, and ergo a sham of some sort. Sort of an “I’m smart, and if I don’t get it, it must be impossible or a trick” perspective – a denial by fiat.
Now you try it. Maybe start your own blog – and practice saying Bah!
Bah! Now it’s your turn.
Comment by Bob O'Brien -
Kent, Anyone with a background in physics is aware of the Second Law of Thermodynamics.
Over the years, there have been a number of con artists who have scammed people out of money by trying to convince them of new technology that would make a perpetual motion machine or a free energy device a possibility. Skeptics that cite the Second Law of Thermodynamics are dismissed as closed minded or arrogant.
The “naked short seller” scam doesn’t violate the Second Law of Thermodynamics, but it does violate an important financial principle. Namely, events that take place in the third market have no impact upon the fundamental financial performance of a corporation. The place to look for a scam is on a company’s balance sheet and income statement. A company with solid financials can not be impaired by short selling, naked or otherwise. And a company that burns away all its capital, never reaches profitability, and treats its shareholders like red headed stepchildren ultimately can’t be saved by a movement hellbent on demonizing short sellers.
Comment by James Brownfield -
Mark, you seem to be pretty convinced of your opinion here. Fine, good for you. But to think that your opinion is more likely to be correct, just because lots of people are telling you it’s wrong — that’s just silly. That puts you in a place where all of your convictions reinforce one another, and there is no room in your head for error-checking.
Every time somebody agrees with you — they’re smart people, and they prove you’re right. Every time somebody disagrees with you — that just proves that they’re scammers, which proves, again, that you’re right.
Hmm. Not much room for self-correction here, is there? What if you are wrong? How could the belief that you are wrong ever get into your head?
“The harder someone tries to convince me the sky is falling down, the more I smell a scam.”
OK, sure. There’s a scam going on. But who is the scammer? A truly great scammer will convince you that the ones who are telling you about his scam are the real scammers.
The charge being put forth by the anti-naked-short crowd is simple: there is corruption within the stock market. People have found a way to game the stock market for their own benefit and to the detriment of everybody else. They are skirting or breaking the law and making themselves rich. Why is it so difficult to believe that? Would that really be surprising behavior in any way?
I have no proofs myself one way or the other about the naked shorting issue. But I truly have an open mind about it. I’m willing to learn from both sides, and try to figure it out. From your comments, it’s pretty clear that you don’t.
Comment by Kent -
Again, real slowly now, for the truly dim.
No fairy tales. No elaborate theories where the bad management did unproved things – in Aremisoft, it is well documented exactly what they did, and it wasn’t selling shares out the back door.
So that straw man won’t fly. All facts are known, and there are 45 million authorized shares, and over 90 million “holders.”
Wall Street printed those additional 45+ million shares, pocketed the cash, and moved on, fat and happy.
So who pays the holders of those fails their expected chunk of the $200 million? For simple math reasons, let’s say that each authorized share is owed $4.25.
You have 100 shares, I have 100 shares, mine happen to be the authorized ones, yours are IOU’s your broker represented as legit, took your money for, and never settled.
How much should you get, and from where? I know I should get $4.25, because that is the total number of legit shares, and I’m holding some.
Now to the lawsuit issue. Let’s say you want to sue the bad scam company. They did bad things. Bad bad company. So you sign up for the class action and the company files a motion, like Computer Associates did, and your class is tossed because there is no way for you to sue, given that you aren’t the owner of anything but an IOU your broker fraudulently represented to be a settled share. Who do you have legal redress against?
Again, try to stay focused here.
It isn’t the straw man “the company is bad” that you are trying to argue. Let’s just assume the company is bad. There. I said it. They are bad. Bad bad bad company.
So you are one of 90 million shareholders, but one of the unlucky ones that didn’t get settled (to the tune of 45+ million.)
Who do you sue?
Who is liable to you?
The answer? The law says the broker, until the trade settles, which it didn’t for 45+ million shares.
So there’s your answer.
The broker. The industry. The system. It is liable. To you. The agrieved shareholder, who is in a suing mood, because as previously discussed, the company was bad bad bad, and you want your pound of flesh from the bad bad company.
This isn’t hard. Stop trying to change the circumstances because you don’t want to answer the question being asked. The question is, “who is liable for legal redress on the FTD shares?”
The answer is the broker/settlement system.
And that’s why this is a huge problem.
Thank you. Thank you very much.
Any questions?
Comment by Bob O'Brien -
Patch, When it comes to ignorance, I fear it is you who takes the cake.
I am not the one who touts Jag Media as a viable company.
You are the one making absurd allegations, not me. I won’t be chasing geese to demonstrate what a dolt you are. The financials of any company you tout do that with ease.
If there is anyone who needs to be proving anything, that burden would rest upon you. Along those lines, perhaps you can show us a class action suit that was settled where the proceeds distributed per share, net of attorneys’ fees, was less than what should have been distributed given the number of shares outstanding.
Being the chief “naked short seller” doofus, this is data you should have immediately at hand.
Comment by James Brownfield -
James – you really are ignorant.
Prove one single class action lawsuit where the short seller naked or legitimate – paid out on the class action settlement against the company. Better still, show me a class action where something other than a brokerage account statement was used to prove ownership. Do you really think they went into the bowels of the settlement system to define periods of ACTUAL Beneficial Ownership to use in the distribution phase? The DTCC has been hiding that data forever, they certainly would not freely open up their settlement info to all these class action attorney’s.
The Company and the Shareholders will all pay the burdens of the excessive shares created by short selling.
Comment by Dave Patch -
James, furthermore, all “Bob” has done is make a case for why FTDs are theoretically bad when trying to compensate victims via class action lawsuits. Since his only example of an alleged massive FTD case is based on a management scam, it only serves to bolster the argument that the majority of such lawsuits would be similar, i.e. not based on naked shorting, and thus we should put our first priority on locating and convicting such people, not plying our senators with fairy tales about $5000 companies being targeted by naked shorts. But we’ve been saying that for weeks now to obviously no avail.
Comment by Jeff Mitchell -
O’Brien, That’s not the way a settlement would work. Contra parties to a short position, whether they are “naked” or “borrowed”, are responsible for the value of the shares they’ve shorted.
Unfortunately, if its the company and its management itself that has run up the share count, as has often been the case as they scream about “naked short selling”, then your victimized shareholders will see their claims diluted.
Comment by James Brownfield -
I guess some have a hard time reading.
The shareholders of Aremisoft are victims. Fist of the management team’s hijinks, and now of having to divide their dollars up among 90 million “shareholders” when there are only 45 million outstanding shares.
Is there some part of that you find confusing? Which part, precisely?
Do the math.
45 million shares.
$200 million to divide up.
90 million shareholders, 45 million of whom don’t own legitimate shares.
Someone is going to get screwed, unless a sharp class action attorney picks up the ball on this. Which I suspect will be the case. The 45 million legit shareholders shouldn’t have to divide up their money with non-legit holders of IOU’s from brokerages. And the 45 million holders of the IOU’s should be entitled to the same matching dollars their brethren with certificates get – but out of the brokers’ pockets. That’s who owes them the dollars. Simple.
The liability stays with the brokers until the trade is settled. No trade settled equals brokers still on the hook.
Starting to get it now? And that’s just one company, one example.
Oh, did I mention that all 90 million shareholders also got 1 share of the new company that was spun off from Aremisoft’s profitable roll-ups?
That means that the real shareholders got screwed to the tune of half their holdings.
That will be suit number 2.
This gets into the half a billion or more category in a heartbeat.
Now imagine 500 more companies much like it. Starting to see why FTD’s are a problem for the financial integrity of the system?
No?
Read this again.
Comment by Bob O'Brien -
“Bob”, ROFL! Are you seriously trying to make a case that Aremissoft was a victim of naked short selling? Quite the opposite. It was exposed, as many scams are, by short-sellers. Any undelivered shares (I’m taking your word for it they exist) were obviously from those minted by the con artists that ran the company. Document otherwise.
This is from the SEC Complaint:
‘On or about May 14, 2001 a short-seller’s report detailed numerous allegations of irregularities and misrepresentations by AremisSoft, including several relating to terms of the Bulgarian contract… In an effort to staunch the sharp decline in AremisSoft share price, the company issued a press release on May 15, 2001 announcing that Poyiadjis had purchased 100,000 shares of the company’s stock. According to the press release, Poyiadjis said, “we believe the shares of AremisSoft are undervalued in the marketplace due to the concerted activities of unscrupulous short sellers who have been spreading false and misleading information . . . We remain highly optimistic about our business prospects and the recent stock activity has created an opportunity for me to invest at what I believe is an attractive valuation.”‘ http://www.sec.gov/litigation/complaints/comp17172.htm
How many times can you cry the naked short wolf and expect people to give you the credibility and attention you crave?
Comment by Jeff Mitchell -
O’Brien, You seem to be confused about who the victim is. There is no doubt that the people who buy shares in garbage companies are victims. However, you would try to lump the managements of these companies into victimhood status as well. The managements are not victims. In most cases, they are the culprits.
Revenues alone are not enough to keep a company solvent. WorldCom had over $20 billion in annual revenues when they filed their 11. Cal-Maine’s problem is not a lack of revenues. Cal-Maine’s problem is a lack of profits.
Despite your assertions, there is not one company that has ever been “naked shorted” out of existence. The airlines are not hampered by the existence of “naked short sellers”. They are hampered by cost structures and balance sheet flaws that can’t be made to work profitably in an industry that remains in over capacity.
Comment by James Brownfield -
O’Brien,What about the retail investors who were screwed by the penny companies you still represent as honest and victims of ‘naked shorting’? I have never once heard you lament that the ‘naked short claim’and scam of James Dale Davidson and his ‘naanss’,’investigatethesec.com’ of Dave Patch,Financialwire of Essary,and whatever sponsors the ‘faulkingtruth.com,erroneously made by and for over 100 penny stock ‘companies’ in order to con investors to go long awaiting ‘famed trial attorney O’Quinn’s et.al. judgements when all along it was a massive penny dump and dump scam ?
Have you visited many rb message boards of penny scam boards like rb’s cmkx where your ‘naked short’bs and Washington Post letter to President Bush is perhaps helping the mafia connected Mr.Maheu of Las Vegas and inspiring penny tout scams to be revived again on and on ? Why don’t you ask Mr.Maheu or Congressman Bennett to give you protection so we can know who sends anonymous stock advise to our President from offshore ? Are you an American ?
