posted July 22, 2004 10:45            

"Naked shorting" helps to curb hype and crime associated with microcap stocks

Business Week:
Commentary by Gary Weiss
December 8, 2003

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

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

And that is where short-sellers perform a valuable role. Shorts wager on stock price declines by borrowing stocks and then selling them, in the hope of buying them back at a lower price. So, with microcaps becoming frothy, you'd think that the Securities & Exchange Commission would be encouraging the practice. Instead it has done the exact opposite. On Oct. 29, in a move that received little attention outside the securities industry, the SEC caved in to a vociferous campaign by microcap companies and proposed a rule that would curtail the primary form of short-selling that can deflate the hype of small stocks.

The new rule is designed to stamp out what is known as "naked" short-selling. It works like this: Ordinarily, traders must borrow a stock, or determine that it can be borrowed, before they sell it short. But some professional investors and hedge funds take advantage of loopholes in the rules to sell shares without making any attempt to borrow the stock. The new rule would effectively ban such short-selling.

Critics of shorting say this move is a good idea. They maintain that thinly traded microcap stocks are vulnerable to aggressive short-selling. Gayle Essary, CEO of Investrends Inc., a research service that focuses on small companies, says naked shorting "screws shareholders. They put $3,000 into a stock they think is going to cure cancer or something, and before you know it their stock is worth $300."

But there is another side to the story. Short-sellers argue that the SEC action would eliminate the only market force against overhyped -- or even fraudulent -- small-cap and microcap stocks. And that, they maintain, would be as devastating for ordinary investors as it would be -- financially -- for the short-sellers. "It would crush the whole business of market-making and short-selling and enhance a hundredfold the crime level in these stocks," asserts one New York short-seller who -- like all shorts interviewed for this article -- requested anonymity.

There’s no doubt that shorts often drive down the prices of thinly traded stocks. The problem is that such stocks often became tempting to shorts only because they are richly priced as a result of manipulation. A good example of that took place in the mid-1990s, when several microcap brokerage firms, including Hanover Sterling & Co., collapsed after shares they had promoted to sky-high levels were attacked by aggressive shorts. Hanover brokers and managers were subsequently imprisoned for stock fraud.

Shorts argue that if naked-shorting had not taken place during the microcap crime wave of the 1990s, such stocks would have climbed even higher before they crashed. In the past, the SEC was loath to act against naked shorting, but it now has succumbed to organized pressure -- including a letter-writing campaign encouraged by more than 100 microcap companies, organized as the National Assn. Against Naked Short-Selling (NAANSS).

The arguments used by the organized opponents of naked shorting, lamenting the supposed depredations of short-sellers, are so repetitious that the SEC has categorized their comment letters -- which are piling up at the agency -- as "Letter Types A, B, C and D."

So who is behind this campaign? Calls to the NAANSS were answered at a firm called Investor Communications International, whose clients include companies attacked by shorts. Their anger is understandable. The market is a ruthless place, but it's supposed to be. The SEC should let it work -- and not cave in to this campaign to suppress the only force that can curb hype in the resurgent microcap market.

posted July 22, 2004 11:09            

quote:

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Originally posted by Money_Penny:
Oh sure, now naked shorting, which is killing small legitimate companies left and right, while the MMs are getting rich off it, is a GOOD thing? Naked shorting is to protect the investors? Give me a break.

---

posted July 22, 2004 11:15            

If penny stocks and pink sheets are dumb why was he on here? That is everyone's point who wanted him gone. He made no sense what so ever to come on a penny stock forum and say penny stocks are bad. He gave no advice, no DD, no other options in stocks, except for CMKX was a scam. He did this everyday. The idiot deserves this...

posted July 22, 2004 11:19            

If anyone deserves to be banned, you do.
However, I would also object to that as well.

