The Naked Shorts Get Some Clothes

I’ve had a blast watching all the commentaries from the “Naked Shorts are the end of the world” cult. Bob ‘O Brien and his buddies have done an admirable job of bringing attention to a problem that doesn’t exist by continually shouting the same slogans over and over again. Loud enough that I, along with others, opened our windows to see what the racket was.

As I have written in previous blog entries, the racket was about a whole lot of nothing. Well, apparently, the SEC heard the racket as well. This past week the SEC issued an FAQ about Reg Sho, Short Sales and Fails to Deliver.

It does a good job of explaining what Reg Sho is and isn’t, how short sales and fail to delivers are handled, and most interesting to me, and previously unbeknowst to me, lets us all know that Long Sales that are not delivered also qualify for the list.

How could that work? Let’s say you are a long in and you decide that you don’t want to own the stock anymore. You give your broker a sell order. It’s quite possible, and even likely that there are already short sellers who have borrowed that stock and shorted it. As a result, your broker doesn’t currently have a locate on shares of stock to sell. If enough people are selling shares, it could create a situation where the long sales cause to appear on the Reg Sho list.

This is completely the opposite of what the Naked Short cult would have you believe.

Hopefully this will shut them all of up.

And remember, rule of thumb #1 If the CEO of a company that you own stockofscreams about short sellers hurting the price of the stock. Sell the stock. Fast.

And give serious consideration to shorting the stock.

139 thoughts on “The Naked Shorts Get Some Clothes

  1. Your logic is faulty. The naked shorts are still that which has put Reg SHO onto the list, by creating stocks that aren\’t there. You basically just said that counterfeit stocks are more important than real stocks; that because the longs are added to the stock pool, then it must be their fault. What you have said is both technically incorrect and biased against stock market reformers. For such an experienced investor, you don\’t really understand how this works.

    Comment by James Cummins -

  2. OK, Bob, I see where the problem is. I’ve neglected to use fuzzy farm animals in my examples. So let me try again…

    You go to Farmer Fred’s Petting Zoo and see Harriet the horsie…

    On second thought, I’m really only interested in educating the few people remaining who, for some odd reason, you’ve still managed to confuse. So let’s try again…

    Say you (in the broad sense of the word) are a vendor set up outside the American Airlines Center selling limited edition Mavs t-shirts. Thanks to a great promotional announcement after an emotional Mavs win, the crowd is in a buying mood. Luckily you aren’t beholden to a price cap so you start inching up your prices. So well are the t-shirts selling, that you anticipate you will sell out before you have satisfied the demand. After thanking your lucky stars you weren’t a long-suffering Knicks fan like me, you call your supplier for help but, gasp, he just can’t get there before the crowds have all gone home. Now what?

    As luck would have it again, you spot Barbara Eden in the crowd. With a blink of her eyes, she makes you the exact number of knock-off shirts you will need to satisfy the remaining people in line. Thank goodness you have not read Bob O’Brien’s definition of supply and demand so, of course, you continue to sell the knock-off shirts just like the real ones– at continued higher prices. You then ask Barbara to blink into her Jeanie costume using her 1960s body, but she tells you not to press your luck… but I digress.

    Along strolls who else but Bob O’Brien! Bob just happened to have witnessed the creation of the knock-off shirts and starts lecturing you about how knock-offs increase supply and thus will depress your shirt price. You sloooowly try to explain to Bob that the *only* reason you made the knock-offs was in response to an increased demand you could not meet, not the other way around. In fact, if it makes him feel any better, you’ve already made plans to switch the knock-offs for real shirts when your next delivery comes in. Bob then demands to know what you will do if there are not enough authentic shirts left to make a complete switchover. Once again, you sloooowly explain that if demand continues to go up, so will the price, so shirt holders have nothing to worry about under that scenario. If shirt holders one day create selling pressure, you will simply retire whatever shirts you sell that were knock-offs. Simple as that.

    But Bob is still confused and begins writing more stories about fuzzy farm animals. Zzzzzz…

    – Jeff

    Comment by Jeff Mitchell -

  3. Jeff, are you dim? Really dim? Like in, I can’t read the SEC or the NASAA or the NASD’s comments on naked short selling dim? Like in “I don’t understand how filling a limited demand with an unlimited supply would be depressive” dim? Like in, when the SEC or the NASD or the NASAA says that naked short selling can seriously hurt a stock’s price due to the depressive effect of selling shares in excess of the authorized outstanding issue my head gets fuzzy and my ears ring and I hear voices dim?

    Try this: Koko has an appetite for 10 apples a day. The company has authorized and issued enough apples so that she can get 10 apples per day for $1, her allowance. Then the bad hen comes along, and through a scheme, issues 20 apples a day for $1, even though hen doesn’t have any real apples – but everyone thinks that the IOU’s hen is selling are good for real apples.

    Do you think Koko will pay $1 for 10 apples when hen says she can have 10 apples for 50 cents? No? What if hen says I can get you as many apples as you want for a dime? Will Koko pay $1 for 10 apples then?

    Supply and demand. If you allow sellers to sell in excess of legitimate supply, then prices will fall – there is a glut of supply. This is simple math. Very, very simple math. You have to be very dim not to get it.

    Very dim.

    Hence my question – Jeff, are you that dim? Buying fraudulently created IOU’s doesn’t drive the price up. The equivalent on the buy side would be if you could just print money, or IOU’s for cash, and exchange those for legitimate shares – and you weren’t price sensitive. No limitation on creation of IOU’s to buy, limited number of shares.

    Get it? It would drive the price up – a bidding war.

    Printing shares or IOU’s or shares, the opposite effect. It drives the price down.

    Your paragraph two would be a lot shorter if you simply abridged it to read: “I was wrong and confused the two women and companies.”

    Your paragraph 3 would be more accurate if you rewrote it to say: “I have no idea what the entire comments Jim gave the film crew consisted of.” I do, however, as I have the transcript of his comments, and they do not differ materially from his filmed statements.

    Quit while you are really, really behind, now.

    Increasing the supply with a static demand reduces the price of the commodity. All women and companies are not the same. You have no idea what Jim actually said, merely some reporter’s second hand account of part of what he is alleged to have said.

    That about covers it, I think.

    Comment by Bob O'Brien -

  4. I find it quite amusing that in Bob’s world selling shares that don’t exist (naked shorting) deflates the stock price yet buying shares that don’t exist (naked buying) not only don’t inflate the price but somehow invoke “Bob’s law of supply and demand” and, voila, deflate the stock price as well. LOL! Note, Bob, that the demand drives the issuance of the IOUs, not the other way around. Regardless, as there is no proof IOUs are permanent (nor any metric in filings to account for them), they can’t be legitimately accounted for as dilutive.

    Thanks to Tony for pointing out it was “Joyce N”, not Mary Campbell”, whom Bob portrayed as a victim of naked shorting rather than of corrupt Nanopierce management. Same principle, different actor. As for Mary, if someone’s portfolio is cut in half because of problems with a single stock, calling it a portfolio is a misnomer. I sincerely hope Bob has counseled her to be more diversified instead of double up on Novastar.

    My comments in reference to Professor Angel feeling misled were quotes from a Dow Jones article. Anyone who took the time to read his full letter to the SEC from which I quoted should now know how he truly feels about naked shortselling. It’s well worth reading regardless. When you do, you’ll see that all FTDs are not counterfeiting and fraud as Bob maintains is always the case.

    – Jeff

    Comment by Jeff Mitchell -

  5. ‘I am not an officer or director of Endovasc.I have a few shares that I received in exchange for assigning my rights in what could be a valuable patent to the company.’

    -James Dale Davidson

    Question,as an investor-sucker,do I have a right to know,even if only a ‘few shares’were exchanged for a ‘patent’,what the patent number is and how many shares ? Can anyone give me any feedback on that ?
    The SEC certainly won’t.

    James Dale Davidson ignored that query along with the one as to whether he still thought Clinton killed Davidson’s former employee,ex-CIA Chief Colby.

    Comment by Tony Ryals -

  6. Dear Vantage Point Investor,
    You may be as startled and upset as I am by the sudden collapse in the price of GeneMax (GMXX), which has tumbled in the last nine trading days. The question is, why? I can’t pretend that I fully understand the answer. But I have a disturbing guess. It appears that the naked short-sellers who have counterfeited millions of GeneMax shares in an attempt to destroy the company have enlisted powerful help.

    In theory, the Securities and Exchange Commission is a regulatory body charged with maintaining the integrity of public securities markets in the United States. In reality, the SEC is like any other government agency. It responds to powerful entrenched interests. It abhors bad publicity, rewards its friends and punishes its critics.

    Unhappily, the SEC also lies. I know because the SEC field office in Utah has lied about me. And I suspect that these lies are the culmination of a carefully laid plan to discredit GeneMax and punish the company for raising troublesome issues about naked short selling, which has also embarrassed the SEC.

    If you have been a subscriber to Vantage Point for any length of time, you are no doubt aware that I am a critic of “electronic counterfeiting,” the process by which some investment banks, market makers and broker-dealers drive down the prices of Nasdaq Bulletin Board companies by selling unlimited quantities of shares they don’t own. Since stock prices are determined by supply and demand, allowing unlimited counterfeiting of stock essentially guarantees that the stock becomes worthless.

    Of course, a company whose shares are worthless won’t last long. It is unable to raise money if its stock is worthless. All too often, such small companies are driven into oblivion by electronic counterfeiting. When we are slogging along with a weak economy, I consider it almost criminal negligence that the government would permit investment banks, market makers and broker-dealers to weaken the economy further by destroying small companies that could otherwise be a major fountain of growth.

    Why would the government let this happen? I don’t think it is necessarily a Grand Conspiracy with a capital “G.” But the bad guys have managed to control most of the news about “electronic counterfeiting.” And perversely, they also seem to have the regulators on their side.

    I had a painful lesson in this reality at the beginning of this week when I learned to my astonishment that the Utah office of the SEC had tarnished my name by accusing me of failing to disclose an interest in two investments that I recommended in Vantage Point Investment Advisory. Their exact charge is as follows:

    “Among the issuers promoted in this manner have been GeneMax Corp. and Endovasc Ltd., Inc. Davidson is an officer, director and, indirectly, a substantial shareholder of these two issuers. Neither the soliciting e-mail nor the subsequent company report discloses Davidson’s relationship to the companies.”

    This is total rubbish. I deny any impropriety. Indeed, the charges are remote from the facts.

    As you will know if you subscribed to Vantage Point last summer, I fully disclosed my role as a founder, director and officer of GeneMax when I recommended the company and its promising treatment for cancer. And I also disclosed a special relationship with Endovasc. I am not an officer or director of Endovasc. I have a few shares that I received in exchange for assigning my rights in what could be a valuable patent to the company.

    To be sure that I wasn’t missing something, I had my attorney review the record. He concluded that my disclosures are complete: “I spent this afternoon reviewing Agora marketing copy for Vantage Point and the newsletters and have verified that the charge that you failed to disclose your personal interest in GeneMax is completely false.” Agora will be filing a motion to dismiss the SEC’s baseless complaint.

    I fail to see how anyone of good faith who reviewed the record could possibly construe it as the SEC apparently has. Although I can’t prove it, I have concluded that the SEC, or at least some of its personnel, were more offended by my criticism of electronic counterfeiting than they are by the abuse itself — which causes you and other investors hundreds of billions in losses. In fact, the costs of electronic counterfeiting are much higher than those entailed in the accounting scandals which have garnered so much attention. Nonetheless, instead of correcting these abuses, the SEC has gone out of its way to rope me into a doubtful complaint that they have developed against another Agora publication — a product to which I have no connection other than a passive one as a minority shareholder in Agora.

    Nor do I take it to be entirely a coincidence that while I have recommended more than 30 investments in Vantage Point over the past 16 months, my reputation is being tarred in respect to just two companies, GeneMax and Endovasc. These two companies have one thing in common, in addition to the fact that both have promising medical innovations that could ease much suffering and save many lives. Both have been at the forefront of legal action to combat the abuse of electronic counterfeiting of their shares. But these efforts have hardly earned them the friends they should. Rather than garnering applause, their efforts to confront the abuse of electronic counterfeiting of their shares has made both companies the focus of negative publicity.

    In particular, one writer, Carol S. Remond, undertook to paint a negative picture of both companies, publishing what bordered on outright lies. For some reason known only to others, the SEC appears to have adopted Remond’s text in defense of the electronic counterfeiters. In this respect, it is suggestive that the SEC apparently leaked its complaint about Agora to Remond, who cooperated by writing a story trumpeting the SEC’s effort to discredit me and these good companies.

    I wanted to write to you immediately when I got this startling news to tell you that I will not be cowed by these Machiavellian tactics. I will continue to raise important issues of investor protection that the SEC appears to wish to duck. I do so with faith that the truth will eventually triumph, the evil of electronic counterfeiting will be curtailed, and the integrity of public security markets restored.

    Or to put it another way, if powerful people are so keen to discredit my criticism of electronic counterfeiting that they will orchestrate an entirely bogus charge of the kind carried on the wires against me this week, that itself indicates that more light needs to be shed on the shadowy activities they are trying to protect.

    But, on to the status of your GeneMax holdings… Absolutely nothing about this company or its exciting immunotherapy development has changed and would warrant this share price decline. In fact, in an independent study commissioned by the company, it was determined that if GeneMax were funded as low as at $1.50 per share, and assuming that its products prove to work as well in humans as they have in animals, the present value of the stock would be $420 per share, notwithstanding dilution. GeneMax remains a fundamentally sound company and a tremendous buying opportunity at these levels. I recommend that you increase your GeneMax shares, as well as those in Endovasc (EVSC.OB). And, may I reiterate, I am a shareholder in both companies.

    And, if you are as concerned as I am about electronic counterfeiting and its effects on the dynamic young companies that must fuel our country’s future growth (as well as your portfolio), I urge you to write your congressman. You can also register your concern with the National Association Against Naked Short Selling (,, which is taking up the fight for companies and investors alike.


    James Davidson

    Comment by Tony Ryals -

  7. dirtydirtydeeds or dirtydirtydirtydeeds or O’Brien or James Dale Davidson has so many stories he thinks we get confused or hopes we are.(Who are you now on Yahoo’s NFI message board,or is that a secret ?)

    I must state I never bought Endovasc for reasons that James Dale Davidson was on the ‘Audit Committee’then off the ‘Audit Committee’ after Carol Remond of DJ wrote an Endovasc expose’.

    Nor because he was replaced,according to Endovasc and an SEC filing,by Montgomery, Texas’ Judge Ken Reilly, (who in personal email to me denied the SEC filing and claimed only to be Endovasc’s lawyer).I bought it for a Stanford patent to use nicotine for angiogenesis.

    And the Stanford researchers appear to have made out like bandits as well, although Endovasc no longer touts the Stanford patent nor will they allow me to know what became of it.

    (There were two patents actually,one was for ‘stem cell recruitment’,but I bought for the angiogenesis patent,wanting to do a good thing at the same time and believing Stanford researchers had a shred of ethics.)

    The naked short scam there was clearly to mask James Dale Davidson’s pump and dump of November 2002 from a Schwab account(LOM ?).

    BUT THE ACCOUNT WAS FOR ‘SELECT CLIENTS’, NOT ‘REGULAR’ CLIENTS SUCH AS MYSELF,SO SCHWAB PROTECTED THE PUMP AND DUMP FROM THEIR ACCOUNT DISGUISED AS ‘NAKED SHORTING’.SCHWAB COULD HAVE BLOWN THE ‘NAKED SHORT FRAUD’ OF J.D.Davidson,Endovasc,and Attorney John O’Quinn clear out of the water but Schwab and Schwab Capital,in many ways,was an insider to the fraud as well so they kept quiet as I was defrauded further into buying a ‘cert’ from transfer agent Alexander Walker who was an insider as well !!!!



    America,what a land of opportunity.They sure had me fooled.

    And to top it all off Davidson claimed in one of his ‘Vantage Point’ mail fraud and cyberfraud tout releases to have traded a nicotine patent of his own ‘discovery’,(that would have infringed on the Stanford patents as I thought I understood them!!!),but there was nothing in SEC filings and neither the SEC nor anyone else cared !!!

    Stanford Report, July 11, 2001
    Researchers discover nicotine stimulates growth of new blood vessels


    Nicotine promotes the growth of new blood vessels and can also stimulate tumor growth and the build up of plaque inside arteries, say researchers at Stanford University Medical Center. The finding is the first proof that nicotine affects blood vessel formation.

    It suggests that while nicotine treatment may be useful to revive tissue deprived of blood by a stroke or heart attack, physicians should exercise caution when considering the long-term use of nicotine as a treatment. Currently the chemical is a useful tool in smoking-cessation programs and is being studied as a potential therapy for Alzheimer’s and Parkinson’s diseases, as well as chronic pain.

    The scientists, led by John P. Cooke, MD, PhD, tested levels of nicotine similar to those that would be found in a moderate smoker puffing about 20 cigarettes each day. They emphasize, however, that it’s difficult to directly compare nicotine’s effects with those caused by tobacco smoke, which contains thousands of additional components. The results of the study are published in the July issue of Nature Medicine.

    In a series of experiments, the researchers found that nicotine could enhance new blood vessel growth in mice whose hind limbs were artificially starved of oxygen. They also found that lung cancer cells implanted into mice grew more quickly when the mice consumed nicotine in their drinking water. Mice susceptible to developing plaque in the arteries of their hearts also experienced more rapid plaque growth when exposed to nicotine than mice who were not exposed.

    The researchers believe nicotine works by binding to a receptor on the surface of endothelial cells that recognizes acetylcholine — a chemical that nerve cells use to communicate with each other. Endothelial cells line the interior of blood vessels throughout the body. These nicotinic acetylcholine receptors were only recently discovered outside the central nervous system and their function is not well understood. The ability of nicotine to modulate the activity of these receptors in the central nervous system renders it a potential therapy for neurologic disorders.

    Researchers speculate that when nicotine binds to the receptor on endothelial cells it stimulates the cells to release a cascade of chemicals that promote the formation of new blood vessels. The new vessels then deliver oxygen and nutrients to the interior of tumors and plaque deposits.

    The Stanford researchers were surprised to find how strongly nicotine stimulates new blood vessel growth, a process known as angiogenesis.

    “We expected to see that nicotine impairs angiogenesis because it’s known that smoking impairs endothelial function,” said Chris Heeschen, the first author of the paper and a postdoctoral fellow in cardiovascular medicine in Cooke’s laboratory. “But nicotine is not smoking.”

    Under some experimental conditions the magnitude of nicotine’s effect was comparable to that seen with naturally occurring proteins involved in angiogenesis. In every case, chemicals known to inhibit other molecules associated with angiogenesis also blocked the effect of nicotine — confirming that nicotine affects blood vessel formation.

    The researchers began the study by testing whether nicotine could stimulate the division of cultured endothelial cells. They found that nicotine was as effective as vascular endothelial growth factor, or VEGF — a naturally occurring, well-defined protein that has long been known to enhance endothelial cell proliferation. Cells cultured in the presence of nicotine or VEGF also assembled themselves into whorls in the tissue culture dish — perhaps a preliminary step to forming new blood vessels. Chemicals that block nicotine’s binding to the receptor also blocked proliferation of the cells.

    The researchers also found that nicotine enhanced the vascularization of discs implanted under the skin of mice as well as another naturally occurring compound, known as fibroblast growth factor. The discs cause inflammation, which frequently stimulates new blood vessel growth.

    To test the ability of nicotine to restore blood flow in oxygen-starved tissue, the researchers tied off a main artery that supplies blood to one hind limb in mice, and then injected nicotine daily into the affected leg. After three weeks the nicotine-injected limbs sported a higher blood vessel density and were receiving more blood flow than those that had been injected with a saline solution.

    Finally, the researchers tested nicotine’s effect on diseases such as lung cancer and atherosclerosis. They found after only a few days that lung cancer cells implanted under the skin or in the lung tissue of animals who drank nicotine-laced water grew much more quickly and were more densely packed with blood vessels than cancers in animals who were not exposed to nicotine. Mice bred to accumulate plaque in the linings of their arteries also suffered from nicotine exposure. The plaque blockages grew more quickly and were thicker in these mice than in the control animals.

    The acceleration of tumor and plaque growth raises a concern about the use of nicotine in patches or gum as an adjunct to smoking-cessation programs. However, Cooke pointed out that “it is critical for people to stop smoking because of the strong evidence that tobac

    Comment by Tony Ryals -

  8. Not So Bad

    The neighborhood is an older one, quiet, a little worn around the edges, but conveniently located. Las Vegas had grown a lot over the years, and this neighborhood had been spared much of the rampant sprawl that characterized the outlying areas of the city.

    A woman, older, but still vital, makes her way out to her car, ready to depart for her part-time job at one of the casinos.

    “It isn’t so bad,” she insists with a tone of quiet dignity – “you get to see the shows, and it pays more than minimum wage. I get by. I do alright.”

    Widowed, Joyce N’s time is her own. But for all the pragmatism, she admits that this isn’t the retirement she’d planned out for herself. She’d imagined going on cruises, playing a little golf, maybe a nice restaurant now and again. As she thinks about what it could have been like, her face clouds for a moment, and then takes on a look of determination mixed with resignation.

    “It’s not so bad,” she says again.

    She’d worked hard all her life, and had invested pretty wisely, or so she’d thought. Starting out with a financial services firm in the early 70’s, she’d actually become a stockbroker, and had built up a reasonable clientele of like-minded women who took their financial futures seriously. But at some point, maybe during the late 80’s, the business had changed, or maybe she’d just been at it for too long, and she’d lost her taste for it. All she knew was that she was tired of the market, tired of working very long, hard hours, tired of the sacrifices that it demanded.

    And then her husband had gotten sick. Caring for him had occupied a lot of her time, and as his condition had worsened, she’d left the brokerage to attend to his needs. Inevitably nature took its harsh course, and he passed away, changing her life forever in the process.

    She never went back to work.

    A meager pension was supplemented by her investments – conservative for the most part, but with a certain portion of her portfolio devoted to growth. She was a professional, so she thought she understood the rules of the game, and with hard work and some moxy, she figured she could use her knowledge to build a future with her savings. Everything went pretty well, and then she made a devastating mistake. She had the misfortune to invest in several smaller companies that were at the forefront of their fields, and should have left her comfortable in her later years. Instead, they left her seriously impaired.

    One of the companies was Nanopierce Technologies. She had carefully, painstakingly done the research, and had learned all about their prospects and their promising future. And ultimately had decided to make a larger than usual investment as she felt, based on her years in the market, that it was a “can’t lose” proposition. Smart, honest management, breakthrough technology, momentum, strategic partnerships – this had the makings of a profitable long term investment.

    But Joyce hadn’t factored in a newer type of player in the game, something that hadn’t been part of the mainstream when she’d been in the business. That mistake cost her everything she invested. And it happened with the relentless momentum of a runaway train, leaving her shocked, and angry, and broke.

    “I had bought a lot of the stock when it was at $2 and $3, and then over a period of maybe six months it went to under 50 cents. And then under 25 cents. And I couldn’t understand why, where all the shares were coming from, who would be selling when everything was going so well for them.”

    She pauses, looks bleakly at the horizon, then smiles.

    “It finally got to the point where it just wasn’t worth it to sell anymore – I’d already lost 95 cents on the dollar. I didn’t think this kind of thing could happen in America, but I’ve learned an important lesson. The market isn’t fair, and it isn’t safe, and there’s nobody looking out for you. Nobody is prosecuting the thieves that stole my money from me. Nobody cares.”

    She cracks open her car door, considers her watch, registers that she’s now running late – she needs to be on time, can’t afford to lose her job or have a reprimand on her record. Traffic in Vegas can be pretty terrible at times. She has to go.

    “It’s not so…listen…really. Some times are just harder than others. But what’re my choices? Hey, I..I really have to get going. Thanks for listening.” She slams her door, starts the tired sounding engine, cautiously puts the car into gear.

    Another day, another sad story, another casualty who’d learned a harsh truth about the system and its workings. The irony is that Joyce isn’t a gambler, doesn’t roll the dice, doesn’t really have a taste for the blinking lights or the ringing bells – and yet that’s where she spends 4 to 6 hours a day, on her feet, doing what she has to do.


    It’s not so bad.

    Comment by Tony Ryals -

  9. Jeff:

    She is the executive director of NCANS.

    The company is Novastar Financial, not Nanopierce. For a guy who claims to be so connected, you got the basics pretty badly wrong. You don’t understand supply and demand, and then construct an odd straw man argument based on a different argument.

    Odd, that.

    As to Jim’s comments, he had a chance to review the NCANS video before it went out and introduced no objections. And it isn’t an infomercial. Jim is an academic, so he probably doesn’t realize that infomercials are pieces that their producers pay to run (advertising) and have a call to action that involves buying something. Neither of these things are true of the VNR that was produced.

    We spoke for well over an hour, and his comments, that there needs to be more transparency in the system, and that naked short selling can be disastrous for companies, was given free, with no coercion, to a NJ news camera crew. The other half an hour of comments didn’t make it onto the roll for the same reason that my other half an hour of comments doesn’t make it onto the roll – it’s a 3 minute piece where everyone got about 15 seconds or so.

    Jeff, you are wrong about Mary, wrong about supply and demand, wrong about the company she is invested in, and wrong about me.

    I’d quit while you are behind. You are starting to seem a little Tony-ish, ya know?

    Just a little constructive criticism…

    Comment by Bob O'Brien -

  10. “Bob”, tossing in a bunch of insults not only doesn’t strengthen your argument, it makes you look silly and childish. Unlike you, I (with the help of other on-line friends) have a long track record of getting scam companies shut down (although I like to think of myself as “retired”; too many lawsuits and threats of bodily harm). Not only that, but I maintain the nation’s largest database of legal reference material relating to hundreds of bogus lawsuits scam companies have brought in an effort to pretend they are merely victims. So you are trying to snow the wrong person about penny stock scams.

    You claim to distance yourself from penny stock scams. Your self-produced video on naked shorting reveals otherwise. In it, you feature a woman who gives a sob story about losing half her portfolio to naked shorting:

    >> Before changing the social security system, the Bush administration needs to crack down on a practice known as naked short selling. It’s hurting investors from Wall Street to Main Street. Just ask Mary Campbell. She says naked shortsellers caused a huge drop in the value of a family portfolio she was building to provide care for her nephew who was brain-damaged in a car accident. “We don’t want him to be a burden on his siblings. They need to have the economic latitude to have lives and hire help. We’ve lost about half our portfolio to this illegal naked shorting.” >>

    Is it true, as this woman claims elsewhere on the Internet but not in the video, that she is “Executive Director of NCANS”? Is it true, as referenced on the Yahoo message boards, that the so-called targeted company was Nanopierce (NPCT), a notorious penny stock?

    >> The CEO has been sued by the SEC twice for fraud. He was also sued over missing stock certificates. He was not allowed to practice law in front of the SEC for 36 months. He’s never had a successful company. He went bankrupt. The company stock promoters have been sued by the SEC for fraud in relation to their promotion of npct and other companies. The company stock promoters are currently being sued for fraud by an investor. >>

    Do you advise people to put half their portfolios — which they claim they need to pay for the care of a disabled child — in a penny stock, let alone Nanopierce?

    Let’s move on to Professor James Angel who is also featured in your video. As it turns out, according to Dow Jones, you tried to snow him as well about the purpose of it and badly misrepresented his thoughts on short-selling:

    >> Georgetown University finance professor James Angel, who appears in the video, didn’t realize NCANS was behind it. Angel said he did an on-camera interview a few weeks ago but thought he was dealing with a New Jersey television station taping a news story.

    “I didn’t realize it would be an infomercial,” Angel said in an interview.

    While Angel is described as sharing NCANS’ concerns, it turns out his views are a bit different. He thinks legitimate short selling is good for the market and says small firms probably need more attention from short-sellers, not less. He added that he doesn’t know if short sales abuses have had a significant impact on U.S. markets. None of those comments are included in the video. >>

    Professor Angel’s true comments about how to address FTDs are the best I’ve ever read. Here’s a snippet:

    >> There are other times when markets work better because market makers can short easily. For example, from time to time fraudsters pump up microcap stocks, pushing their prices to unrealistic levels. In such instances, short sellers should make it harder for manipulators to push prices up, leading to more efficient prices in the market. This also reduces the incentive for microcap fraud, and presumably deters it. However, because it is hard for individuals to short OTC stocks, this job is left up to the market makers. This means that the market makers may have to sit on large short positions for long periods of time.