I THOUGHT HOMELAND SECURITY WAS TELLING US ONLY YESTERDAY THAT ANONYMOUS MESSAGES OVER MASS MEDIA WERE OF INTEREST TO HOMELAND SECURITY BECAUSE TERRORISTS COULD BE PASSING SECRETS IN THE MESSAGE ? You,like a spoiled child,claim it a joke that your websites have originated out of B.V.I. rather than the U.S. where the message is targeted.
That’s outrageous. And to top it all off the big penny naked short scam to mask offshore(LOM et.al.)and insider dumping originated,in many ways,IN WASHINGTON,D.C.COINCIDENTALLY – WITH JAMES DALE DAVIDSON – A BELTWAY INSIDER !!!!
In this post 911 era I would think that is the least we could ask of you,and Dr.Byrne,and Senator Bennett.It is obvious when your colleague Dave Patch states that Senator Bennett’s interest in this ‘naked short claim’ dates further than the latest penny stock of the day(Global Link?) Financialwire had just touted as another poster child of ‘naked shorting’.
Some here really do believe that your history with the ‘naked short’ issue dates back longer than NCANS.SOME BELIEVE YOU MAY HAVE A PAST WITH ‘NAANSS’ WHICH IN MANY WAYS IS A WASHINGTON,D.C. ORIGINATED STOCK SCAM IF YOU CONSIDER THE MIND BEHIND IT AND PROMOTING IT THROUGH VANTAGE POINT AND THE OLS NAANS WEBSITE WAS JAMES DALE DAVIDSON,WASHINGTON, D.C. INSIDER.
It would seem to me you are touting slightly higher market caps companies of questionable and precarious financial futures and playing the same scam James Dale Davidson and his ‘NAANSS’ website did with the pennies.
Comment by Tony Ryals -
It is interesting to me that those who would deny the obvious fact of naked short selling, as definitively documented by the Reg SHO list and cases like Compudyne and such, ALWAYS go for a fatuous straw-man that the SEC also favors: Blame the victim.
You can point them to a Cal Maine Foods, with a ton of revenue, or an NFI, also with a ton of revenue (hundreds of millions), or legit companies in crisis like United Airlines or Delta, and yet they will simply ignore those and focus on the penny stocks.
Here’s an area for all you geniuses out there to consider when you are saying that there’s no downside to naked short selling – other than the fact that it is illegal for brokers and any non-MM to engage in the practice – oh, that.
You have a company like Aremisoft – a company where a fraud was perpetrated by the owners, and $200 million was embezzled offshore. Fine. They were crooks. Got it. Thankfully, that $200 million is now frozen, and will be returned to the shareholders. One problem, though: there are 45 million shares authorized, and 90+ million shareholders. Who is going to get screwed here – the 45 million legit shareholders, to the tune of a 50% haircut on their money return, or the 45 million owners of FTD’s, who were misled by their brokers into believing that when they bought and paid for the “shares” they were entitled to legal redress as owners?
Simple question. Who pays the 45 million holders of vapor the money they think is coming to them? The company? Why? They don’t owe them a nickel. The executors of the settlement? Why? They aren’t entitled to a nickel. They aren’t owners. Period. They were conned – they lack the essential ownership to claim redress.
This is the fundamental problem with blaming the victim and pretending that the issue doesn’t exist.
And here’s the kicker: when those shareholders all want to sue in a class action suit, WHAT RIGHT DO THEY HAVE TO DO SO? They didn’t own shares issued by the company. So they have no cause of action against the company – they aren’t legitimate owners. So who pays them for all the damages that they find out they aren’t entitled to?
The legal answer is the brokers. The burden rests with them. If you don’t understand what a huge contingent liability this represents for the financial system vis a vis every company on the SHO list, as well as every company that has ever been naked shorted, then you are missing a pretty significant point.
So while you are busy tarring and feathering the companies that have been naked shorted out of existence, consider this: The shareholders should have a right to sue if the management has been up to no good. And to win a settlement.
That right has been stolen from the investors when the system takes their money but doesn’t force settlement. And it could be a centi-billion dollar contingent liability, if not a trillion dollar liability, that the brokerage community is now facing – legally it is their problem until the trade is settled.
I’m going to bet that the SEC didn’t really think that through when they grandfathered in all the past failures rather than forcing settlement – it seemed like a good idea to let their broker buddies off the hook easily, but it carries a huge negative I believe nobody considered. Because those “shareholders” all think they still have the legal rights of redress that legit shareholders do. And technically they do – but against their brokers and the DTCC, not the companies.
Wonder if Bear Stearns and Goldman and Schwab have figured this one out yet. Probably not. But they will, as soon as an enterprising class action attorney figures it out.
And they will.
I repeat. Failing to deliver (naked shorting) is a problem that goes far beyond whether the companies in question are good, mediocre or bad. It is a fundamental question of systemic fraud. Plain and simple. Nothing more.
Good old fashioned taking the money but not delivering the goods.
There are no new ideas – just new applications. Anyone too dim to get this is either being deliberately obtuse, or shouldn’t be allowed to type in a public forum. Take your pick.
Comment by Bob O'Brien -
Patch, I don’t believe anyone ever tried to blame the collapse of Enron or WorldCom upon naked short selling. Maybe Ebbers should try it at his trial.
Sedona’s collapse can be traced directly to its financials. Had Sedona not taken every penny of the $60+ million they raised and wasted it, no broker could ever have collapsed the stock.
Had Eagletech not taken the nearly $16 million they raised and burned it all away, their stock would not have collapsed. It is management activity (or inactivity) that is responsible for their woes.
That Amazon and Google have been and remain overpriced does not change what is taking place in the “naked short seller” movement. That one group of investors will get skinned by those two companies does not forgive your attempt to skin yet other group of investors by selling them your “naked short seller” snake oil.
My engaging in private securities transactions, effectively the same as your goofy “naked short selling”, does not short circuit the economic theory of supply and demand. We all get a vote in determining what a company is worth. My vote just happens to be that many of these companies are overvalued. Your fight against the “naked short sellers” is an attempt to create an asymmetric market where participants with no position in a stock may only buy or not buy. A truly efficient market needs to accomodate players who see overpriced junk and want to short it.
Comment by James Brownfield -
The question at issue here is “Naked Shorting – Is a politician being used?” I pointed out that Global Link’s S-8s register hundreds of millions of shares not subject to adjustment from forward or reverse splits. Unless you can somehow explain away what happened to these shares, the only conclusion to draw is that whoever did prime Senator Bennett with this alleged naked shorting smoking gun either was supremely stupid or a bald-faced liar.
Let’s also not forget that, S-8 shares aside, all this fuss is over a company where the alleged sole owner paid a whopping $5,205 for the honor. Just the type of company we need to hound our Senators to protect — at taxpayer expense — from those pesky naked shorts!
Comment by Jeff Mitchell -
James,
Enron was not unraveled until later, neither was Worldcom, etc..
Sedona – SEC convicted Rhino Advisors of Securities fraud and the DOJ has the audio tapes where Badian’s BRIBED brokers to collapse the stock. The tape was part of teh arrest indictments against the Badians – So…Was Sedona stock manipulated?
Eagletech – The SEC just went after several organized crime members for manipulating the stock and selling massive unregistered securities into the market. Do ya think it affected the stock and/or the company?
3. Jag Media. Mark Valentine attempted to sell $10Mln in securities to an undercover FBI agent when there was not $10Mln in Market Cap. Do you really think the undercover fed was the only one Valentine was selling to? How about the e-mails Wall Street sent to the company talking about their inability to settle trades. If Buy-Ins were so easy, why not just buy-in? Why ask the Issuer what to do?
The greatest fraud perpetrated against investors comes from Wall Street. Research Analyst conflicts was the greatest P&D scheme orchestrated to date. Naked Shorting, and the volatility in sell side pressures is extremely profitable to Wall Street because it forces people to sell out of positions (Commissions) simply due to the illegal sell side pressures.
When Amazon started out it took 7 years to turn a profit. Nobody believed in the concept let alone the business. Look where it is today. You do not buy based on fundamentals alone as it would never create future opportunities. Naked Shorting stop those opportunities before they get teh opportunity to root. Is Google priced according to fundamentals today?
It was my impression that market capitalizations is based on many circumstances INCLUDING the economic theory of supply and demand. Should naked shorting take out that basic economic priniciple? Naked shorting actually just brings in more victims as they artificially depress valuations below what people perceive to be an acceptable valuation using counterfeit shares to draw them in.
Comment by Dave Patch -
Patch, The point of demonstrating the ease with which a transaction can be completed that results in the same effective exposure as a “naked short” is to demonstrate the folly of blaming “naked short selling” for the misdeeds of these companies. I don’t have to have the shares to short a private futures contract and, assuming a steady stream of suckers exists to buy shares in garbage companies, I can always roll the contracts forward.
A private transaction will affect the market price. If there is an idiot out there who would have paid 40 cents a share for a large block of Jag Media and I manage to engage him in a private futures transaction at a price of 35 cents, that’s demand that won’t make its way to the public trading for Jag Media shares. My writing contracts for five million shares of Jag Media is effectively five million shares of Jag Media that won’t get bought on the open market.
A retail investor can demand physical delivery of their shares at any time. If their broker has acted as principal in the transaction and fails to deliver the shares, the customer can lodge a complaint with the NASD and force the delivery of the shares. However, in the vast majority of cases, brokers act as agents in their customers. Therefore, the fail is not the result of the customer’s broker taking a naked short against them, but rather the result of the contra broker/dealer not delivering shares. Here, the customer’s broker/dealer would have every incentive to file a buy-in to keep their customer happy.
You’re not REALLY going to tell me that Eagletech has any value at all, are you? With every cent they ever raised gone? How does a company with no income, no revenue, no common equity, and an executive suite that has milked the company dry have any value? And Jag Media? Sedona?
Do you even bother to look at these companies’ financials before you start blithering? I do have something to back up my arguments with each and every company you mention. It takes the form of a balance sheet and an income statement. Look at any company that has ever complained about being victimized by naked short selling and you find the same thing time and time again.
A company has raised capital
A company has burned most or all of their capital
A company now wants to blame someone else for their woes.