Must go now --- things to do.

posted July 22, 2004 11:23            

Alas, the order has been in since yesterday but no, it hasen't filled... I am thinking of just changing it to let it fill at .0005 What do you guys think? I am sending over like 100 dollars tomorrow, so at the very least, if Tuesday it went down to .0004 I can still get filled.

I lose 77k shares right now if I switch the order to .0005 from .0004 To me every share counts but if it goes to .0006 I will lose even more... choices choices...

posted July 22, 2004 11:26            

Must go now --- things to do."

Wallace,

I thought we agreed to not talk to one another... So why are you talking to me? I don't like you. I think you are a fraud who has either split personalities or split motives. Don't talk to me. I don't like you, I don't care about you, and I don't care for you. Thanks partner

-John

posted July 22, 2004 11:38            

The Law of accelerating returns

The Depository Trust Company is a trust company organized under the banking laws of New York State. It is owned by banks and broker-dealers. It is a custodian of securities that effects "book-entry delivery" in which "transfers of securities within the DTC system are processed by debits and credits to Participants' accounts."

In reviewing a lot of material about the DTC, which I must say is obscure and boring in the extreme, I got the distinct impression that its organizers were more concerned with effecting payment for securities than with the niceties of securities delivery. The DTC says, "DTC does not itself guarantee any funds or securities transfers which its Participants are obligated to make." The DTC is organized on the assumption that broker-dealers, market-makers and clearing agents are all operating in goodwill and need looking at mainly to ascertain that their wire transfers in payment for securities don't go astray.

Where this electronic settlement becomes an issue is when it comes to the shares of mini and small-cap companies traded on the Pink Sheets, the OTC and the Nasdaq. The rules and conventions that have arisen around electronic settlement effectively permit unscrupulous operators among the many thousands of broker-dealers to counterfeit large quantities of stock, which they can sell for payment.

Given the magnitude of the logistics problem in clearing trades, it is understandable that this could happen. It is much easier to monitor the delivery of payment than it is to authenticate the delivery of shares, especially in an electronic clearing system where every broker-dealer has the de facto capability of counterfeiting securities by simply finding a buyer for them.

Say you want to buy a million shares each of GeneMax and another small cap company. Market maker Doaks has shares of neither. But, either on behalf of some client or on his own account, he sells them to you, crediting your broker's account with 1 million shares of GeneMax and 1 million shares of the other. Your broker now has an electronic credit for those shares, against which he wires funds or nets funds against his credit at DTC to Doaks' Participant account there. Thus are counterfeit shares created and put into circulation.

Doaks or his client has pocketed a lot of money for counterfeiting shares he did not have. And your broker has an electronic credit for those shares at DTC. When another of his clients dies, the executor of his estate orders the liquidation of his account, including 500,000 shares of GeneMax. The credit for those shares originally concocted by Doaks now transfers to the account or accounts of the participating broker-dealers whose clients bought the GeneMax shares from the estate. And so on.

Ostensibly, broker-dealers have the capacity to sell securities they don't own and don't have to borrow - as you would if you were selling short - to facilitate market-making. In theory, the broker-dealers can sell quantities of stock they don't own in order to make an orderly market and prevent the price from spiking on big buy orders. In theory, abuses are limited by the requirement for the market-maker to post capital and limit "naked short sales" of any one issue to 10% of the capital account.

That is the theory. The reality is a bit more ugly. No one is really monitoring the aggregate impact of the counterfeit sales on any given issue. It is simple to confirm that payment has been rendered for a sale. When the cash credit is transferred between participants within DTC or the Fed wire hits, the issue is resolved. But in an electronic, book-entry deposit system, every credit for a share purchased is indistinguishable from an actual share issued by the company treasury, even if it was counterfeited. No one bothers to reconcile the share credits in the DTC system with the authorized, freely trading shares of the company.

Consequently, it is quite common for the effective float of small-cap companies to be inflated significantly by electronic counterfeiting. In some cases, the total effective float has been multiplied many times over.