    These legitimate anti-fraud activities can also result in fails to deliver. For example, the manipulators who are pumping up a stock may attempt a short squeeze by asking shareholders to demand delivery of the shares. A short who has legitimately borrowed the shares may have them recalled and be unable to locate the shares at a reasonable price. >>

    As for Compudyne, they entered into a PIPE, aka a toxic convertible. I’ve been railing against these sorts of death spirals — in public — for more than a half dozen years– back in the days no one really knew how to read an SEC filing let alone contemplate such a financing scheme. Perhaps the most notorious perpetrator of these was Thomson Kernaghan, headed by Mark Valentine. Heck, I was sued by the guy (I fought it pro se and it was dismissed). But let’s not forget that companies willingly enter into these things since without any additional funding they’d likely be bankrupt anyway. No, I don’t condone the lying that often goes along with them (“don’t worry, we won’t short your stock”). Based on the recent resignation of FBR’s Emmanuel Friedman, it appears there may have been much more chicanery going on behind the scenes wrt their hedge funds. If so, of course I think further legal action is warranted. However, to lump PIPEs in with “every-day” FTDs just serves to severely confuse the issue.

    The problem with you, “Bob”, is that your demeanor and obvious lack of objectivity afford you very little credibility. Worse, your severely misleading self-produced video has disaffected you from the media, the very people who you need on your side. I give you credit for being able to generate publicity, but, then again, penny stock scam companies have also been quite successful at generating publicity. It’s time you realize that just because someone doesn’t wholeheartedly agree with you, it doesn’t mean they are stupid or wholeheartedly support nefarious activity.

    – Jeff

    Comment by Jeff Mitchell -

  11. Perhaps you will find the new powerpoint flowchart of how the stock borrow program works, now up at will take some of the confusion out of it for everyone. Dunno.

    And Mark, if you could find out how those 82% are handled, it would really be neat – the DTCC doesn’t seem to feel that is information the public should know. Strange, that.

    No rules I know of against telling how the fails their system doesn’t handle are processed. And yet nobody is talking.


    Comment by Bob O'Brien -

  12. It’s really my ‘sho’ statement to the SEC regarding James Dale Davidson’s ‘naked short scam’ to mask his preferred share and debenture dumping(from LOM account ?).At first I had to wonder what that would have to do with their profession then it occured to me James Dale Davidson used his ‘credibility’ and an Oxford handwriting ‘expert’ to claim that Clinton killed Vince Foster based upon a probably false claim that Vince Foster’s suicide note and signature were forged.

    If this link doesn’t work do a google search of ‘naanss’ and scroll to bottom of first google page to find the link.

    Comment by Tony Ryals -

  13. Tony Ryals cited in American Board Of Forensic Document Examiner in regards To James Dale Davidson’s Fraudulent Naked Short Claim !!Follow Link Then Scoll Down To Tony Ryals.The interest of forensic examiners may be greatly due to Davidson’s fraudulent claim that a signature of Vince Foster was forged,a fraudulent claim by J.D.Davidson to blame Foster’s death on Bill Clinton:

    Comment by Tony Ryals -

  14. Oh yes, when Mr. Skilling said such madness to my friend Mr. Chanos, oh how I and a little friend of mine jumped all over Enron…

    Comment by Lockheed -

  15. This thread of responses proves only one thing.
    Most of you are idiots.Move on.
    Mark post something new please I am bored with this crap.

    Comment by dan -

  16. Jeff: One case? Compudyne. 975 separate transactions, over 1/3 the entire float sold short, naked, by one hedge fund. Not one transaction flagged or stopped. All allowed to fail, and go into the system.


    So there’s your one case. Go read the NASD charges.

    And it doesn’t matter if they said those sales were long or short. They were what they were – fail to deliver/naked sales.

    What happens when you are allowed to increase the number of shares outstanding by printing IOUs and delivering those instead of real shares? Massive dilution. And the price falls.

    That’s what happened with Compudyne.

    I didn’t understand your mumbo jumbo nonsensical math. Let me summarize what I think you are saying: Increasing the supply of shares via IOUs when you have a finite pool of buyers any day results in an increase in price? Not a decrease? Wow. Will every economist and mathematician in the world be glad to hear that, as will the NASD, NASAA and SEC – they are on record and of the opinion that the creation of new, unauthorized shares results in prices dropping.

    That, and it is counterfeiting.

    You know, where you represent to the end buyer that what they have in their account is a genuine share, that they paid for with a genuine dollar, but instead it is a fake, i.e. not what you are claiming it is?

    So again. Increase supply and price drops. Only the company is authorized to increase its float – not the NSCC or a bunch of brokers. Representing a fake or proxy or IOU as genuine in order to separate someone from their money is counterfeiting and fraud.

    Let’s not make this hard. It isn’t.

    BTW, your little treatise is one of the most idiotic I have ever read, leaving Tony out of the mix for a moment.

    Comment by Bob O'Brien -

  17. “Bob”, “Bob”, “Bob”… You should know better than to set up a straw horse argument.

    >>Does increasing supply in a limited demand market: A) increase prices; or B) decrease prices?<< We're talking the stock market here, not street vendors selling t-shirts after a ball game. Your example was of two people seeking to purchase stock. We aren't talking about increasing the supply of stock (which, as you know, is called dilution). We are talking about an increase in demand of a fixed amount of stock (i.e. the public float). As anyone with any common sense knows, when the market is driven by a surge in demand, prices generally go *up*. I know... you consider the so-called IOUs as being dilutive. The problem with that logic is that these shares are not factored into any metrics that would affect the stock price (like real newly issued shares would be). They are there for bookkeeping purposes. As I'm sure you know from being around penny stocks, when insiders pump and dump, prices skyrocket from the pump despite the fact the insiders are flooding the float with new *real* shares. Again, when the market is driven by a surge in demand, prices generally go *up*. Surely, you say, if these FTDs are not resolved quickly such that several iterations of your IOU buying scenario are allowed to proceed that the resulting hidden dilution will eventually substantially negatively impact the price of the stock. In reality, assuming the price doesn't rise forever (in which case the worry about a depressed share price is moot), at some point there will be selling pressure. At that point, the IOUs can start being canceled out. Even assuming new FTDs are created instead, then this canceling effect will be implicit (something that could be resolved on a ledger if someone took the time to do so). The key line in the Shapiro letter is this: "First, Regulation SHO requires that all transactions be clearly marked short or long. If the DTCC and NSCC do not know whether sales are short or long as Mr. Thompson contends, they choose to not know." Yet despite the fact these FTDs are not labeled, people like you and the "scholars" would have us all believe the majority of the FTDs are from naked shorting. If this is so true, then why haven't the scholars been able to provide even one irrefutable documented case? Yes, I know, the DTC is not forthcoming with the needed data. So, once again, we have reduced the argument down to better transparency at the DTC. To frame it any other way without clear supporting (non-circumstantial) evidence is simply unnecessary propaganda. - Jeff

    Comment by Jeff Mitchell -

  18. And yet more chatter from the Yahoo Crypt called NFI:

    CTE Press Release
    by: dirtydirtydeeds (43/M/Cyberspace)
    Long-Term Sentiment: Strong Buy 04/21/05 10:28 pm
    Msg: 294825 of 294862

    Just the latest example of an outcry that is building.

    Wonder how many press releases per week the
    SEC needs to see before they figure it out?

    Subj: Re: Question about paper stock certifica
    By: azteca_ace
    Date: 04/22/05 01:50 am

    “Keeping a paper cert is the only way you can tell whether you have real shares or bogus markets with no actual value other than what your broker pretends it’s worth.

    Sorry folks, that’s the truth on that one.”

    BS from the master of BS, i expected that EXACT reply from you, Dirtydirtydeeds. You are advising folks to be 2nd class in trading speed with the rest of the market THAT IS FULLY ELECTRONIC. Last one out holds the bag or in this case a paper cert, DDD.

    “Almost every broker I’ve ever dealt with will allow you to trade instantly and get them the certs after the fact – so anyone advising you against it is a lying naked short who is afraid that if enough start asking for certs the price runs away. ”

    INCREDIBLE ULTRA BULLSHIT. I tell you what, DDD, i’ll drive to Schwab tomorrow and test that false info of yours, i’ll tell the branch manager i have 10,000 of GOOG and I’d like to bring in my cert (“it’s in the garage somewhere”) next week but i want to sell them immediately into my account. that’s should work, huh! HAHA

    A broker is not responsible to know what stock certs you own NOR will they allow you to trade on a “promise to get back to you” like you are stating here, liar.

    Are are you F’n for real?! or is this some troll you are on. That’s the stupidest comment i’ve ever heard from you and you type A LOT of nonsense on this message board.

    No wonder Cutler quit. He sees where this is going.

    And it is not going to be pretty. The only answer is to open up the books at the DTCC, and have transparency. Once that happens, then the brokers and their accounting firms will be in the crosshairs.

    And the whole ugly mess will be revealed for everyone to see.

    And it is ugly.

    Subj: what about opening ‘tranfer agents’
    By: biodog0
    Date: 04/21/05 10:49 pm

    records and peenny pump dump skkkams records and LOM of Berrmuda’s records ?

    Subj: Re: CTE Press Release
    By: azteca_ace
    Date: 04/21/05 11:26 pm

    Dirtydirtydeeds, BUYINS.NET??? you have to be kidding… looks like the classic boilrroom operation.

    Their “stock of week” profile was written by a owner of that stock profiled too, as stated in the disclaimer.

    What a crock. You should trade ad space with them on your tout sites, DDD! LOL!!!

    Subj: check out letter to Schwab’s anti-money
    By: biodog0
    Date: 04/21/05 11:52 pm

    and anti-pump dump group,Mantas,re ‘naked short scam’on blogmaverick:

    Subj: ddd don’t you think Schwab should have
    By: biodog0
    Date: 04/22/05 12:00 am

    to check that pump dump account out,just in case J.D.Davidson or say LOM of Bermuda was dumping through it and calling it ‘naked shorting’ to mask a pump and dump op ?

    Don’t you ? Maybe we could put a letter in the Wshington Post to ask ? Don’t want to give real naked shorting confused with pump and dump,right ?

    Subj: Re: I’ll bite Dirty…aw shucks, now we
    By: cinemo2001
    Date: 04/22/05 12:02 am

    got someone pretendin to be a good ol boy.

    But both you’n I know that there’s a nice little thin’ called a dividen..

    And that nice little thin’ means that you all and your pardners will have to pony up about 8 bucks per share in the next 8 months for the phoneee shares you all are try’n to pass…

    Me and my pardners are real happy-like to see that moolah taken out of you alls pockets ‘n put nicely into our’n.

    ‘N as long as you all oblige us so kindly with that gift, we love return’n the favor by buy’n more…

    So it all seems to us’n that the harder you all try’n, the more you all are gonna be pay’n.

    But we don’t like you all, because you all are stealin the dough you all owe us for usin our shares without payin’ somethin extra for the borrowin’.

    Like cattle rustlin…and we all are lookin ahead to you all hangin bein a truly sweet time…

    Worst a luck to you all…because you all will hang, whethern it be by payin those dividens or by payin by the law…

    Subj: Re: check out letter to Schwab’s anti-m
    By: manyyrstogo
    Date: 04/22/05 12:06 am

    And you call dirty obsessive. OCD to the core.

    Subj: I think we bit off more than we can
    By: biodog0
    Date: 04/22/05 12:08 am

    chew,don’t y’all ?

    Subj: obsessive is one thing,right and
    By: biodog0
    Date: 04/22/05 12:11 am

    wrong quite another,one can be either and be either right or are attacking the messenger and for some reason refusing to analyse the message.

    Subj: so only look at dtcc to draw attention
    By: biodog0
    Date: 04/22/05 12:14 am

    from other variables in the same equation ?
    yes ddd’s ‘naked short’ equation if he wrote one would be flawed for ignoring the varibles i am pointing out.

    Subj: Re: CTE Press Release…BUYINS.NET
    By: azteca_ace
    Date: 04/22/05 12:59 am

    “The person that organized has been fighting stock touters for 6 years and was directly responsible for nailing Mark Valentine. ”

    Why is BUYINS.NET touting IIG then????

    Gee, Mary, you sure know A LOT about that website and owner. The contact info states NO NAMES of the owner of that site. nor ANY OTHER INFO at all other then listing in/out Reg SHO stocks.

    Being you are the “director” of NCANS what is
    your relationship to this stock trading site and it’s “weekly profile” that in the case of IIG was written by a shareholder of IIG who, as it states in the disclaimer, “would benefit if the stock price rises” ?

    You do realize that the SEC warns investors about INTERNET websites and individuals that tout stocks. Shouldn’t the director of NCANS post a disclaimer too? otherwise it’s all a tangled weave of suspicious activity for a alleged “grass roots” org you are running.

    Do you not see how bad it looks from the outside????

    Subj: wierder and wierder……
    By: biodog0
    Date: 04/22/05 01:14 am


    Subj: Re: Question about paper stock certifica
    By: azteca_ace
    Date: 04/22/05 01:15 am

    The case is simple – If you are holding a paper stock cert there is a delay in the time you can convert the stock electronically into tradable shares (eg you must walk-in or mail the cert to your broker who then has to verify and update your portfolio with the shares)

    It’s a timing thing. and time is money. could take days. If the company you are invested in issues a nasty PR and you are sitting there holding you pretty paper stock cert in your hands you are then screwed in the ability to liquidate those shares at the days pricing.

    Keeping a physical stock cert is a stupid idea nowadays, it could cost you a fortune for your misguided “ownership” ideals.

    Subj: ‘I would like to ax everyone at the SEC
    By: biodog0
    Date: 04/22/05 01:23 am

    ‘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

    Note: This letter was published by JUST Response on February 27 2005

    Subj: Endovasc Announces Shareholder and Divi
    By: biodog0
    Date: 04/22/05 01:26 am

    Endovasc Announces Shareholder and Dividend Alert
    Business Wire, Nov 12, 2002

    Business Editors & Health/Medical Writers


    Comment by Tony Ryals -

  19. Well Mark Cuban must be gloating if he was ‘slammed’ by that moron.

    Comment by Tony Ryals -

  20. “Im sorry that this is a little off topic ,but did any of you hear The Donald slam Mark Cuban tonight? I thought it was completely uncalled for.”

    I’ve never seen more unqualified, uncreative individuals in a business environment. Guess they just reflect “The Donald” himself.

    Comment by jimmiejo -

  21. Letter Brian Ruby to Mantas, ‘anti-money laundering and anti-pump and dump arm of Charles Schwab.Wonder if this guy is related to Jack Ruby ? (hee hee)

    Dear Brian Ruby,
    I noted only recently that Mantas was hired by Charles Schwab in May of 2002 for the purpose of preventing money laundering and monitoring unusual activity in or through Schwab accounts.This is indeed an important task not only to Schwab itself,but also to their clients,shareholders and account holders alike,who may even be adversely effected by such activities unbeknownst to them.

    I am sending to you a shareholder agreement between Endovasc(thatSchwab Capital was a leading market maker in for several years),and an unidentified party of ‘select clients’ as you can see written in hand on the agreement by a Schwab employee.I,as a shareholder who bought my shares retail through Charles Schwab in 2001 was assured in writing from this penny stock biotech that I would maintain my same ‘proportionate percentage ownership’ after a 40 for 1 ‘reverse split’ took place in July 2002.This would have left less than 3 million shares outstanding,because before the ‘reverse split’ approximately 100 million shares were in existence.

    Yet I now know and as you can see from the agreement,a deal had already been made two months earlier to fill a Schwab account with up to 30 MILLION SHARES ! As you know,pump
    and dump activity in any security is illegal.I lost my entiire investment and the company blamed it on Charles Schwab,Refco,and Ameritrade ‘naked shorting’.I now know this was a fraudulent lie.Even a fraction of the number of shares allowed into that account and sold or dumped would have done far more damage to my investment than any ‘naked shorting’by Schwab could possibly do,don’t you agree ?

    I also know for a fact that a Mr.James Dale Davidson touted the stock around October and
    November of 2002 when volume went from near nothing to substantially over a million shares traded for perhaps a couple of weeks.The stock rose from below one dollar to over $3 and then
    plunged back again to new lows it never recovered from.Endovasc and attorney John O’Quinn put out a pr claiming Schwab had ‘naked shorted’ me and I needed to buy a ‘cert’ for my remaining shares to protect myself from my own broker !!!

    I wrote to Charles Schwab asking them to refute this claim by Endovasc and their attorney John O’Quinn.Schwab replied they were in litigation with Genemax another James Dale Davidson connected penny pump and dump biotech and so could not answer if they were ‘naked shorting’ me or not !! For this reason I took Endovasc and O’Quinn’s advise and bought the ‘cert’ from Alexander Walker’s ‘NATCO’,which is notorious enough that you must have heard about.Anthony Elgindy did an expose’ that I only read,about Walker,Sulpco, Endovasc,etc.,too late.Only later did I find this transfer agent was an Endovasc ‘insider'(which I would have thought illegal)and that he received $200,000 in freely dumpable shares probably for hiding the float and allowing unregistered shares to Belladorgroup boiler room of Kuala Lumpur !!!

    I feel that if the pump and dump from a Schwab account had been stopped in late 2002 the Kuala Lumpur fraud would never have occured and am quite upset with Schwab to this day.I was investing in a Stanford patent NOT a James Dale Davidson pump dump scam disguised as ‘naked shorting’ !!! I have gone from a naive investor to perhaps the foremost expert on the naked short scam for masking share dumping.

    Now just look at that ‘shareholder agrement’ I am sending as an attachment.Do you see any money mentioned or exchanged for these ‘up to 30 million shares’ to be deposited in a Charles Schwab account ? Was this ever brought to your attention by Charles Schwab or Schwab Capital ? How could I be suckered into buying retail,at what at the time I did consider a cheap price in my ignorance,for my percentage ownership from Schwab and these individuals in effect got all my shares deposited FOR FREE into their account for what could only have been an illegal pump and dump from a Schwab account ??!! How could I compete with 1/40 the shares I originally had and they dumping as Davidson,ubnbeknownst to me,touted though Agora, Vantage Point,etc. ? Mr.Davidson even lied about receiving shares for a patent that does not exist !!! And no these shares were not accounted for in SEC filings.

    You must know that Schwab or Schwab Capital has now been named by the SEC as a dump account for Mr.Lines and LOM of Bermuda ? It can be found along with my writing on the subject by a Google search,’schwab lom’.So to sum up could you verify a major sale or dump of Endovasc shares occured from that ‘select clients’ account in or around November and that was what Endovasc and Davidson fraudulently claimed was a ‘naked short’ ?

    Other than that what else would ‘up to 30 million shares’ be freely placed into the Schwab account for ? I can think of nothing else.Also I suspect it was the LOM account because Mr.Davidson was a substantial owner of LOM itself at one time and recommended it,without declaring his ownership,in his book,’The Soveriegn Individual’.And it is a known fact that shares of Genemax were sold-dumped from LOM as well.And the Schwab-LOM account has been the most active of all LOM’s U.S.accounts.

    While Schwab has a reputation to protect I do not believe it ethically should be by negatively effecting your own and so am bringing this to your attention.It would occur to me the money laundering may also fall into the definition of this transaction and in a post 9/11 world this is indeed even more depicable than before if that’s possible.
    Tony Ryals

    Note: forwarded message attached.

    Comment by Tony Ryals -

  22. CTE Press Release
    by: dirtydirtydeeds (43/M/Cyberspace)
    Long-Term Sentiment: Strong Buy 04/21/05 10:28 pm
    Msg: 294825 of 294832

    Just the latest example of an outcry that is building.

    Wonder how many press releases per week the SEC needs to see before they figure it out?

    No wonder Cutler quit. He sees where this is going.

    And it is not going to be pretty. The only answer is to open up the books at the DTCC, and have transparency. Once that happens, then the brokers and their accounting firms will be in the crosshairs.

    And the whole ugly mess will be revealed for everyone to see.

    And it is ugly.

    Subj: what about opening ‘tranfer agents’
    By: biodog0
    Date: 04/21/05 10:49 pm

    records and peenny pump dump skkkams records and LOM of Berrmuda’s records ?

    Comment by Tony Ryals -

  23. Im sorry that this is a little off topic ,but did any of you hear The Donald slam Mark Cuban tonight? I thought it was completely uncalled for.

    Comment by Nick -

  24. Golly, Mark, here I am giving you all this credit for being bright.

    And yet it’s the same old saw from you, no illumination or novel insights.

    You posit non-disprovable platitudes, ignore any data that doesn’t support your agenda, and essentially are trying to sell a specious argument. If you encounter a genuine authority and expert like Shapiro, you launch an ad hominem attack rather than refute the facts. You ignore, selectively filter, explain away anything that conflicts with your agenda, and show a spectacular disregard for the truth, as well as an equally spectacular lack of understanding of the law.

    You make imbecilic comments about new companies on the Reg SHO list and then when you are handed your head, you come up with some laughable dross about how it COULD be “good” naked shorting.

    Oh, it’s probably all that good naked shorting, ya know, the kind that is good – that kind – some of my best friends are good naked shorters…

    I really believe that you deserve guys like Jeff who don’t understand supply and demand, and Tony, who is an illiterate tape recorder of errata and libel.

    Try to follow along.

    Failing to deliver is bad.

    It is bad because the SEC has rules against it, and the NASAA, the NASD, the SEC, and every other entity that knows anything about the topic admits and says that it is bad. Try to get that through your noggin’ – naked short selling is most often used as a part of an illegal manipulation technique – and it’s against the law. PEr the SEC, NASD, NASAA, etc. etc. naked short selling can have devastating results for companies that are manipulated by scumbag hedge funds and short sellers who think they should be allowed to rob investors, and lie with impunity.

    Now, perhaps we have all been sucked into some wormhole wherein the laws on the books are electives, and as long as you are OK with someone counterfeiting shares it’s OK to counterfeit them.

    But that isn’t the way the law reads. Selling drugs is illegal, regardless of whether the addict really wants the dope or not. Prostitution is illegal even if both parties are OK with it. Are you starting to notice a theme here?

    Read the code. Learn something. And then try to explain what happens to the 82% of the fails that don’t get cured by the borrow program. How are they handled. I called the DTCC today and nobody could answer the question. You give it a try.

    And check out CTE’s press release from this afternoon for an example of another company that is citing naked short selling as a problem.

    Either that, or comfort yourself with people that don’t understand basic supply and demand and its impact on pricing – your blog seems to be attracting those.

    Water seeks its own level, isn’t that the saying?

    Comment by Bob O'Brien -

  25. Mark,

    Here is a report on the quality of the SEC and what they have to say – Remember, they first denied a whistleblowers account of this in Boston.

    GAO: Distracted SEC Failed to Find Abuses

    Friday April 22, 2005 12:46 AM


    AP Business Writer

    WASHINGTON (AP) – The Securities and Exchange Commission failed to uncover trading abuses throughout the mutual fund industry that cost investors billions because it had other priorities, congressional investigators have found.

    Congress’ Government Accountability Office, in a report being released Friday, said the SEC’s inspectors should have detected the market-timing abuses prior to September 2003, after New York Attorney General Eliot Spitzer brought the violations to light and regulators began an industrywide crackdown.

    The chairman and senior Democrat on the House Judiciary Committee seized on the GAO report to roundly criticize the SEC. Such concerted bipartisan attacks on the agency have been rare in recent years.

    “The SEC was years late in uncovering these massive abuses that are nothing short of theft,” panel chairman Rep. James Sensenbrenner, R-Wis., said in a statement. “The SEC must take a stronger position on finding, preventing and punishing abuses by insiders, or Congress will be forced to take another look at how mutual funds are examined and regulated.”

    The ranking Democrat, Rep. John Conyers of Michigan, said the report shows that the SEC “was asleep at the switch.”

    Market timing of mutual funds, which involves rapid in-and-out trades, is not illegal but is prohibited by many funds because it can disadvantage ordinary shareholders. In many of the cases brought by Spitzer and the SEC, mutual fund companies allowed favored clients such as hedge funds to engage in market timing.

    Before September 2003, the SEC “did not examine (funds) for market-timing abuses because agency officials viewed other activities as representing higher risks,” the GAO report says. “SEC can strengthen its capacity to identify and assess evidence of potential risks.”

    The report cited estimates that market-timing abuses in the $7 trillion mutual fund industry – which it called a “persistent risk” before September 2003 – cost fund investors some $5 billion a year.

    The GAO’s findings point especially to the SEC’s Office of Compliance Inspections and Examinations, known as OCIE.

    Its director, Lori Richards, in a recent letter to the GAO investigators, said that after the fund misconduct came to light, “the SEC took comprehensive action, including … enhanced examination oversight.”

    “The SEC’s examination program has adopted a risk-based approach to oversight that emphasizes the prompt identification and investigation of emerging compliance risks,” Richards wrote.

    SEC spokesman John Nester declined further comment Thursday.

    The National Association of Securities Dealers, which is the brokerage industry’s self-policing organization, also failed to detect the trading abuses prior to September 2003 in its inspections of brokerage firms selling mutual funds, the GAO report noted.

    NASD spokesmen couldn’t be reached for comment Thursday evening.

    Spitzer’s office discovered the misconduct during the summer of 2003 by following up on a tip from a hedge fund insider.

    Comment by Dave -

  26. It’s high time for your team Mark, Write something about your chances so we can bet with u..

    Comment by kedar -

  27. Mark,

    If you had a clue what you were talking about the Mavs would be Champions.

    Whether a fail is created from long side or short side is irrelevant as EVERY month a Broker/Dealer is cited for improperly tagging trades. The real issue is trade settlements and the responsibility to settle.

    Now if you had an analyst mind you could go out and validate or refute what Robert Shapiro had to say. Instead you attack his objectivity. Try the math first.

    As for a securities mind I suggest you read again the report that came out of the SEC from Leslie Boni (Strategic Failures) and then go in and read a little securities laws. Start with The Securities Act of 1934 Section 17A (reguirements for prompt and accurate clearance and settlement of trades to protect teh industry as a whole) and then follow up with Rules 15c6-1 and 15c3-3. These rules, promulgated from the Securities Act discuss the requirements for intent to settle trades within 3-days unless prior WRITTEN agreements to settle beyond are made.

    As you read the securities acts, read the SEC’s reponse to rationalizations for grandfathering (large pre-existing fails of 6-months or greater) and the Boni reportexplain the conflicts in statements.

    Bob keeps calling you an intelligent guy while you attack in response. Maybe you ought to open up your mind to the facts and understandings you are clearly lacking at this point in time.

    Do your homework. Ask yourself how and why Global Crossings (GLBC) can have a 116% reported short position and turn it’s float 1/month yet remain a threshold security for 3+ months. Requirements on a loan in a margin account is that the loan is called in when the stock is sold. Can’t turn the entire float over each months and yet the shorts are not called in to cover the float exchange.

    Do the research and do the math. It all starts with understanding SECURITIES LAW.

    Comment by Dave -

  28. Bob O –

    I am trying to understand your argument regarding IOU’s issued by the DTCC or market makers or whomever. Here’s what I don’t get: if a company has issued a limited number of shares of stock (10M for example) and has released a portion of those shares (5M for example) into the markets (which then registers them as outstanding shares on their books), how can anyone write and record an IOU on these shares and not have the books be “unbalanced” or incorrect? Shouldn’t such an inaccuracy be identifiable at any point in time and readily transparent?

    Maybe I just don’t understand the system well enough to know this. Could you help me out?


    Comment by Mike V -

  29. >

    Jag Media goes so far as to identify “naked short selling” as an ongoing risk in a number of their SEC filings.

    Of course, there is no mention of the $40+ million that Jag Media management has squandered over the years in any of their risk factor disclosures, but it does stick out on their balance sheet.

    Comment by James Brownfield -

  30. Bob O, I guess you cant read.

    Your list of reg sho companies. You dont know if the FTDs are longs or shorts. You have zero knowledge one way or the other.

    Nor do you know if the FTDs are problem FTDs or not. Its also quite possible that all parties are fine with it. The buyer of the longs that were FTD’d might be fine with it.

    There have been multiple times i have asked for delivery of stock i have purchased and it was FTDd for a period because it had been lent out. I didnt have a problem with it. Im sure other buyers might not as well

    So how bad are the naked shorts hurting NFI and OSTK these days ?

    And Im still waiting for the name of a new company whose CEO stands up and has a real case against naked shorts.

    You must be able to find a new mouthpiece beyond Byrne ?

    If not, why not ?

    Comment by Mark Cuban -

  31. Bob, it’s *your* premise that selling stock that doesn’t exist (aka naked shorting) depresses the share price. So, by *your* definition, purchasing stock that doesn’t exist (aka naked buying) would inflate the share price. QED.

    – Jeff

    Comment by Jeff Mitchell -

  32. Jeff, you are being obtuse, or are dim.

    Does increasing supply in a limited demand market: A) increase prices; or B) decrease prices?