Comment by James Brownfield -
You really should take a look at this posting by Patrick Byrne, CEO of Overstock.com:
http://forums.auctions.overstock.com/viewtopic.php?t=6405
At the link above, Mr Byrne has written an excellent, concise description of the “naked shorting” issue. After reading Mr Byrne’s description, it should be crystal clear to you that in the recent “Bob O’Brien vs Mark Cuban” battles here, it was indeed Bob that was the logical, clear thinker on this issue.
Mark, if you’re reading this, I think you should cut your losses and concede that Bob was right. If you continue trying to defend your faulty thinking, and continue trying to paint Bob as a scam artist, you’re only doing the Dan Rather thing. Admitting that you are wrong can, in hindsight, be viewed as a *very* smart thing to do.
Comment by Tom -
James.
1. A Private sale of stocks would not be a naked short unless the seller never really had the shares in the first place – hence counterfeiting. Can’t be a naked short unless no delivery is made.
2. Private sale – outside the market – will NEVER impact stock valuations.
3. Buy-In’s. Tell me fool, is the investor ever told that their trade failed settlement? Do you know of one investor holding any of the SHO securities who was notified they purchased under a fail and thus initiated a buy-in? Fact is, if you call the Broker you went through THEY DO NOT KNOW that it actually settled in teh true sense of settlement (DELIVERY!) So what is this BS that James can initiate a buy-in by calling his broker when the shares he bought never settled. ONLY brokers initiate buy-ins and that rarely happens.
4. Every Company on REG SHO, Sedona, Compudyne, Eagletech, etc… have all been held artificially low by naked shorting. Do you really value Google at $200.00/share? Can you tell me why many on SHO fluctuate +/- 30% if stocks trade on VALUATIONS alone? How do you even define valuations when you have no idea about shares and P/E ratio’s.
You are extremely stupid in your arguements as you have nothing to back them up. I find it ironic how none of you will even explain who and what the SEC was talking about during the proposal and release of SHO. Was it all about theories when they used the present tense? What did they mean by GREATER LEAVERAGE and reduce stock price?
Comment by Dave Patch -
mfv, (1) There are plenty of ways that an ordinary investor can take an effective “naked short position” in a stock. All you need to do is find an investor silly enough to want to hold shares in one of these garbage companies and engage them in a private transaction that can take the form of a futures contract, a repo, or a Euro style call option with an absurdly low strike price (like a penny a share).
(2) If there is illegal naked short selling taking place on these exchanges, there are already rules in effect that enable a contra party to a failed transaction to force settlement. The buy-in rules and regulations have been around for years.
(3) Name ONE company that has had their shares artificially decline in the face of naked short selling.
Every company that I have ever seen where people alleged that naked short selling has been taking place has traded at valuations that no one in their right mind could possible support. David Patch’s favorite company to whine about is Jag Media. If you go and take a look at Jag Media shares, you will find a company that has raised $40+ million over the years. They have a toxic funding package in place that they regularly tap, to the detriment of its shareholders. Before their most recent toke off the toxic funding bong PIPE, they had TOTAL assets of $300,000 yet their market cap has been around $10 million.
No one in their right mind would argue that Jag Media’s shares are artificially depressed.
Comment by James Brownfield -
1) Naked shorting is illegal for 99% of the people out there.
2) Illegal naked shorting is occuring in the NYSE, AMEX, NASDAQ as well as the OTC stocks
3) Naked shorting causes an artificial decline in stocks.
All the talk about pumpers/dumpers, crappy stocks, etc. has no bearings on these facts. Tony has lost a bunch of money (100k+) on a bad stock and therefore is understandably upset. However, all his dancing around naked shorting, he cannot intelligibly disprove what I’ve mentioned above.
Comment by mfv -
This 2003 Businessweek article by Gary Weiss mentions the ‘NAANSS’ of James Dale Davidson,Brent Pierce et.al. that was located at Blaine,Washington Genemax(gmxx)office, decrying ‘naked shorting’ by market makers
as they dumped touted penny shares, particularly gmxx shares and probably through a LOM account or accounts among others.
Genemax made a feigned effort upon resignation of James Dale Davidson as CEO of beginning a litigation against LOM but this faded to nothing….
I am most surprised in retrospect that Gary Weiss and Businessweek didn’t do a more thorough investigation at the time and it was not hard even then for the SEC or Businessweek to know who was touting the ‘anti-naked short’ crusade and its real motivation.
It was the very death spiral offshore-onshore debenture and preferred shares dumping elite mafia or mafias in my humble opinion who through various cyber-tout vehicles promoted the idea that share value was due to ‘naked shorting’ rather then their dumping.
This would include Americans but also and more so Europeans,Israelis,Arabs,and others who take advantage of SEC Reg S to manipulate and defraud retail investors in America who buy from Schwab,Ameritrade,etc. And yet they may have been some of Schwab Capital et.al’s best clients over the years.
Even Adnan Khashoggi has gotten in on the action as well as his son.Genesis Intermedia is an example of a Khashoggi penny stock train wreck of fairly sizeble proportiions and his son resigned from Spantel located as so many penny scams,out of Florida.
What is most amazing to me about Reg S that the SEC created and has not seemed to have reconsidered is that it creates the perfect vehicle for penny stock money laundering and the defrauding of American retail purchasers who do not buy American penny stocks on a level playing field with the offshore pros who get their shares for pennies on the penny.:
And to add insult to injury these penny con pros do not leave cash from their dumping of American pennystocks on the U.S.investors and market.They have the defrauded American cash sent to their accounts offshore to even avoid U.S.taxes on what they steal with illegal pump dumps aided by U.S.brokers who refuse to know their clients or reveal them to defrauded Americans.
Don’t Force The Shorts To Get Dressed
“Naked shorting” helps to curb hype and crime associated with microcap stocks
Business Week:
Commentary by Gary Weiss
December 8, 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.
And that is where short-sellers perform a valuable role. Shorts wager on stock price declines by borrowing stocks and then selling them, in the hope of buying them back at a lower price. So, with microcaps becoming frothy, you’d think that the Securities & Exchange Commission would be encouraging the practice. Instead it has done the exact opposite. On Oct. 29, in a move that received little attention outside the securities industry, the SEC caved in to a vociferous campaign by microcap companies and proposed a rule that would curtail the primary form of short-selling that can deflate the hype of small stocks.
The new rule is designed to stamp out what is known as “naked” short-selling. It works like this: Ordinarily, traders must borrow a stock, or determine that it can be borrowed, before they sell it short. But some professional investors and hedge funds take advantage of loopholes in the rules to sell shares without making any attempt to borrow the stock. The new rule would effectively ban such short-selling.
Critics of shorting say this move is a good idea. They maintain that thinly traded microcap stocks are vulnerable to aggressive short-selling. Gayle Essary, CEO of Investrends Inc., a research service that focuses on small companies, says naked shorting “screws shareholders. They put $3,000 into a stock they think is going to cure cancer or something, and before you know it their stock is worth $300.”
But there is another side to the story. Short-sellers argue that the SEC action would eliminate the only market force against overhyped — or even fraudulent — small-cap and microcap stocks. And that, they maintain, would be as devastating for ordinary investors as it would be — financially — for the short-sellers. “It would crush the whole business of market-making and short-selling and enhance a hundredfold the crime level in these stocks,” asserts one New York short-seller who — like all shorts interviewed for this article — requested anonymity.
There’s no doubt that shorts often drive down the prices of thinly traded stocks. The problem is that such stocks often became tempting to shorts only because they are richly priced as a result of manipulation. A good example of that took place in the mid-1990s, when several microcap brokerage firms, including Hanover Sterling & Co., collapsed after shares they had promoted to sky-high levels were attacked by aggressive shorts. Hanover brokers and managers were subsequently imprisoned for stock fraud.
Shorts argue that if naked-shorting had not taken place during the microcap crime wave of the 1990s, such stocks would have climbed even higher before they crashed. In the past, the SEC was loath to act against naked shorting, but it now has succumbed to organized pressure — including a letter-writing campaign encouraged by more than 100 microcap companies, organized as the National Assn. Against Naked Short-Selling (NAANSS).
The arguments used by the organized opponents of naked shorting, lamenting the supposed depredations of short-sellers, are so repetitious that the SEC has categorized their comment letters — which are piling up at the agency — as “Letter Types A, B, C and D.”
So who is behind this campaign? Calls to the NAANSS were answered at a firm called Investor Communications International, whose clients include companies attacked by shorts. Their anger is understandable. The market is a ruthless place, but it’s supposed to be. The SEC should let it work — and not cave in to this campaign to suppress the only force that can curb hype in the resurgent microcap market.
Comment by Tony Ryals -
“by James Brownfield
Patch, The Reg SHO list is populated by losers. These companies will blame their woes upon “naked short sellers”, but in actuality their problems stem from mismanagement.”
Uh uh! That is beyond a stretch. You cannot back that up, but I await your attempt.
The bear raids Patch refers to is partly the unregulated hedge fund industry doing its best work. Working in collusion is not uncommon. When they can essentially margin short on stock that comes from thin air the consequences for the retail shareholder is devastating. Short every uptick until retail is worn out, kill investment, strangle the company.
It’s not a fair fight, not a fair practice, not a fair way to punish legitimate companies.
I’ll say it again, the OSTK CEO is a hero to his employees, investors and American business.
Mark how would you react if you were in Byrne’s shoes? I think I know.
Comment by Mike Mora -
Is the legal system being used by those who can afford to buy their days in court(or postpone them) and making a mockery of justice while those who really have need of it go unheard because of them ?
Below is a letter from ‘famed trial attorney’ John O’Quinn whose name appeared on Endovasc and other penny stocks companies’ press releases who claimed to be ‘naked shorted’ by market makers like Schwab,Ameritrade, Refco,and on and on.The truth I believe,in retrospect,is that most all of these questionable share touting ‘companies’ were dumping instead.
But O’Quinn was a famous attorney and was also representing ‘itis’ and its law library and jag notes media,and although it took on r.j.reynolds for the Texas government it was representing little biotech Endovasc with their Stanford nicotine patents and on and on.
Below shows that in January 2004 O’Quinn was still misinforming the SEC by claiming that it was ‘naked shorting’ that had caused damage to these very companies that in fact were still dumping shares faster than ‘naked shorting’ could account for and O’Quinn was causing most all the damage by deceiving investors to go long on questionable penny stocks he represented as victims of ‘naked shorting.