Hence the sometimes weak performance of mini- and small-cap stocks. Their stock prices plunge because the supply of stock is artificially multiplied by naked short selling, better understood as electronic counterfeiting. Unscrupulous broker-dealers and market makers can effectively drive the prices of stocks into oblivion by selling vast quantities of stock not issued by the company.

Having come to understand this, I see an urgent need to curtail this electronic counterfeiting of the shares of small-cap companies. It not only fraudulently deprives investors in the affected companies of wealth but it is also destructive to the economy. And the news media seldom deign to report on it. Other than a few minor squibs on the news pages of The Wall Street Journal, there has been virtually no coverage of this issue.

Indeed, it is so obscure that you may not even know what I am talking about.

If so, that only underscores the need to shed more light on this predatory practice. I should also say that I am confident that this problem will be rectified. Maintenance of honest and orderly capital markets is tremendously important to the economy of the United States.

Sincerely,

Jim Davidson, for The Daily Reckoning

P.S. Having made the argument for small caps, and shed light on the potential for small cap manipulation...you should also know that small-cap stocks are more volatile and "riskier" than large-cap stocks. Small-cap companies generally are more heavily indebted relative to their income than their large-cap counterparts, meaning their earnings are more leveraged. Small-cap companies have fewer assets than large-cap companies. Small-cap companies are statistically more likely to go bankrupt than large-cap companies. So portfolio theorists calculate that the extra return you get over time is a result of investors being compensated for bearing more risks. Keep that in mind if one or more of your "high-upside" stocks bites the dust.

posted July 22, 2004 11:48            

I am a whimp... I bought at .0005 222k shares of CMKX

I am now the proud owner of 2,962,000 shares muwahahahahahahahahhahaha

My goal was/is at least three million so I am now there. I suppose anything I get after this will go towards the 'long' shares. What is great now is that it will only take like maybe three hundred more dollars to satisfy my 'long' shares...

Excellent Smithers! Now release those Market Makers!

Yes, Sir!

=============================================

Am I addicted to CMKX? Yes.
Am I addicted to stocks? Totally.
Am I addicted to Allstocks? 100% Yes.
Do I mind? No, I've blown money in worse ways.

Is this an adventure? Probably one of the longest in my life... I love seeing my money go up, and even, disapper lol... (It's like Vegas but you can always have money on the table... )

posted July 22, 2004 12:02            

(THE FLOORLESS CONVERTIBLE SECURITY)

ALSO KNOWN AS "THE DEATH SPIRAL"

In our opinion, the biggest source of short selling and naked short selling abuses comes from the use of toxic funding strategies. These come in many forms from convertible debentures and options to simple private placements with a variable pricing structure based upon future market values. Regardless of their form, they all share one common trait. They all allow the funding source to purchase shares at a significant discount below the existing market, regardless of how low the stock price might fall. This sets the stage better than anything else for short selling abuses. A ruthless individual can literally drive a stock from over $1 to the sub penny level using toxic funding strategies and make risk-free money doing it.

Since many, if not most, toxic funding sources exist within obscure offshore corporations, it is easy for them to short sell at will, undetected and assure themselves high profitability with complete disregard for the other shareholders in the company.

Still, there are unsavory elements everywhere in business and it is up to the unscrupulous or lazy corporate executive to invite these funding strategies in before they can abuse the company.

Since the dangers of toxic funding are so widely known, only a CEO lacking any ethical foundation or one so lazy and stupid he doesn't deserve your support would enter into one of these agreements. To claim that the capital source promised or agreed not to sell and hurt the stock or not to short the stock falls into the same ignorant excuses as "the checks in the mail" and "it's only a cold sore".

Toxic funding is an invitation to short selling abuses, it is as simple as that. Blaming the system that allows naked short selling for the abuses caused by toxic funding is as stupid as blaming the lock manufacturer for your loss after giving the fox the key to your hen house.