    For instance, I can create as many IOU’s for stock as I want and hand them out with little or no cost associated with them. Do you think that virtually limitless supply of stock with a limited number of buyers will increase the stock price, or decrease it? If increase it, explain how oversupply in a finite market does that.

    Comment by Bob O'Brien -

  33. Bob, you described a scenario of the same shares being *bought* over and over. For your premise that naked shorting kills a stock price to be true, then the reverse of naked buying, by definition, must also be true. Given that going long a stock is more common than going short, the FTDs, by defintion, would be most often inflationary to stock prices.

    Your remaining paragraphs are just a plea for better tranparency at the DTC and in the markets in general. IMO, you’d have a much better chance at getting a more serious discussion about this if you didn’t align yourself squarely with companies that blame all their problems on naked shorting.

    – Jeff

    Comment by Jeff Mitchell -

  34. Jeff, tell me that was a joke, right?

    The sell transactions that were being conducted were being done with IOU’s treated by the ex-clearing system as genuine, providing more sell side volume that would be possible by shares issued by the company – i.e. artificial supply meeting fixed demand.

    If I could sell as many widget IOU’s as I wanted but there was, by definition, only a fixed demand, what would happen to the price of widgets as the supply outstripped the demand?

    That’s what I just described.

    It is actually worse than that. You have the NSCC only satisfying 18% of the fails with shares from the borrow program, per their own admission. The other 82% ostensibly receive IOU’s or markers or whatever other euphemism you want to call counterfeit shares (that’s what they are when you represent them to they buyer as genuine.) And then those markers go into the system to the next level, and get traded back and forth between the various participants, who have all agreed that they will be treated as genuine for the purpose of effecting transactions. That’s yet another level of fraud, systemic, actually.

    The model that makes the most sense is a small bank, where you have a bunch of companies that are making deposits and writing checks all day long. Some customers just write a lot more checks than they have cash to back up, but because you have divided up your check paying department and your collections department, the way it is expressed in your computers are accounts with a debit. You smile and tell everyone that it’s all good, but what you are actually relying on is that not all customers will come in and demand cash for the checks they got today – they’ll just take your IOU (check) and hold it till the end of the week, or better yet, just sign it over to someone else when they need to pay a bill. You may not have nearly enough on deposit, but as long as the confidence in your bank is good, no one will question things – you’re good for it.

    It’s a confidence game. It falls apart when a lot of shareholders lose confidence and demand certificates. There aren’t nearly enough. So as long as the confidence can be maintained, most won’t demand proof you actually have the shares before they hand over the money (i.e. take your word for it) and thus the game continues. They trust you. Or rather, they trust the few large houses on Wall Street and the Accounting firms that audit them.

    In other industries it would be fraud. This one too. They just have institutionalized it to the point where the fraud is systemic and condoned by everyone on the inside. Otherwise the system would collapse.

    It’s a confidence game, pure and simple.

    That’s why they have to simultaneously mock and vilify those that question the system, while refusing to lift the curtain and reveal how it actually works.

    That’s how you get Mark trying to mock and denigrate Shapiro, one of the top credentialed economists in the country, rather than simply looking at his comments and saying “holy sh*t.” A guy that doesn’t know how many new companies are on the SHO list any given day and revels in his ignorance, denigrating someone that actually knows his subject matter. The attempted victory of hubris over substance.

    Note that the game is wearing thin.

    Like all confidence games, eventually the rubes catch on and demand to know what is being sold to them when their money is taken out of their account.

    That’s what is happening now, and they are fighting tooth and nail to make it all seem like much ado about nothing. The sound of their protestations is a trifle shrill.

    If I wasn’t laughing I’d be crying.


    Comment by Bob O'Brien -

  35. Anyone know anything about this ? Jeff Mitchell can you explain what’s being said here ? If I understood I probably never would have beeen suckered by ddd in the first place.
    Did these guys perhaps get a deep discount,as usual ?

    from Yahoo NFI board:

    HH: Any NFI MBS in Belle Haven ABS CDO?
    by: veritas_i_seek_the_truth 04/21/05 12:44 am
    Msg: 294417 of 294419


    What is the dollar amount of Novastar MBS in the Belle Haven ABS CDO that you and your colleagues put together?

    Does NIBC know that you post stock advice to individual investors on message boards? I can’t imagine that they’d approve of that sort of thing.


    Comment by Tony Ryals -

  36. Ummm, Bob, you punched a great big hole in your own conspiracy theory!

    In your example, you *purchased* only 180 real shares out of 1000 ordered, receiving the rest as an IOU. This means you are naked *long* the other 820 shares! Then someone comes along and buys all 1000 from you, meaning he also went naked *long* another 820 shares.

    Since going long is far more popular than going short, might the imbalance create far more rises in stock prices than depressions? Uh oh. Back to the drawing board!

    – Jeff

    Comment by Jeff Mitchell -

  37. There have been multiple times i have asked for delivery of stock i have purchased and it was FTDd for a period because it had been lent out. I didnt have a problem with it. Im sure other buyers might not as well

    Comment by runescape money -

  38. No, I don’t condone the lying that often goes along with them (“don’t worry, we won’t short your stock”). Based on the recent resignation of FBR’s Emmanuel Friedman, it appears there may have been much more chicanery going on behind the scenes wrt their hedge funds. If so, of course I think further legal action is warranted.

    Comment by wow powerleveling -

  39. now that the sec has issued a release saying naked short selling is a SERIOUS issue you mus feel like a moron …… like you lost a championship or something

    Comment by anthony kalantzis -

  40. good!

    Comment by 11nong -

  41. Mark,

    The sad part of your naked short doesn’t hurt people comment is that your wrong.

    I know that your short OSTK stock so you are very happy to have the naked shorts jumping on.

    It helps you and all real shorts. it’s to your advantage.

    What if someone “naked bought” 5 million shares and ran the stock to $40 a share? of course they wouldn’t give real money to the people that sold.

    Would you like that? your comments like this are the very reason that Warren Buffett thinks that your such a punk!

    Comment by Jerry Doll -

  42. it s good site

    Comment by ujjwal -

  43. This was written a couple of days ago but coincidentally Texas Attorney John O’Quinn who apparently is representing Patrick Byrne and OSTK against Rocker Partners is mentioned.

    To John Reed Stark,SEC Re : James Angel, Georgetown University, Aids Penny Stock Fraud
    Tony Ryals

    Securities Exchange Commission
    Office of Internet Enforcement
    August 9,2005
    Dear John Reed Stark,

    I was hoping to reach you in some capacity other than just as the head of the SEC Internet Division,or as a Georgetown professor,and ask you,human to human, what the hell is going on in the penny stock securities fraud and internet securities fraud business ? Just how big of a business is it and who does it really benefit ?

    A David Marchant ,’KYC’ ,’Know Your Client’, or inspired article in ‘The Royal Gazette’ last year,quoting one SEC lawyer and a broker at VFinance said this.:

    ‘”The volume of LOM’s US trading, whether on behalf of its customers or its own accounts, is staggering,” stated Mr. Ungar. “For example, in LOM’s account at Schwab, during a two-week period in 2003 – the same year in which the SHEP and Sedona transactions in question occurred – LOM bought or sold, on over 4,000 different occasions, a total of 151 million shares of US securities traded over various US securities markets.”
    The trader at Florida-based vFinance who was in charge of LOM’s account testified that “LOM’s trading over the US markets was more than the trading of most US regional banks” and that he “either accumulated or liquidated millions of shares a day for them”, stated Mr. Ungar.’

    James Dale Davidson and the Lord Rees-Mogg were both shareholders when they recommended LOM in their book,’The Sovereign Individual’,(again information gleaned from David Marchant’s,KYC,or,without disclosing that fact,of course.I am almost sure Endovasc and Davidson dumped from the Schwab LOM account but Schwab will not disclose to me even though it appears obvious it was an illegal pump and dump account and their Beltway located ‘anti-money laundering,anti-pump and dump expert,Mantas Inc.,with all its software,didn’t catch it.Why ? !

    James Dale Davidson definitely touted or fraudulently promoted Endovasc through Agora’s ‘Vantage Point’in late 2002.He did not simply send out mailings to private clients as the SEC claimed,he was involved in and benefitted from illegal pumps and dumps of Endovasc and Genemax,among many many others over the years, then fraudulently claimed they were ‘naked shorted’ knowing full well,as an insider to the illegal pump and dump from a Charles Schwab account,that this was a lie.

    Now he,I mean ‘Bob O’Brien’,is using the same ‘naked short’ scam that I consider to be of Beltway origen to rob naive Americans and perhaps launder money,just as the Nigerian letter scam has Nigerian origens,to tout Patrick Byrne’s OSTK and NFI. James Dale Davidson,I mean ‘Bob O’Brien,is claiming in both cases they are victims of ‘naked shorting’ and that investors in either should buy ‘certs’ to protect
    themselves .

    I believe because NFI is more a ponzi scheme where dividends are paid to recruit more suckers and more shares are sold to pay the dividends among other things,,this puts the lie to the ‘naked short’ claim because no one, to my knowledge, has claimed having shares that are not receiving their dividends.I don’t know why James Dale Davidson,excuse me,I mean ‘Bob O’Brien’ didn’t figure that flaw in his fraudulent ‘NFI is being naked shorted’ scam.As for OSTK,’ncansd3′ or ‘Bob O’Brien has been touting it furiously since the recent SEC filing,and claiming the ‘float’ is only 100,000 shares!!! And to buy ‘certs’ to protect yourself from ‘naked shorters’ of course.

    Also can you or anyone provide an explanation of this ‘shareholders agreement’ below on pdf file ? Is this any proof of an illegal pump and dump from a Schwab account ? Does pump and dump always include money laundering as a corresponding crime ? What other purpose would such an account filled with millions of EVSC shares for ‘select clients’ be for ?

    I was able to get this letter and ‘shareholders agreement’ from Schwab in 2003 but never able to get any documentation of ‘trading activities’ for that account for late 2002 when James Dale Davidson promoted or touted through Agora and trading volume hit the ceiling for a couple of weeks.Then the ‘company’ and attorney O’Quinn claimed I was being ‘naked shorted’! This I am now sure was a fraud to conceal a pump and dump but Schwab remained silent. So I bought a ‘cert’ from former SEC employee Alexander Walker and his ‘NATCO’ tranfer agency in Nevada,not knowing he was also an insider to the fraud and would receive $200,000 in freely dumpable shares as an ‘insider’ a year later and no telling what under the table.

    I’ve wanted to put this letter from Charles Schwab and the Endovasc shareholders agreement online for a couple of years but couldn’t do the simplest of pdf posting skills.The format or whatever made it fairly straight forward so here it is. And is the fact of no money changing hands being mentioned in the ‘agreement’ to deposit up to 30 million shares – two months in fact before a ‘reverse split’ would supposedly reduce all shares to less than three million – unusual !?

    I don’t understand.It would appear Schwab Capital and other market makers would not allow the reverse split in June if already that many shares would be deposited in a Schwab account,thus making the ‘reverse split’ null and void ? Yet they did. Can anyone explain ? I’m as confused as I was defrauded.I feel Charles Schwab and Endovasc and their ‘select clients’ all worked togather to deceive and deraud me and among other things,Schwab working as both broker and market maker and accounts holder benefitted from illegal insider information in being able to know the trading or dumping patterns from the very stocks the were market making with.

    And I do feel the failed their fiduciary duty to me by not providing a heads up as to what was going on,much less in hosting a pump and dump account that would destroy my investment,however naive that investment might have been in retrospect.

    Also around November 2002 James Dale Davidson began his touting in Agora-Vantage Point and that is when the volume exceeded a million shares per day.I couldn’t believe it for a couple of weeks,thinking nearly half existing shares were being bought and sold every day,then it all ended as fast and Endovasc and attorney John O’Quinn put out a businesswire pr claiming I was ‘naked shorted’ by Schwab,Ameritrade and Refco !I learned next year of course they had dumped perhaps 10’s of millions of shares, so it was no ‘naked short’.

    Schwab remained quiet and I only got this ‘shareholder agreement’ a year later after complaining to the SEC.Schwab will still not say if it was LOM or Davidson or who.Is there any way I can find out ? Did SCHWAB knowingly host an illegal pump and dump account ? Who are they protecting ? LOM of Bermuda as you may know has come under some investigation from SEC for unusual volume manipulation and dumping of penny stocks from their Schwab account.Davidson and or Agora Publications was accused of touting Endovasc, Genemax,and ‘USU’ but they may have gotten off,I’m not sure.

    Do I have any right to know as an investor in Endovasc and client of Schwab and or any legal recourse ? Or will the SEC stop coddling the criminals,whether they are of Beltway origen or foreign citizens ?

    Would this account not go a long way in explaining what many,including your colleague James Angel of Georgetown,James Dale Davidson of the National Tapayers Union and ‘NAANSS’ and ‘NCANS’, and Texas’ ‘famed trial attorney John O’Quiin ‘ claim to be ‘naked shorting’ ? Why not provide them an explanation? They appear even more confused than I am.But I admit they

    Comment by Tony Ryals -

  44. email to james angel of georgetown :

    dear james angel,

    excuse that i have yet a new email address,i guess i can thank ‘o’brien’ or ‘dirtydirtydeeds’ or ‘ncansd3′ or james dale davidson for that once again.he,’ncansd3’, proudly boasts he could have me killed by a ‘cabby’ for $500 in guatemala.real nice company we keep,huh ? i guess at least none of us can deny that the ‘o’brien’ who set you up for that naked short selling ‘infomercial’ is the ‘dirtydirtydeeds’ who posted personal info re marc cohodes of marin on yahoo nfi message board and the same one who,(as ‘ncansd3’), claims i’m an evil short seller,or ‘naked short seller’,whatever,(rather than someone defrauded in one of his ‘naked short scams’ or pump and dump ops),in guatemala.

    here’s my take(below) on senator bennett from message board.i think a search ‘ryals’ on utah.indymedia has the article-commentary i made re ‘stanford heeschen cooke’.my emphasis there is that that commentary was one that google cached and then deleted from google, i did not do ‘dd’ at least correctly from guatemala re endovasc,perhaps greatly in part because i thought stanford who rented them the ‘nicotine-angiogenesis’ for their pump and dump ops had done it for me.

    oh sure i could have imagined sloppy management etc. but not fraudulent claim of naked shorting are that everyone but me knew the sec does not audit shares and thus the flow of dollars !! i had to create my own term,’share-money laundering’ for what i experienced and to finally accept the reality that charles schwab and probably their lom account was behind it ? why ?, because james dale davidson and his lard rees-mogg once touted it as well without disclosing they were significant shareholders.

    i have not dug out my original communication with you but i remember the general questions i had for you.first was,do you know james dale davidson who is indeed a beltway figure and the founder,to my knowledge,of the national taxpayers union ? i know he kept shares of his penny pump and dump miv therapeutics at that same address as the national taxpayers union in his and his children’s name.i don’t believe he made a claim for mivt being ‘naked shorted’ but he did a arrange phoney collaboration in order to enhance the touting and dumping of both.

    i am almost positive senator bennett knows who conned him.he probably sat at the hearing
    or hearings where mr.davidson spoke to a senate committee as representative of the national taxpayers that’s my main question,do you know mr.james dale davidson and do you not now believe he is o’brien’ or at least,(hee hee),the ‘brains’ behind mr.bob o’brien’ ?
    in retrospect do you feel you were used by this man,whoever he is ? do you now realize mary campbell in the infomercial is really mary helburn who touts nfi on yahoo incessently and an unending amount of penny stock pump and dump scams that all claim to be victims of ‘naked shorting ? and she of course is ‘president’ of the whose infomercial you and senator bennett appeared in ?

    i suppose having lost everything to these frauds i would like to see you take as much interest in exposing the scam that is using the naked short claim for fraud to mask their illegal pumps and dumps as you have to decry the evils of ‘naked shorting’.again do you have a single proven case of ‘naked shorting’ that harmed a viable company ? neither james dale davidson or o’brien’ or mary cmpbell helburn have not provided a single one to my knowledge.and the fact is james dale davidson never disclosed his holdings of endovasc shares as he touted to dump through agora’s ‘vantage point’ and he lied straight out about another ‘nicotine patent’ that did not exist and would have conflicted with stanford’s patent if it did !!!

    it’s been so long since i got back to you i forgot whether or not i sent you the nfi board post of june 1 where ‘ncansd3’, in his excitement after an email communication with jesse eisinger of wsj, actually blurted out the name ‘james davidson’ in regards to a ‘significant contributer’ to ncans as well as a ‘boat’ by that name.i presume the boat to be kept on or near the potomac.
    perhaps near that of san diego congressman cunningham for all i know.

    so i think you can make out the most important queries you know james dale davidson and do you realise he has had a history of using the ‘naked short claim’ to mask his illegal pump and dump operations with penny stocks ? do you now see that o’brien’ and mary campbell helburn are repeating the same scam as davidson’s older ‘naanss’ and david patch’s investigatethesec’ ? not to menton mark faulk’s ‘thefaulkingtruth’ that touted global links heavily after senator bennett made his claim which also appeared in the infomercial you were in.

    do you wish to stop at the infomercial and just let it be seen that you oppose ‘naked short selling’, without providing one single example,by the way.or are you as mad as i am that you were used to promote a fraud by penny stock con artists and wish as much as i do to clean up the fraudulent mess ?

    tony ryals

    re: utah senator bennett duped in penny stock scam
    by does the ‘naked short scam’ have a beltway origen ? on 7/25/2005 2:03:20 am

    does senator bennett endorse the cheetah club striptease as well ?
    or is it only natural that the ‘naked short scam’ of beltway connected james dale davidson’s ‘’,or ‘national coalition against naked short selling should have a las vegas striptease club connection,at least as a fraudulent address ?

    and like his national taxpayers union and his now defunct national association against naked short selling or ‘naanss’, which was also used to mask his illegal pump and dump of penny stocks both onshore and offshore,is it only natural that it should have the phoney pretense of ‘national’in its acronym to divert attention from the fact that it is an international criminal,even money laundering enterprise using unaudited shares to disguise the flow of money often from defrauded americans in illegal pump and dump activities to offshore entities ?

    and is it only ‘natural’ that it’s original address at the time of the february 8 $100,000+ ad-letter to president bush in the washington post would be an adress and website located in the british virgen islands ?

    doesn’t senator bennett realise he has been made a laughing stock by james dale davidson of the national taxpayers union,agora publications ,etc. ? and he has aided and abetted illegal pumps and dumps and offhore money laundering though sec’s reg.s and other penny stock share distribution schemes by touting for davidson’s,’’? doesn’t he realise the anonymous person calling himself ‘bob o’brien'(james dale davidson)used a fraudulent address,(the cheetah striptease club in las vegas!!),for this mafiosi scam ?

    doesn’t senator robert bennett realise that the ‘stop naked shorting’ fraud is a scam and he was set up by james davidson and senator bennett’s ‘contituent’in utah,patrick byrne and his,who are the ones who placed the $100,000 plus ad-letter to president bush in the washington post to promote a stock fraud claiming social security investing was threatened by ‘naked short selling’ when in truth the fraudulent claim was used to disguise the flow or manipulation and illegal pump and dump of penny stock shares aiding and abetting fraud and money laundering !? and far from protecting investors he was working with their defrauders ?

    and is the securities exchange commission going to allow the ‘naked short scam’,(much worse than the nigerian letter scam), to go on indefinitely when it is originating in their own beltway backyard ? will the fraudulent absurdity never end ? do they want money to be laundered and american retail ‘investors’ in u.s.penny stocks to be defrauded by beltway criminals and a las vegas penny stock

    Comment by Tony Ryals -

  45. Below are links to my indymedia story about the disappearance of the Google cache of my
    message on calling for a boycott of until Patrick Byrne discloses the true identity of ‘O’Brien’.The only variation to the two links being the intro. Whereas on the Utah indymedia version I emphasize Senator Bennett’s role in the ‘naked short’ scam of James Dale Davidson and in the Washington D.C. version I emphasize more James Dale Davidson’s role as a Beltway insider which I post with the links here below.:

    Utah Senator Duped In Penny Stock Scam

    Utah Senator Bennett involved in or duped into aiding fraudulent pump and dump scheme of a penny stock scam called Global Links(gbll) and others and made false claim that it was a victim of ‘naked short’ selling.He was either duped by James Dale Davidson a Beltway con artist who goes by alias Bob O’Brien on his ‘naked short’ scam website or is aiding and abetting the fraud !!!! It appears much of this penny stock fraud may have a Beltway connection and Senator appears to be doing political favors for Byrne who has donated to Republican causes, including the anti-Kerry Swift Boat Captains, etc.. Senator Bennet probably knows the fraudster James Dale Davidson who is allowed to carry on his masquerade even threatening others over the internet because of his far right leanings and Beltway political connections !!! So far the SEC has done nothing to uncover and dismantle what increasingly appears to be a massive right wing securities fraud with Beltway origens.

    Google Censors Indybay For Patrick Byrne, and Washington Post

    The removal of Indybay’s announcement to ‘Boycott Advertisers in the Washington Post’ by ‘donna neversurrender’ from the Google search engine is, in my opinion, a censorship to protect Patrick Byrne and his from scrutiny or criticism.

    And coincidentally, as I will try and show, it begins in great part with a $100,000 + ad-letter to Bush in the Washington Post about SS investing in stock markets and ‘naked short selling’ that Byrne and an anonymous partner,’O’Brien’,(who I believe to be the Beltway political and stock fraud James Dale Davidson), placed in the Washington Post on February 8 for the purpose of defrauding and deceiving investors in the stock market.

    Below, ‘ncansd3’ or ‘dirtydirtydeeds’ or O’Brien’ or ‘James Dale Davidson’,as I like to call him,responds tonight on Yahoo’s OSTK message board to my indymedia writing on their Washington D.C. and Utah webbsites re the disappearance of my Google cache requesting a boycott of’ until Patrick Byrne, discloses the true identity of ‘O’Brien’.:

    Subj: In the highly unlikely event…
    By: ncansd3
    Date: 07/18/05 09:27 pm

    …that anyone reads this poster’s dross, please understand that he is either badly unhinged, or is merely libeling the good Senator, as well as Dr. Byrne and yours truly in an attempt to discredit anyone willing to tackle the naked short selling issue.

    I would presume that most are capable of seeing past the poor grammar and incoherent vitriol to the gibbering heart of his message, which is essentially that he wasn’t nurtured as a child/was dropped on his head/was thrown into a lake by his stepfather in a burlap sack with a bunch of cats/took a few too many shrooms in high school/likes the funny cigarrettes, smokeee smokeee.

    Or, he is being paid to clog and to insult and intends to be taken seriously, in which case his inability to frame a readable idea, coupled with a singular lack of linear thought in his ramble, renders his screed a laughable contrivance at its best, and fishwrap at its worst.

    I apologize that the poster has taken some sort of homo-erotic fascination with me, and has taken to following me to any board I post. It does make even the simpering bile of some of the denizons of this board read like the bard’s iambic pentameter, so there is a bright side to this.

    Again, apologies to one and all for the intrusion. I really hope they don’t go to all automated bashing, as the synthetic loons rarely have the foam-at-the-mouth good fun value of the real McCoy.

    Comment by Tony Ryals -


    Can anyone provide an explanation of this ‘shareholders agreement’ below on pdf file other than for an ilegal pump and dump from a Charles Schwab account ? Is this any proof of an illegal pump and dump from a Schwab account ? Does pump and dump always include money laundering as a corresponding crime ?

    I was able to get this letter and ‘shareholders agreement’ from Charles Schwab in 2003 but never able to get any documentation of ‘trading activities’ for that account for late 2002 when James Dale Davidson promoted or touted through Agora and trading volume hit the ceiling for a couple of weeks.

    Then the ‘company’ and attorney O’Quinn claimed I was ‘NAKED SHORTED’! This I am now sure was fraud to conceal a pump and dump but Schwab remained silent.

    I’ve wanted to put this letter from Charles Schwab and the corresponding Endovasc shareholders agreement online for a couple of years but couldn’t don’t have the simplest of pdf posting skills.The format or whatever it’s called made it fairly straight forward so here it is.

    Can anyone provide an alternative explanation for this Schwab account filled with ‘up to 30 million Endovasc shares’ in May 2002,(2 months BEFORE SUPPOSED ‘REVERSE SPLIT’that should have left less than 3 million shares existing),OTHER than an illegal pump and dump account ?

    And is the fact of no money changing hands being mentioned in the ‘agreement’ to deposit ‘up to 30 million shares’ – two months in fact before a ‘reverse split’ would supposedly reduce all shares to less than one million share – unusual !?

    I don’t understand.It would appear Schwab Capital and other market makers would not allow the reverse split in June if already that many shares would be deposited in a Schwab account,thus making the ‘reverse split’ null and void ? I mean how could you allow each share to be re-evaluated up 40 times overnight when a 40 to one ‘reverse split’ never happened ? Yet they did. Can anyone explain ? I’m as confused as I was defrauded.

    Also around November 2002 James Dale Davidson began his touting in Agora-Vantage Point and that is when the volume exceeded a million shares per day.I couldn’t believe it for a couple of weeks,thinking nearly half or more of all existing shares were being bought and sold every day.Then it all ended just as fast and Endovasc and attorney John O’Quinn put out a Businesswire pr claiming I was ‘naked shorted’ by Schwab,Ameritrade and Refco!

    I only learned the next year of course they had dumped perhaps 10’s of millions of shares, so it was no ‘naked short’. Schwab remained quiet and I only got this ‘shareholder agreement’ a year later after complaining to the SEC.

    Charles Schwab will still not say if it was LOM or Davidson or who.Is there any way I can find out ? Did Schwab knowingly host an illegal pump and dump account ? Who are they protecting ? LOM of Bermuda as you may know has come under some investigation from SEC for unusual volume manipulation and dumping of penny stocks from their Schwab account.

    Davidson and or Agora Publications was accused of touting Endovasc,Genemax, and ‘USU’ but they may have gotten off,I’m not sure.
    Do I have any right to know as an investor in Endovasc and client of Schwab and or any legal recourse ? Here is pdf of Schwab letter threatening me with legal action for speaking out and the ‘shareholder agreement’ to deposit ‘up to 30 million shares’ in one Schwab account absolutely free !:

    Below is my virtual ‘blog’ on spitzer2006 that I took over from someone in February who was trying to promote the ‘naked short scam’ again,coincidentally,shortly before a letter-ad to Bush appeared in the ‘Washington Post’ warning of the supposed dangers of ‘naked shorting’ to SS investing in the markets.

    I recognized the scam immediately as the same one that ripped me off in 2002 and that ‘blog’ now has some VERY interesting material re penny stock fraud and the ‘naked short scam’,as I call it, which is the opposite of what its fraudulent promotors claim it is,in my opinion.

    Their ‘naked short’ claim’ was and is used to mask the dumping,particularly of penny stock shares,that the SEC,for some reason,is unable or unwilling to audit.Great for death spiral manipulation and money laundering.Great for defrauding honest and trusting investors who believe their lies.

    Comment by Tony Ryals -

  47. On June 2,’O’Brien’ or ‘dirtydirtydeeds’ or ‘ncansd3’utters James Davidson(his own name?)for the first time on Yahoo’s NFI message board in the context of a big donor to his

    But he still can’t bring himself to admit who he is.Later when he posts his communication by email with Jesse Eisinger,in hopes of putting a damper on any possible DJ story in advance, he censors with xxx’s any place where James Davidson is mentioned.Even the boat with the name ‘James Davidson’ mentioned on Yahoo below
    will be self censored a few days later on his or ‘bobosrevenge’ blog.Too funny.Yet the post of June 2 by ‘ncansd3’,(#310727), remains for all to see,unless his newer alias goes the way of ‘dirtydirtydeeds’,hee hee.

    As Jeff Matthews says,I couldn’t make this up :

    As I’ve said from the beginning ‘ncans = naanss’.Do ‘naanss ncans’ google search.

    from NFI board :

    Re: Send, or not? Comment, or copy? RVA
    by: ncansd3
    Long-Term Sentiment: Strong Buy 06/02/05 12:02 am
    Msg: 310727 of 310731

    I would add that copies of emails in which Mr. Eisinger cites very granular banking info regarding NCANS deposits are available if they wish to email me.

    What is actually funniest to me is that through all of this, the reporter hasn’t considered that he might have found a guy who contributes to NCANS and has used his cash to help the cause – but is someone different than me. Someone who actually has been very helpful with things like procuring anonymous cell phones and the like, but is no more Bob O’Brien than the Granny he went to terrorize. Oh well, I’m sure it will all make great theater, and the attorneys are likely to have a ball with it. Like I said in the beginning – they require a Bob O’Brien at all costs, and it really doesn’t matter much whether he is the genuine article or not at the end of the day.