My biggest peave is that O’Quinn never answered my queries as an investor in Endovasc about insider dumping but worse he must have known about J.D.Davidson’s involvement at time of ‘reverse split’and about his tout business
publications and more so a link to offshore death spiral manipulations.He might have checked more deeply into shares supposedly ‘naked shorted’ by Charles Schwab and found that account for ‘select clients’. And O’Quinn apparently never examined the records of his client companies themselves or their transfer agents to my knowledge,as if they were above suspicion.
And of course James Dale Davidson is a well connected man in Washington,D.C…..
From: Alexandria DonAngelo [Alexandria.DonAngelo@kswny.com]
Sent: Monday, January 05, 2004 7:44 PM
To: rule-comments@sec.gov
Subject: File S7-23-03
Comments of John M. O’Quinn, Esq. on Proposed Regulation SHO
January 5, 2004
Mr. Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street, NW
Washington DC 20549-0609
Re: Proposed Regulation SHO
Dear Mr. Katz:
Over the last couple of years, I have been representing people who have been
devastated by predatory and illegal short-selling. This illegal securities
misconduct has been cleverly concealed by the perpetrators for years. Recently,
the S.E.C. has acknowledged this reoccurring illegal conduct and taken some action.
While those actions are a step in the right direction, they do not go far enough
to protect vulnerable corporations and their legitimate stockholders from this
pernicious activity. If, as a nation of laws, we do not act now and forcefully
to stop this pernicious illegality and to protect such corporations and stockholders
from it, our stock markets will be viewed by investors as corrupt and faith will
be lost in our markets, both here and abroad. Naked short-selling destroys the
value of the small innovative companies that have historically been the powerhouse
of our American economy.
When we speak of “naked” shorting, we are referring the practice of selling
shares short without fulfilling the obligation to deliver the shares to the purchaser.
Opportunistic traders have learned how to take advantage of an overworked regulatory
system to manipulate stock prices and profit from virtually riskless trading strategies.
These current recommendations are not strong enough to give the protection
and relief to the hundreds of companies that have been, and continue to be,
victimized by unscrupulous naked-shorting. Unless the system assures the public
that every short position taken is backed by actual shares of the issuer there
will be no effective restraint imposed upon these manipulators. We depend on the
S.E.C. to protect these companies and ensure the integrity of the market. The time
has come for true reform in this area.
Sincerely,
John M. O’Quinn, Esq.
O’Quinn, Laminack & Pirtle
Houston, Texas
Comment by Tony Ryals -
Patch, The Reg SHO list is populated by losers. These companies will blame their woes upon “naked short sellers”, but in actuality their problems stem from mismanagement.
Take a look at the companies that persistently show up on the Reg SHO list. None of them are undervalued. They all have market caps that no one with a financial background could possible justify. They will use their presence on the Reg SHO list to intimate that a great “short squeeze” is coming, but the only parties being squeezed in that garbage are the nutjobs stupid enough to hold their shares.
Comment by James Brownfield -
I guess the SEC was only imagining things when they wrote this as well.
Although short selling serves useful market purposes, it also may be used to illegally manipulate stock prices.23 One example is the “bear raid” where an equity security is sold short in an effort to drive down the price of the security by creating an imbalance of sell-side interest.24 Further, unrestricted short selling can exacerbate a declining market in a security by increasing pressure from the sell-side, eliminating bids, and causing a further reduction in the price of a security by creating an appearance that the security price is falling for fundamental reasons.
Bear Raid? Appearance that a price is falling for fundamental reasons – Kinda like the 30% swings the SHO securities are seeing today on GOOD news.
Unrestricted short selling – as in NAKED SHORTING. There is no unrestricted short selling if you are required to borrow as when the shares are no longer available to loan short sales are RESTRICTED.
It are the fools like you Geoff who would have ignored all the other fraud claiming Wall Street and these Companies are really looking out for all of us. There is no RAL FRAUD on Wall Street – we should eliminate all policing of teh crooks, the Markets will automatically correct itself.
Oh yea, I got a bridge in NY you can buy real cheap. Just send me the check and I’ll send you a title. LOL
Comment by Dave Patch -
GT..
Did the Market work properly when Wall Street was fined 3.9 Billion for fraud as posted above?
Naked Longs? You mean when investors put up cash to buy stocks. Was not aware you could buy without paying as you can with short sales.
There is NOBODY from the naked shorting efforts that are going after LEGAL shorts. You want to trade futures do so but buyers and sellers must understand and value their offers based on them being futures and not present markets. Naked shorting is selling futures at non futures prices at teh expense of the buyers (SEC claimed in SHO proposal).
I hope you never find out that you have been defrauded as those holding Enron, Worldcom, Tyco, and so many others have.
Regarding valuations, the dot.com runup was made worse by short sellers caught in times where they kept betting on stocks that kept moving up DUE TO ANALYST HYPE. The short squeezes that occurred made higher highs than if the shorts were not forced to cover. Likewise lower lows get created when shorts pile on to bad news with shares they can not settle. There is nothing wrong with controls but there is everything wrong with selling something you can not deliver.
Comment by Dave Patch -
This insane carry-on about naked shorts is yet another manifestation of what is wrong with what Americans try to pass off as “capitalism”.
Naked shorts do nothing more than naked longs (although naked longs do not have a long-side analog of the uptick rule to contend with). Naked longs think a stock is worth more than its current trading price, naked shorts think otherwise. End of story.
In any case, anyone with half a brian who wanted naked short positions in major stocks, would just use SSFs (Single Stock Futures); no uptick rule, for a start.
Anyone who had a significant bear view of an index in which a short target resides can also use its index ETF (no uptick rule), or buy PUTS.
This attempt to paint short-sellers as the source of downward pressure on indices, ignores 100 years (and fifty financial-markets… stocks are traded outside the US as well) of history… EXCESSIVE OVERVALUATION causes downward pressure on stock prices… shorts just CAPITALISE on the profit opportunity.
Nobody moans like a whining four-year-old abotu short positions in the bond futures market (or any futures market, for that matter). Legislators ought somply to BACK OFF and let the markets work. If people get burned as a result, let them look to the underlying REASON why the stock price was so elevated in the first place (show me a stock with a PE less than 10, that has suffered as a result of a “bear raid”…)
It’s like blaming higher interest rates on BOND shorts…
Regards,
GT.
http://marketrant.blogspot.com
Comment by Geoffrey Transom -
James.. You are so insightful. I guess the Reg SHO threshold list is just a figmant of our imagination. Better still, the SEC comments when they Proposed SHO were really just a mocking of all these whiney companies:
From the Proposal of SHO:
Naked short selling can have a number of negative effects on the market, particularly when the fails to deliver persist for an extended period of time and result in a significantly large unfulfilled delivery obligation at the clearing agency where trades are settled.28 At times, the amount of fails to deliver may be greater than the total public float. In effect the naked short seller unilaterally converts a securities contract (which should settle in three days after the trade date) into an undated futures-type contract, which the buyer might not have agreed to or that would have been priced differently. The seller’s failure to deliver securities may also adversely affect certain rights of the buyer, such as the right to vote. More significantly, naked short sellers enjoy greater leverage than if they were required to borrow securities and deliver within a reasonable time period, and they may use this additional leverage to engage in trading activities that deliberately depress the price of a security.29
So…Exactly what did they mean? Why did the SEC conduct what they called “sweeping reforms in short selling” to address naked shorting if it does not exist?
In Jan of 2004 the NASD and SEC created a joint task force to evaluate naked shorting – that came from the Counsel to Shelby of the Senate Banking Committee. In addition, the SEC hired Professor Leslie Boni to evaluate this issue (you should speak to her it may educate your closed mind). They did not do this for fun. They did not spend millions in time and resource evaluating a situation and reforming short sales on NOTHING.
I will pose the question to you as I have to all others including regulators: WHO was the SEC referring to by Company when they talked about naked shorting abuses? What have they done for enforcement to protect those companies?
Comment by Dave Patch -
The “naked short selling” story is nothing more than a diversion used by touts to keep their bagholders from selling shares.
If you examine any and every company that ever complains about “naked short selling”, you will see the same thing EACH and EVERY time.
The company will have raised capital. The company will have burned away most or all of the capital they raised. And then they will seek to blame a nebulous third party for the damage that has been done.
Comment by James Brownfield -
Wall Street is soooo clean. How many Executives took the heat for this magnitude of fraud – And the likes of Mark Cuban defends the honesty of the Industry.
WorldCom Settlement Update, Part II: $3.991 Billion and Counting
Another day, another $437.5 million in settlements in the WorldCom case. Today, settlements were announced with Deutsche Bank ($325 million), as well as WestLB AG ($75 million) and Caboto Holding SIM ($37.5 million). The full list is now as follows:
Citigroup: $2.575 billion
Bank of America: $460.5 million
Deutsche Bank Securities: $325 million
ABN Amro: $268.3 million
West LB AG: $75 million
Tokyo Mitsubishi: $75 million
Lehman Brothers: $62.7 million
Caboto Holding SIM: $37.5 million
BNP Paribas: $37.5 million
Mizuho Int’l: $37.5 million
CS First Boston: $12.54 million
Goldman Sachs: $12.54 million
UBS AG: $12.54 million
TOTAL: $3.991 billion
Comment by Dave Patch -
I think Mark is on to something. You should read Jeff Matthews blog on OSTK
Comment by Its strange -
great site with very good look and perfect information…i like it
Comment by Litfaßsäule -
Now, you hypothesize that the company “could” be issuing more, or that existing shareholders “could” be converting their preferred to common and selling it like mad – of course, the only thing lacking is proof.
Comment by runescape money -
The Company confirms that of the total 14,894,785 restricted shares issued, 14,871,844 shares have not been, or are ineligible to be pledged, borrowed, or hypothecated or used in any way for any normal short sale coverage.
Comment by wow powerleveling -
good!
Comment by 11nong -
IN THE MONEY: ‘Get Shorty’s’ Path From Utah To Washington
1 April 2005
Dow Jones News Service
English
(c) 2005 Dow Jones & Company, Inc.
By Carol S. Remond
A Dow Jones Newswires Column
NEW YORK (Dow Jones)–A senior U.S. senator’s surprising interest in an arcane campaign against short selling followed hefty donations to Republican causes by one of the issue’s key champions.
Patrick Byrne, a prominent corporate leader in the home state of Senator Robert Bennett, R-Utah, last year donated hundreds of thousands of dollars to a political advocacy group that financed advertisements against Democratic vice presidential candidate John Edwards. Byrne was also the largest private donor to Utah Republican gubernatorial candidate Jon Huntsman Jr. He also gave to Swift Boat Vets and POWS for Truth, a group that financed anti-John Kerry ads.