CONCLUSION

posted July 22, 2004 12:31            

STOCK FRAUD'S SILENT ACCOMPLICE

or

posted July 22, 2004 12:55            

quote:

---

Originally posted by JBCak47:
"JBCak -
If anyone deserves to be banned, you do.
However, I would also object to that as well.

Must go now --- things to do."

Wallace,

I thought we agreed to not talk to one another... So why are you talking to me? I don't like you. I think you are a fraud who has either split personalities or split motives. Don't talk to me. I don't like you, I don't care about you, and I don't care for you. Thanks partner

-John

---

posted July 22, 2004 13:08            

-------------------------------------------

Naked shorting into $0.0001, or, **Cellar Boxing**
There’s a form of the securities fraud known as naked short selling that is becoming very popular and lucrative to the Market Makers that practice it. It is known as “Cellar boxing” and it has to do with the fact that the NASD and the SEC had to arbitrarily set a minimum level at which a stock can trade. This level was set at $.0001 or one-one hundredth of a penny. This level is appropriately referred to as “the cellar”. This $.0001 level can be used as a "backstop" for all kinds of market maker and naked short selling manipulations.

“Cellar boxing” has been one of the security frauds du jour since 1999 when the market went to a “decimalization” basis. In the pre-decimalization days the minimum market spread for most stocks was set at 1/8th of a dollar and the market makers were guaranteed a healthy “spread”. Since decimalization came into effect, those one-eighth of a dollar spreads now are often only a penny as you can see in Microsoft’s quote throughout the day. Where did the unscrupulous MMs go to make up for all of this lost income? They headed "south" to the OTCBB and Pink Sheets where the protective effects from naked short selling like Rule 10-a, and NASD Rules 3350, 3360, and 3370 are nonexistent.

The unique aspect of needing an arbitrary “cellar” level is that the lowest possible incremental gain above this cellar level represents a 100% spread available to MMs making a market in these securities. When compared to the typical spread in Microsoft of perhaps four-tenths of 1%, this is pretty tempting territory. In fact, when the market is no bid to $.0001 offer there is theoretically an infinite spread.

In order to participate in “cellar boxing”, the MMs first need to pummel the price per share down to these levels. The lower they can force the share price, the larger are the percentage spreads to feed off of. This is easily done via garden variety naked short selling. In fact if the MM is large enough and has enough visibility of buy and sell orders as well as order flow, he can simultaneously be acting as the conduit for the sale of nonexistent shares through Canadian co-conspiring broker/dealers and their associates with his right hand at the same time that his left hand is naked short selling into every buy order that appears through its own proprietary accounts. The key here is to be a dominant enough of a MM to have visibility of these buy orders. This is referred to as "broker/dealer internalization" or naked short selling via "desking" which refers to the market makers trading desk. While the right hand is busy flooding the victim company's market with "counterfeit" shares that can be sold at any instant in time the left hand is nullifying any upward pressure in share price by neutralizing the demand for the securities. The net effect becomes no demonstrable demand for shares and a huge oversupply of shares which induces a downward spiral in share price.

In fact, until the "beefed up" version of Rule 3370 (Affirmative determination in writing of "borrowability" by settlement date) becomes effective, U.S. MMs have been "legally" processing naked short sale orders out of Canada and other offshore locations even though they and the clearing firms involved knew by history that these shares were in no way going to be delivered. The question that then begs to be asked is how "the system" can allow these obviously bogus sell orders to clear and settle. To find the answer to this one need look no further than to Addendum "C" to the Rules and Regulations of the NSCC subdivision of the DTCC. This gaping loophole allows the DTCC, which is basically the 11,000 b/ds and banks that we refer to as "Wall Street”, to borrow shares from those investors naive enough to hold these shares in "street name" at their brokerage firm. This amounts to about 95% of us. Theoretically, this “borrow” was designed to allow trades to clear and settle that involved LEGITIMATE 1 OR 2 DAY delays in delivery. This "borrow" is done unbeknownst to the investor that purchased the shares in question and amounts to probably the largest "conflict of interest" known to mankind. The question becomes would these investors knowingly loan, without compensation, their shares to those whose intent is to bankrupt their investment if they knew that the loan process was the key mechanism needed for the naked short sellers to effect their goal? Another question that arises is should the investor's b/d who just earned a commission and therefore owes its client a fiduciary duty of care, be acting as the intermediary in this loan process keeping in mind that this b/d is being paid the cash value of the shares being loaned as a means of collateralizing the loan, all unbeknownst to his client the purchaser.