    And I’m not telling – not going to do it. Kind of pisses everyone off, I can tell. Sorry guys. But I’m quite sure you have the right guy – keep on keeping on – he sounds like a bad ‘un to me. Very mysterious. I was told a sandwich shop was involved. One shudders to think what goes on there. And a boat. I think it’s named the James Davidson. It is all unclear at present. Or maybe the sandwiches are subs – those are marine sounding.

    Actually, I do kind of wish it was me. Not that it isn’t. Or is. Or may be. Or not.

    But what I do know is that violating federal laws is a no no last time I checked – and if what they discovered was a big donor to the cause – I hope it was worth someone going to jail over. That’s what happens when you violate federal law, I think – I haven’t done any federal lawbreaking, so couldn’t tell you.

    So what do we have at the end of all of this? People who can easily be shown to do anything it takes to get their way, regardless of the law, and who aren’t bright enough to get that they are holding nothing. Capital N. Nada. Which they will ultimately find out, as do most who have nothing, over time. In the meanwhile, I think maybe this will be a good mechanism to launch the fiction book – it’s about a corrupt, criminally linked hedge fund who sets out to crush a company as part of its serial killing mechanism, who uses the press to do its dirty work and considers itself above the law due to its political contacts, and decides to go after a guy that creates a website that exposes their scheme and creates considerable difficulty for them. I even have a corrupt reporter or two in it. Sort of wrote itself. I think it’s a good read. Fast, and believe it or not, has a few similarities to real life.

    Have to figure out how to get it out there. I suspect now is the time.

    Oh well, good night all. Thanks for all the FBI and WSJ complaints – they will follow up, and they don’t just poo poo this sort of thing when it involves attorney trust accounts and feloniously obtained bank records.

    We shall see what the day brings.

    Posted as a reply to: Msg 310685 by rvac106

    Comment by Tony Ryals -

  48. I thought to add my recent emails to James Angel the Georgetown professor and NASDAQ SOMETHING OR OTHER who was ‘used’ in O’Brien’s
    or ‘dirtydirtydeeds’ or ‘ncansd3’ or James Dale Davidson’s scammy infomercial on ‘naked short selling’,starring Senator Bennett, Bloody Mary Campbell Hellburn and her used nephew ‘Matthew’,as well as,(if we are to believe him),’O’Brien’,who appeared to be a mere shadow of his real persona.

    But of course when Hedge fund magnates are sneaking around trying to put a horsehead in your bed…

    Anyway the infomercial is on the tinyurl below in case anyone wishes to review it before perusing my emails to James Angel.

    And yes,read Angel’s letter to Jonathan Katz of the SEC and judge for yourself if he was not overdoing the ‘naked short selling’ danger even then at the expense of completely ignoring the fact that James Dale Davidson and others were using it at the very same time as an excuse to divert attention from their penny stock pump and dump activities.Does he know his fellow Beltway ‘man about town’ James Dale Davidson ?

    In all honesty,Mr.Angel has some explaining to do.

    Dear James Angel,

    You may recall I emailed you a couple of weeks ago.Since then I was ‘tos’ed on Yahoo and my original email account erased along with my posts on Yahoo’s NFI board,etc.,no doubt for criticising ‘O’Brien’ on the Yahoo NFI message board who you unwittingly did that ‘naked short infomercial’ for.

    I have in the mean time come across a statement you made to the SEC and Jonathan Katz that perplexed me somewhat.You see I read your disclaimer to the WSJ and that you were taken out of context by ‘O’Brien’ or ‘dirtydirtydeeds’ or ‘ncand3’ or ‘James Dale Davidson’ as I like to call him because his is almost a dead ringer for Mr.Davidson’s old ‘naanss’ website that was located in the Blaine,Washington office where he and convicted Canadian securities fraudsters touted Genemax and dumped from various locales,including LOM’s many American penny stock manipulation and dumping accounts,such as it’s Charles Schwab account.I presume you must be aware of all this,particularly in your capacity as a NASDAQ penny stock advisory position.

    And all the while Davidson cried ‘naked shorting’ as the very real shares he owned as an insider and executive to that fraud were dumped into the rapidly growing float.You may also be aware he was once a substantial investor himself in LOM of Bermuda where many of those GMXX shares were dumped from that he fraudulently claimed was ‘naked shorting’.If not,both you and the NASDAQ have some serious catching up to do regarding one of the biggest penny stock scams of the century so far.I’m still rather perplexed that GMXX is not one of the penny stocks named in the SEC’s investigation of LOM penny stock manipulations.

    Old James Dale Davidson has the luck of a Rhodes scholar,or Beltway insider.

    Personally I can’t believe the SEC,or the NASDAQ more so,have allowed parasites such as David Patch,who is James Davidson connected from the ‘naanss’ Genemax pump and dump days and now coincidentally ‘O’Brien’ connected and part of that scammy letter to President Bush in the February 8 edition of the Washington Post,to go on and on about jag media, and more penny scams than I can keep up with,being victims of ‘naked shorting in his ‘investigatethesec’ and Financialwire of Gayle Essary.

    I can’t believe the SEC or Nasdaq never had rapid disclosures of shares and share auditing by now to prevent money laundering, if for no other reason.Much less from my experience in being taken in the Davidson-Endovasc ‘naked short scam’,discovering what appears to be what I term a share – money laundering operation out of Dubai connected Belladorgroup’s Kuala Lumpur boiler room ops.Yet they don’t even mention it in the SEC filings and NASDAQ certainly doesn’t seem interested.I didn’t support a Stanford ‘angiogensesis’ patent as I thought I was doing,I funded a money laundering operation with my last dime in a terrorist suspect enclave with the SEC’s and NASDAQ’s blessings it would appear !!!

    I could go on but I’m sure you get the idea. So my real question for you is if you are going to mention ‘naked short selling’ at all as a danger investors face in penny stocks or elsewhere, why are you not mad as hell that you were used by ‘O’Brien’ and Mary Campbell Helburn in that fraudulent ‘infomercial’ ?

    Do you realise you are now a ‘heroe’ to the likes of CMKX penny stock fraudsters who use you to back their fraudulent claim of being ‘naked shorted’ ? Have you perused the ‘NCANS.NET’ website where your raving about the dangers of ‘naked shorting’ is located and viewed it again recently ? I say ‘raving’ because that film,edited or not,sure makes you appear to be saying ‘naked shorting’ is what brought genemax,endovasc,cmkx, usxp,nanopierce, etc. etc.,to share price collapse – not pump and dump ops as was the case .

    For those of us who were defrauded in the scam and many who were brain washed to believe
    as they were robbed blind by ‘naked shorting’,would you do something ? Would you denounce this,the biggest penny stock fraud of the century ?Or will you just let your name and reputation be used to continue, this, the biggest penny stock and NASDAQ fraud of the century ?

    Note below is my post with my second thoughts after emailing you the last time as posted on,’SS funds invested in manipulated markets’.I would sure appreciate an eloquent or well thought out statement from you on the fraudulent use of the ‘naked short claim’ to cover up pump and dump ops as I know it has been used for. Or just tell me you are on O’Brien’s side and that Senator Bennett was correct about Global Links being a poster child for penny stock companies victimized by ‘naked short selling’.But if that is your conclusion then please tell me who is ‘naked shorting’ them ?

    I find it interesting ‘O’Brien’ has taken his ‘naked short claim’ to larger capitalized companies such as NFI BUT THE NEED TO PAY A DIVIDEND THERE CONFOUNDS HIS CLAIM.AND Also that Patrick Byrne’s OSTK and NFI are both ‘mysteriously’ listed on German exchanges.
    Where have I heard this scam before ?
    Tony Ryals

    From sipitzer2006 :

    Note James Angel of Georgetown and thus Beltway where

    the ‘naked short fraudster’James Dale Davidson who uses the claim fraudulently to cover his illegal penny stock pump dump ops and still has political clout,also claims ‘naked shorting’ as big big problem or insinuates it is without providing proof.

    What kind of academic,(or NASDAQ where he is involved with penny stocks),credibilty or accountabilty is that ? And much worse since he has allowed himself around March of this year to be used by ‘ncans’, a criminal organization that threatens SEC employees and others and appears to be part of James Dale Davidson’s criminal penny stock manipulation propaganda machine !!!!

    Ethically Mr.ANGEL HAS SOME EXPLAINING TO DO BY THOSE OF US RIPPED OFF by illegal pump and dump of NASDAQ overseen penny stock scams that have fraudulently used the ‘naked short claim’ to cover up illegal pump and dumps that neither the SEC nor the NASDAQ have done anything about !!!

    This is and has been the great fraud and ‘stockgate’upon American investors in the fraudulent penny stock market that both the SEC and NASDAQ oversee, NOT ‘NAKED SHORTING’,as the penny con artists David Patch,James Dale Davidson and their cyberfraud sites, etc., claim.

    And coincidentally both NASDAQ and the SEC allow it to go on just as they did when Ollie North was laundering money through penny stocks and George Bush was dumping his shares of Harken Energy.And still the SEC leaves rules in place(Reg S) that actually is knowingly used by pump and dump operations that are illegal and by money launderers.Why !!!???

    I did a google of ‘james angel naked shorting’ and

    Comment by Tony Ryals -

  49. Follow this spitzer2006 link below to original post I am placing here.I thank both Eliot Spitzer and Mark Cuban for allowing me to invade their websites for posting my own blog-like opinions and providing,as good Americans, forums for free speech.I have some things such as direct email from James Dale Davidson,not on spitzer2006,but here and vice versa,so cross linking is not a bad idea and this link should lead to my most recent posts on spitzer2006 where you can work back from there if you wish.

    Humorous dialogue on Yahoo NFI board this evening.

    Note,’ibarf'(an alias that has also shown up on discussions that Mark Cuban initiated generally defending ‘O’Brien and his ‘naked short scam’),tries to make me believe ncand3 isn’t James Dale Davidson or at least ‘O’Brien’,even though that ‘ncand3’ alias,as those who follow this spitzer2006 discussion ‘blog’ or NFI Yahoo meessage board,know he is.So,first a post by ncand3 below,followed by our comments.Remember,I’m biodog0.Go to to follow ncand3 and his interview with WSJ’s Jesse Eisinger.He censors mention of James Dale Davidon there although he already gave name away on Yahoo NFI JUNE 1 AS I RE-POSTED HERE ON SPITZER2006 ABOVE :

    Odd that all the BB ID’s have come aliv
    by: ncansd3
    Long-Term Sentiment: Strong Buy 06/07/05 07:35 pm
    Msg: 313187 of 313199

    One of the ones I deleted from my ignore list was the Finaltouch ID, which was here 2 years ago.

    Apparently they are throwing everything they can at this to keep it away from $40. Wonder why that number is significant? Options? Just their credit lines?


    Nothing new to report from my end – interesting to see the whole sector rising and NFI dropping on no news – kind of like yesterday – but then again, when you see 600K vs. 300K trading volume, you know the churning is going strong.

    Subj: 40 is your IQ, meathead! eom
    Date: 06/07/05 07:38 pm

    Subj: Re: Odd that all the BB ID’s have come a
    By: Ibarf
    Date: 06/07/05 07:50 pm

    Since your ID was only created in April, how do you know what was being posted here two years ago?

    Doggy says your Dirty. I’m starting to believe him.

    Subj: duh,ibarf,what alias appears here
    By: biodog0
    Date: 06/07/05 07:55 pm

    to announce new posts on ncans or booboosrevengeblog before they appear there ? uhhh,which alias tells us about boat with ‘james davidson’ on it and that he’s gonna post the details on booboo’s revenge before he does ? any guesses,duuuh ?

    Subj: Re: duh,ibarf,what alias appears here
    By: Ibarf
    Date: 06/07/05 08:13 pm


    I don’t know what you are saying. The NFI board is just a sideline to many other investments. Please make yourself clear.

    Also, I wish you would be a good Doggy and go away for a week or so.

    I need NFI near 40 by next Friday.

    I’m not saying that you hurt the stock price anymore than the ignorant long pumpers, but at least I can talk to you.

    If someone says that NFI earns $4.27 and pays $6.80 in dividends; then that someone is a basher even if the info is public knowledge.
    That is common ignorant long pumperspeak.

    Subj: Re: duh,ibarf,what alias appears here
    By: ibarf_biodogs
    Date: 06/07/05 08:15 pm

    How amusing.. two absolute dolts telling each other who is the dumbest!

    Comment by Tony Ryals -

  50. Kevin,
    As you know ‘O’Brien’ runs the same precise scam as Davidson so if you are ‘united’ with him you might consider that.O’brien and Mary Helburn’s ‘NCANS’ IDEA WAS TO BRING BACK THE ‘YOU’RE BEING NAKED SHORTED’ FRAUD OF DAVIDSON’S ‘NAANSS’ TO MASK THEIR SECURITIES MANIPULATIONS,PERHAPS OF NFI STOCK PARTICULARLY.

    But the funniest thing is that everyone with shares gets dividends as long as the scheme lasts so it becomes obvious it is not naked shorted or someone(s) would not receive their dividends,which is not the case.Too funny.And funny to watch O’Brien try and find a ‘theory’ to explain this paradox,hard to believe a Rhodes scholar could be that stupid.

    But as you know Mary Helburn is always soliciting donations for their scam website on Yahoo NFI board.And the ncans website at first originated from B.V.I. just as their ‘private’ NFI tout website and uses ‘NATIONAL’ in the acronym JUST AS Davidson’s website located in Genemax office in Blaine,Washington did.’NAANSS’ DID.

    But what ‘nation’ ? So they certainly are not working for American investors but to further their own scams.

    I believe they have been greatly discredited and their plan to pump and tout scam companies like CMKX Diamonds,Global Links,Nanopierce,and so many more for scammy penny stock companies and claim their dumping as ‘naked shorting’ and ‘buy certs’ for ‘protection’,has fallen through.

    You may review O’Brien’s sad tale of the woman who lost everything(reposted above from ncans website) and then review the real history of Nanopierce and its convicted director then tell me,was this mythical woman dreamed up by O’Brien to gain sympathy(just as they used Mary Helburn’s brain damaged Matthrew to get sympathy for their tall tale)really the victim of ‘naked shorters’ and the evil SEC or of people like O’Brien,Mary Helburn and nonopierce ‘mamagement’ ?

    James Dale Davidson worked with convicted Canadian securities fraudster Brent Pierce,who you reminds me of you a little by the way,while always pretending to be the ethical victim fighting for the rights of investors. Sound familiar ? The naked short claim was being used for fraud then and is being used for fraud now.

    Me ? I’m neither buying nor selling,Davidson stole me retirement in his naked short fraud last time around.Shame,I didn’t know he was even on board or who he was till it was too late.I do hope you’re correct about the guilty going to jail though.

    Comment by Tony Ryals -

  51. Tony, So what the heck does any of that have to do with the price of rice in China?

    Who cares if you found “ONE” scamster or not… the world is full of them. To say I won’t acknowledge something I have never even been asked about or talked about just shows how low you have to think to come up with something to write…. you make absolutely NO SENSE Tony!

    The fact remains……. you will see, and in a very short time, the TRUTH come forward. After that, the only question is going to be if they allow computers in jail so some people can keep posting that the crime of naked short selling is a figment of our imagination…lol

    And those that are thinking they are not going to get caught because it can only be proven that they are LEGALLY shorting stocks have forgotten the nature of man. Think about this question…. How long do you think a broker from a Market Making firm will keep quiet after he/she is caught by the FEDS doing something RELATED to these actions that is highly illegal? And, I wonder if he/she is still working for the same market maker in an undercover role now and just collecting evidence?

    I know of a couple of people that should have deep concerns for this scenario………..!

    United We Stand!

    Comment by Kevin M. West -

  52. So neither Kevin West nor ‘Shekhar’ will acknowledge James Dale Davidson’s now disappeared ‘naanss’ website(do google search)
    was used for a pump and dump scam and that it was located out of same office where’Genemax’ was touted as the poster company victim of ‘naked shorting’ ?

    And that they did a ‘reverse split’ and then dumped millions upon millions of shares while crying about being victims of ‘naked shorting’
    and telling others to buy ‘certs’ as they dumped from LOM of Bermuda’s Schwab and other ACCOUNTS ? Do you at least acknowledge the naked short claim has been used for pump and dump fraud in the past ?

    You can go back to Genemax and 2002 and discover there were only a few hundred thousand shares when Davidson,Brent Pierce made this claim.When they were through touting the stock to $20 per share and dumping shares all the way down to the few pennies per share it’s ‘worth’ today there were TENS OF MILLIONS OF SHARES DUMPED !!! A very lucrative fraud and that was only one of well over 100 penny stocks that made the fraudulent claim.

    And now O’Brien’ is trying to make the same claim for NFI but his mistake is that NFI ‘management’are obliged to pay a dividend to get investors and keep it ‘pumped up’or else it’s price would collapse as investors sold.It may be a ponzi scheme or not in the end but dividends MUST be paid on each and every one of those shares AND SO FAR THEY ARE !!! SO THERE ARE NO ‘NAKED SHORTS’ AT NFI OR INVESTORS WOULD NOT RECEIVE DIVS FROM NFI AND WOULD SCREAM BLOODY MURDER,BUT THEY AREN’T !

    So can you review Davidson’s ‘naanss’ to promote naked shorting to mask his own pump dump op,calculate shares at time of ‘reverse split’ and how many when he snuck out of the board of directors and acknowlege the damage to share price was dumping and his naked short claim a fraud ?

    If not you have 0 credibility and are yourselves,through ignorance or not,promoting a scam.Same goes for Davidson’s Endovasc,a 40 to 1 ‘reverse split’leaving 3 million or less shares followed by a pump from Agora and Davidson’s ‘Vantage Point’ and now there are over 100 million shares all of a sudden where there were once under 3 million.Which did the most damage to share value,the mythical ‘naked shorting of Endovasc,or the very real dumping of over 100 million shatres ?

    I await you’re being real.

    Comment by Tony Ryals -

  53. I’ve waded through this thread, skipped the Tony ‘Psycho’ Rials blog spam, and read the posts by Bob O’ Brien, Jeff Mitchell, Dave, Kevin.. and yea, even you Mark.

    There are two separate issues here that keep getting improperly entwined. A> Bad companies that deserve to be shorted B> Illegal *naked* shorting.

    I don’t care if bad companies are shorted, they should be. However, that does not condone an illegal act (naked shorting.. selling shares you haven’t even borrowed)

    Jeff’s argument that future sells or buys will cancel out the IOUs is specious. I won’t delve into that logic, because the SEC has done it and that is why naked shorting is ILLEGAL. Over, end of story.

    Now, the issue that’s left is transparency. How do you differentiate a legal *short with borrowed shares* from an illegal naked short? Only with transparency.

    I’m not sure why this has been so hard to figure out.

    On another *transparency* note, how do NBA refs call fouls? I know there are rules, but their interpretation is getting murkier by the minute. Also, what’s the accountability for NBA refs? How are they appointed and who gets to ref in the playoffs? Is it all seniority or is there some mechanism that periodicaly culls out the good ones from the bad ones? Do the teams have any say, thru back channels or otherwise?

    I had a rather heated debate about this with my buddies and the argument was between *it must be ok or else the NBA team owners wont put up with it* and *show me, tell me what it is, dont ask me to agree with your assumption, however reasonable it might seem*.

    So, “O mav owner Mark”, what is it? Are you satisfied with the ref-ing system in the league? Your two cents on this would be nice to read.

    Comment by Shekhar -

  54. Tony Ryals… you failed to read. As you will notice, the shorting I am talking of is of the legal kind by those that are wealthy. However, the colusion comes in where the hedge fund becomes involved to naked short into buying pressure to cover the shorts.

    This changes the game from legal to illegal. As for names, you will read about them soon enough.

    As for the cheap scamster claims, I do nothing to make money from the injustice that I fight… please show me the scam?

    Your talk of degrading people by calling names only hurts your own credibility, so please keep them coming.

    United We Stand!

    Comment by Kevin M. West -

  55. So who ‘informed’ you of this Kevin West ? It sounds like you are just spreading tout rumors from some fraudulent tout website to me.If these ‘very large investors’ can do ‘naked shorting’ why are they letting ‘hedge funds’ who can’t naked short either do it for them ?

    Something very fishy about your tall tale and unless you can name names and identify your sources you only appear as a cheap scamster passing rumors here yourself.

    So who is ‘naked shorting’ and where ? First you have to come to grips with the FACT that the ‘naked short claim’has been used falsely for fraud for to mask insider dumping and death spiral financing and the use of te claim for fraud is what has caused most damage to investors so far by a long short and NOT naked shorting in and of itself which,if it existed, would by neccessity be neutralised by market maker buy ins.

    The unsubstantiated naked short claim is the fraud so far,not naked shorting itself, and you in your ignorance,are aiding and abetting it.

    Comment by Tony Ryals -

  56. Been a long time since I posted on here.

    Side note, looks like the Mavericks could have used the help of the same Steve Nash they traded away………… Maybe they will still win the series so Mark can look me up when they come to San Antonio to decide the post season for the West, GLTY on that one Mark…. really!

    Anyways, I have been informed that there may well be some very large investors shorting certain $12-$14 stocks by taking short positions of 500,000 to 1,000,000 shares or more and then allowing a hedge fund or two to do naked shorting into the buyback to keep the profit margin very high. Heard they are taking $14 stocks down to $7 and then using this colusion to keep the profits…….
    Wow, just think what will happen to all their money when they are busted! The shorting is legal (or maybe not in this case), but the colusion with then naked shorting is very illegal. They call this “market manipulation”. Of course, one might also see “market manipulation” just from shorting a company so hard that the actual act in shear number of short sales causes the company to drop in pps by 1/2. Could ruin a few very wealthy (and greedy) people out there.

    OK, was just a thought I wanted to share.

    United We Stand!

    Comment by Kevin M. West -

  57. Below is a philosphical and ethical discourse re Mantas Inc.and its ‘anti-money-laundering’ and ‘anti-pump and dump’ software from Yahoo
    SRX or SRA International,Inc. message board.

    And what,you may ask,does this have to do with the subject of ‘naked shorting’ ? Plenty.

    You see had Mantas Inc.and Charles Schwab caught the extreme signs of ‘pump and dump’ and penny stock manipulation from LOM’s Schwab account,the ‘naked short claim’ of James Dale Davidson and Genemax and the naked short claim of James Dale Davidson and Endovasc would have been nipped in the bud and with it,probably, the other 100 + copycat claims made by other fraudulent penny stock ‘management’ that also wished to hide their pump and dump activities under the mask of a fraudulent claim of being
    ‘naked shorted’ !!!!

    For my part,I resent that Schwab’s and Mantas Inc.s,either incompetence on a grand scale or cover up to protect what Schwab itself calls ‘select clients’not only defrauded me and my shareholder value in terms of Endovasc shares I held and that was ‘reverse split’ under false claims of the company but the ease with which they were able to pull off a pump and dump scam from a Schwab account.

    This further emboldened them to go on to work with a boiler room op in Kuala Lumpur that may easily have benefitted terrorist tansactions besides defrauding me even further !!!!

    And of even greater importance is that the Charles Schwab and Mantas Inc. cover up and protection of that ‘select clients’ account
    encouraged the ‘naked short fraud’ to grow !!
    And so in many ways Scwhab and Mantas have the reponsibility for the massive scam,to mask money through laundered penny stock pump and dumps,that we see even today when they could have nipped it in the bud and reported to the SEC in 2002 !!! Why ?,is my question.Why did they help hide it ??!!

    Re: I love this company
    by: ellensbookstore 05/06/05 12:56 pm
    Msg: 227 of 236

    It is a wonderful company. I’ve worked there almost 20 years, and we’ve always grown…every year for our whole history.

    For so many years we were privately’s still funny to me when I hear a reference us on the radio or see posts like those here. Are the people here daytraders? I don’t mean that in a rude way if it can be construed negatively…it’s just that I don’t understand most of the posts so it’s clear to me you guys know a lot more about the stock market than I do.

    Posted as a reply to: Msg 224 by nicecast1

    Subj: then you love fraud money laundering
    By: biodog0
    Date: 05/14/05 02:21 pm

    and perversion of justice.

    Subj: test
    By: biodog0
    Date: 05/14/05 02:25 pm

    Subj: or perhaps srx is no longer connected
    By: biodog0
    Date: 05/14/05 03:35 pm

    with mantas inc.but if it is it had better check out whose side it’s on that of defrauded investors in pennystock scams that
    had their money stolen and laundered as mantas inc. looked the other way or those who were defrauded.

    Subj: biodog0
    By: bsmittytx
    Date: 05/15/05 01:12 pm

    Biodog0, you’re going to get hurt shorting this stock. You should probably look elsewhere.

    Personally, I have no problem with short interest in this stock (especially around earnings announcements). It will act as rocket fuel as this company wins contract after contract and grows to be the largest, best of breed, IT government contractor.

    Subj: i’m not shorting the stock i’m
    By: biodog0
    Date: 05/15/05 01:27 pm

    exposing the corruption of its supposed anti-money laundering,anti-pump and dump spin off mantas inc. has aided and abetted both for schwab ‘select clients’.

    Subj: Biodog’s Concerns re: Mantis
    By: ellensbookstore
    Date: 05/18/05 05:13 pm

    Mantis was a commercial spinoff that applied SRA’s data mining and pattern discovery technology to analyzing large volumes of stock transactions for transaction patterns that could indicate fraud, money laundering, and/or other illegal activities.

    Per SRA’s 2004 annual report, SRA had a 15% non-controlling interest in Mantis as of 9/03. I don’t know whether SRA still owns any share of that company at this point.

    I’ve never heard of any issues such as those alluded to by Biodog. I can only imagine that the software flagged some of his transactions for closer scrutiny and he felt unfairly singled out.


    Subj: ellensbook,a la contraria,Mantas Inc.
    By: biodog0
    Date: 05/18/05 08:44 pm

    covered up a Schwab-LOM(Lines Overseas Management)of Bermuda pump and dump account that could have saved my asetts had I known, as Schwab and Mantas Inc. must have,that an illegal pump and dump,or one might say MANY ILLEGAL PUMPS AND DUMPS,were going down through LOM’s Schwab account or accounts.I have written to Jack Ruby of Mantas Inc. directly for an explanation and he and Mantas Inc. has been less than forthcoming.

    Here you go,this is the link to the ‘The Royal Gazette’article that has been disappeared from its Google cache twice if not 3 times !!!I’ll accept coincidence but..
    You can do a Google search ‘schwab lom’ and read a letter to titledd,’Where do Google Caches Go When They Die ?’ to read about that.Since it appeared the ‘The Royal Gazette’ article reappeared as well,but has again disappeared from a Google search.Check it out.

    OK Mantas brags about detecting $5,000 dollars entered into an account by a broker who got a raise – yet the LOM Schwab acciount accounts for MILLIONS OF DOLLARS THAT YOUR SOFTWARE SOMEHOW OVERLOOKED !!!! How can you explain that phenomenon ? 30075&SearchID=73208477355648

    Clients stood to benefit from suspect stock sales – claim

    “The volume of LOM’s US trading, whether on behalf of its customers or its own accounts, is staggering,” stated Mr. Ungar. “For example, in LOM’s account at Schwab, during a two-week period in 2003 – the same year in which the SHEP and Sedona transactions in question occurred – LOM bought or sold, on over 4,000 different occasions, a total of 151 million shares of US securities traded over various US securities markets.”
    The trader at Florida-based vFinance who was in charge of LOM’s account testified that “LOM’s trading over the US markets was more than the trading of most US regional banks” and that he “either accumulated or liquidated millions of shares a day for them”, stated Mr. Ungar.

    Comment by Tony Ryals -

  58. I was just perusing’s 10-q and noticed that the company has purchased $47 million in call options on its own stock. I am curious what the purpose could possibly be behind this transaction. Isn’t this rather unusual? Am I correct in assuming they will have to realize an investment loss if the strike price is not in the money which I would have to imagine is the case since the purchase were made in the 1st quarter? The calls appear to expire June 30, 2005. Maybe I’m missing something. Any clarification you can provide would be most appreciated.

    Comment by Alex -

  59. Bob O’Brien is the stock fraudster named James Dale Davidson of Agora Publications,founder of
    ‘National Taxpayers Union’,National Association Against Naked Short Selling,and now National Coalition Against Naked Shorting.