Byrne, president and chairman of online retailer Overstock.com (OSTK), has become a crusader and benefactor for conspiracy buffs who believe that Wall Street firms are cheating investors out of millions of dollars by illegally shorting stocks. The practice is known as “naked short selling.”
In recent months, Byrne himself has done battle with short sellers and those critical of Overstock.com. In February, Byrne helped write and finance a full-page ad in The Washington Post to raise awareness about naked short selling and its potential impact on President George Bush’s plan to privatize social security. The ad was sponsored by the National Coalition Against Naked Shorting or NCANS, a group endorsed by Byrne.
Short sellers typically borrow shares to sell them, hoping that they will be able to replace them with shares bought at a lower price later. Trading without a borrowing agreement is called naked short selling. It’s illegal for most investors, but legal for firms that make markets in stocks by bringing liquidity to the market.
The campaign against naked short selling got a major boost earlier this month when Sen. Bennett publicly confronted Securities and Exchange Commission Chairman William Donaldson about purported short selling abuses and told him that a new regulation known as Reg SHO has failed to correct the problem.
“You put out a new rule in January to deal with naked short selling. And nearly as I can tell from my constituents who feel victimized by this, it’s not working,” Bennett told Donaldson during a Senate Banking Committee hearing. The senator from Utah, chief deputy majority whip and a respected Republican leader in Washington, cut short Donaldson when he tried to explain how Reg SHO works. Bennett demanded to be briefed on the issue. A meeting is planned for early April.
Sen. Bennett’s support for the anti-naked shorting crusade was surprising because the issue has been centered around tiny companies many of them shells without real businesses and minimal revenues.
Especially puzzling was Sen. Bennett’s choice of an example to illustrate trading abuses – Global Links Corp. (GLKCE) and Robert Simpson, an investor who says he tried to buy all of the company’s shares.
Global Links, a development stage company that has generated but $1.6 million in revenue from 1993 through last September, had just $45,000 in cash as of last September, according to an SEC filing. It finances its tiny business by selling stock, something illustrated in other SEC filings. For example, as of last March, Global Links had 68 million shares outstanding. Three months later, that number rose to 107 million. Then as of late September last year, just six months later, it grew to 147 million.
It’s most recent corporate development includes the acquisition of a small number of properties from Utah-based Diversified Financial Resources Corp. (DFLR), a company under SEC investigation for its participation in an offshore boiler room scheme.
Although brief, the exchange between Sen. Bennett and SEC Chairman Donaldson has become a rallying point for those who accuse brokerage firms and hedge funds of manipulating stock prices through illegal short selling.
Recently, Bennett’s comments were featured in an infomercial about the evils of naked short selling produced by NCANS. Overstock.com’s Byrne is also featured in the promotional piece, although he now claims that his company has not been a victim of naked short selling. Another person featured in the infomercial is Georgetown University professor James Angel who now says that his comments were taken out of context.
Responding to emailed questions, a spokeswoman for Sen. Bennett said that Byrne was one of the constituents that complained to the senator about short selling abuses. She declined to identify others. She said one constituent gave Sen. Bennett a story about Global Links and the alleged trading abuses. She declined to identify that constituent. The spokeswoman said that Byrne’s donations to Republican causes didn’t influence Sen. Bennett’s decision to take on naked shorting.
Byrne acknowledged he had a brief conversation with one of Bennett’s staffers although he said in a later e-mail the conversation was not “substantive.” In the e-mail, he said he had extensive conversations on the subject with staffers of other committee members. He said he did “open lines of communication between the Senator’s office and folks in the naked shorting movement.”
Despite Sen. Bennett’s strong words to Donaldson during the March 9 public hearing, the spokeswoman said in an e-mail that in fact “Senator Bennett doesn’t know whether all the allegations of short selling by NCANS and others are accurate or whether claims that the new SEC regulation isn’t working (are accurate)- for this reason he’s pleased Chairman Donaldson has agreed to come brief him on how the SEC is enforcing the new regulation and what it has seen since it has been in effect.”
It’s likely that Byrne’s large political donations last year bought him lots of goodwill from Utah Republican leaders.
Federal Election Commission records show that Byrne and his father, legendary insurance man Jack Byrne, each donated $500,000 to a political advocacy group named Save American Medicine on Oct. 6, 2004. FEC records show that the 527 group was registered by Evan Twede on Oct. 1 “to support reform of medical liability laws.” Jack Byrne is Overstock.com’s vice chairman.
Expenditures records filed with the FEC show that $858,650 of the million donated by the Byrnes was spent airing anti-Edwards ads attacking his record as a personal injury lawyer in his home state of North Carolina. One ad can still be seen at http://www.saveamericanmedicine.com .
FEC records show Chuck Warren of Bully Pulpit Inc. was the only other person who donated to that 527 group, giving $200 on Oct. 4. Utah electoral records show that Bully Pulpit was a campaign consultant for gubernatorial hopeful Huntsman in 2003. Huntsman was elected last year. Warren is a long-time Republican staffer who in the late 1990s was chief of staff for then congressman Chris Cannon, R-Utah.
Meanwhile, Twede, the man who registered the 527 group, is also known as a Salt Lake GOP operative. According to news articles, Twede designed a bold marketing campaign that helped Bennett win his fist Senate seat in 1992. Stan de Waal, another GOP insider, is Save American Medicine’s treasurer.
Sen. Bennett’s spokeswoman said that Bennett has no relationship to the 527 group gifted by the Byrnes.
FEC records show that in the past Byrne gave to both Republican and Democratic candidates. But his political contributions took a sharp turn to the right in 2004. And in an e-mail, Byrne said he contributed to a number of Democrats in 2004.
He raised political eyebrows in Utah last year when he donated $75,000 to Huntsman’s campaign, the largest contribution outside the Huntsman family.
Byrne
Comment by Tony Ryals -
I really cannot believe all this time being spent on disproving naked shorting. It is blatantly obvious and has now ripped over $2 trillion dollars from the American people.
As a Professional Trader, I see it every day. In fact, this past week alone, a new candidate hit the list. Eltek(ELTK) posted great quarterly numbers about 10 days ago. A smaller float company, it took off to the upside and set a new 52 week high. It came down on profit taking to $3.88, then this past Monday, it broke out from $4.12 to another new high at $6.40. Since that $6.40 on Monday, CIBC World Markets showed up with “the refreshing ask from hell”. CIBC had no previous position in ELTK. The stock has 5.49 mil O/S and a flaot of 2.8 mil shares. No insiders have sold any shares nor have they filed to sell any shares. On Monday, the stock traded over 12 million shares…almost 5 times the float.
From that point on Monday, the stock traded over 14 million shares and CIBC shorted and/or sold 6.683 million shares.
How is this possible? It’s very possible. And it is very real. It is naked shorting.
After their earning’s release on 3/21, ELTK showed up on 3 German exchanges as a listed company WITHOUT THE COMPANY’S CONSENT.
This Friday, they appeared on the Reg SHO FTD list.
I have personally witnessed it myself. I see it all day long. It is not hard to find it.
Take a stock that is trading maybe 500K-1mil shares a day. Take the slow time from 11:30am-1:00pm EST. The MM’s are kiting shares on an immediate basis. I will enter an order to buy an obscure amount of shares…like 1423 or 2137 shares. I buy them on the ask. Somebody just sold that many shares that I bought. That sell, and of course my buy, will settle in 3 days. But, the sell is what we are concerned with from the person I bought from.
As I said, the MMs will kite those shares that were sold to me and sell them again. Just watch the tape. Sure enough, a few minutes later at the ask or a penny or two above the ask, here comes the identical same number of shares crossing the tape. If you don’t see it in the tape because that ask was bought in partials, you will see it as the best ask lot if and when the price gets there.
The MM’s will do it all day long. Tomorrow they will do it again. Four days from now, they will kite shares to replace all the nakeds from today that are settling. Then, they will pass the entire lot off to a hedge for a fee to skirt any FTD’s.
Not just in theory, but in provable practice, it takes twice as many shares to make a stock go higher as it does lower.
This is the MAIN reason the MMs are fighting so hard to keep Level 3 out of the hands of the investing public. They scream we should not have access to their complete book. This is so they can hide this illegal practice, and so we can’t see their intent to steal the stop-loss shares of so many stocks on their slam campaign.
There are now 9000 hedge funds out there. Plus, the off shore factions that are involved. You can rest assured they have every security on the board covered. It’s a little more than one per hedge.
Say what you will to “make us all crazies”. It is happening…every stock…every minute…every day.
The American people will call for immediate reform and DEMAND no less than the following:
1). Donaldson…gone
2). 300 attorneys at the SEC…gone.
3). DTCC reform and present officials…gone. No more protection of their illegal $50
bil. a year income.
4). A newly formed SEC comprised of private investors. An SEC formed solely for the purpose of which the Securities Act of 1934 called for…protection of the private
investor.
5). No security prospectus anywhere warns any investor of the perils of naked short selling. Therefore, the SEC by its own admonition has created a securities market
where they have openly committed fraud on the individual investor by allowing any
practice of naked short selling as a part of bonafide market making. By grand-
fathering all previous naked shorting previous to Jan. 2005, they are committing
a second fraud on the American investor. Therefore, the SEC shall immediately be
called to answer some 40000+ charges of fraud and market manipulation.
6). An immediate call of all outstanding short shares. The SEC does know exactly who is
naked short selling our securities. All companies will then re-issue their “auth-
orized” number of short shares. Since “the sum of the parts cannot be more than the
whole”, then all the parts are deemed null and void. A private agency will then be
formed to administer the short shares of every US listed company. Seven days notice
will be required to locate the short shares of any US listed security.
7). There will be no more pools of short shares created on a daily basis as naked shares to
counteract the effect of buying on margin. This is called “kiting” shares. It is illegal anywhere else in the world with a check, and illegal in the markets. There is no accountability in this practice and no justification for it. It forces every stock on the board to have twice as
many buyers as sellers for it to appreciate in price.
8). Immediate enforcement of the uptick rule. No more shorting into the bid.
9). Immediate access to Level 3 for all investors. It is not a level playing field until it is a level playing field.
10). No more trading off the board by market makers. All trades must cross the tape
during market hours.
11). No more painting the tape by specialists. The 4pm close is the 4pm close.