An interesting phenomenon occurs at these "cellar" levels. Since NASD Rule 3370 allows MMs to legally naked short sell into markets characterized by a plethora of buy orders at a time when few sell orders are in existence, a MM can theoretically "legally" sit at the $.0001 level and sell nonexistent shares all day long because at no bid and $.0001 ask there is obviously a huge disparity between buy orders and sell orders. What tends to happen is that every time the share price tries to get off of the cellar floor and onto the first step of the stairway at $.0001 there is somebody there to step on the hands of the victim corporation's market.

Once a given micro cap corporation is “boxed in the cellar” it doesn’t have a whole lot of options to climb its way out of the cellar. One obvious option would be for it to reverse split its way out of the cellar but history has shown that these are counter-productive as the market capitalization typically gets hammered and the post split share price level starts heading back to its original pre-split level.

Another option would be to organize a sustained buying effort and muscle your way out of the cellar but typically there will, as if by magic, be a naked short sell order there to meet each and every buy order. Sometimes the shareholder base can muster up enough buying pressure to put the market at $.0001 bid and $.0002 offer for a limited amount of time. Later the market makers will typically pound the $.0001 bids with a blitzkrieg of selling to wipe out all of the bids and the market goes back to no bid and $.0001 offer. When the weak-kneed shareholders see this a few times they usually make up their mind to sell their shares the next time that a $.0001 bid appears and to get the heck out of Dodge. This phenomenon is referred to as “shaking the tree” for weak-kneed investors and it is very effective.

At times the market will go to $.0001 bid and $.0003 offer. This sets up a juicy 200% spread for the MMs and tends to dissuade any buyers from reaching up to the "lofty" level of $.0003. If a $.0002 bid should appear from a MM not "playing ball" with the unscrupulous MMs, it will be hit so quickly that Level 2 will never reveal the existence of the bid. The $.0001 bid at $.0003 offer market sets up a "stalemate" wherein market makers can leisurely enjoy the huge spreads while the victim company slowly dilutes itself to death by paying the monthly bills with "real" shares sold at incredibly low levels. Since all of these development-stage corporations have to pay their monthly bills, time becomes on the side of the naked short sellers.

At times it almost seems that the unscrupulous market makers are not actively trying to kill the victim corporation but instead want to milk the situation for as long of a period of time as possible and let the corporation die a slow death by dilution. The reality is that it is extremely easy to strip away 99% of a victim company’s share price or market cap and to keep the victim corporation “boxed“ in the cellar, but it really is difficult to kill a corporation especially after management and the shareholder base have figured out the game that is being played at their expense.

As the weeks and months go by the market makers make a fortune with these huge percentage spreads but the net aggregate naked short positions become astronomical from all of this activity. This leads to some apprehension amongst the co-conspiring MMs. The predicament they find themselves in is that they can’t even stop naked short selling into every buy order that appears because if they do the share price will gap and this will put tremendous pressures on net capital reserves for the MMs and margin maintenance requirements for the co-conspiring hedge funds and others operating out of the more than 13,000 naked short selling margin accounts set up in Canada. And of course covering the naked short position is out of the question since they can’t even stop the day-to-day naked short selling in the first place and you can't be covering at the same time you continue to naked short sell.