    His ‘naked short claim is a fraud to mask his own dumping and death spiral of penny stock frauds he touts.He is a beltway insider who does political dirty tricks,including founding the far right wing propaganda website passing as journalism called ‘’ which is why there was no priority to identify him after fraudulent ad-letter to Bush in Washington Post claming SS funds invested in stock markets were most at risk by ‘naked short selling’ than any other event,a phoney lie to further his own penny stock frauds and mask his own stock manipulations,including as it now appears,with CIA insiders.His own Agora Publications was involved with touting ex DIA George Tenet’s Ionatron for one and profiting
    certain individuals within the CIA through illegal touting and dumping of that company’s shares.

    Bob O’Brien or James Dale Davidson explains his modus operandi perfectly in his and Lord William Rees-Mogg’s book,’Sovereign Individual’
    and how anonimity is an internet weapon to be used and profits can be laundered overseas so as to not pay taxes on what he steals through his securities cyberfraud.He has some Agora Publications related penny stock tout sites related to his own name but basically creates and disappears his cyberfraud sites at will, depending on whether they get too hot and his cyberfraud de jour may be catching up with him.

    You would appear to have much to learn about James Dale Davuidson.Perhaps links below will help a little.

    1.CIA Tenet and J.D.Davidson connected Bonner meet at New Orleans conference in 2004.CIA uses James Dale Davidson’s Agora in illegal pump and dump schemes to benefit himself and CIA insiders in various questionable penny stocks focused on ‘defense’ ‘homeland security’ and potential internet spying for personal gain – all under guise of protecting us. Americans are defrauded again !!!

    2.Mantas Inc.:Is CIA on Wall Street better than mafia ?

    Comment by Tony Ryals -

  60. I come from the bean counter side so I am not well versed in the mechanics of short selling. That said, I have taken a class in capital markets and I have passed the CPA examination. What I see on this thread is a clash between short sellers and long buyers.

    Now, Robert J. Shapiro makes some interesting points which center on the lack of disclosure by the DTCC and brokerage firms. Bob O’Brien does a good job of explaining and simplifying the fractional reserve method and the expansion of shares when a short sale occurs. And, I do understand that broker/dealer capital requirements do regulate the expansion of said shares. Now, he also asked a serious question. What exactly happens when FTD shares remain in the system for a long time?

    If Bob O’Brien’s hypothesis is correct, then the FTD shares left remaining in the system do provide additional overhang on the market and could cause a depressive effect. Further, if some dealers know and take advantage of that information – the trading system is not exactly fair to average investor (both in a short squeeze and naked short sale dump and panic trick).

    And, If Bob O’Brien is correct about these undelivered shares, “IOUs” or “phantom shares,” which buyer of these “phantom shares” gets to vote on company matters and which do not?

    My understanding is that the clearing house uses a lottery system to handle this problem. But, assuming Bob is right, there must be some shareholders who fail to get a proxy statements and fail to vote. If buyers of a company’s stock can’t vote on company matters then a real disservice has been done to said buyers. I would assume the Big Boys, like Kerkorian, would be outraged to know his soon to be 18% voting block of GM stock has no real voting power. He would be filing a lawsuit in a New York minute. Can someone explain the exact mechanism of the voting procedures are in regards to undelivered stock?

    Comment by Ledger Plus -

  61. Re:’cia tenet agora oxford new orleans’ Google search manipulation and disappearances.:

    Remember Agora Inc.of Delaware is very much James Dale Davidson related and no matter what ‘O’Brien’ claims he could not have created a ‘naked short scam’ with so many similarities to James Dale Davidson’s scam and never have heard of him !!!


    And all Agora propaganda for conference is gone.Here is one link to the New Orleans conference of 2004 where CIA ex DIA George Tenet met Agora related penny stock touters who touted Ionatron among others.

    It can no longer be found on Google search to my knowledge.Certainly it has been hidden if still there.Agora is disappearing any mention as well no doubt.

    The post or posts I have on, have been disappeared from caches as well.Add ‘kyc’ to search above and you will no longer find a word indexed cache or a link to KYC or where all our posts are.YOU FIND LINK TO KYC BUT NO WORD INDEXED CACHE OF WHAT WE ARE SAYING ON KYC !!!! Now I want to take pastes or copies of the few caches remaining and keep them for record when and if they disappear a well.

    Remember,do ‘schwab lom’ google search and find my ‘Where Do Google Caches Go When They Die?’.This is looking like another case of that.Also The Royal Gazette article about Schwab LOM etc. inspired by David Marchant’s SEC discovery IS completely missing AGAIN from ‘schwab lom’ google search !!

    You can go into archives search,’schwab’,and find it but its gone from Google.I’d like to say all this again on offshorebusiness but everyone thinks I’m,or the topic,is crazy.

    Also,like I said,I’ll have to copy ‘cache’URLs or whatever their cache codes are called on the google caches of the few remaining on this topic and keep those URLs OR WHATEVER THEY’RE CALLED FOR THE RECORD.

    Besides some of what you all posted on diligizer which is still on search so far,I should have more google caches than below,however they do have at least 2 from spitzer2006,one from blogmaverick,etc.,BUT NONE FROM KYC !!!

    Why ain’t Marchant on this case ?
    Tony Ryals

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    Comment by Tony Ryals -

  62. Note it would most or all names below are also connected with NFI.:

    Hill,Johntson,Newman&Davidson Connected

    by: ursus_malayanus 05/05/05 08:47 am
    Msg: 301281 of 301414


    Click on this link to verify for yourself before reading any further.

    I didn’t believe it at first. But, biodog0 (who sometimes seems a little crazy) was absolutely right. If you visit the old longwaves. net archives, you will find the following names posting

    “Howard Hill” (still posting as hhill51)

    “Geoff Johnston” (is this the not so peaceful one?)

    “Alan Newman” (who mentioned his Cross-Currents publication repeatedly on this olds ite)

    “James Davidson” (Is this THE infamous J.D. Davidson? From his posts, it sure seems like it.)

    All of this could just be pure coincidence of course. But, my money says biodog0 was correct.

    Here is the link again. Verify it for yourself. Then ask hhill51 and peacefulposter about this list.


    Comment by Tony Ryals -

  63. go read ‘O’Brien’s’ blog.

    Comment by Tony Ryals -

  64. If you are interested in the markets, econoimcs, politics, modern culture, or any random blather from an undergraduate student: check out my new and first blog.

    “Handwriting on the wall”

    Thanks, I appreciate any comments!

    Comment by Michael Orecchio -

  65. Mark-

    I love to read your blog on a regular basis. You always have interesting insights on topics that I am very interested in. However, this is and you haven’t blogged about the Mavs in over a month now. Give us some sweet Mavs playoff talk, or at least bash some refs. Please……?!?

    baby arm

    Comment by Jared -

  66. More Yahoo NFI chatter:

    Why is Alan Newman in on NCANS fraud?
    by: veritas_i_seek_the_truth 04/20/05 04:57 am
    Msg: 294033 of 294155

    Was it you Howard? Or you Geoff?

    I guess one of you sure took an interest in his website and “research” publication.

    Replace HHH with www, and here’s what you will find. Good old Alan hanging out with Howard and Geoff…
    Web Site Update

    Wed, 24 Feb 1999 13:29:32 -0500
    Alan Newman (

    For those who may be interested, my web site will be updated sometime between 9 AM – Noon on Friday, February 26th.

    Alan M. Newman
    Editor, HD BROUS & Co., Inc.’s CROSSCURRENTS

    Subj: Re: The hedge fund’s network has a prob
    By: veritas_i_seek_the_truth
    Date: 04/20/05 07:32 am


    How was the trip to New York last week?

    How’s Patrick doing?


    P.S. Defined benefit plans are great aren’t they.
    Subj: I thought it was a Colorado U.,I rememb
    By: biodog0
    Date: 04/20/05 12:05 pm

    I thought it was a Colorado U. WEBSITE,I remember finding old James Dale Davidson posts on a google search as recently as 2003,but couldn’t find them again.What a self righteous fraudulent jerkkk.

    THANX veritas_i_seek_the_truth.

    Comment by Tony Ryals -

  67. Mark said:

    “Given the percentages your economist sites, there should be companies who are being abused by Naked Shorts showing up every day. We should be hearing from their CEOs. From their Shareholders.”

    You mean the same CEO’s and Shareholders that you label as paranoid and kooks when they do speak out? Go work for the SEC/DTCC.. You have there same mentality.. and do some due dilligence before talking.. You’re looking like a fool.

    Comment by mfv -

  68. and the answer is :

    Re: biodog
    by: dirtydirtydeeds (43/M/Cyberspace)
    Long-Term Sentiment: Strong Buy 04/20/05 12:40 am
    Msg: 294007 of 294020

    With all due respect, when you start paying your advisors what I have paid mine, they will find ways to achieve virtually anything you can think of.

    Posted as a reply to: Msg 294004 by How_Long_

    Comment by Tony Ryals -

  69. chatter from Yahoo NFI BOARD :

    The hedge fund’s network has a problem
    by: dirtydirtydeeds (43/M/Cyberspace)
    Long-Term Sentiment: Strong Buy 04/19/05 04:00 pm
    Msg: 293815 of 293993

    How long will it be before the first indictments come down?

    If you read the Shapiro response to the DTCC, you get the sense that this is going to come unravelled, and that anyone stupid enough to still be aiding and abetting a hedge fund that has many of the Reg SHO companies on his short list is going to be caught in the collateral blast. And it will be a big, bright blast.

    Fair warning.

    I haven’t lied to you yet.

    Subj: Re: The hedge fund’s network has a probl
    By: How_Long_
    Date: 04/19/05 11:28 pm

    You haven’t lied to us yet except when you told us you bought NFI on margin in your retirement account. Can’t be done. If it can, please tell me!

    Comment by Tony Ryals -

  70. Mark —

    You still haven’t answered my questions in #4 above…. I know you must enjoy the ping-pong w/ ‘Bob’, but I asked a couple of simple, clear questions, which you seem to want to ignore. Can you tell me the difference between extended failure to deliver and ordinary fraud?

    FWIW, I think that most of the naked shorting that goes on is entered as long sales, since the seller has no intention of delivering and it’s so much easier to ignore all that uptick nonsense….

    Why again should there be a free pass for anyone in the market? Grandfathering of fails in 2004 and before? No disclosure how many shares are diluting the legitimate share base?

    Could it be because you personally benefit from shorts you never close, and the taxes you never pay on that cash? Seems like you have a vested interest in keeping things this way, giving benefit only to those that don’t have to have the stock before they sell, and enjoy the benefit of having their friendly brokers protect them from the minor losses that a buy-in might cause in one of their positions.

    Comment by hhill -

  71. Mark: Thanks for the non-response. You still don’t get it, or you are deliberately being obtuse. You aren’t stupid, therefore I can only conclude that you have an agenda.

    And FYI, new to the SHO lists over the last 14 days:

    INGN 14 ( open market days )
    AXAI 14 ( open market days )
    MX 14 ( open market days )
    ALBAU 14 ( open market days )
    FFF 14 ( open market days )
    UCPJ 14 ( open market days )
    UTYW 14 ( open market days )
    UTH 13 ( open market days )
    RVSIQ 13 ( open market days )
    FEU 13 ( open market days )
    LMMG 13 ( open market days )
    ANX 13 ( open market days )
    VNWI 13 ( open market days )
    SYBR 13 ( open market days )
    BLRV 13 ( open market days )
    WEGC 13 ( open market days )
    IOTN 12 ( open market days )
    MEA 12 ( open market days )
    ALF 12 ( open market days )
    EAG 12 ( open market days )
    TMRT 12 ( open market days )
    EWMH 12 ( open market days )
    WNDXQ 12 ( open market days )
    WFTV 12 ( open market days )
    EGMI 11 ( open market days )
    SHRN 11 ( open market days )
    MBRI 11 ( open market days )
    TREN 11 ( open market days )
    ATPL 11 ( open market days )
    PATY 10 ( open market days )
    BHLL 10 ( open market days )
    LPL 10 ( open market days )
    BKHM 10 ( open market days )
    ISV 10 ( open market days )
    HESG 10 ( open market days )
    TCHC 10 ( open market days )
    TBXR 10 ( open market days )
    TNOG 10 ( open market days )
    BME 9 ( open market days )
    BOSC 9 ( open market days )
    TORCQ 9 ( open market days )
    NVEI 9 ( open market days )
    NAX 9 ( open market days )
    IDUL 9 ( open market days )
    VGK 9 ( open market days )
    CTKH 9 ( open market days )
    RIV 9 ( open market days )
    QMM 9 ( open market days )
    RSTG 8 ( open market days )
    RWF 8 ( open market days )
    GWDB 8 ( open market days )
    CPN 8 ( open market days )
    GPD 8 ( open market days )
    PSRC 8 ( open market days )
    PBIP 7 ( open market days )
    NMKT 7 ( open market days )
    VHT 7 ( open market days )
    HDTV 7 ( open market days )
    AYS 7 ( open market days )
    GNIZQ 7 ( open market days )
    SMEFF 7 ( open market days )
    TNOLF 7 ( open market days )
    VDC 6 ( open market days )
    PDRT 6 ( open market days )
    POMH 6 ( open market days )
    GMS 6 ( open market days )
    RTK 6 ( open market days )
    OXFV 6 ( open market days )
    ELN 6 ( open market days )
    ELC 6 ( open market days )
    MRAE 6 ( open market days )
    SFSH 6 ( open market days )
    EEM 6 ( open market days )
    CTCHC 6 ( open market days )
    VGT 5 ( open market days )
    SIMC 5 ( open market days )
    CFIN 5 ( open market days )
    XLK 5 ( open market days )
    SMSI 5 ( open market days )
    VB 5 ( open market days )
    RGWC 5 ( open market days )
    OCFL 5 ( open market days )
    SOHU 5 ( open market days )
    VITX 5 ( open market days )
    GBR 5 ( open market days )
    IMAX 5 ( open market days )
    PWHT 5 ( open market days )
    IYC 5 ( open market days )
    MLQ 5 ( open market days )
    SSTY 5 ( open market days )
    ALAN 5 ( open market days )
    IGE 5 ( open market days )
    INO 5 ( open market days )
    DIO 5 ( open market days )
    LGCP 4 ( open market days )
    NVAX 4 ( open market days )
    GNLB 4 ( open market days )
    CTE 4 ( open market days )
    IMNR 4 ( open market days )
    NVEC 4 ( open market days )
    AGG 4 ( open market days )
    ICF 4 ( open market days )
    ICRD 4 ( open market days )
    ARWRW 4 ( open market days )
    PGTVN 4 ( open market days )
    DTMG 4 ( open market days )
    FORD 4 ( open market days )
    FFNM 4 ( open market days )
    BIZ 4 ( open market days )
    ZANC 4 ( open market days )
    TCHL 4 ( open market days )
    EWW 4 ( open market days )
    VSNI 4 ( open market days )
    ADTR 4 ( open market days )
    PACT 4 ( open market days )
    BFBC 3 ( open market days )
    UWRL 3 ( open market days )
    IEV 3 ( open market days )
    VEXP 3 ( open market days )
    RTH 3 ( open market days )
    CYB 3 ( open market days )
    SDA 3 ( open market days )
    ZIXI 3 ( open market days )
    TKP 3 ( open market days )
    HAWK 3 ( open market days )
    AMHI 3 ( open market days )
    VLCCF 3 ( open market days )
    PST 3 ( open market days )
    JBK 3 ( open market days )
    MARSB 2 ( open market days )
    SPIL 2 ( open market days )
    TKTJF 2 ( open market days )
    ALR 2 ( open market days )
    IPIX 2 ( open market days )
    EWL 2 ( open market days )
    TPO 2 ( open market days )
    DIAAF 2 ( open market days )
    ABY 2 ( open market days )
    ITEX 2 ( open market days )
    CYTR 2 ( open market days )
    HOM 2 ( open market days )
    WPCS 2 ( open market days )
    EWQ 2 ( open market days )
    VCR 2 ( open market days )
    HRT 2 ( open market days )
    SONT 2 ( open market days )
    DVNTF 1 ( open market days )
    CEII 1 ( open market days )
    DCA 1 ( open market days )
    FTSTQ 1 ( open market days )
    FFCO 1 ( open market days )
    BGTH 1 ( open market days )
    CITC 1 ( open market days )
    ACTT 1 ( open market days )
    VDE 1 ( open market days )
    VXEN 1 ( open market days )
    MTR 1 ( open market days )
    CVV 1 ( open market days )
    ULTEQ 1 ( open market days )
    ADELQ 1 ( open market days )
    SURE 1 ( open market days )
    CNVX 1 ( open market days )
    VEGF 1 ( open market days )
    LOUD 1 ( open market days )
    AHOM 1 ( open market days )
    FSTC 1 ( open market days )
    DOR 1 ( open market days )

    Comment by Bob O'Brien -

  72. You dont get it Bob O. If you want to go on a crusade about transparency from the DTCC. Great do it.

    Paying some guy (by the way, thats the entire business of Precision Econ, to be paid to take a position) to play chicken little for you and make it seem like because there are naked shorts and because we dont have the level of transparency from the DTCC that you want, that everyone must be hiding something nefarious, is your typical faulty logic.

    Actually, the worst thing that could happen to you is that the DTCC was completely transparent.

    Then you would have nothing to hide behind.

    Just curious. We started this months ago. Who are the newest and latest victims of Naked Shorting ?

    Given the percentages your economist sites, there should be companies who are being abused by Naked Shorts showing up every day. We should be hearing from their CEOs. From their Shareholders.

    Who are the newest victims Bob ?

    Comment by mark -

  73. So help me understand.

    You don’t know anything about whether the FTD’s are naked shorts or “long shares that didn’t deliver.” Just don’t know. Are actually unable to articulate what the difference is between the two – certainly none when it comes to the end result – a fail – or the depressive effect of engaging in a selling transaction and not having a share to make good on a sale, regardless of what you choose to call it.

    But quick to dismiss a guy with the highest possible accolades and credentials.

    Because, presumably, you know better. But you admit that you don’t actually know anything. None of us do. Because the system is opaque.

    That’s a good old fashioned conundrum.

    We do know that 82% of the fails aren’t settled through the borrow program. So what happens with those?

    Nobody knows. I’ve sent countless emails to the DTCC to clarify, and they aren’t telling. Presumably you feel that’s a good way to handle requests for information – stonewall, and mock. Well, why don’t you have a go at it and tell us how you like it?

    Here’s my theory of what happens. Feel free to punch holes in it.

    82% of the time, the NSCC issues an IOU to the broker when he comes up to the window, or, alternatively, the broker just issues an IOU to the buying customer’s account and never tells him what has happened.

    Here’s how I believe it might work:

    I buy 1000 shares of NFI through Aneritrader. My account is debited today – bye bye cash. Tomorrow morning my account says I “own” 1000 shares of NFI. Except that’s not really 100% correct. T+3 Aneritrade goes to the window at the NSCC to get the shares and they are told that 820 of the shares are not available, even through the borrow program, but here’s an IOU for them from the NSCC – hell, we’re good for it. Or, alternatively, they are just told so solly, no shares today, come back maybe next week, bye bye.

    Either way, my account is out the cash, and aneritrade has a conflict. What to do? They certainly aren’t going to represent to me that they took my money and delivered, well, nothing so far, or maybe only 180 of the 1000. So what they do is either stick the NSCC IOU in the system representing the shares I will get at some point, AND JUST TREAT IT THE SAME AS REAL SHARES, REPRESENTING THEM TO ME AS REAL SHARES AS WELL, or they create an IOU themselves, and do the same thing. That’s where the fraud comes in – when the broker represents to me that my hard dollars bought me shares, when in fact I have an IOU being represented as something it isn’t – shares.

    But now it gets better – this is the ex-clearing level counterfeiting/fraud.

    I decide to sell my 1000 shares of NFI next month, Click sell, and poof, they are sold. The buyer, a customer at Smith Blarney, buys them. Only there’s 180 real shares, and an IOU he just bought. At the end of the day, the trading desk at aneritrade calls Smith Blarney and tells them so solly, we only have an IOU, but it’s ours/the NSCC’s and you know that we/they are good for it. SB, who was just about to make the same difficult call to aneritrade on 1000 shares of TASR, understands completely – it’s an imperfect world. So they swap the IOU’s, make some ledger entries, and everything is fine.

    Except that the new buyer has also been defrauded by having the IOU represented to him as something it isn’t (that’s the counterfeiting part/fraud) in order to get him to pay his cash today. And in the meantime 2000 or 3000 shares worth of transactions have impacted the marketplace and depressed the stock price as though 3000 real shares had been dumped.

    You see the problem?

    You also see why no transparency is not a solution?

    If that’s what is going on, then it’s an industry wide problem that is huge in proportion – how huge? You don’t know. Neither do I. But I can guess.

    Big enough to make the SEC want to just pardon all the fails rather than having to deal with the fallout – by their own admission. Words like large are used, and volatile.

    Tell me why this isn’t an issue again? And tell me why I haven’t just described an industry wide fraud scheme? Where did I get that wrong, and how is the creation of these IOU’s not counterfeiting, given that they are being represented as genuine to the buyers?

    Help me figure this out. Take off the adversary hat for a second, and just help me understand.

    Comment by Bob O'Brien -

  74. 1 more thing Bob O. This isnt a new crusade for Mr Shapiro.

    Its one he has been on for a long time.

    So in reality, his letter is just a rehash of what he wrote 2 years ago

    Comment by mark -

  75. Of course you dont come out and say that the law firms that hire him as an “advisor” are the ones who stand to gain the most in fees by pushing his misuse of data.

    He does fit in well with your group Bob. Dismissing FTDs as “mostly naked shorts”, without knowing whether or not its “mostly long sales that werent delivered”

    There are certainly FTDs.
    There are certainly a variety of reasons for them.
    They certainly are the result of both long and short transactions.

    We just dont know details on any of this.

    But paying off someone with all the degrees and the resume is certainly a better approach than paying off a Senator.

    Comment by mark -

  76. Hey Mark. Thought you might have some fun with this – it’s Robert Shapiro’s response to the DTCC’s Mr. Thompson.

    Shapiro is the former U.S. Under Secretary of Commerce for Economic Affairs from the Clinton Administration, a Harvard Ph.D, and an expert on the capital markets.

    In it, he basically calls Thompson a liar, and further clearly articulates that your take on this is desperately, completely and totally flawed – and that’s the charitable explanation. Perhaps you can take the time to respond to this letter bringing your amazing powers of engagement to bear? Because you seem to enjoy branding those of us who use reason and logic as kooks – so let’s see how you do with Shapiro.

    Here’s the letter:

    April 13, 2005

    Jill M. Considine
    Chairman and Chief Executive Officer
    The Depository Trust & Clearing Corporation
    55 Water Street
    New York, New York 10041-0099

    cc: Stuart Z. Goldstein, Managing Director, Corporate Communications
    Larry Thompson, Managing Director and Deputy General Counsel

    Dear Ms. Considine:

    I am Robert J. Shapiro, chairman of Sonecon LLC, a private economic advisory firm in Washington, D.C. I served as U.S. Under Secretary of Commerce for Economic Affairs from 1998 to 2001, Vice President and co-founder of the Progressive Policy Institute from 1989 to 1998, and principal economic advisor to Governor William J. Clinton in the 1991-1992 presidential campaign. I hold a Ph.D. from Harvard University and have been a Fellow of the National Bureau of Economic Research, Harvard University, and the Brookings Institution. I currently provide economic analysis to the law firms of O’Quinn, Laminack and Pirtle, Christian, Smith and Jewell, and Heard, Robins, Cloud, Lubel and Greenwood, on issues associated with naked short sales, including matters raised in an interview published by @DTCC with DTCC deputy general counsel Larry Thompson. Certain comments by Mr. Thompson in that interview were inaccurate or misleading, and I request that you allow me to correct the record by publishing this response.

    Mr. Thompson begins by asserting that “the extent to which [naked short selling] occurs is in dispute.” While this statement may be narrowly correct, objective academic analysis has established that naked short selling has been a widespread practice and one which, when allowed to persist, can pose a threat to the integrity of equity markets. A recent study by Dr. Leslie Boni, then a visiting financial economist at the SEC, analyzed NSCC data and found that on three random days, an average of more than 700 listed stocks had failures-to-deliver of 60 million-to-120 million shares sold short – naked shorts – that had persisted for at least two months.

    In addition, over 800 unlisted stocks on any day had fails of 120 million-to-180 million shares sold short that also had persisted for at least two months. The total number of naked shorts, including those that had persisted for less than two months, was presumably considerably greater.

    Regarding the extent of naked shorts, Mr. Thompson has provided closely-related additional information: “fails to deliver and receive amount to about $6 billion daily…including both new fails and aged fails.” Mr. Thompson minimizes this total by comparing it to “just under $400 billion in trades (emphasis added) processed daily by NSCC, or about 1.5% of the dollar volume.” By most people’s standards, a problem involving hundreds of millions of shares valued at $6 billion every day is a very large problem. Moreover, the $6 billion total substantially underestimates the actual value of all failed-to-deliver trades measured when the trades actually occurred. Most of the $6 billion total represents uncovered or naked short sales, many of which have gone undelivered for weeks or months with their market price being marked-to-market every day. As a stock’s price falls, the market price of naked shorts in that stock also declines, reducing the total value of the outstanding failures-to-deliver cited by Mr. Thompson.

    In other respects, Mr. Thompson’s comparison to the “$400 billion in trades processed daily by NSCC” seems disingenuous and misleading, because that $400 billion total covers not only U.S. equity trades which can involve most of the failures-to-deliver at issue, but many other transactions also processed by the NSCC. The value of all equity transactions on U.S. markets in 2004, for example, averaged $82.3 billion/day. If Mr. Thompson is correct that the daily value of fails-to-deliver averages $6 billion, that total is equivalent to 7.2 percent of average daily equity trades or nearly five times the 1.5 percent level suggested by Mr. Thompson. Furthermore, the DTCC reports on its website that on a peak day, “through its Continuous Net Settlement (CNS) system, NSCC eliminated the need to settle 96 percent of total obligations.” Assuming that CNS nets out the same proportion of trades on other days, $384 billion of the $400 billion in daily trades cited by Mr. Thompson are netted out, leaving only $16 billion in daily trades that require the actual delivery of securities. The $6 billion of fails-to-deliver securities existing on any day are equivalent to 37.5 percent of the average daily trades that require the delivery of securities, or 25 times the 1.5 percent level cited by Mr. Thompson.

    Mr. Thompson tries to explain the large numbers of shares that go undelivered – in most cases arising from naked short sales — by citing problems with paper certificates, inevitable human error, and the legitimate operations of market makers. This also seems misleading or disingenuous. Regarding problems with paper certificates, the DTCC estimates that 97 percent of all stock certificates are now kept in electronic form. Nor can human error or legitimate market-making operations explain the high levels of failures-to-deliver that persist for months – on any day, an average of 180 million-to-300 million shares have gone undelivered for two months or longer – as documented by Dr. Boni’s analysis of NSCC data.

    Mr. Thompson also disparages the attorneys who represent companies that have been damaged or destroyed by massive naked short sales, and their shareholders, by claiming falsely that the cases in this matter have almost all been dismissed or withdrawn. The legal firms that I advise — O’Quinn, Petrie and Laminack; Christian, Smith and Jewell; and Heard, Robins, Cloud, Lubel and Greenwood – have not lost any motions against the DTCC or its affiliates and currently have one case against the DTCC pending in Nevada and another case against the DTCC pending in Arkansas. In addition, on February 24, 2005, these attorneys were granted an order by the New York Supreme Court ordering the DTCC to produce trading records involving two companies they represent, including records from the Stock Borrow program, which may establish whether large-scale naked short sales were used to manipulate and drive down the stock price of those two companies.

    Mr. Thompson also asserts that the plaintiffs suing the DTCC for damages associated with the handling of naked short sales rely on “theories [that] are not an accurate reflection of how the capital market system actually works.” This assertion is inaccurate. There is no dispute about how the capital markets work — nor any doubt that naked short sales have been used to manipulate and drive down the price of stocks, as seen in numerous death-spiral financing cases. The issue here is the DTCC’s role in allowing or facilitating such stock manipulation through its treatment of extended naked short sales.

    In explaining the DTCC’s role in these matters, Mr. Thompson rejects the claim that the NSCC’s Stock Borrow program allows the same shares to be lent over and over again, potentially creating more shares than actually exist or “phantom” shares. By Mr. Thompson’s own account, shares borrowed by the NSCC to settle naked short sales are d

    Comment by Bob O'Brien -

  77. Below is from James Dale Davidson’s,,a far right poliitcal psyops and propaganda website posing as ‘news’ that Jack Wheeler,Al Haig,the Lord Rees-Mogg and other far right individuals contribute to.Now why do I make such strong statements about these characters ? It is my contention that James Dale Davidson uses the same strong arm and manipulative techniques for his securities frauds,such as his many semi-permanent as well as fly by night websites such as the now disappeared ‘NAANSS’ or ‘National Association Against Naked Short Selling’ and all his more permanent Agora related tout websites as he applies to politics – for fraudulent and manipulative ‘securities psyops’.