12). Immediate reform and disclosure for all hedge funds. They changed the rules with-
out telling anybody. They won’t mind if we demand changing the rules for the benefit of the private investor.
13). No get out of jail free cards. No deals. This is the largest crime in World History
and they all need to be made an example of. The practice of shorting should be a
scary endeavor where even the slightest news will cause panic. That was the way it
was designed. For years now, it has been the other way and anybody long a stock
cannot even sleep at nite because the criminals never sleep.
14). An immediate daily publication of all open short interest on a stock, with name or entity and number of shares.
15). Immediate delisting of all companies listed on foreign exchanges without the companies consent.
16). Immediate investigation of all media, reporters, and newswriters who have received funds for writing articles about any company. All payola payments will be found, off-shore accounts will be seized, and those involved immediately thrown in jail. I’m sure a good place to start is CNBC with their off-shore accounts and their blatant attack against Taser. There are a few thousand others. CNBC doesn’t report news. They create news. There is no first amendment right to freedom of speech when you harm a stock price through a news story. Even airing a commercial for which you were paid is in fact receiving $$$ for airing slam stories against a company. News is news. Repeating the same news over and over is slamming. And CNBC is guilty as charged.
Comment by B. Patterson -
Petition Against Petitions Against Naked Shorting
This petition is for individual investors only; NAFF members, please continue to use this version.
http://freedomfunds.net/papans.html
In signing this petition, you are requesting that there be an independent Congressional investigation into the flood of abusive and deceptive petitions being sent to the Securities and Exchange Commission regarding the investment strategy of naked short selling. This petition will request that the investigation seek answers as to who is really behind these petitions, which are clearly being orchestrated in order to distract the Commission from what it does best, namely to proceed with very deliberate caution while the markets take care of themselves.
Since the early 2000’s, a small group of shady stock promoters, many of them convicted of securities fraud, have waged an increasingly vociferous campaign against various trading practices routinely used by private investment partnerships, especially so-called “naked short selling.” As an investor in one or more of these private investment partnerships, I am outraged that these criminal elements are trying to reduce the effectiveness of the managers I trust with my investment dollars.
This campaign is clearly a smokescreen to draw attention away from the illicit promotion, massive dilution and insider enrichment that are the norm in the microcap equity markets, all at the expense of the gullible public that speculates there. So far, the SEC has failed to investigate those behind this nefarious and fraudulent campaign, but we demand that action be taken, that those responsible be held accountable. We must not lose the investment freedoms that have made this country what it is today.
DISCLAIMER: Your email address will only be used for this petition and will not be used for solicitation of investment opportunities, nor will it be given to any 3rd party.
Your Name:
Email:
Confirm Email:
City:
State:
Country:
Optional: stocks you think are short-to-zero certainties, esp. those where CEO blames “naked shorts” for the stock price (what professionals call “Probable Opportunity Securities”):
POS 1:
Comment by Tony Ryals -
Below is from Mr.David Marchant whose website, offshorebusiness.com,I highly recomend.This is a post from Mr.Marchant himself in reply to the subject thread I began after the open letter to Bush in the ‘Washington Post’ appeared in early February.
Mr.Marchant is responding in regards to a quote from Davidson’s and the Lord Rees- Mogg’s ‘Soveriegn Individual’that highly recommended opening an offshore account of $100,000 or more with LOM of Bermuda.LOM has come under some much needed scrutiny from the SEC as well as British Columbia securities officials which I am sure I already posted on this blog.
Mr.Marchant’s investigative journalism inspired a ‘The Royal Gazette’ of Bermuda article in late November 2004 that revealed the SEC had discovered huge penny stock share dumping and manipulation from LOM’s Charles Schwab and other U.S. brokerage accounts.
A google search of ‘schwab lom’will turn it up now although it has twice disappeared from a google search coincidentally.
http://www.offshorebusiness.com/message_board_detail.asp?id=15056&page=1
Re: Dear SEC or Was ‘naked short scam’ invented in Washingtion,D.C. ?
By David Marchant on 3/25/2005 5:56:47 AM
E-mail: editor@kycnews.com
What Lord William Rees-Mogg and James Dale Davidson failed to mention when recommending LOM so whole-heartedly to their readers is that they were also shareholders in LOM (Holdings) Ltd.
David Marchant
Comment by Tony Ryals -
Well,touting Charlie,when I bought ‘certs’ in late 2002 because Endovasc,’famed trial attorney O’Quinn’ and James Dale Davidson,with his ‘National Association Against Naked Short Selling’,CONNED ME INTO DOING SO, CLAIMING CHARLES SCHWAB WAS ‘NAKED SHORTING’ ME – THOSE CERTS WERE NO PROBLEM IN GETTING AT ALL AS MR.DAVIDSON AND GANG HAD DUMPED ,MILLIONS OF FRESHLY PRINTED SHARES,PROBABLY FROM LOM OF BERMUDA’S CHARLES SCHWAB ACCOUNT !!!
BELOW IS THE FRAUDULENT ‘BUY CERT’ PR THEY RELEASED AND,AS I EXPLAINED MANY TIMES,CHARLES SCHWAB WAS SUPPLYING THEM WITH A PUMP AND DUMP ACCOUNT TO DEFRAUD ‘RETAIL’ INVESTORS-SUCKERS. SO CHARLES SCHWAB WAS PART OF THE FRAUD AND SO WAS THE BUY ‘CERTS’ SCAM ONE ANGLE OF THE OVER ALL ‘WE’RE BEING NAKED SHORTED FRAUD’.
BECAUSE A PUMP AND DUMP ALONE IS ILLEGAL AND BECAUSE SCHWAB DID NOT REPORT IT TO THE SEC,TO MY KNOWLEDGE, AND CERTAINLY NOT TO ME THEIR DEFRAUDED NOT SO ‘SELECT CLIENT’, AND ALLOWED THE MONEY STOLEN FROM RETAIL INVESTORS TO BE SENT OFFSHORE, PROBABLY TO ONE OF LOM OF BERMUDA’S OFFSHORE ACCOUNTS,CHARLES SCHWAB AIDED AND ABETTED NOT ONLY AN ILLEGAL PUMP AND DUMP BUT THE LAUNDERING OF MONEY OFFSHORE MADE BY THE CRIMINALS IN THAT ILLEGAL PUMP AND DUMP DISGUISED AS ‘NAKED SHORTING’ !!!!ALL THIS IN THE POST 911 WORLD WHERE THIS WAS NOT SUPPOSED TO BE ALLOWED.
AGAIN TO MAKE IT SIMPLE,NCANS IS NAANSS AND J.D.DAVIDSON IS BEHIND THIS,NOT NEW BUT ON GOING,NAKED SHORT SCAM.AND IT DOES HAVE A BELTWAY ORIGEN IN THE CRIMNIAL BRAIN OF BELTWAY INSIDER JAMES DALE DAVIDSON.AND YES, DAVIDSON MADE OPTIMAL USE OF THE FEAR OF ‘ELECTRONIC TRADING’IN HIS PREVIOUS ‘NAKED SHORT-MONEY LAUNDERING SCAM AS WELL.
CAPISCE ?
MONTGOMERY, Texas–(BUSINESS WIRE)–Nov. 12, 2002
Endovasc (OTCBB:ENVC) – a biotechnology company with two new cardiovascular drugs approved for final FDA phase III trials -announced today that it has — in the opinion of its consultants — uncovered an oversold position in excess of 1,000,000 shares in the company’s stock, held primarily by The Charles Schwab Corp. (NYSE:SCH), Ameritrade (Nasdaq:AMTD) and Refco. The findings are a result of an ongoing litigation intelligence work conducted in connection with the $216 million stock manipulation lawsuit filed by Endovasc and accepted on contingency basis by the legendary trial attorney John O’Quinn, who also won the record $17.3 billion dollar settlement for the State of Texas vs. Big Tobacco.
“The oversold position in our company’s stock can actually be great news for our shareholders,” says Dr. David P. Summers, Chairman and Chief Executive Officer of Endovasc. “The overselling in our stock in the past few weeks does not seem to have had a negative impact on our share price. But, if shareholders actually asked for physical delivery of the shares they bought, the market would probably have to pay a premium in order to deliver them.”
“Additionally, our Board has recently approved the issuance of a tracking stock dividend plan. But according to our plan, as approved, it won’t be possible to issue any dividends to anyone that the company can’t identify as a legal beneficial shareholder. This is why it is imperative that our shareholders contact their brokers to ask their stock to be taken out of the street form and put into physical form,” states Summers.
Endovasc’s flagship drug Angiogenix(TM) is a revolutionary new cardiovascular drug that has been proven to recruit the body’s own stem cells that help grow new heart vessels predicted to relieve chest pain and improve heart function. Angiogenix(TM) is a simple, small molecule derived from the tobacco plant that, when given in low doses, has demonstrated remarkable results in stimulating robust growth of new vessels in four different animal experiments with simulated blood-flow deficiencies, suggesting that it will do the same in a human patient’s heart and limbs.
The treatment covered in the patent is licensed to Endovasc on exclusive basis for 10 years. In the most recent animal feasibility modal using Angiogenix for treatment of chronic myocardial ischemia, all subjects’ demonstrated signs of new renewed blood flow at 4 to 5 weeks post treatment. The study proved that Angiogenix(TM) is safe and more effective than anything else on the angiogenesis horizon – with the potential of becoming a biological alternative to a by-pass surgery. The most recent research results were publicized during an oral presentation at the recent 49th Annual World Wide Conference of the American College of Angiology (ACA) in Maui, Hawaii where Endovasc’s CEO, Dr. David P. Summers, PhD, FACA presented a summary of the results of animal experiments to date.
Comment by Tony Ryals -
Paul companies have gone in and bought shares and investors have requested delivery of certs and none of it works. Fact is, the system allows for the failed delivery of shares claiming you can sell what you have anytime you want. The fact that you want delivery of physical shares is over their heads.
In this day in age, not the past, we deal in a virtual world of electronics. The dealing in electronic shares allows for this type of fraud to continue.
Comment by Charlie -
According to paragraph 4.1.1 of Global Link’s “Amended Employee Stock Incentive Plan for the Year 2004 No. 3″:
…the number and class of shares subject to each outstanding Award, shall not be proportionately adjusted in the event of any increase or decrease in the number of the issued shares of the Common Stock which results from a split-up or consolidation of shares…” http://www.sec.gov/Archives/edgar/data/949728/000101540205000011/doc2.txt
In other words, any stock issued to anyone under this plan would not be subject to the 1 for 350 reverse split. On January 3, Global Link registered 600M shares under this plan– which included non emloyees and consultants. I read some speculation that this might have been cancelled, but even so, hundreds of millions of shares were issued pursuant to it starting back on 7/28/04. And you wonder where the volume might have been coming from?