What typically happens in these situations is that the victim company has to massively dilute its share structure from the constant paying of the monthly burn rate with money received from the selling of “real” shares at artificially low levels. Then the goal of the naked short sellers is to point out to the investors, usually via paid “Internet bashers”, that with the, let’s say, 50 billion shares currently issued and outstanding, that this lousy company is not worth the $5 million market cap it is trading at, especially if it is just a shell company whose primary business plan was wiped out by the naked short sellers’ tortuous interference earlier on.

The truth of the matter is that the single biggest asset of these victim companies often becomes the astronomically large aggregate naked short position that has accumulated throughout the initial “bear raid” and also during the “cellar boxing” phase. The goal of the victim company now becomes to avoid the 3 main goals of the naked short sellers, namely: bankruptcy, a reverse split, or the forced signing of a death spiral convertible debenture out of desperation. As long as the victim company can continue to pay the monthly burn rate, then the game plan becomes to make some of the strategic moves that hundreds of victim companies have been forced into doing which includes name changes, CUSIP # changes, cancel/reissue procedures, dividend distributions, amending of by-laws and Articles of Corporation, etc. Nevada domiciled companies usually cancel all of their shares in the system, both real and fake, and force shareholders and their b/ds to PROVE the ownership of the old “real” shares before they get a new “real” share. Many also file their civil suits at this time also. This indirect forcing of hundreds of U.S. micro cap corporations to go through all of these extraneous hoops and hurdles as a means to survive, whether it be due to regulatory apathy or lack of resources, is probably one of the biggest black eyes the U.S. financial systems have ever sustained. In a perfect world it would be the regulators that periodically audit the “C” and “D” sub-accounts at the DTCC, the proprietary accounts of the MMs, clearing firms, and Canadian b/ds, and force the buy-in of counterfeit shares, many of which are hiding behind altered CUSIP #s, that are detected above the Rule 11830 guidelines for allowable “failed deliveries” of one half of 1% of the shares issued. U.S. micro cap corporations should not have to periodically “purge” their share structure of counterfeit electronic book entries but if the regulators will not do it then management has a fiduciary duty to do it.

A lot of management teams become overwhelmed with grief and guilt in regards to the huge increase in the number of shares issued and outstanding that have accumulated during their “watch”. The truth however is that as long as management made the proper corporate governance moves throughout this ordeal then a huge number of resultant shares issued and outstanding is unavoidable and often indicative of an astronomically high naked short position and is nothing to be ashamed of. These massive naked short positions need to be looked upon as huge assets that need to be developed. Hopefully the regulators will come to grips with the reality of naked short selling and tactics like "Cellar boxing" and quickly address this fraud that has decimated thousands of U.S. micro cap corporations and the tens of millions of U.S. investors therein.

posted July 22, 2004 13:16            

quote:

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Originally posted by cool1sh:
M_P
Do you have the link? Thanks

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posted July 22, 2004 13:34            

quote:

---

Originally posted by Kimberlystocks:
IMO I feel that CMKX stocks will not move at all until after the 20th. I think the MM's will take the stock for a ride as far as they can go with it until they are forced to be accountable, if there is indeed massive shorting going on. I have been invested with CMKX for almost a year now and I am willing to ride it out all the way whether gain or loss. I could live with the loss if the company went under, more than living with dumping the stock too soon and losing a lot more if the stock went through the roof!!

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posted July 22, 2004 13:45            

quote:

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Originally posted by Kimberlystocks:
That is basically what I live by is the official PR's. I enjoy reading the message boards to get other opinions, and the occasional post that really explains an issue in question regarding the company. For instance, what naked shorting means, MM's, disbursement of dividends. I've learned a lot for being a newbie just reading message boards.

---

Me too! But today I have learned also that BusinessWire press releases are basically paid advertisements. Same with PRwire.

posted July 22, 2004 13:52            

The regulators are beginning to take a hard look at the practices of short sellers. After several years of high profile cases surrounding the excesses which caused stocks to go artificially high, the extended bear market has fostered a climate wherein the regulators are examining the practices of those who benefit by illegally forcing stocks artificially low.