    And that the $100,000 + letter to
    Bush ‘connecting’ SS investing to ‘naked short selling’ and pretending it was paid for by ‘mom and pop’ investors is just another in a long line of securities frauds over the years.Most have gone on with much less fanfare in the penny stock sector,unnoticed and or ignored by the SEC or DOJ who,for whatever reasons,have had a history of looking the other way at best.

    One of the many aliases associated with David Patch(of on, was ‘gadfly’.This alias along with a number of others touted James Dale Davidson’s genemax on message board.His allied aliases on ragingbull touting his Genemax pump and dump particularly,were obvious and the SEC could have moved in at the height of the tout and dump of 2002-2003 but,of course,did not.

    David Patch of ‘’ out of Vancouver, I believe,(though he may live near Washington,D.C.) rose to prominence as chief touter of the ‘we’re being naked shorted fraud’ after Davidson,Brent Pierce, and Grant Atkins,long time Canadian penny stock fraudsters,closed down ‘NAANSS’ at their Blaine,Washington Genemax office after my complaint to the SEC in December 2003 in the form of a ‘sho’ commentary that the SEC,in all fairness, was at least kind enough to keep online even though,I believe,the ‘NAANSS’ gang attempted to take my complaint offline.

    The ‘NAANSS’ website was taken off line by the fraudsters several months after my SEC statement appeared under a google search of ‘NAANSS’ where it still remains so far.The aliases on rb’s gmxx as well as jagh boards made much of it at the time and kept mentioning it on rb as if that somehow would intimidate me.They seem well versed in getting aliases who question their tactics removed from rb,as well,and often make much of doing so.

    One of the many aliases associated with David Patch on James Dale Davidson’s genemax message board was ‘gadfly’ as well as night_raider.At one time,coincidentally,I saw reference to that alias(gadfly) on ,another James Dale Davidson associated message board that often promotes him or links to one of his many Agora or cyberfraud or mail fraud penny stock tout scams.

    As the pump and dump from under a buck to $20 per share and back again wound down aliases on gmxx began,for whatever reason,to drift over to Jag Media Holdings, now symbol ‘jagh’ and most have remained until recently.The David Patch alias actually predicted the Washington Post ad-letter to Bush a day in advance on ragingbull’s jagh board.

    SIRIUS an ‘rb’ poster on various penny scam boards since 1999 and ‘proscan’,who some call ‘proscam’have,until recently,haunted the jagh board but appear to be keeping lower profile since the heat of the letter to Bush and unfortunate tout of Global Links,a scam Senator Bennett appears to have been conned into promoting as a victim of ‘naked shorting’ brought attention they may not have predicted.

    The SIRIUS alias has now moved almost full time to the non-securities ‘gov’ board posting right wing newsmax-like diatribes,and hate Arabs or Palestinians type postings,and in a very short while established more posts there than his history on most of the penny scams he has touted for years.This is in part because ragingbull ‘management’ has taken posts of succeeding years off line as if to destroy or bury the evidence of ragingbull’s long corrurpt past.(To keep an open mind,it could be due to the shear volume of posts the would have to maintain and server space.)

    Also of interest is that the touter alias ‘burnier’ that may also be ‘gump’ migrated to the truly fraudulent penny stock scam CMKX Diamonds from Canada,(but incorporated in Nevada as most penny stock scam are incorporated).And you may remember O’Brien’ did begin a little tout of that fraud a short while after he and’s Patrick Byrne placed their scammy letter in The Washington Post in early February this year.

    The link below is a google cache of that shows just how Beltway connected Mr.James Dale Davidson really is, including with and to Bill Clinton although as you will note they had a bit of a falling out and Davidson’s as well as his Strategic Investment mailing,(now an outrageous website promising hundreds of percentage point returns taking his advise as most of his tout sites do), used ex-CIA Chief Colby’s name for stock touts was converted to a Clinton killed Vince Foster psyops rag.Even now we can find no proof William Colby believed Davidson or approved of the use of his name on the scam.He was obnly paid to have his name on an unfortunate securities tout mailing edited by Davidson.

    James Dale Davidson,like Bill Clinton,is a Rhodes scholar,but his Washington associates are no doubt further to the right and he is founder of National Taxpayers Union that Steve Forbes has also presided over.Richard Mellon-Scaife,of course,is Davidson connected and like the British Lord Rees-Mogg,former editor of London Financial Times,flocked together like vultures on the issues of ‘Whitewater’ and Monica Lewinsky hoping to gorge themselves on Clinton’s death throws. In fact there does seem to be a far right English connection in the psyops against Clinton and most of Davidson’s surrogate ‘Clinton did it’ writers are far right Brits.(Note Christopher Ruddy is a Brit and his writing and attempt at a book on ‘Cinton killed Vince Foster’as well as being the author of the newsmax article on Colby’s death.),+2000++newsmax&hl=en

    Economist: Inflation Rate Is Double Official Number

    Christopher Ruddy and Ryan Troup
    March 14, 2000
    Jan. 20, 1993, and Bill Clinton was not president 24 hours when he saw James Dale Davidson at one of several Washington Inaugural Balls.

    Clinton quickly waved past the salutations and congratulations. “Jim,” he said, “You may able to help me.”

    Davidson, a Clinton campaign donor, a financial writer, then head of the National Taxpayers Union and someone who had known Clinton for years from annual retreats at the Hilton Head Renaissance weekends, nodded with agreement.

    “I think the Bush people were cooking the economic numbers in the months before the election,” Clinton said, continuing, “Do you think you could put together a report for me on how they did it?”

    Davidson agreed but the thought went racing through his mind, “This man’s not president for one day and he’s already trying to figure out how to fix the books.”

    Since his inauguration Clinton has survived an avalanche of scandals that would have crushed any other mortal.

    One factor cited by both Clinton critics and friends has been the booming U.S. economy and the longest bull market in the history of the world.

    “It’s the economy, stupid!” was the Carville-inspired slogan of the Clinton-Gore ’92 campaign. The slogan has become the White House mantra for two terms.

    Federal Reserve Plays Key Role

    Since World War II the chairman of the Federal Reserve has had an increasing influence over the U.S. economy.

    The cha

    Comment by Tony Ryals -

  78. From the SEC mouths to your ears (Mark’s Link). I can’t believe people are standing for this!

    F. Grandfathering Under Regulation SHO

    The requirement to close-out fail to deliver positions in threshold securities that remain for 13 consecutive settlement days does not apply to positions that were established prior to the security becoming a threshold security. This is known as “grandfathering.” For example, open fail positions in securities that existed prior to the effective date of Regulation SHO on January 3, 2005 are not required to be closed out under Regulation SHO.

    The grandfathering provisions of Regulation SHO were adopted because the Commission was concerned about creating volatility where there were large pre-existing open positions. The Commission will continue to monitor whether grandfathered open fail positions are being cleaned up under existing delivery and settlement guidelines or whether further action is warranted.

    ********* Oh BOO HOO!

    It is important to note that the “grandfathering” clause of the Regulation does not affect the Commission’s ability to prosecute violations of law that may involve such securities or violations that may have occurred before the adoption of Regulation SHO or that occurred before the security became a threshold security.

    7. Does grandfathering permit illegal activity to go unaddressed?

    Regulation SHO does not require close-outs of “grandfathered” fails. As noted above, “grandfathered” status applies where the fail position was established prior to the security becoming a threshold security. However, any new fails in a security on the threshold list are subject to the mandatory close-out provisions.

    Any grandfathered position that resulted from illegal activity, such as manipulation, continues to be fully subject to redress by the Commission.34 The Commission will continue to monitor whether grandfathered open fail positions are being cleaned up under existing delivery and settlement guidelines or whether further action is warranted.

    ********* I think you would scare them more if you just snuck up on them and said BOO!

    11. Can I obtain fails information?

    Currently, threshold lists include the name and ticker symbol of securities that meet the threshold level on a particular settlement date. Some investors have requested that the SROs provide more detailed information for each threshold security, including the total number of fails, the total short interest position, the name of the broker-dealer firm responsible for the fails, and the names of the customers of responsible brokers and dealers responsible for the short sales. The fails statistics of individual firms and customers is proprietary information and may reflect firms’ trading strategies. The release of this information could be used to engage in unlawful upward manipulation of the price of the securities in order to “squeeze” the firms improperly.

    ******* So it’s OK to illegally short something but we certainly don’t want to cause a “squeeze”.

    Comment by mfv -

  79. It really is ashame that people take the SEC and DTCC “FAQ” on it’s face value and not dive into the meat of it all; Something I’m sure the SEC & DTCC are really happy to hear about. Mark, did you actually read any of it? Did you skip the part where the SEC said that pardoning the prior naked shorts was done to avoid extreme volatility in the market? How about the part where they said revealing the true Fail To Deliver numbers would traumatize the trading strategies of those that employ it (And let me remind you Naked Short Selling is still ILLEGAL for the majority of people trading). I suspect not as you probably weren’t on the can that long to read the whole thing. Pity.

    BTW- If you can’t add an ignore feature on here, how about just banning Tony Ryals. Can we at least all agree on that?

    Comment by mfv -

  80. O’Brien you’re a whiny boy,just coincidentally like James Dale Davidson that you must admit as I have pointed out ad naseum,you have so musch in common with.

    In fact from the quote and link to his Vantage Point website below,correct me if I’m wrong,but you must be in 100% agreement with him.Or do you see any conflicts between Davidson’s claims below and on link and yours ?

    I mean you both agree about me for starters and then there’s the ‘naked shorting’ and what he says about ‘electronic counterfeitting’ of shares.

    So,is there anything about James Dale Davidson’s statements you disagree with ? To me his writing style and subject matter is so similar to yours,O’Brien,as to be uncanny.
    Maybe you should meet him,don’t you think ?
    He may be the father figure you’ve longed for.

    I only found this on a Google search recently with a ‘james dale davidson gmxx’ search, then I couldn’t find it a second time but the URL still seems to work.I, as you can guess, am ‘crazy dog’ but he lies of course.HE CERTAINLY KNOWS WHO I AM AS I POSTED HIS REPLIES TO MY EMAIL CORRESPONDENCE HERE FOR THE RECORD.

    I had just emailed him for first time with my real name around April 2004,so he knew my name.

    J.D.Davidson in his own words about his ‘naked short’ securities fraud and penny stock touts.I,no doubt,am the ‘crazy dog’of his obsessions :

    Lies, Lies, Lies: Stalkers Meet the Stock Market

    It is hard to imagine a retiree or a housewife with time on her hands suddenly deciding to make a hobby of posting anonymous slanders on the GeneMax thread. But one can read dozens of embittered messages there complaining of everything but the real problem. For example, some bozo whose screen name translates to “crazy dog” recently posted an outrageous slander of me: “Does Davidson, as founder of National Taxpayers Union, ever pay taxes on fraud pump-dumps he”s orchestrated using “naked shorting” as a subterfuge to mask his fraud?” In one sentence he manages to falsely imply that I have engaged in a whole range of felonies. I don”t know whether to feel flattered that the naked short sellers find me so formidable an opponent that they would stoop to anonymous smears, or to hire a bodyguard.

    In any event, I would hope that Mr. “crazy dog” is well paid for his pains. With the possible exception of a few demented people I”ve crossed paths with, I can”t imagine anyone other than stalkers and major parishioners of naked short selling being so obsessed with me. And what humanitarian motive could explain the smears they pour down on GeneMax – a company that if it can raise sufficient funding may possibly help cure cancer? Go figure.

    The Electronic Counterfeiter”s Worst Nightmare:
    Circle Group Holdings Rallies 30,000%

    The worst nightmare of naked short sellers is that the companies they attack should survive and actually succeed. When that happens, as recently occurred in the case of Circle Group Holdings Inc. (CXN: AMEX), the counterfeiters are obliged to enter the market and buy the duly authorized shares of the capital stock of the company they have sold. CXN rose by nearly 30,000%, from 3 cents to almost $9, as naked short sellers were obliged to buy and deliver shares they counterfeited prior to CXN”s move to the AMEX.

    When you think of what happened in the case of Circle Group Holdings, you can see why the malicious charges leveled against me by anonymous smear-mongers on Web sites are ridiculous. If their assertions that I was orchestrating naked short selling were correct, I would hardly have become one of the leading critics of the practice. Nor would I continue to champion the causes of the companies I had “sent under” by allegedly selling wave after wave of electronically counterfeited stock.

    And as the example of CXN demonstrates, the damage done to the share prices of companies targeted for destruction by electronic counterfeiters is also a measure of their upside potential – for everyone but the counterfeiters.

    Of course, even the most virulent rantings of Mr. “crazy dog” are unlikely to carry much weight with thinking people. To orchestrate more effective smears, the electronic counterfeiters needed a more apparently credible platform. An Internet site called our-street. com emerged to fill the market arising from naked short sellers for seemingly trustworthy smears of small-cap companies that threaten to succeed.

    Thus for one reason or another, our-street. com and its marquee character, who writes under the pseudonym Nick Tracy, stepped up to service this
    market. Our-street immediately began hurling accusations about securities
    violations left and right. I first became aware of Nick Tracy and his tendentious exposés when someone sent me a copy of an hysterical attack he did on ChampionLyte Products (CPLY: OTCBB) , a company in which I and a group of investors took a portfolio interest as it attempted to restructure its balance sheet and realize the potential of its low-carb sports drink.

    Comment by Tony Ryals -

  81. See what I mean? Clutter, clutter, clutter.

    Renders your blog useless.

    Your choice how you handle it.

    Comment by Bob O'Brien -

  82. Yet more chatter from Yahoo NFI board.Funny I know of one poster who posted as ‘wolfblittzzer0’ on ragingbull and their alias lasted a few months telling the truth about the scams,probably because it gained a little press attention and also because the scam company UCSY and its CEO Michael Zwebner had for whatever reason become a litigation with Lycos and ragingbull.Then another poster used the alias jddavidson911 and his alias and posting privileges were removed within hours !!! I say that because note,one of the NFI aliases on yahoo is now ‘ctonyryals’:

    Re: When will NCANS update on Global Lin
    by: dirtydirtydeeds (43/M/Cyberspace)
    Long-Term Sentiment: Strong Buy 04/17/05 06:42 pm
    Msg: 293029 of 293039

    Please direct me to the area of NCANS where Global Links is “touted” or discussed in any detail. Given that we have never actually followed the story, I’m sure you must have some basis for your “demand” that we start following it.

    We have avoided two main problems that many of the members of the anti-naked short selling groups have been sucker punched by – the “Dateline is going to air and blow this wide open” and “Global Links is significant in any way other than as an example of how orders of magnitude more stock can trade than is issued.”

    In retrospect, our keeping NCANS non-affiliated with these two causes was prescient. I personally don’t think that Dateline will ever air, but would love to be wrong. I also have misgivings about Global Links given the state of their filings and the apparent issues surrounding their reverse split and preferred stock – although the issue of whether the company is a POS is a separate one from whether they are being naked shorted into the ground.

    So again, where in the NCANS website is Global Links touted? Specifically?

    Posted as a reply to: Msg 293015 by azteca_ace

    Subj: I thought orders of magnitude more
    By: biodog0
    Date: 04/17/05 07:12 pm
    shares were issued than you and Global Links ‘management’ admitted.At least you acknowledgwe a relationship with David Patch who made the claim on your ncans website ?

    Subj: Paul Saunders
    By: rnarket_genious
    Date: 04/17/05 06:48 pm

    Is that the real name of DDD? Someone should check his background for criminal activity.

    Subj: Re: Paul Saunders
    By: jbw53190
    Date: 04/17/05 07:09 pm

    Not reallly I have Seven Rubals invested in finding out your id and where you live; Then I will invest fifty cents( you are not worth more-)
    in getting a police gazette paper to check out your police record.
    What is fair for one is fair for all;
    OHHHH! just back the investigator said no one cared who you are or where you live::: Now ain’t that a laugh;;;

    Subj: Re: I thought orders of magnitude more
    By: ctonyryals
    Date: 04/17/05 07:23 pm

    Woof, woof, Clarence.

    Many suspect you have a liposome for a brain, honey.

    Comment by Tony Ryals -

  83. dirtydirty,Well you’ve been saying over and over that I’m employed to denounce you who defrauded me over and over again.Now if you’d just let me know who’s employing me I could collect my much needed salary,which wasn’t needed at all till my path crossed with yours.

    Why don’t you stick to conning and psyopsing politicians and leave us little guys alone ?
    They may deserve it,we don’t.And I only recently read your of May 2004 raving about me as ‘crazy dog’ bashing your prize genemax tout and dump,what a riot.And all that on and on about ‘electronic counterfeiters’ just like your email to me a short while earlier and pretending you didn’t know my name even though I emailed you using my real name,idiot.

    And besides not answering me about the patent
    number of the non-existent patent you claimed fraudulently to have traded the Endovasc ‘management’ for shares.

    And you still never answered my query as to whether or not you still blamed Clinton for the death of your former employee William Colby. So how’s about an answer ?

    I was amazed that you or your ‘’pal
    predicted Colby’s death a month in advance. Still am.

    The Body Count: Add One More
    Christopher Ruddy

    Related Articles:

    William Colby’s Death Mystery

    It was March of 1996. My cell phone rang. My literary agent was on the line.

    “Cross Colby off the list. He’s dead.”

    “Colby is dead,” I said with some shock.

    “Yes, I just heard on the radio he died in a car crash,” my agent said.

    I did not know former CIA Director Bill Colby, nor did my agent. But we both knew James Dale Davidson, editor of the investment newsletter Strategic Investment. Davidson was not only an associate of Colby’s, but Colby had worked for Davidson as a contributing editor for his newsletter.

    At the time of my agent’s call, he was attempting to find a publisher for my book on the Vince Foster case. We still had no publisher, and my agent had floated the idea of William Colby writing the proposed book’s foreword. This would serve several purposes. Colby, as a former CIA chief, would give the book some credibility with a publisher.

    Colby had been a key figure in the Watergate scandal after he refused to allow the CIA to block the FBI probe on the Watergate burglary. Colby could not be accused of being part of a right-wing conspiracy. After leaving the CIA, he argued for unilateral disarmament and became a fixture at the left-wing Institute for Policy Studies.

    My agent thought Colby might be open to the idea. After all, he worked for Davidson and Davidson openly claimed Foster was murdered, pointing the finger at the Clinton White House.

    But now the idea of a Colby foreword seemed lost.

    I called Davidson and asked him if he had heard the news about Colby. His voice became strained. He sounded stunned when I told him.

    But, of course, Colby had not died that March. He died a month later. My agent was wrong. To this day, he swears he heard something, and to this day, we laugh about the Jungian wrinkle in time. Davidson was peeved at me for the false report, as he well should have been.

    Comment by Tony Ryals -

  84. Dear SEC,
    You may have missed this April 14 dialogue from yahoo’s NFI board.What it means if alias edwardfolari’s cybersnooping is correct is that Senator Bennett was set up for sure and this is the gang that did it.P SAUNDERS, ET.AL.,THEN,BESIDES WORKING WITH THE NCANS CYBERFRAUD WEBSITE WAS ALREADY CONNECTED WITH, OR THE NCANS GROUP AND DAVID PATCH AND ‘INVESTIGATETHESEC’ AS A WHOLE WERE CONNECTED WITH, GLOBAL LINKS’, THAT SENATOR BENNETT WAS CONNED INTO PROMOTING AS A VICTIM OF ‘NAKED SHORTING’.

    I think it is very significant if true.And Dave Marchant’s on April 15 had new abstract in upper left of KYC news about a newsletter writer fleeing the U.S.. to avoid SEC questions re LOM.I think you,(and I),would get many answers if you insisted Schwab answer my questions from years past.






    And needless to say if the SEC had been on the ball about the Charles Schwab pump dump account(s) Endovasc’s fraudulent management and Nevada Agency And Trust Co. and Alexander Walker(who received $200,000 in freely dumpable shares after aiding and abetting the ‘naked short fraud’ of Endovasc and James Dale Davidson),would not have continued with more boiler room activity through Belladorgroup boiler room of Kuala Lumpur, Dhubai,etc., that I also discovered and informed you about!!!

    And yet that boiler room feels so confident even their Arizona Attorney posted on the message board in 2004 touting EVSC ‘management’ and with veiled threats against me for having brought the fact to that message board.Where was the SEC ????!!!!

    I don’t even know today if those shares were registered but I don’t see them,among other things,in SEC filings,do you ???

    Tony Ryals

    Re: Geoff/Saunders/dirty FTD timeline
    by: edwardfoolari (23/M/Tulsa, OK) 04/14/05 04:29 pm
    Msg: 292314 of 292771

    Is it also a coincidence that a P Saunders was an analyst who published comments about a cyber casino penny stock that morphed into Global Links?

    Why the name P Saunders? Why not Nobody or Haha? Or John Doe?

    Posted as a reply to: Msg 292302 by cinemo2001

    A tip of the hat to edwardfolari,(on yahoo nfi board),
    this will be added to spitzer2006 discussion ‘ss funds invested in manipulated markets’that has been receivng a fair amount of hits since it was started by the ‘naked short pransters’ but taken over by Tony Ryals for information gathering and educational purposes.
    Again much thanx and credit to edwardfolari.
    (NOTE:dirtydirtydeeds on yahoo NFI board is James Dale Davidson)

    Geoff/Saunders/dirty FTD timeline
    by: edwardfoolari (23/M/Tulsa, OK) 04/14/05 03:40 pm
    Msg: 292282 of 292341
    We know that the FTD file was created at 2:15pm on 4/13 and uploaded to a Yahoo group by peacefulposter who then posted a message to dirtydirtydeeds saying the file had been uploaded. The file says it was created by Geoff Johnston. peacefulposter came unglued about having the name Geoff Johnston posted publicly and threatened me.
    I think it’s clear that peacefulposter’s real name is Geoff Johnston and he was the original created of the FTD document.
    It appears from dirtydirtydeed’s posts that he downloaded the FTD document and “added verbiage”. The file shows that the person who edited the file did so under a Windows account with the name “P Saunders”. The file indicates that there were a total of 4 revisions to the file and total editing time was 19 minutes.
    At 8:16pm EST dirtydirtydeeds posted that he had uploaded the modified file to the NCANS website.
    I downloaded the file this morning and it showed that there had been 4 revisions made and the last one was at 9:01pm 4/13 (the time would be local to the computer it was edited on).
    It’s quite clear that the P Saunders that popped up here and claimed to be P Saunders didn’t do the editing, that is something that dirtydirtydeeds did himself.
    Despite the claims of a poster that she was P Saunders and P Saunders is a 24 year old webpage maintainer working for NCANS, I just don’t think a webpage maintainer who never posts here just happened to stop by and read my message.
    I think it’s far more likely that dirtydirtydeeds actually is P Saunders or at the very least was using the computer of someone named P Saunders last night to edit the FTD document.
    Subj: Re: Geoff/Saunders/dirty FTD timeline
    By: azteca_ace
    Date: 04/14/05 04:03 pm
    I guess DDD will have to come out the closet, so to speak, earlier then he wishes. That’s a good thing for someone running an alleged “grass roots” org anyhow.
    Nice work, Edward. People should know that Microsoft’s Doc format indeed holds a whole lotta user info.

    Subj: Re: Geoff/Saunders/dirty FTD timeline
    By: cinemo2001
    Date: 04/14/05 04:11 pm
    DDD is a lot smarter than you couple of idiots.
    I routinely run computers computers without any trace of my name on them. Others do also. It’s easy to put a phony name in MS apps programs, as well as XP. I do it all the time.
    Subj: Re: Geoff/Saunders/dirty FTD timeline
    By: edwardfoolari
    Date: 04/14/05 04:26 pm
    So you are saying that the poster who claimed to be P Saunders and worked on the NCANS website was lying?
    Do you wear a tinfoil beanie while you routinely run computers computers?
    Make sure you send a tinfoil beanie to Geoff Johnston (aka peacefulposter, can you be a peaceful poster and threaten other people?). He needs one.

    Subj: Re: Geoff/Saunders/dirty FTD timeline
    By: azteca_ace
    Date: 04/14/05 04:45 pm
    “DDD is a lot smarter than you couple of idiots.”
    Well now that’s not nice! hehe
    “I routinely run computers computers without any trace of my name on them…”
    That’s besides the point, someone of THAT name logged into a Windows PC with those credentials, at those times, since that is how the Word docs got embedded with it. You can’t change the original ownership of a Word doc.
    The center never holds, people make mistakes.
    No one is totally anonymous.
    I recently started received porn spam with my full name in the subject header, i was shocked!
    This w

    Comment by Tony Ryals -

  85. Well, Mark, you have attracted the guy who apparently is employed to clog any thread where meaningful discourse about the topic is to be had.

    This guy’s deal is to claim that I am someone he knows I am not (from various eye witnesses, as well as my TV appearance) and then to cut and paste endless reams of drivel about that other person and his organization, which he knows I have no affiliation with and which is not associated with NCANS in any way, shape or form, and yet which he has posted literally thousands of posts erroneously linking the two.

    The question is, do you keep his drivel posted, or do you delete it as the clutter it so clearly is?

    Either Tony is unbalanced and has committed his time to posting round the clock due to mental problems, or because he is paid to do so. Those are the choices. It will be interesting to see how you deal with this.

    Comment by Bob O'Brien -

  86. of James Dale Davidson that sucks on the reputation of his dead employee ex-CIA Chief William Colby and promises hundreds of precentage point returns, now THAT’S FRAUDULENT !!!!

    And all,coincidentally,by the man who founded National Taxpayers Union(to avoid taxes on what he steals),and ‘NAANSS’ or National Association Against Naked Short Selling’.


    Comment by Tony Ryals -

  87. Why can’t you see that failing to deliver securities that have been sold (whether a long or a short sale) is simply fraud? If the failed stock sale were bought in on T+4 after the trade, there simply wouldn’t be a problem large enough for the SEC to give a free pass to previously existing fails. The Treasury bond market is going exactly the opposite direction: On the recommendation of the Bond Market Association, they are moving to tighten buy-in on fails to just 15 minutes. That’s right — 15 minutes! It seems that the integrity of what is arguably the most important capital market in the world is so important that the participants cannot tolerate failure to deliver….

    Why should any stock seller get a free pass? If their brokerage firm has lent out too many shares to shorts, then let the brokerage firm call the shares back in from those shorts, or buy in the position when the fail occurs. If it’s the customer’s fault, charge the cost to the customer. If it’s the brokerage’s fault, then let the customer fight that out with the brokerage. But let’s not make every other shareholder pay by letting some sellers dilute the stock.

    Simple, really. Now why can’t the SEC tell us how many shares are failed, even after more than two weeks have passed? Why can’t the SEC tell us how many shares of these stocks were failed, and for how long, before this toothless new regulation went into effect? Why don’t you care about these issues, Mark?

    Here’s the definition of fraud, which seems to fit the act of selling stock and not delivering it pretty well:

    “A deception deliberately practiced in order to secure unfair or unlawful gain.”

    Does calling it “strategic fail to deliver” make it any less fraudulent?

    Comment by hhill -

  88. Cyberchatter from Yahoo NFI BOARD

    Mark Cuban – still hot for Bobo
    by: dirtydirtydeeds (43/M/Cyberspace)
    Long-Term Sentiment: Strong Buy 04/17/05 05:02 pm
    Msg: 292999 of 293011

    Reminds me of an old Van Halen song…Hot for Bobo….

    Anyhow, for those so enclined, yet more from the great mind at

    Subj: the word on spitzer2006 board:
    By: biodog0
    Date: 04/17/05 05:14 pm tThread&forumId=76&topicId=187&maxrows=20
    Subj: Re: Mark Cuban – still hot for Bobo
    By: aok1903
    Date: 04/17/05 05:09 pm

    Mark Cuban is not a bad guy…just a lucky sob.

    His posting was/is amusing, and his TV show sucked.

    Subj: Eliot Spitzer may ‘get hot’ for Bobo
    By: biodog0
    Date: 04/17/05 05:16 pm


    Subj: Re: Mark Cuban – still hot for Bobo
    By: larry_walterbyrd
    Date: 04/17/05 05:18 pm

    It’s all coming apart at the seams for you Bobo. Senator Bennett is really pissed that you conned him, the SEC decided to take a special interest in Global Links and sent it packing to the pink sheets, the mainstream press agrees with me that your video is an infomercial, Professor Jim says the infomercial took his words out of context, you got caught trying to pass off the executive director (aka front man) at NCANS as just some ordinary investor named Mary Campbell, the Big O came off the Reg SHO list and the stock WENT DOWN.