In addition, the supposed innocent investor who claimed to have purchased 100% of the stock, Richard C. Simpson, is in reality the CEO of ZANN Corporation (ZANC), another penny stock which itself just effected a 1 for 350 reverse split.
Comment by Jeff Mitchell -
Mark, how is borrowing stock that does not exist and shorting against legitimate investors a good or even healthy practice.
Bryne is a hero in my book. Byrnes takes the activity personally as he should. Crooks are manhandling his stock and dampening investment. More affected CEOs should take up arms as well.
Straight up shorting can act as a meassure of a stocks health, shorting with stock that does not exist is inherantly crooked.
Comment by Mike Mora -
Mark, how is borrowing stock that does not exist and shorting against legitimate investors a good or even healthy practice.
Bryne is a hero in my book. Byrnes takes the activity personally as he should. Crooks are manhandling his stock and dampening investment. More affected CEOs should take up arms as well.
Straight up shorting can act as a meassure of a stocks health, shorting with stock that does not exist is inherantly crooked.
Comment by Mike Mora -
Politicians today are so full of crap. While I do believe that many of their actual votes are based on their real beliefs, the garbage that comes out of their mouthes is almost always nothing more than political grandstanding designed to appeal to some group of voters in their state or district.
It is amazing how often the minority party in the house/senate will float an absurd bill just to make it an issue in the election. Even though they (Democrats and Republicans) have no real desire to pass the bill they just want to say ‘See, the [democrats/republicans] are trying to screw the [rich/poor] people!’ etc.
Comment by Shawn Fox -
dead on marc
Comment by james -
Mark you said, “My scamdar is pretty good, and its vibrating loud and clear on this issue.
The good news is, that where there is scamming going on, there is money to be made on the other side. I think i will start in Utah to look for companies that let worrying about Naked Shorts take time away from running their businesses”
Overstock has 5 million shares short out of its 12 million share float. They also have a $50mm buyback in place if the company believes the shares are undervalued. Why in the world would you want to short a company with the aforementioned factors existing? FWIW, I personally dont believe CEO of Overstock is involved in any scam.. I think he’s just looking out for his shareholders.
http://biz.yahoo.com/t/28/1365.html
It’s not like insiders at Overstock are dumping their shares, if anything they are buying more at these prices.
Also FYI, GRU has been on the reg SHO list since Jan 7.
Comment by Jeff Boyd -
SEC Complaint Data 2004 vs 2003 I’m Shocked!
« Thread started on: Today at 2:15pm »
——————————————————————————–
NOT!
Complaint Type FY 2004 FY 2003 Change
1 Manipulation of Securities, Prices, or Markets
Up 314.80%
2 Advance Fee Fraud
Up 99.53%
3 Unauthorized Transactions
Down 0.87%
4 Transfer of Account
Up 6.77%
5 Excessive or Unnecessary Administrative Fees
Down 7.87%
6 Bankruptcy or Issuer Reorganization
Down 0.97%
7 Account Closing: Problems with Redemption, Liquidation, or Closing
Up 46.57%
8 Misrepresentations: Inaccurate or Incomplete Disclosures
Down 30.22%
9 Theft of Funds or Securities
Down 16.14%
10 Spam: Unwanted Emails or Faxes
N/A
http://www.sec.gov/news/data
Comment by Troy Wine -
Mark,
IMHO you’ve got it perfectly right. Find listed companies too busy bribing politicians and issuing statements about how naked shorting hurts their stock, and short the hell out of them.
Go long good companies so as to have not too much net exposure.
I don’t know how you made your money since I just discovered your blog and your about page doesn’t say, but indeed with this recipe I believe you will grow richer.
Plus, you share your thoughts and positions in the market with everyone for free.
The ironic thing is that for this to work, smart money like yours will always need whiners who buy shares of bad companies for the system to work…
I’d rather mimic you.
Thanks for the interesting blog.
Marc
Comment by Marc Mayor -
2005 Forbes Billionaires List:
http://www.forbes.com/static/bill2005/rank_501.html?passListId=10&passYear=2005&passListType=Person&searchParameter1=unset&searchParameter2=unset&resultsHowMany=25&resultsSortProperties=%252Bnumberfield1%252C%252Bstringfield2&resultsSortCategoryName=Rank&fromColumnClick=&bktDisplayField=&bktDisplayFieldLength=&category1=category&category2=category&passKeyword=&resultsStart=501
MCube = 1,300 stacks of 1 Million Dollars….
James Parham Jr.
Yuba City, CA
Comment by James Parham Jr. -
Um, maybe I’m just out of it, but I was sort of hoping for some useful discussion on shorting strategies. There’s like too many $ chasing investments of all types these days, including stocks, leaving many of them overpriced. Naked or not, how do you make money shorting those suckers or otherwise betting that they’re going South? Instead we seem to be getting some sort of “Crossfire” type debate about policy and politics. No offense, but . . . yawn.
So, Mark — thanks for showing your current stock positions the other day. But frankly I’m more interested in your >strategy<, particularly when it comes to shorting. You know, teach a boy to fish vs. giving him one. Thanks. Mark. Go Mavs!!
Comment by Bill -
Mark..
Your post is about a politician being used. I responded about teh workings of Washington and yet you again reverted back to the Company.
This thread is about a politician being used – Defend the difference between an person or group of people concerned going to their congressman about this vs. any other subject matter.
Stick to the thread and defend why an injured investor has no right to a politician yet Tobacco Industry, Gun Industry, drug Industry all pay millions to lobbyists to get their points across and discussed in Congress.
Why is is okay for multi Billion dollar Industries to pay off politicians yet it is not okay for injured parties to simply talk to and show politicians fraud that injured them? Ever see what Wall Street pays into Washington and then look at the most recent Wall Street fines payed for fraud.
Notice how no Wall street Execs were ever responsible for the fraud but instead got hefty raises for the ill-gotten gains of their comapny.
The difference between you and me. I do not take anything for granted and see what happens in the World. You make to much to care about what happens to those who make America what it is today – the working class.
Comment by Dave Patch -
Thanks for all the insite here. I have learned a lot from Mark’s post as well as from the other peoples comments here.
Thanks again,
Derrick
Comment by Derrick Pizur -
Mark,
I will be the first to throw out the concerns about the company. I know nothing about it so to carry the torch you must be CLEAN. That is not the issue. Clearly Bennett was on to this well before the Friday PR about Global Links. The Friday Financialwire article was just the easy catalyst to use.
To think that presenting that to Bennett was using the Senator is dead wrong. You ignored the Hilary Shane complaint I sent you like it never existed. You deny the statements of the SEC when they proposed SHO and admitted naked shorting. We have audio tapes of the GC of Bear Stearns admitting regulators came to them for years talking about short sale violations that resulted in excessive fails. You still deny it. BTW.. We also have perjury from teh SEC to Congress as well as Reporters cathcing teh SEC lying to them – ALL ON THIS ONE LITTLE MATTER.
Did you notice Donaldson tried to joke away the trading on a subject matter Bennett claimed was on the agenda?
Is Global Links the company to carry the torch? I have no idea. Is naked shorting abusive? Tell me how Taser gets a 90% short position, or Global Crossing at 98%. Can’t do it legally with cash and IRA accounts. So how is it allowed and how is it not abusive?
Comment by Dave Patch -
Yeah, that company GLKCE is the example you want to parade as the pillar of abuse for naked shorting.
lets see, their CPA issues a going concern report. They can him.
Who do they turn to. A single person CPA, I wont give her name. Thats right. One person shop in Vegas who just got approved to audit public companies.
Not that there is anything wrong with being a start up entreprenuer, but if GLKCE was really serious about solving this problem, i woulud think they would go to someone who could bring in some depth and experience in this matter.
dont you ?
Comment by mark -
Cuban you are an idiot – Take a lesson in politics you fool.
If Bennett was being used here what do you think all of Washington is doing? Ever hear of Lobbyists?
Go back to Basketball – You may suck at that too but at least you have a chance there.
Comment by Dave Patch -
To be honest it’s not clear to me whether naked shorting is or is not a problem. It’s clear there is naked shorting going on, but it’s not clear that this really hurts a company structurally. But, I’ll tell you one thing. If I own shares in a company and that company’s CEO believes his company’s shares are being abused by naked shorts I don’t want the CEO or anyone else in management spending 5 minutes on the issue. If the business is run well the shares will find their rightful balance in due time.
Yes, the CEO has a duty to accurately portray the value of his company, but chasing naked shorts is not a productive way to do so. A better way would be for operational management (CEO, CFO, COO, etc.) to buy their shares that they believe are artificially depressed. Another good option is for the company to buy shares via a — hopefully in place — share buy-back plan. After all that’s the true hallmark of great management: putting cash to work to return the best possible value for all shareholders.
Comment by Nate -
The problem is nobody wants to take responsibility anymore. If a stock is going down people will refuse to accept that they are wrong. They will attempt to rationalize, “it’s those damn shorts”. Often management is drinking the same kool-aid, because their net worth is often tied to the stock; ie:bernie ebbers. It is my experience that some of the best stocks out there have been companies which the management owns very little of, and therefore they are not interested in stock promotion but rather the business itself. Such companies don’t issue press releases and they don’t try to explain why the stock is trading where it is. If people actually did research instead of just buying CNBC hype, they might actually buy a stock trading below its book or even cash assets. I know Mr. Cuban will never say so, but deep down he must love CNBC, because it diverts the attention away from the money making situations out there.
Comment by barry g -
The above Mavericks analogy is possibly the most retarded statement I have ever read. No matter how good the rest of your post, I can’t take it seriosly.
Remember Charlie Brown’s parents..? No matter what they said to Charlie, it just sounded like “WAAAH WAAH WAWAAA WAHHH WAHHH”.
Yeah, kinda like that. Good luck losing your money in the market.
Comment by Brian -
Proof of Naked Shorting. I am the Mavericks and I just won the NBA title on a last second shot. After the game is over the other team purchases a 3 pointer. The next morning I read the Headlines “Mavericks Lose”!
If I understand NAKED SHORTING here is how it works.