On April 19th I published an edition entitled "Is the SEC Pendulum Swinging? - Regulators Go After Short Sellers". I covered the recent actions the SEC took against one fund manager who used short selling in a death spiral financing to illegally enhance his profits.

Today we're looking at the issues surrounding naked short selling in microcap stocks, and how the regulatory landscape may be changing to level the playing field for small public companies and their shareholders.

About 80 small public companies have signed up for the "OTC Rebellion". To learn more, read on:
The OTC Rebellion

The DTC, or Depository Trust Company, is responsible for the electronic transfer of billions of shares of stock in the US markets. The DTC electronically handles the delivery of stock from buyer to seller in the open market once a trade takes place. DTC handles billions of transactions annually and has a monopoly in the US markets despite being a private company.

There are about 80 microcap companies attempting to withdraw their shares from being handled by the Depository Trust Company. If successful, they go back to the old fashioned practice of having every transaction handled by the company's Transfer Agent. They believe short sellers are able to illegally create millions of shares of stock which don't exist, and are flooding the markets with these counterfeit shares. The practice only works because of flaws and loopholes in the DTC system.

In a legitimate short sale of stock, shares are borrowed by the seller against a future pledge to buy the stock back. If the shares drop in value, the short seller makes money when he closes his position with a buy transaction.

Naked short sellers flood the markets with millions of shares that simply don't exist and which have not been legitimately borrowed. Microcap companies are targeted because they don't have institutional shareholders with deep pocketswho have the conviction to take on the short sellers. Short sellers are able to bully this end of the marketplace. Furthermore, microcap companies have a much higher failure rate, giving the short sellers much greater odds of long term success.

Naked short sellers are able to sell shares which simply don't exist because the normal three day settlement rules are mostly ignored by the DTC System. As the buyer you purchase shares in the open market and pay for the purchase within the normal three day time frame. The shares show up in your account as a line item entry. However, most investors don't know that your shares might never be electronically delivered to your account in any reasonable time frame. These "open fail to delivers" can stay on the books of brokerage firms for months because the DTC system does not force them to be delivered.

This allows naked short sellers to flood the market with millions of shares which don't exits and where no shares have been pledged or loaned against the short trade.

There are two primary mechanisms short sellers use to execute these trades.

posted July 22, 2004 14:10            

I'll take .0005, what is the worst that happens it goes down a little

I'll agree witht he PR statement.

=============================================
Money P-diddy,

If anything, in my mind at least, I too see the MM's stalling on raising the price, however a thought keeps comming to my mind and that is that may let the price run up a little and take it down again, causing perhaps another round of weak naked short shares as well as long shares?

I mean if some MM's are really working as teams, for what ever reason, they could very well trade stocks equally back and forth, artificially raising the price, then dropping it. I mean like going from .0005 to like .001, then big dip down to .0006-4 levels... some longs may possibly sell at .001 to take profits? Who knows... all wild predicitions on my part, which must I add are just that, wild & predicitions.

Regardless I still stand Long and Strong!
I am buying more shares because maybe soon CMKX will win a race then BAM! Instant advertising

We shall see I suppose...
p.s. (I am almost tempted to go collect cans for the bottle deposits. One SINGLE can/bottle will fetch 100 shares of CMKX!!! (at .0005)
(Okay I am a full blown Stockhead. You will see me comming through your towns with a shoping cart that says 'CMKX Recycling' on it hahaha...

=============================================
Where is Pharm today???

I bet 1 CMKX share he's in the hot tub... Eating Cheeze Whiz on Ritz crackers.

=============================================

Anyone else buy CMKX today?