    You think you’re breaking new ground, you’re just breaking old wind, penny stock pumpers have been spreading the manure of naked shorting for DECADES.

    The funniest thing is that your grammar and spelling have really gone to the dogs lately. Seriously, what the hell do you mean by “for those so enclined”?

    So what’s up with that Bobo? Pressure of being exposed as a snake oil salesman starting to get to you? Are the cult members starting to get restless?

    Comment by Tony Ryals -

  89. Well now Mark, there you go again.

    First off, let me say that it is refreshing to see you airing your views. I am a little surprised by a few of the comments, but then again, I live in a constant state of wonder, so it is not necessarily meaningful. To your points and observations:

    1) Notwithstanding the use of pejorative language like “cult” and “slogans” etc, you offered a spectacular admission of being ignorant of all the permutations that can result in a fail to deliver. It is no surprise, then, that you arrive at an erroneous conclusion as to what the SEC was referring to W/R/T long sales resulting in fails. Your scenario is one possibility. Another, more obvious one, is that the seller fails to indicate they are selling short. Simple. They just don’t differentiate the sale correctly. Same result, no issue with having to wait for an uptick, and it is only at T+3 that the failure becomes obvious – by that time the damage to the stock price is usually done. Given that there has never been an enforcement action or prosecution for doing this, you can probably appreciate why it is done all the time, with impunity, by unscrupulous hedge funds.

    2) My personal favorite bit of vitriolic hyperbole from your latest entry, simply oozing with venom and erroneous mis-statement: “Bob O Brien and his buddies have done an admirable job of gaining attention to a problem that doesnt (sic) exist…”

    Now Mark, you aren’t a stupid guy. Not dumb, done well, looked up to and idealized by a certain subset of the population, no doubt. So how can your statement reconcile with the actual statements in the SEC doc you claim to have read? I did a little deconstruction of the SEC’s fine work at which I believe highlights some of the cognitive problems and contradictions in that document.

    While reading the SEC’s piece, you probably saw the following statements, which contradict your facile and glib assertions that there is no naked short selling problem:

    A – “The grandfathering provisions of Regulation SHO were adopted because the Commission was concerned about creating volatility where there were large pre-existing open positions. The Commission will continue to monitor whether grandfathered open fail positions are being cleaned up under existing delivery and settlement guidelines or whether further action is warranted.”

    B – “The fails statistics of individual firms and customers is proprietary information and may reflect firms’ trading strategies. The release of this information could be used to engage in unlawful upward manipulation of the price of the securities in order to “squeeze” the firms improperly.”

    Now, Mark, help me out here. You say it isn’t a problem, and yet the SEC in the document you reference says in quote A above that it is “large,” that there are pre-existing positions, and that the reason that the SEC pardoned (grandfathered) the positions was because they were afraid it would cause volatility for those who broke the rules and hold the fails. Never mind the question of whether the SEC has the legal authority to pardon prior illegal acts. Let’s focus here on two items: the SEC admits that there were (and still are due to the grandfathering) large fail (naked short) positions, and that it chose to give the lawbreakers a get out of jail free pass in order to not cause undue discomfort or inconvenience to them.

    Tell me, Mark, does that sound like the job of a regulator who is supposed to be protecting investors and companies from illegal predation? Pardoning past instances of what it admits are large violations of the rules, and using as justification the fact that it would cause problems for the violators? If so, how does that help and protect investors and companies? The point is, they admit it is a large problem, large enough to require a unilateral pardon or cause disruption in the marketplace. How did you get “…a problem that doesnt (sic) exist…” out of reading that? Break it down for us all. I’m genuinely interested in how the above first quote led you to that conclusion.

    Now to B. In this statement, the SEC is trying to articulate why it won’t tell anyone how big the problem is. They won’t tell how many fails there are. Why? Well, because, again, they are afraid that the information could be used to cause discomfort for those who use strategically failing to deliver as a trading strategy – more simply put, they don’t want to cause pain or financial inconvenience to those illegally naked shorting as a trading technique, as it could squeeze the naked shorts, as well as presumably raise embarrassing questions like “how did the problem get that big,” and “why aren’t the rules being enforced,” and “why is protecting a group of illegal corporate marauders more important than making transparent disclosure of important information about a corporation’s actual outstanding float?”

    Again, you aren’t a dumb guy. So help me understand the logic here. If it isn’t a significant problem, then why keep it secret, admittedly for fear of harming criminals – unless it was large enough to cause a mushroom cloud in the hedge fund/broker sector? And why admit in writing that the reason you pardoned the past large fails is because, well, because it IS A LARGE PROBLEM? Perhaps you were able to read some nuance or hidden message in this that I missed.

    I also agree that if a CEO complains about short sellers hurting the price of a stock, it could be a sign of a problem. Since Dr. Byrne hasn’t ever done that, I presume you are referring to other CEO’s, as well as advancing and perpetuating the prevailing wisdom that the best defense to being gang raped by mountain men is to lay back, think of England, and above all, don’t fight or complain – the rapists don’t like that. Always nice to see that the mindset which has provably been so inefficient for so many companies is being advocated anew. You might want to check out my latest blog on exactly that topic titled “Casinos, Markets and the Philosophy of Manipulation” at

    As always, it’s been a slice. I await your response with considerable anticipation.

    Comment by Bob O'Brien -

  90. Very good point; the Naked Shorts should understand this as it is intro economic theory (rather than ‘analysis’).

    Comment by Luke -

  91. That was the most long winded post I’ve ever read.

    Comment by Ibarf -

  92. Did ‘O’Brien’ gang threaten a
    talented handicapped artist on Yahoo NFI board as well ? Did you send any threats to his home ?

    Here’s where the ‘O’Brien’ touter gang claimed I was Tony Ryals the handicapped artist a while back.Nice aren’t they ? One regret about my posting on the fraud I’ve endured is I have no idea how many threats that Tony Ryals has received from this penny stock mafia.

    Re: Tony Ryals
    by: darockabilly (50/M/TheBigHouse)
    Long-Term Sentiment: Strong Buy 04/06/05 11:01 pm
    Msg: 289535 of 289541

    He won’t be able to defend for himself in the joint. I guess if I were him I’d be pretty mad at the world. Feel like everybody owes me. Barely employable and only to trash the work of others. I guess the thing that would make me the most frustrated if I were him would be that I couldn’t masterbate. Perhaps that is where all the aggresion is coming from. He has done some wonderful work with kids, fishing and art. I hope he decides to focus on that. He is truely a wonderful artist.

    Posted as a reply to: Msg 289532 by aok1903

    Tony Ryals
    by: cfoduckturd 04/06/05 09:50 pm
    Msg: 289512 of 289533

    How did you go from such an inspiration to such a scam artist? I really hope you get to do a little more fishing and spend some time with the kids and give up on shortfrauding and medicare scams. Please get some help. Everyone here wants the best for you.

    Comment by Tony Ryals -

  93. Dave I NEVER said you were James Dale Davidson.I said ‘O’Brien’ was James Dale Davidson or that his ‘’ plagiarized James Dale Davidson’s ‘NAANSS’,using both ‘National’and ‘Naked Short’ in the acronym – just as Davidson also used ‘National’
    in his ‘National Association Against Naked Short Selling’ or ‘NAANSS’ and in his ‘National Taxpayers Union’.

    And his modus operendi was stock manipulation and masking his dumping of shares he touted and probably money laundering,JUST LIKE JAMES DALE DAVIDSON.

    Where did I say a ‘Dave’ posting here was James Dale Davidson ? You must have misread.I only said ‘O’Brien’ was James Dale Davidson, and if not,has plagiarized him for some reason.Which is strange because he is plagiarizing a fraudulent scheme to manipulate stocks in the market.

    As a Beltway insider Davidson has come to see himself as above the law and so far he has been.O’Brien,placing a $100,000 + open letter to the President in the ‘Washington Post’ making a false claim re ‘naked shorting’ being the foremost danger to investing SS funds in the market,is also making a fraudulent claim or a highly stupid and irresponsible one.So he also sees himself above the law.A ‘sovereign individual’,so to speak.

    ‘O’Brien’ recently denied ever hearing of James Dale Davidson until I brought him up.This would be a definite lie which would be nothing new for James Dale Davidson either.

    But I believe it’s against mathematical odds for a number of reasons and I am sure any expert in plagiarism or writing style and word usage would agree with me when having James Dale Davidson’s email to me and his tout editorials from Agora’s ‘Vantage Point’ etc.,
    to compare with posts and writings of ‘O’Brien’. Capisce ?

    Read James Dale Davidson’s and the Lord William Rees-Mogg’s ‘The Sovereign Individual’
    and refer to the index on how many mentions are made of ‘cyberspace’.Note ‘O’Brien’ gives his address as ‘cyberspace’.

    I still believe that Davidson’s pump and dump,’Genemax’,is probably named for his right wing political psyops publication,that he passes as journalism,called ‘newsmax’.And Genemax was dumped mainly from LOM of Bermuda, AND THUS PROBABLY ITS CHARLES SCHWAB ACCOUNT, as Davidson touted through his Agora cyber and mail fraud publication called,’Vantage Point’.

    Davidson and the Lord Rees-Mogg were large shareholders when they recommended LOM for
    offshore accounts for the wealthy – without disclosing that fact when they recommended it, of course.

    And what,pray tell,is the crime I am accused of,defaming an alias ? James Dale Davidson certainly isn’t complaining now,is he ? And I am the one who was defrauded by James Dale Davidson’s pump and dump of Endovasc,from a Schwab account mainly.And probably the LOM ACCOUNT.CAPISCE ?

    Comment by Tony Ryals -

  94. a investigation Is underway Tony

    Comment by Troy Wine -

  95. Tony,

    Ever think of setting up a vacation in a state facility?

    First I was JDD, then it was Bob O’Brien. You post on every possible message board hundreds of times/day and post your same useless garbage that – BTW – is all false.

    Why not answer the LEGAL questions I raised instead of the jibberish you post?

    Comment by Dave -

  96. ‘SS funds in manipulated markets’on spitzer2006 gaining more readers:

    Comment by Tony Ryals -

  97. BooBoo, NFI’s 4Q2004 was driven by a onetime gain as a result of IRS rules for IOs in the mortgage sector. Their underlying performance has deteriorated badly.

    There is an unusually large fly in the ointment with their $51 million note issue at LIBOR plus 350.

    The alarms are ringing. Don’t press the snooze button this time.

    Comment by James Brownfield -

  98. The fact is that GAAP for MREITs is a poor metric. If you actually reviewed taxable income for NFI, you’d note that their Q4 was the highest in the company’s history – the impairments that impacted GAAP don’t impact taxable income. And that is what defines the dividend.

    In 1998 the entire industry was impacted by a little event called LTCM. Most of NFI’s competitors went under. They didn’t. Barring another LTCM, you can’t pretend that singularity was a rate defined issue – it wasn’t.

    I’ve been hearing about the death of American housing for 20 years now. So far bad call.

    NFI is trading at a 60% discount to peers on dividend yield, which is how these are measured. Not on book, not on PE, but dividend yield. That’s how they are measured.

    If you are contending that a 60% discount to peers is not abberational, you don’t understand the business.

    Comment by Bob O'Brien -

  99. ddd,’O’Brien,James Dale Davidson ?etc.,receives email from William
    Alpert of ‘Barrons’ :

    Alpert, William to NCANSmail

    Are you James Dale Davidson ?


    To: Alpert

    Ha ha ha ha ha. You’re kidding me, right?

    No. The only one that advances that lunacy is a presumably paid message board basher who posts 50 or so times per day, and appears to have been stalking me on various blogs – his agenda appears to be character assassination. he is either a pro, or unbalanced. My gut
    says pro.

    So not JDD. I’d never even heard of him until that guy brought it up.
    It is funny how insidious the rumor mill is, though.

    I’m just a private citizen, nobody famous or notorious, and will no doubt disappoint one and all at my ordinary-ness once I step forward
    and take off the mask. FWIW, I’ve been asked if I’m Penn Gillette (of Penn and Teller), Ben Stein, and a host of other folks.

    I’m not any of them, either, although nobody has ever seen Penn and I in the same place…

    Help me understand something – why is a senior editor of Barrons interested in a trivial conflageration on an obscure message board for
    a small midwestern MREIT? What’s the news value? Why does anyone care, much less you?

    below more chatter from Yahoo NFI board:
    (ncans3d is new ddd alias to replace dirtydirtydeeds that was removed from Yahoo NFI board for his previous outrageous posts)
    By: ncans3d
    Date: 04/29/05 01:31 pm

    Hard to believe unless you read it yourself:

    “Are you James Dale Davidson?”

    Up at the site on the news page.

    DDD, send this to Alpert
    by: mhelburn 04/29/05 02:26 pm
    Msg: 297935 of 298749

    I have met Bob OBrien, and can absolutely guarantee that he is not the same person pictured on the book by JDD. Now the question is, “Is JDD pictured on his book?” According to Biodog, JDD is the person featured on the book cover.

    Between Bob’s chief accuser and one of his biggest fans… we have the answer. I wonder why Albert came up with that question. Was that Marc or Tony Ryals trying to instill more doubt? Biodog/Ryals? Shark/Marc?

    Subj: mhelburn you are no credible witness,
    By: biodog0
    Date: 04/29/05 05:01 pm

    mhelburn you are no credible witness,
    you work with O’Brien’ in same
    institute ‘ncans’ remember ? and have tried to mislead from the get go,from giving your or ncans address as ‘ohio’ while suggesting SEC employees be ‘axed’ or made to commit suicide in mass,remember ?

    I have never said ANY photo of James Dale Davidson was authentic,YOU DID,remmber ?
    I have no doubt James Dale Davidson is known to Steve Forbes,Richard Mellon-Scaife,the Lord William Rees-Mogg even Bill Clinton,but I have never seen him in person and take the photograh he chooses to post on internet at ‘face value’.

    And I would presume he may have contacted and be known by some SEC employees in person but then again being able to throw money at lawyers and buy time and the court system to some extent as well as being well connected politically in the Beltway,who knows he may have never appeared at court.The SEC would be the best judge of that.

    But mhelburn you are no credible witness as you have been dishonest from the get go.Your post on spitzer2006 ‘gov reform’ discussion makes about ‘naked shorting’ etc. makes no mention of your position as co-founder and executive of ‘’.Nor does your infomercial on the same subject matter make mention of your position with nor NFI,etc.etc. Alittle dishonest wouldn’t you say ?

    My suggestion is that Mr.James Dale Davidson be contacted directly and asked just who he thinks might have used his ‘naked short fraud’ borrowed from ‘NAANSS’ first website with ‘National’ as well as ‘NAKED SHORT SELLING’ in its acronym and for the very same purposes of fraud.Don’t you think ?

    And who are the people who set up the website that hosted it originally in B.V.I. so cynically using ‘national’ while B.V.I. IS A CENTER FOR PENNY STOCK FRAUD AIMED AT THE AMERICANS AND THE AMERICAN MARKET AS WELL AS MONEY LAUNDERING ACTIVITIES.

    Comment by Tony Ryals -

  100. Warning was touted by Mary Helburn on Yahoo NFI board.You people will use any means and place to tout your frauds want you, Dave ?

    Mary Helburn of James Dale Davidson’s or ‘O’Brien’s has already
    lied and deceived about ‘naked shorting’,made fraudulent claims,and used her disabled nephew Matthew whose assets she admits to losing in penny scams.So if she recommends you had, better stay as far away as possible and you might ask SEC to put it on their radar screen.

    What’s your relation to Dave or any ‘companies’ it touts ? And O’Brien has come to attention of Barrons recently for threats and intimidations,mafiosi-like on Yahoo’s NFI board.Check recent.Bill Alpert Barrons story about that incident.

    You may be under scrutiny by association Dave.

    Comment by Tony Ryals -

  101. Lets start with the facts – Bare Facts: – Note the duration of time companies are on this list and realize pre-publications of the lists dating months earlier have these same companies listed.

    Then review the NASD Notice to members regarding 15c3-3 Fail Codes and try to come up with legal rationalization for these long standing fails.

    As for Rule 15c3-3 it states,

    “A broker or dealer shall promptly obtain and shall thereafter maintain the physical possession or control of all fully-paid securities and excess margin securities carried by a broker or dealer for the account of customers.”

    Fully Paid for securities take place the moment the cash is debited from your account.

    Then, Factor in the principles of a borrowed stock and explain how a float can turn over multiple times without the fails or teh short positions being affected.

    By definition, when a long who puts up shares on margin for loan to a short seller decides to sell, the call in for those shares MUST take place in order for the long to settle on the sale. For stocks on the threshold list, by definition, there are not easily accessible shares to re-borrow to carry the short. How then do the shorts, and the fails, stay intact when the float turnover is high as is teh short position (Global Crossing short position 116% of float)

    I have repeatedly asked the question of Securities Regulators and the likes of James here to explain how a fail has legal standing of near 80 trading days [120+ Calendar days]. The longest legal delay in settlement is the 90 day (calendar day) period provided to Arbitrage and Hedge arrangements. Unfortunately James and his cohorts never seem to come up with answers supported by our securities laws – Why Not?

    Comment by Dave -

  102. ‘wolfspitzer0’ alias gagged by penny stock securities fraudsters running the ‘we’re being naked shorted’ scam on,time will tell if posts are disappeared as well. :

    from ragingbull Global Links (GBLL) board:
    By: sevenstepper
    29 Apr 2005, 10:55 AM EDT
    Msg. 13374 of 13381
    Jump to msg. #
    You guys notice wolfspitzer0 posting over six hundred times in the last nine days…

    Soon you will see all his posts go bye bye, watch..

    BTW how does it feel to own the most watched stock in the free world…

    This is my safest investment, but that’s also so sad that it has to come to this…

    (Voluntary Disclosure: Position- Long; ST Rating- Strong Buy)

    Comment by Tony Ryals -

  103. Note how alias ‘AllenC’ on JAGH message board predicts publication of ‘naked short’ letter by alias ‘O’Brien’ and Patrick Byrne of Pesident Bush of dangers of ‘naked shorting to SS investing),in Washington Post a day in advance.’Mako’ is just one disappeared alias of David Patch of who was touting Davidson’s GMXX who then moved mainly to camp at JAGH board after gmxx shares were dumped from LOM’s Schwab and other U.S.brokerage accounts.

    ‘O’Brien’,you may recall,immediately began placing David Patch’s ‘stop naked short selling’ bs on his after the Washington Post letter appeared.’AllenC’ apparently took full advantage of David Patch’s and more so Senator Bennett’s tout claim that Global Links was a victim of naked short selling as you can see if you go to GBLL message board.

    By: positive-punch
    07 Feb 2005, 05:10 PM EST
    Msg. 65412 of 68880
    Jump to msg. #
    Mako, Do you still think we will see something new to shed new light on things tommorrow? Where should we be looking?
    – – – – –
    View Replies »

    By: AlanC
    07 Feb 2005, 06:11 PM EST Msg. 65416 of 68880
    (Msg. is a reply to 65412 by positive-punch.)
    positive-punch: Rumor I heard was Washington Post. Go JAGH!!!
    (Voluntary Disclosure: Position- Long)

    recent post from ragingbull Global Links (Gbll) board that David Patch and (hee hee) Senator Bennett touted.

    By: AlanC
    26 Apr 2005, 02:03 PM EDT Msg. 13353 of 13381
    (Msg. is a reply to 13351 by Spiderman_LOL.)
    By: kevinw777
    26 Apr 2005, 01:04 PM EDT
    Msg. 915292 of 915404
    Jump to msg. #
    Get Involved… New documentary on the NSS crimes. We need people to participate in Washington D.C. and NY City

    (Voluntary Disclosure: Position- Long)

    Comment by Tony Ryals -

  104. BooBoo, I have seen how NFI attempts to hedge their exposure and, to their credit, their income over the past year has not fluctuated as badly as the change in the yield curve would suggest it would have if they were completely unhedged. However, their income has taken a nasty hit. Their YoY fourth quarter income shrank by over 40%, and the yield curve has tightened up even more since 12/31/2004.

    In addition to their yield curve exposure, they are susceptible to any downturn in the mortgage underwriting industry. (Go check out the dividends they paid between September 1998 and August 2001.)

    Finally, for the four comparables you listed, NFI trades at the highest premium to book value. Given their dividend history, their presence in the sub-prime lending arena, and the overbought condition of real estate across the nation, it’s remarkable that they trade at such a rich premium to book.

    Clearly they have not been harmed by any “naked short sellers”.

    Comment by James Brownfield -

  105. Bob, as you know, what you are describing with NFI may be annoying, but it’s not indicative of anything illegal. Shortsellers don’t randomly target companies, they do serious research and pick and choose companies they feel are either overvalued, full of hot air, or just plain scams. Any relationships with journalists or legal firms comes only with time and an earned credibility. It’s not something that’s arbitrary or purchased, although given that just about anyone can point to what appears to be a much worse company (i.e. a better short), it might seem arbitrary and conspiratorial.

    The problem is that rather than make a generic plea for more transparency at the DTC, you have chosen not only to automatically assume all FTDs are from naked shorting, but that the DTC is complicit with outright fraud. To make matters worse, you took out a full page ad in a major newspaper, have two web sites devoted to this topic, and have even produced a video on it. This puts the burden of proof squarely on your shoulders. To say “the SHO list is all the proof I need” and then try to coerce others to do the investigating for you, let alone Congress, is quite brazen to say the least. Meanwhile, you have even allowed your cause célèbre to be used as a convenient excuse for companies the SEC has charged with securities fraud. The most ridiculous part is how you then sit back and react to all the attention with an attitude of “I can’t understand why people are so interested in l’il ‘ol me.”

    Do you think when Rocker Partners and other shorts and so-called bashers just dial up the SEC and tell them XYZ Corp is a scam, trust them, so go shut them down? No, they provide evidence that can readily be followed up, verified, and acted upon. Since you are so sure NFI is being manipulated by “evil” naked short sellers like RP, why not start making some calls over at NFI and start making a *real* case of it? I guarantee you that once you get some credibility, you’ll have those pesky journalists finally on your side.

    – Jeff

    Comment by Jeff Mitchell -

  106. James, You couldn’t be more wrong.

    First, NFI is an MREIT, not a REIT. MREITs are entities like IMH, NEW, TMA, RWT, etc.

    Second, NFI does not borrow short and lend long. They are a portfolio management company, wherein they have created and are continuing to build a portfolio of loans that are securitized within a few months of creation. What they actually do is have a warehouse line that floats above LIBOR. They buy loans on the wholesale market, and then immediately hedge those loans against any rate fluctuations until the final hedges are put into place upon transfer to the Trust, and bonds issued against the loans.

    Once in the trust, the loans are used to collateralize the bonds (the securitization part) whose proceeds are used to pay off the warehouse line.

    The amount of raw spread is generally a broker/originator number – NFI pays whatever the market is for the loans, and the brokers/originators take most of the hit on the margin compression.

    Additionally, the loans in the portfolio switch from being fixed to adjustable after 18 months to 2 years, at which point the spread actually increases.

    Be careful about making facile assumptions about things that you don’t really understand.

    For instance, MREITS are valued based upon their yield. NFI trades at a 60% discount to their peers. If that isn’t a steep enough discount to peers to raise your eyebrows for a company that has tripled earnings over a few years, what, precisely, would be?

    Comment by Bob O'Brien -

  107. BooBoo, You don’t get mocked for your allegations that “naked short selling” might be taking place with NFI. You get mocked for your allegation that “naked short selling” is doing any harm to NFI. You get mocked for your inability to find, download, read, and understand an SEC filing. You get mocked for trying to compare NFI to the rest of the REIT sector.

    One other note about NFI… They are a classic “borrow short, lend long” play. That strategy works very well when you have a positive, steeply sloped yield curve. At the beginning of 2004, there was a ST/LT spread of over 300 basis points on the yield curve. The yield curve is no longer so steeply sloped. The spread has contracted sharply.

    Guess what that does to a company like NFI.

    Comment by James Brownfield -

  108. Jeff:

    I can prove that NFI has been naked shorted – the SHO list is all the proof I need.

    Again, there is no transparency in the system, so you can’t prove or disprove the legal or illegal naked short proposition – it’s kind of like any non-disprovable twaddle…it’s possible that NFI is all legally naked shorted ….anything’s possible….

    To mock me for not being able to prove something that the clearing system deliberately keeps hidden, is, well, a little pathetic. You can’t prove that the entire world isn’t being controlled by an alien overlord strictly to torment me. But it is unlikely.

    So why does the clearing and settlement system keep all this a secret? Well, the SEC says so as not to disrupt the trading strategies of the participants. Isn’t that nice? Don’t want to show the trading of the bad guys to the general public. That could cut down on the trading as folks ran to get what was left of their money out of the market.

    I can show that Herb has written 33 articles bashing NFI in 12 months. I can show that RP has been a big put owner for the biggest drops, and is short the company per his own statements. I can show that virtually every one of RP’s short plays mysteriously gets a class action suit filed against it by MW. I can show that they all get some sort of regulatory scrutiny at the most opportune times for him. I can show a network of compromised reporters and editors who have an endless appetite for slamming his picks based on tips from anonymous sources. I can show listings on foreign exchanges that accommodate arbitrage plays for FTD’s. I can show shifts of message board bashers working his short picks. I can show automated bashing on his picks. I can show suspicious trading and specialist complicity on his NYSE picks. I can show a suspicious pattern of his picks showing up on the SHO list. I can show dramatic increases in trading volumes that would indicate churning.

    But maybe you’re right, and it’s all innocent.

    Maybe I’m right and something stinks.

    Won’t it be fun to find out? A year ago there was no proof that naked short selling was a huge problem, and that it went on. Now we know that it in fact does, and is, per the NASAA and SEC’s own words.

    What a difference a year makes.

    Comment by Bob O'Brien -

  109. ‘Bob O’Brien’ meets ‘Barrons’ :

    Comment by Tony Ryals -

  110. Dave, There are a number of sites that are carrying the story about the SEC’s inquiries into FBR’s alleged insider trading as the PIPE deal with Compudyne was being done. I think this story from does a good job of laying out what took place.

    Note, in particular, the following:

    “Regulators are looking for evidence that a select group of investors took unfair advantage of the usual decline in a company’s share price after a stock placement is announced. The regulators are concerned that some hedge funds might have found out prematurely that a company was considering a PIPE deal. So armed, a hedge fund could set up a short position on stock, betting that a flood of discounted shares will drive down the price.”

    The emphasis is on funds finding out “prematurely” that a company was considering a PIPE deal. The purpose of a “Chinese Wall” is to ensure that other departments of a financial institution don’t find out “prematurely” what is taking place with a client company’s investment banking deals. If the SEC determines that there were parties that found out “prematurely” that Compudyne was taking a PIPE, then FBR will rightly be penalized for their failure to properly maintain a Chinese Wall. When all is said and done, FBR will end up with a civil penalty somewhere in the neighborhood of $7.5 million or so and then life will go on. Compudyne will still be a garbage company and you’ll find another windmill to chase.

    I know that you continue to cling to this bizarre hope that the “Get Shorty” movement will save your misguided investment in Jag Media. It’s unfortunate to see you waste so much money on a company that has so badly burned its equity investors. Sooner or later, you do need to wake up to the fact that “naked short sellers” haven’t damaged your investment.

    Comment by James Brownfield -

  111. James,

    Keep your head buried deep so it is protected from being lopped off. Hilary Shane’s complaint by the NASD directly claims the sale of unregistered securities.

    The trader for FBR takes orders and executes the trades from above. He would know whether short sale rules were being fired and yet HE was also charged/terminated.

    I can tell you emphatically that this is the start of the cases against the naked shorting – The CEO did not resign and take this heat for some low level insider trading case. It is much bigger than you think and FBR and SG Cowen are teh cracks in the armour.

    Comment by Dave -

  112. Dave, The case against FBR is all about insider trading. What drew the sharpest scrutiny in the investigation was the shortcomings of their Chinese Wall procedures. Chinese Walls are intended to confine sensitive, nonpublic information to a financial institution’s investment banking unit in order to prevent trading on insider information by other units. It would seem that FBR’s were inadequate for the task. However, the topic of selling unregistered shares appears nowhere in any of the investigations into FBR’s practices.

    It’s entirely a case of insider trading.

    As for the Compudyne’s current condition, it wasn’t FBR or anyone else besides Compudyne management that gunned through their shareholder’s equity. Here, you must place the blame squarely where it belongs: On the shoulders of those people who are running the company.

    Comment by James Brownfield -

  113. James,

    I see you are as blind as you are stupid. FBR is being taken to task for assisting Hilary Shane in the SALE OF UNREGISTERED SECURITIES. The CEO has resigned over this and now more enforcement against the firm has taken place. Blaming the company for this problem is utter stupidity. Is NOBODY allowed to seek outside funding? LOL

    The fact that they tried to find friendly financing that resulted in ILLEGAL trading seems to be something you miss.