Lets say a company’s has 100 shares total to trade. We as investors purchase in good faith the 100 shares in the open market and the price goes up. The shorts come along and think we have made a bad investment so they place their bet against ours (which I think is fair) so they borrow the 100 shares and the price goes back down and there is a stalemate going on waiting for either good news or bad news to drive either more selling (therefore the shorts can fairly cover or short more shares thus fairly driving the price down) or buying (on good news) thus driving the price up. All of the above is fair. HOWEVER, lets look at NAKED SHORTING
We buy the 100 shares and the price goes up.
Shorts borrow 100 shares and the price goes down. But Jim Bob gets greedy and does not want to play fair. He gets a hold of the neutral party who is holding OUR Shares/Borrowed shares and tells him I will pay you $10 for a I.O.U. for an additional 10 shares, THERFORE “WE” now own 100 shares and Shorts own 110 shares thus making the price go down unfairly even further. The HOPE of the naked Short is with the price going further down, it will trigger additional selling thus they can recover the I.O.U. PLUS additional positions. The PROBLEM arise when NO ONE SELLS and they are unable to cover their I.O.U. so they go back to the neuteral party and ask for ANOTHER ADDITIONAL I.O.U. thus driving the price down even further hoping someone will sell. WE STILL HAVE OUR 100 shares but now they have 120 shares – 20 of which are VAPOR/Pretend/Counterfeit!
The stock has some good news and new buyers come along so now the thieves get ANOTHER I.O.U. to cover all new buys so now they are in the HOLE 40 Shares etc, etc,etc!!!!to the point they are 1000 shares naked and the price does not match it’s true valuation at ALL!
If they drive it down long enough and low enough in MOST cases there are enough investors willing to part with their shares at a huge loss allowing the illegal naked short to return (cover) his I.O.U.
Shorting is fair and good. Naked shorting is illegal and steals American citizens money. In the OTC & Pink “Average” Americans can not even “Short” the stocks. We can only play one side of the market. Then you throw in NAKED SHORTING and it is out and out STEALING!
My life’s savings was placed on a “Bet” and I thought I was “betting” on a level playing field. If my few hundred dollars are put up against a Billion Dollar Hedge Fund it is impossible to win. The Rich are STEALING the poor’s money.
How can Mr. Floto sell his shares if Mr. Simpson owns them?
Paul J. Floto! http://www.pinksheets.com/quote/news.jsp?url=fis_story.asp%3Ftextpath%3D%5C2005%5C03%5C08%5CEDGARNews_0001320098-05-0000010000949728.html%26clientid%3D168%26provider%3DEDGARnews&symbol=GLKCE
Simpson filed a U.S. Securities and Exchange Commission Schedulce 13D http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=3299823)
on February 3, showing his purchase of and sole voting power for 1,158,209 shares of the corporation.
” Now your staff is gonna comment on this and were gonna have a briefing on this in depth and I won’t go into greater depth here. But this article just last Friday in a national publication indicates that people are still selling short shares they don’t have and are clearly never gonna acquire. I am told one brokerage house that sells short has 13 days under your rule under which to acquire the shares. In that 13 day period the brokerage hands the whole transaction off to another brokerage house.”
Fast forward to 1:19:30 and you will see the senator grill Donaldson on this particular stock about the naked shorting.
http://banking.senate.gov/05_03hrg/030905/live.ram
Comment by Corey Griffith -
Reading over my comment a little earlier it might seem as if I was taking a jab at mark. I wasn’t!
I was poking fun at all these people who care about naked shorts or other investment tricks. I do not even understand why mark is giving you the time of day to put thought into making a post. My only conclusion is that he is attempting to antagonize you and from the responses it seems to be working extremely well.
Why do you people even have time to browse the blog when you are probably watching stockwatch.com every 5 minutes and on the phone to your buddies saying “omg, who the F is doing this, jesus!”. Then you get up close your door (while still on the phone; use the hands free head piece) so the people in the next office don’t hear you muttering to your self “not again, please, not again”.
You’re in a frantic frenzy; please if you have time and are reading this devote your energy to something useful like couching a little league team or donating some money to the homeless shelter.
Or if you don’t like kids and giving to the poor, contact me, I plan on making me first sky diving trip and need about $300.
Comment by Justin -
What WOULD convince you that naked shorting exists?
Comment by Ryan O'Neal -
The above comment outlines the problem with this argument. It’s not about pumping some xyz stock or that (chuckle) it’s a rich man’s game and therefore don’t play unless you can afford it. There are two issues with Naked Shorting.
1) It is illegal for 99% of the people out there. So unless you’re a MM, you can’t legally Naked Short.
2) The byproduct of Naked Shorting is that it artificially drops the price of a stock because (counterfeit/manufactured/non-legal/non-existant) shares are being introduced into the pool of real shares causing supplyside pressure.
If anyone can intelligently argue either of the points I’ve set forth, I’d welcome the opportunity to learn something new!
Comment by mfv -
Hey Mark….After all the recent conversation and debate regarding “naked shorts,” I find myself having a hard time deciding what to believe….? Either way, I do know this: It is always easier to believe/think something wrong (or possibly illegal) has taken place when a trade or investment goes sour. People need justification for taking a “bad beat.” Just human nature I suppose….
James Parham Jr.
Yuba City, CA
Comment by James Parham Jr. -
It’ sad. I really don’t know what you’re thinking Mark. You refused to even correct your PROVEN false statements that I have pointed out.
Never mind. It’s your blog and your reputation.
As for me, I’m tired now of pointing out your errors in detail and giving supporting proof, yet you refuse to go back and correct your statements that are in error on very key points in your blog. And very obviously so. We all make them, no shame. But like I said, your blog, your reputation.
So go ahead and cling to your opinion that naked shorting is all a scam, because your scamdar says so, because it smells to you, and because heaven forbid, now a Utah Senator has complained about it in a hearing. To hell with the facts. Let opinions rule.
Though I do note with amusement that your stated opinion and Senator Bennett opinion agree on the importance of expensing stock options and assigning correct and consistent value to them. If you listen, that was the very next thing he raised in yesterday’s hearing to SEC chairman Donaldson, right after mentioning the naked shorting issue. But since it came from Senator Bennett yesterday, it must be a scam…..or is it? Because this is exactly what you say too…….scamdar on or off?
I’m done here. Though it doesn’t mean I wouldn’t like to see the Lakers on their arrogant knees tonight.
Comment by Tom -
Jesus Christ Mark… I guess you’ll never get it. You’ve got the fucking SHO list saying there are problems, you’ve got Donaldson bumbling through the questions, either out of ignorance or he’s just plain complicit with the whole damn thing, trying to confuse the issue by inserting legal short selling with naked shorting and redirecting to the SHO. I don’t suppose hedgefund managers walking out in handcuffs would even convince you (and don’t think this ain’t coming). Say hi to your friends Ebbers, Kozlowski, and Rigas for me.
Everyone (before Mark censors this post), decide for yourself. You can watch Donaldson getting his ass handed to him by Bennett (at 1.19.33). http://banking.senate.gov/index.cfm?Fuseaction=Hearings.Detail&HearingID=140
Comment by mfv -
In reality who cares about naked shorting, really? If you have enough money to worry about this issue or you suspect someone of shorting your stock I really have no empathy for you.
Basically I see this as a rich mans game.
On one side you have some rich group who probably run many small companies and on the other you have their competition, business enemy, or someone else out to get them starts buying stock in large clumps and then selling for less than the asking price and driving the price down. Thus scaring the other people who watch the stock and they start wondering WTF.
Typically this only happens to small companies with extremely low liquidity and stock price.
Or they really start shorting the stock and people wonder WTF.
To tell you the truth who cares. If you have enough money to worry about this issue, then I don’t really think you have that much to worry about in real life. I worry about being able to pay my rent next month or if my car is going to start when I head to work in the morning, not about who is shorting some stock. Please!
Comment by Justin -
This is our political system. Anything that can garner a sound bight or exposure or publicity for a member of Congress or the Senate is now worthy of calling and funding an investigative body to find a solution. How many millions are going to be spent on these types of publicity stunts? Why are these issues all one sided issues with little to no opposition to the obvious side to pick. If it required a tough stand or tough fight then there would be little to no member of Congress ready to tackle it, unless of course there was a pork project to be tied to it for their district or a future lucrative employment opportunity after leaving office.
Here is something to chew on Cuban that impacts anyone that buys and sells stocks.
In 1930 SEC surcharge was created to fund the SEC to protect citizens against corporate trading fraud. Since then a small surcharge is charged to every trade and every year close to 11 Billion is collected from these surcharges. Agaain this is supposed to fund the SEC HOWEVER… The SEC only receives a budget of about $250 million a year from Congress. Congress then takes the rest of that money and spends it on anything they want and we the people that incurr the surcharge, that is supposed to protect us from the WCOM’s, Enron’s, and Tyco’s of the world get screwed.
Why is this not Fraud by Congress on the public?
Comment by Webglue -
Who cares what politicos these jerks give or don’t give money directly to,when Byrne allied with ‘O’Brien’ or ‘dirtydirtydeeds’or James Dale Davidson he gave money to political and securities fraud psyops against the honest investor.
The same jerk who ran the ‘Clinton killed Vince Foster’ campaign and tried to pin the death of former CIA Chief Colby on Clinton as well,James Dale Davidson,is behind the NCANS scam just as he was directly involved with ‘NAANS’AND THE PUMP AND DUMP OF GENEMAX ETC. and other penny stock scams pretendinng the pump dumps were ‘naked shorting’.
Byrne’s pal,James Dale Davidson,(whether he knows who he is dealing with or not),was the employee of former CIA Chief Colby when he died in the first place and if Colby had come to understand his securities frauds would be more a threat to his employer Davidson,by far,than to Clinton who probably repected him for refusing to allow Nixon to use the CIA to block a Watergate investigation.
James Dale Davidson,the Beltway securities and political psyops criminal,is also a founder of ‘newsmax’that upon Colby’s death began a campaign to pin his death on Clinton as well.
I give you the ‘newsmax.com’ link to that scam.:
http://www.newsmax.com/articles/?a=1999/3/24/185342
Note the paradox that Christopher Ruddy,their scam British writer who also did most of their ‘Clinton killed Foster’ bs,even acknowledges that these far right wing fraudsters,trying to pin Colby’s death to Clinton,seenmed to anticipate Colby’s death a mionth in advance.Truly psychic and from their own writing.
Comment by Tony Ryals -