Any good rumors circulating lol...?

posted July 22, 2004 15:04            

Back to the subject at hand... so my associate tells his friend about the stock he just invested in and they do some research..who owns the company, who manages the company, CFO, etc... interestingly enough the cop recognizes one of the names and a light goes off in his head... one of these individuals (i believe he said it was Melvin or the CFO) was investigated for fraud. So now anyone he knows who has invested he wants information such as who we invested through and how many shares, etc. My associate is screaming sell sell!! And I am caught up in the middle wondering how something that seems so legitimate and possibly lucrative could be a total scam.

posted July 22, 2004 15:06            

2004-01-28 21:15:00

LA RONGE, Sask. (CP) - Mining company Odaat Inc. approved wholesale changes Wednesday - including a name change to Explor Resources Inc.

After a one-for four share consolidation, the new Explor (TSXV:EXS) begins trading Thursday on the junior TSX Venture Exchange. The old Odaat shares closed Wednesday at 13 cents apiece, down two cents.

After closing $200,000 private placement, the firm also provided Canaccord Capital with rights to acquire 123,333 common shares at 15 cents each within 18 months.

posted July 22, 2004 15:13            

quote:

---

Originally posted by dimndlvr:
I have recently purchased a few million shares of CMKM stock and so far it has been the only thing on my mind...trying to wade through the PR reports to determine whether or not they are legitimate or bogus to see where this prospect of a stock might go. One recent hiccup came from an associate of mine who works at a law enforcement agency who also invested.
Before I continue let me insert here that I am NOT a basher.. merely an interested investor who would like to recieve any quality input from other investors.

Back to the subject at hand... so my associate tells his friend about the stock he just invested in and they do some research..who owns the company, who manages the company, CFO, etc... interestingly enough the cop recognizes one of the names and a light goes off in his head... one of these individuals (i believe he said it was Melvin or the CFO) was investigated for fraud. So now anyone he knows who has invested he wants information such as who we invested through and how many shares, etc. My associate is screaming sell sell!! And I am caught up in the middle wondering how something that seems so legitimate and possibly lucrative could be a total scam.

Please help me fellow investors... is this true what he has said? Was someone high ranking within the CMKM organization investigated for fraud before? Does this relate to our investment in any way? I can say that i'm sticking with it no matter what simply because its play money and this seems to be a solid possibility but my fellow investors locally are dying for answers... anyone know the truth?

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posted July 22, 2004 15:15            

quote:

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Originally posted by dimndlvr:
I have recently purchased a few million shares of CMKM stock and so far it has been the only thing on my mind...trying to wade through the PR reports to determine whether or not they are legitimate or bogus to see where this prospect of a stock might go. One recent hiccup came from an associate of mine who works at a law enforcement agency who also invested.
Before I continue let me insert here that I am NOT a basher.. merely an interested investor who would like to recieve any quality input from other investors.

Back to the subject at hand... so my associate tells his friend about the stock he just invested in and they do some research..who owns the company, who manages the company, CFO, etc... interestingly enough the cop recognizes one of the names and a light goes off in his head... one of these individuals (i believe he said it was Melvin or the CFO) was investigated for fraud. So now anyone he knows who has invested he wants information such as who we invested through and how many shares, etc. My associate is screaming sell sell!! And I am caught up in the middle wondering how something that seems so legitimate and possibly lucrative could be a total scam.

Please help me fellow investors... is this true what he has said? Was someone high ranking within the CMKM organization investigated for fraud before? Does this relate to our investment in any way? I can say that i'm sticking with it no matter what simply because its play money and this seems to be a solid possibility but my fellow investors locally are dying for answers... anyone know the truth?

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posted July 22, 2004 15:26            

quote:

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Originally posted by dimndlvr:
TP~
Yes I too have done some basic internet research tryin to find news articles involving fraud charges and the names of higher ups in CMKM. I came up empty as well, it just caught me by surprise that a name seemed to stick out in this officers head. Ill let him or her do the research, IMHO if it makes me money I could care less what someone did in the past.

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posted July 22, 2004 15:27            

Yes I know what you are saying, its on a lot of peoples minds...

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Money p:

Rumor of a PR Tonight??? Glad I bought in then... What are the rumors surrounding this rumored PR,

heheh...

-John-