    BTW… Been watching SG Cowen? They illegally shorted in at least 10 PIPE deals. That, added to Compudyne adds up to 11 deals between 2 firms. Do you really think it was isolated? Can you say Rigged games?

    Deny what you will, the SHO list is proof that shorting fraud is rampant. CEO’s of well known firms do not resign over “minor” infractions.

    Comment by Dave -

  114. Geoff, There is nothing to stop you from engaging in a form of “naked short selling” if it were something you wished to pursue. If you identify a company that is obscenely overvalued where you would like to profit from future declines in their stock price, you can seek out a buyer content to hold the stock and legally engage them in a private securities transaction that would give you the same effective exposure as a “naked short sell”.

    It’s a little more difficult as an individual to engage in such a transaction. Being an individual (instead of an institution) your contra party will probably expect some sort of a premium to offset the risk of entering into such an agreement with someone who lacks a substantial capital base. The point is, it is possible, and legal, for you to engage in a transaction that creates an effective “naked short sell” for your portfolio.

    Comment by James Brownfield -

  115. James;

    I wouldn’t dare try to defend any of these companies on their performance. The point I’ve been trying to get to is that only certain entities have the ability to legally naked short which makes things uneven for the average investor. If say an entity like a hedge fund did start a naked shorting campaign wouldn’t that action drive the price of the stock down quickly?, thus giving the average investor a greater loss when they bail? Bottom line is I don’t think it’s a good idea to give an unregulated entity that kind of power, especially given the enormous sums of money (from who nows where?) that these hedge funds control.

    Comment by Geoff Altman -

  116. Bobo wrote: >> They [INFI] are one of RP’s shorts, and have been on the Reg SHO list since day one. >>

    Bob, sounds like you are saying that Rocker Partners is responsible for putting INFI on the Reg SHO list. Since you claim all FTDs are the result of blatantly illegal naked shorting, does this mean you have proof Rocker Partners is illegally naked shorting INFI? If not, then if you can’t even prove naked shorting in the company with which you claim to be most familiar (going so far as to host a web site devoted to it), then how can anyone take you seriously wrt other alleged victims of naked shorting? Sorry, but any reply similar to your standard “if you can’t figure this out for yourself you are either stupid or lying” is only evidence that you prefer to substitute insults for facts.

    Comment by Jeff Mitchell -

  117. Geoff, If you’re one of those beholders that happens to think that paying multiple times book value for a company with contracting earnings (or no earnings at all) is a great way to allocate your capital then the rest of us are not going to be surprised when the market puts a stick in your eye.

    You can certainly argue that performing equity valuations is as much an art as it is a science. Good analysts don’t arrive at a single number and blindly cling to it. Good analysts come to a range of reasonable valuations and allow for modification as events unfold.

    None of the companies BooBoo has mentioned to date have market caps that fall below the range where a reasonable analyst would value any of these companies. As is the case in any situation where someone is alleging that damages have taken place, whether the item being damaged is a wrecked car, a burned down house, a maligned character, or a company devalued, then valuation must always enter into the discussion.

    So you better get versed at evaluating a company’s SEC filings if you want to make a case for “naked short sellers” damaging any of these companies.

    Comment by James Brownfield -

  118. James;
    Valuation has always been in the eye of the beholder so you can’t go by that either.

    The old arguement that if a company has one problem (ie. poor/crooked management) that it can’t have another problem, (being attacked by naked shorters) is a bit inane. If anything one problem should breed the other.

    Comment by Geoff Altman -

  119. BooBoo, NFI doesn’t fall under my description for what takes place with most OTCBB and Pink Sheet trash because it’s clearly not a company that hasn’t been victimized by anyone. I know you dislike their current market valuation, but their share prices is clearly not depressed, artificially or otherwise. NFI is a REIT for tax purposes only. In a traditional REIT, the company owns property. If the property is leveraged, and most REIT’s employ some degree of leverage in their approach to managing a real estate portfolio, then they would have mortgages as a “LIABILITY” on their balance sheet. NFI is more of a reverse REIT. They don’t own property, they own mortgages. As an entity that derives the bulk of its income from mortgage interest, they qualify for REIT status. Furthermore, owning mortgages is a great strategy if you’re an income investor and your investment approach is geared towards preservation of principal. However, there is no upside potential in owning mortgages. A traditional REIT owns properties thereby providing the potential for future capital gains to investors. If all you own is mortgages, your upside is practically nil. That’s why NFI’s comps to other REIT’s are so pitiful. So, no, NFI doesn’t mimic the behavior of all of the OTCBB and Pink Sheet stocks that have raped their investors, but NFI clearly isn’t a victim of any sellers, naked short or otherwise. And you have to be a complete financial dunce to compare its ratios to any other traditional REIT.

    INCX is merely a company that went from being obscenely overvalued to being modestly overvalued. Even at $7 a share, the stock is trading at a fat premium to book value. I know that’s of no comfort to anyone who was stupid enough to pay $38 a share for INCX, but if you are foolish enough to overpay for a company’s stock when they’re so ridiculously overvalued, you really don’t have anyone to blame but yourself when the shares come back down to earth. It doesn’t change the fact that, from a fundamental perspective, INCX remains overvalued and, therefore, can’t be categorized as a victim of any seller, short or otherwise. It just means that anyone who bought at $38 and still owns the stock should spend some time and energy learning how to read an SEC filing.

    If you are going to make assertions that “naked short sellers” are committing destructive acts in the markets, then the discussion must always come back to valuations. How else could you possibly quantify what’s been destroyed if the conversation avoids the issue of valuations?

    If the market caps continue to be well in excess of what a reasonable group of financial analysts would assign to a company, like we see with GMAI, then you don’t have a leg to stand on. You and the rest of the “naked short seller” clowns insist that damage is being done in these markets. The SEC filings clearly demonstrate that this destruction in value is not taking place. One of my favorite sayings, “You don’t get Lincoln money if someone wrecks your Ford,” almost applies here. I say “almost” because what you’ve shown me so far is a bunch of Yugo’s that used to sell for Lincoln prices but that now trade for Ford prices. You simply can not demonstrate that there has been any harm caused by “naked short sellers” if these companies still have market caps well in excess of what a reasonable person would pay for their shares.

    I don’t blame you for trying to brush aside the Compudyne mess. Here you find a company that really has trashed its shareholders’ equity. But you’ve got to read the charges being brought against FBR very carefully. (And when you get some practice at “reading carefully”, then maybe you should try your hand at an SEC filing or two.) FBR is not being charged with “naked short selling”. FBR is on the hook for insider trading. Ignoring the key factor that triggers these regulatory actions is a common tactic for those parties who are hellbent on perpetuating the “naked short selling” lie.

    Comment by James Brownfield -

  120. James:

    1) NFI is a financial services company. It is also a REIT, which is required to pay out 90% of its taxable income every year as a dividend to shareholders. REITs are measured by dividend yield. NFI’s is about 22% on trailing 2004 actual dividends. Peers trade at approximately 12% or so. They have been on the SHO list since day one. If you can look at a company that is trading at a 60% discount to peers, and say with a straight face that they haven’t been impacted by NSS, I would ask what a company that had been impacted by NSS was. That, and I would point out that the question wasn’t whether you felt that NFI was fairly valued, but rather whether they fell under your description or not. They don’t. So you simply change the discussion to one of valuations. Again, so you don’t get confused, here’s what you said and what I introduced NFI to counter:

    “…the gist of my logic is that every time you hear someone complain about a company being abused by “naked short sellers”, you go to the EDGAR site and download their SEC filings and in instance after instance you will always find a company that has raised capital, then wasted capital, handed off obscene sums of money to their boardroom executives, and then cried after the house was burned down…”

    Words like always are fun. You use that word here. They “always” have raised capital, etc. etc. Except that NFI hasn’t done the things you say always are the case.

    So you are wrong, or lying.

    2) Same goes for INCX. They were trading at $38 in December, now they are at $7 and change. Nothing changed in their fundamentals. Oh, except for the SHO list thing. So let’s see, they’ve lost 80% of their market cap in 4 months or so on no news…and they are on the SHO list…and they also don’t fall into the category of your “always” statements. So they are another example of how your “always” missive is in fact incorrect. That is two companies in a row that are exceptions to “always.” You also try to convert that into a valuation discussion, rather than a test of “always.” I don’t blame you.

    3) GMAI also is an exception to your “always” statement, and is another one you try to convert into a valuation discussion. I’m noticing a pattern here. When you are proven to be wrong, or lying, your try to move the target to something else. It’s called intellectual and rhetorical dishonesty.

    I won’t even bother with your idiocy about Compudyne. The NASD has brought charges against a hedge fund that naked shorted 1/3 of the company’s shares in 975 separate transactions, none of which the system stopped or caught. But in your lexicon, it’s the company’s fault.

    Given how I have shown you to be either completely wrong or a liar, your observations at this point have all the gravitas of cotton candy. I can say you so far have “always” been wrong, and that would be a true statement.

    So why should I waste any more of my time with someone who is “always” wrong, or is a liar?

    Why should anyone?

    Comment by Bob O'Brien -

  121. Tony,
    Just answered my own question.
    Ionatron WAS touted by Agora’s Investment U on the following web page. There’s a lot of other text. To cut through the tout crap, do a word search on Ionatron.
    I’ll post this up on KYC/OBNR and Diligizer.




    April 25, 2005 — SHARES in a high-flying penny stock called Ionatron Inc. had been climbing for months on a steady flow of press releases about the company’s opportunities at the sword’s point of high technology in the post-9/11 world of homeland defense.
    Then suddenly, on March 18, with Ionatron’s shares having climbed to a high of $10.41, the company’s stock was hit with an avalanche of insider selling, as more than 50 Wall Streeters privy to Ionatron’s innermost secrets bailed out of nearly every share of stock they held, knocking more than 30 percent off the price in the days that followed.
    And Agora also promoted this CIA pump and dump in James Dale Davidson’s and Bill Bonner’s(see German cybertout edition of Agora.

    Comment by Tony Ryals -

  122. FBR is not in hot water for “naked short selling”. FBR is in hot water for trading on material, insider information. If they did in fact trade on material, insider information, then they deserve to be fined just as any other party that violates the insider trading laws, long or short, deserves to be fined.

    However, the damage being done at Compudyne is taking place at the hands of Compudyne management. These are the guys who have overseen the deployment of $51 million worth of shareholder equity that has since shrunk to a tangible net worth of $11 million.

    Comment by James Brownfield -

  123. If naked shorting doesn’t exist, why has Friedman Billings (FBR) been ripped apart by a scandal associated with Hilary Shane and Compudyne? What is now going on at SG Cowen and Co. relative to former Managing Director G. Pollet?

    I understand that these are just the tip of what is yet to come. For SG Cowen, they sold naked short in a minimum of 10 Pipe deals. Cowen PROFITTED $4+ Million. If that was short sale profiteering, what exactly do you think happened to the long shareholders? According to the NY Post, the short sales in at least one of the companies dropped market cap by 50%.

    But it is all a myth.

    Comment by Dave -

  124. (1) NFI is a company with a net worth of $426 million and a market cap in excess of a billion dollars. You may not LIKE where the market values NFI, but NFI is clearly not a victim of “naked short selling” or any other kind of selling for that matter. The central theme to the get after the “naked short sellers” is that naked short selling artificially depresses share prices and prevents companies from raising capital. NFI’s share price is not artificially depressed by any stretch of the imagination and no one is stopping them from raising addition capital in the equity markets if they chose to do so. NFI may not fit the typical mold of what we’re used to seeing in the arena of wrecked OTCBB and Pink Sheet companies complaining about “naked short selling”, but clearly NFI is not a victim of anything.

    (2) INCX is a company with a market cap of $61 million against a book value of $34 million. What’s more, they even managed to raise nearly $40 million in new equity last year. If you own INCX, you might not like the value being assigned to your shares by the market, but yet again, we find another victim that’s not really a victim.

    (3) GMAI has a $250 million market cap. Considering their $60 million in tangible net worth, they don’t look like much of a victim either.

    This is so reminiscent of the scene in Python’s Holy Grail where John Cleese accuses the “witch” of turning him into a newt. (“Well, I got better…”) You clowns keep telling us that “naked short sellers” are running these companies into the ground. You just named three stocks that sell at hefty premiums to their book values and all three of them have managed to raise tens of millions of new equity over the past year.

    If this is your idea of “victimization”, I will start a corporation tomorrow and sell you all the shares you want for 150% of book value. Can you turn away a bargain like that? Afterall, the closest you can get with these three is INCX at 179% of book.

    Comment by James Brownfield -

  125. James:

    Does being provably wrong bother you? I mean, I understand your desire to generalize things into the ground, as specifics aren’t your friend in this kind of argument.

    Take NFI, a case I am intimately familiar with.

    They are one of RP’s shorts, and have been on the Reg SHO list since day one.

    “Geoff, No, the gist of my logic is that every time you hear someone complain about a company being abused by “naked short sellers”, you go to the EDGAR site and download their SEC filings and in instance after instance you will always find a company that has raised capital, then wasted capital, handed off obscene sums of money to their boardroom executives, and then cried after the house was burned down…”

    NFI has done none of the things you are describing. Strike one. In science, all you have to do to disprove a theory is prove the exceptions, and the theory has to be modified, or rejected. This isn’t a lab, but you get the drift – your little folksy generality is wrong.

    Or take INCX – Interchange. On the SHO list, also hasn’t done anything you are describing. Strike two.

    Or GMAI. Again, none of the things you are describing.

    Strike three.

    You are wrong, or lying, or dim.

    It is now up to you to prove your statements. Start with NFI. Knock yourself out.

    Or is it impossible to just admit that your cute little homilies don’t apply to all companies on the SHO list, and that in fact it is nothing more than a terribly naive or simplistic worldview, or part of an agenda that ignores reality and simply repeats the lie in the hopes that it eventually is accepted as truth?

    Comment by Bob O'Brien -

  126. Geoff, No, the gist of my logic is that every time you hear someone complain about a company being abused by “naked short sellers”, you go to the EDGAR site and download their SEC filings and in instance after instance you will always find a company that has raised capital, then wasted capital, handed off obscene sums of money to their boardroom executives, and then cried after the house was burned down. The “naked short seller” is the mechanism used by these company managements and promoters to divert the blame for shareholder losses away from the very people who are responsible for ruining these companies.

    Comment by James Brownfield -

  127. James;

    “it deserves mentioning that there are no companies that have been “abusively” naked shorted anywhere.”

    No entity has been arrested and procecuted for naked shorting abuses therefore none exist anywhere. Is this the gist of your logic?

    Comment by Geoff Altman -

  128. BooBoo, While beyond your grasp, it deserves mentioning that there are no companies that have been “abusively” naked shorted anywhere. The rape victim in any case you could possibly cite is not the company. The rape victim is always the company’s shareholders. And in any case you could ever cite the perpetrator is not a group of “naked short sellers”. The perpetrators are always and every where the cretins managing and/or promoting the company in question.

    Microsoft deserves and receives the same protections as every other company that is publicly traded. The difference between Microsoft and the companies you whine about is not that Microsoft luckily evaded the wrath of “naked short sellers”. A group of “naked short sellers” could never have stopped Microsoft or Dell or eBay or any other company that focused on creating value for their shareholders. The difference is that Microsoft and these other companies were not built from the ground up to be vehicles for management to rape their shareholders.

    Comment by James Brownfield -

  129. Golly Jeff. Thanks for answering James’ questions for him. Or at least one of them.

    I’ll have to think about which companies on the list of abusively naked shorted companies needs to be prosecuted for being bad. Kind of like which rape victim deserves it for asking for it?

    BTW, for a chuckle, go to the website’s news page and review the list of the NASD’s reasons for failing to deliver a long sale. I particularly enjoy the “death of seller” one, that can only be used 9 times per client, in two 14 day extensions.

    Now that’s some regulations with some teeth in ’em, GD it!

    I couldn’t make this up.

    Comment by Bob O'Brien -

  130. Bob, an interesting part about the law that you apparently haven’t noticed is that not only does it protect “good” entities, but it also brings justice against “bad” ones. So, to directly answer your tautological question: yes, I, think all the companies on the Reg SHO list should be treated equally under the law. So here’s my simple question to you: Which ones to do you think deserve to be protected and which ones prosecuted?

    – Jeff

    Comment by Jeff Mitchell -

  131. James:

    So, is that a yes, I missed all those legitimate companies on the reg sho list, or no, I didn’t, just chose to ignore them as they didn’t fit with my agenda?

    And should I interpret your rant about Microsoft as a yes, all companies are entitled to the protection of the rule of law, or no, only “good” companies are?

    It seems that you have a problem answering direct, simply stated questions. Instead, you like to filibuster about tangential points.

    I don’t blame you. I wouldn’t want to have to answer direct, simple questions either.

    But do us all a favor and answer these two – not your straw man as to whether companies that were created in a different market environment 20 years ago or more would have required the same protections from predatory naked short selling hedge funds (that didn’t exist) exploiting a loophole in the NSCC/DTC’s relationship (that didn’t exist) that only has posed a threat for the last 7 or 8 years.

    The reason it is a crisis of confidence and a structural issue is precisely due to a new breed of predatory animal abusing a loophole that was only made possible by the DTCC’s purchase of the NSCC, and their de-materialization of physical shares.

    Is that so hard to do? Answer two questions yes or no?

    You should be a politician if you have that much trouble.

    Comment by Bob O'Brien -

  132. BooBoo, Neither Microsoft nor Dell nor Genentech needed “protection” from “naked short sellers” because Microsoft, Dell, and Genentech were not constructed to transfer wealth from their shareholders to their managers and promoters. People like you and Rod Young strive to confuse people about the origins of Microsoft and these other companies because it furthers the goal of luring investor dollars into enterprises that serves no other purpose than to enrich their managements.

    Comment by James Brownfield -

  133. From the original blog post:

    How could that work? Let’s say you are a long in and you decide that you don’t want to own the stock anymore. You give your broker a sell order. It’s quite possible, and even likely that there are already short sellers who have borrowed that stock and shorted it. As a result, your broker doesn’t currently have a locate on shares of stock to sell. If enough people are selling shares, it could create a situation where the long sales cause to appear on the Reg Sho list.

    If the present rules were followed would this be true? NO, the broker would force one of the open short positions closed which would force a buy in to cover the short and he’d use those shares to close out the long position sell order. The resulting buy (cover), and sell (long) would cancel each other out and should not affect the price of the stock.

    Comment by Geoff Altman -

  134. So, is that a yes, I missed all those legitimate companies on the reg sho list, or no, I didn’t, just chose to ignore them as they didn’t fit with my agenda?

    And should I interpret your rant about Microsoft as a yes, all companies are entitled to the protection of the rule of law, or no, only “good” companies are?

    I just want to be sure I understand your answers to the direct questions I asked you, Michael Dell’s dorm room notwithstanding.

    Thanks for your insights and observations.

    Now answer the questions. Please.

    Comment by Bob O'Brien -

  135. George Tenet,CIA,And Securities Terrorism from U.S.Government

    After coming across this latest article from Christopher Byron of the ‘New York Post’on penny stock pump and dump fraud and the CIA I remembered Ol’Hap’s post(from message board)on the New Orleans conference between George Tenet, and’Bill Bonner of Agora, Alexander Green of The Oxford Club, Michael Checkan (wrote for The Q Newsletter), Porter Stansberry, Dr. Steve Sjuggeruud of True Wealth, and a whole load of names.’

    Note James Dale Davidson founder of the National Association Against Naked Short Selling to mask his penny stock pump and dump frauds,and I suspect money laundering and tax evasion,is also the founder of Agora.

    I found Ol’Hap’s message board post again under search ‘tenet’ and reposted it below this latest article.It is indeed sad to accept the reality that not only are Americans ripped off in these sleezy pumps and dumps run by our ‘intelligence agents’ for their personal gain,but the frauds are subsidized by taxpayers,some of whom are ripped off in the very same pump and dump frauds their taxes pay for.And an insider group of these corrupt ‘intelligence’ officials actually personally benefit from what is clearly fraud perpetrated against their fellow Americans.

    But of course we are at war against ‘terrorism’ and so our own
    ‘intelligence’elite is allowed free reign to terrorize us.This explains much about ‘dirtydirtydeeds’O’Brien of the Yahoo NFI and message boards and author of the letter to Bush in the Washington Post,(who I have every reason to believe is James Dale Davidson),feeling so free to lie to defraud, threaten,and terrorize on the internet with impunity.

    I am sorry to say my own governement is the ‘share-money laundering terrorist’ I was warning about and far from appealing for their help through the SEC for the fraud and money laundering pump and dump I have suffered at the hands of Charles Schwab,Endovasc,Stanford University,James Dale Davidson,Belladorgroup boiler room of Kuala Lumpur and on and on, I may as well try and make contact with Saddam Hussein and appeal to him.



    April 25, 2005 — SHARES in a high-flying penny stock called Ionatron Inc. had been climbing for months on a steady flow of press releases about the company’s opportunities at the sword’s point of high technology in the post-9/11 world of homeland defense.
    Then suddenly, on March 18, with Ionatron’s shares having climbed to a high of $10.41, the company’s stock was hit with an avalanche of insider selling, as more than 50 Wall Streeters privy to Ionatron’s innermost secrets bailed out of nearly every share of stock they held, knocking more than 30 percent off the price in the days that followed.

    Another cautionary tale from the pump-and-dump annals of the penny stock market? In fact, it’s a lot more than that, for behind last month’s bailout at Arizona-based Ionatron Inc. lies an astonishing tale of taxpayer-financed intrigue on capitalism’s street of dreams.

    In reality, nearly every one of the more than four dozen insiders who dumped their Ionatron shares on March 18 have now been identified by The Post as employees of a secretive, Arlington, Va., investment group that is owned, operated and financed out of the black box budget of the U.S. Central Intelligence Agency.

    The group, which calls itself a “venture capital fund,” and goes by the name of In-Q-Tel Inc., was set up in 1999 by the C.I.A’s then-director, George Tenet. His idea: that by investing in promising young companies in digital technology, the fund would be able to keep the agency abreast of developments in this fast-changing world while they were still on the drawing boards.

    Whether Tenet was troubled by the many worrisome consequences of allowing the CIA to become a force on Wall Street, he clearly saw at least one problem with the approach, and sought to address it by setting up the fund as a not-for-profit corporation — in this way presumably sanitizing it from any suspicion that employees of the spy agency might be using it to speculate with taxpayer money for their own personal benefit.

    Nonetheless, a review of various financial documents filed at the Securities and Exchange Commission reveals at least three public companies in which the CIA-backed fund has taken major equity positions. And in each of the three cases, the fund’s employees were able to stage an end-run around In-Q-Tel’s not-for-profit legal status and benefit personally from the fund’s investments.

    THEY accomplished this by buying shares for themselves in a separate and parallel “for profit” entity called the “In-Q-Tel Employees Fund LLC.”

    Using the cash contributions from the employees, the LLC there upon took equity stakes on their behalf simultaneously in each of the three companies in which the not-for-profit fund was itself buying shares — an arrangement almost identical to the so-called “Raptor” partnerships through which top officials at Enron Corp were able to cash in personally on investment activities of the very company that employed them.

    In a public-relations strategy that amounts to hiding in plain sight, In-Q-Tel Inc. issues a steady flow of press releases describing various of its activities, while maintaining a Web site at where yet more information is available.

    The information raises many more questions. The Web site says In-Q-Tel has a total of 50 employees and a board of trustees, but names only two fund officials — a former executive of the Hasbro toy company, Gilman Louie, who now serves as In-Q-Tel’s “CEO”; and a lawyer from Long Island named Stephen Mendell, who serves as the fund’s “executive vice president.” No members of the board of trustees are listed.

    The Web site lists some 67 different companies, both public and private, in which the fund claims to hold investments. But nothing from the fund specifies which companies are public, which are private, or the size of the stakes the fund holds in any of them.

    Two of the companies listed on the Web site — Convera Corp of Vienna, Va., and Electro-Energy Inc. of Danbury, Conn., — are currently traded on the Nasdaq Stock Market, and SEC filings show that in both cases blocks of stock wound up with In-Q-Tel’s employee fund as well as with In-Q-Tel Inc. itself.

    In the case of Electro-Energy, which had been struggling for more than a decade as a private company to develop and market a new kind of “bi-polar” battery, the In-Q-Tel investment was hardly treated as a long-term stake in a promising technology either.

    Filings show March of 2004, In-Q-Tel Inc. paid $500,000 to acquire 268,594 shares of private Electro-Energy at an imputed price of roughly $1.86 per share. The fund transferred 67,148 of those shares to the employee fund.

    Three months later, Electro-Energy merged with a Florida penny stock in the employee leasing business, and began trading on the Over The Counter bulletin board at more than $3 per share — creating a public market (and an instant profit of nearly 100 percent) for the In-Q-Tel gang.

    TWO weeks ago, Electro-Energy filed papers with the SEC to register the shares of In-Q-Tel and other early investors, enabling them to be sold on the open market.

    With the shares selling last week for more than $6.50 each, the In-Q-Tel employees have thus snagged a profit of more than 250 percent in barely a year.

    But that’s nothing compared with the profit of more than 1,000 percent they’ve reaped on In-Q-Tel’s investment in Ionatron Inc. — another quick killing in a deal set up by the employees for the ostensible purpose of helping the CIA stay up-to-speed on developments in high technology.

    In the same way that In-Q-Tel invested in Electro-Energy when it was still privately held and preparing to go

    Comment by Tony Ryals -

  136. booboo, Again, more irony. When you look at the “development stage” companies that consistently make the SHO list or that appear in any given list of “naked short seller” victims, what you consistently find is companies where the only “development” taking place involve residential real estate for their corporate executives.

    Development stage companies aren’t supposed to spend huge chunks of their operating budget on general and administrative expenses, yet this is what we see time and time again with these companies as they burn through their shareholders’ equity.

    Oh, and you’re not going to repeat Rod Young’s lie about Microsoft being on the Pink Sheets in 1975, are you?

    Real development stage companies have executives that are focused on creating a product or service and getting it to market as quickly as possible. You don’t for a minute believe that Bill Gates was taking down a $100,000 a year salary before he sold his first copy of MS-DOS, do you? What do you think Michael Dell paid himself for the year he sold PC’s out of his dorm room? How long do you think a real company like Pfizer or Intel would tolerate the ratios of R&D spending to general and administrative spending we see in these so called “development stage” companies on the SHO list?

    Heads would roll.

    Comment by James Brownfield -

  137. Golly James, I suppose you missed all the companies on the Reg SHO list that don’t fall under that pejorative category – and which, BTW, presumes that those in development stage should not be afforded the protections of the law.

    Thanks for sharing your “interesting” perspective.

    BTW, what was Microsoft’s revenues and earnings like in their first few years? And Genentech in their first 17? And ebay?

    Gets a little tough to use your metric usefully when you apply your logic and discover that many of today’s bigger names would be BK if starting in today’s tilted environment, huh?

    Comment by Bob O'Brien -

  138. Oh, the irony. Now bobo accuses someone else of living in a backwards world.

    You have to love bobo’s world, where companies with negative net tangible assets, no revenues, no income, and overcompensated managements are paragons of virtue.

    Comment by James Brownfield -

  139. Jeff:

    Do you really believe that?

    Perhaps that is why governments think it is OK to counterfeit their currency, and why there are no laws against making counterfeit shares, or any of that silly nonsense.

    Because contrary to what every economist on the planet thinks, according to the upside down world of Jeff, increasing supply with static demand does not impact pricing.

    Why, just take oil for example. When you increase supply to where it outstrips demand, why, the price goes down. Doh…maybe that’s a bad example. Let’s try rare coins or stamps. If you manufacture knockoffs and flood the market, that’s not counterfeiting and the price is sure to go…well…er…down.


    I wonder if that is why there’s all those laws against doing it.


    But according to Jeff, that’s not possible. I guess when the SEC was formed and after the largest crash in the history of the markets decided that naked short selling could have catastrophic consequences, hence the creation of 10(a)2 and 17(a) and 15(c)3 and the very specific rules on delivering in a timely manner and not just printing off as many shares as you felt like…well….they just didn’t have access to Jeff’s unique worldview.

    Those idiots.

    I guess we’ll all have to try to see past their stupidity, as well as that of Professor Finnerty, and Richard Shapiro, and the NASAA, and the NASD, and even the SEC’s own reg SHO descriptions, and instead defer to the world according to ffej – isn’t that the way it’s spelled in backwards world?

    Enjoy that.

    Comment by Bob O'Brien -

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