- Forget SEC "Regulations".... This is Good Old-Fashioned Fraud by Mark Faulk
It's been over a year since the SEC approved Regulation SHO, designed to supposedly alleviate the illegal prectice of naked short selling, in which billions of shares of counterfeit stock are sold short, or borrowed, but never delivered to their rightful owners.
As this fraud has grown exponentially, millions of stockholders who have bought stock in companies have discovered that the stock that they purchased has never been delivered to their accounts. Time after time, investors have requested their stock certificates, only to be told by their brokers that they can't deliver them.....because they never bought them in the first place. The excuses for failure to deliver what stockholders have bought and paid for are varied and numerous, but in the end, they are no more valid than "the dog ate my homework", or in this case, "the DTCC trade settlement system ate your stock certificates".
The band-aid that the SEC applied to the problem in the form of Reg SHO has done absolutely nothing to stem the flow of counterfeit shares being dumped onto the stock market, and in fact, has just served to point out just how rampant this scandal is, as numerous companies, both large and and small, have been on the "trade settlement failure" list since day one.....over 140 days and counting. That's 140 days (and who knows how long before the list was published) that stocks have been bought and sold to investors by brokers who NEVER DELIVERED THEM. (Remember that phrase: NEVER DELIVERED)
While the NASD has done nothing but make lame excuses and deny responsibility (even thought their own loopholes have helped to create this financial nightmare in our stock market system), thousands of hedge funds and their ultra-rich clientele have reaped the benefits of stock counterfeiting, by short selling billions of shares of counterfeit stock with absolutely no intention of ever delivering those shares, and the SEC has in effect pardoned all past transgressions by "grandfathering" in all past trade settlement failures, and by constantly changing their interpretations of their own regulations to fit the crimes.
If this betrayal of the very investors who they are pledged to protect weren't enough, the SEC, in concert with the DTCC, has initiated a covert crusade to convince the states to eliminate paper stock certificates altogether, leaving investors with absolutely no way to of knowing if the stock that they've bought and paid for has been delivered to them, or if brokers are buying and selling them imaginary stock created out of thin air, stock THAT THEY NEVER DELIVER.
And Congress, who could step in at any time and put a halt to this massive fraud, this financial terrorism, this systematic dismantling of our economy and financial institutions, has, up to now, been all talk and absolutely no action. Oh sure, there have been some public displays of indignation, as far back as March of this year, and a few brave souls on Capitol Hill have spoken out, but so far, that's all that we've heard.....talk. In the meantime, billions and billions of dollars continues to pour out of America into offshore hedge funds and foreign entities, and there is compelling evidence that much of it is finding its way into organized crime syndicates and known terrorist groups. As I said earlier, this is financial terrorism, nothing less. (Note to our elected representatives: Actions speak louder than words.....especially your words.)
Investors and the companies involved have, in the meantime, been left with nothing......no shares, no money, and little recourse other than costly class action lawsuits. If the SEC is allowing the perpetrators to sidestep existing rules, and constantly reinterpreting their own rules to cover their own culpability in the fraud, what can be done to stop it, short of waiting for the inevitable collapse of the stock market system itself?
It's simple.....forget about the SEC regulations, forget about the self-regulating NASD, and forget about the DTCC's flawed trade settlement system. This is nothing more than good old-fashioned fraud, no different than any other type of fraud.
The news is filled with the stories of con artists convicted of internet fraud, mail fraud, or wire fraud:
A man in Salt Lake City pleads guilty to defrauding Internet customers of more than $200,000 by selling car parts that he didn't own, and THAT HE NEVER DELIVERED....he faces up to 20 years in prison.
A man in California is indicted for defrauding eBay users of more than $93,000 in auctions for sprorts tickets and rolex watches.....THAT HE NEVER DELIVERED.
In Maine, a man is convicted of accepting personal checks, bank checks, money orders, wire transfer payments and PayPal payments on eBay for merchandise THAT HE NEVER DELIVERED, and for failing to provide refunds. He was sentenced to six years in prison and forced to pay back his victims. (Is anyone else seeing a pattern here? On eBay, the buyer pays for their merchandise, and if the seller doesn't deliver it, they're arrested and they go to prison. It sounds simple enough, doesn't it?)
And just last month, a man right here in Oklahoma pleaded guilty to selling tickets to sporting events and concerts....THAT HE NEVER DELIVERED. Although he "only" defrauded his victims out of a total of $21,000, he faces up to 20 years in prison and a $250,000 fine.
The list goes on and on. In every case, the victims pay for their tickets, merchandise, or services, and in every case, the seller fails to deliver the items. There is absolutely no difference between the thousands of people convicted of these types of fraud and the brokers, hedge funds, and everyone else who is taking money from investors in exchange for shares of stock.....THAT THEY NEVER DELIVER.
When a stock transaction is conducted over the internet, and the stock is never delivered.....that's Internet fraud. The perpetrators should be arrested and sent to prison.
When a brokerage firm accepts money wired into accounts and buys stock with it that is never delivered.....that's wire fraud. They should be arrested, forced to pay restitution.....and sent to prison.
When an investor sends a check or money order to their stockbroker, and their broker uses the money from that check or money order to buy shares of stock that are never delivered to the investors' accounts.....that's mail fraud. They should be arrested, fined heavily.....AND SENT TO PRISON.
It's time we stop looking at stock market fraud as a practice that is immune to any law other than the SEC's own worthless regulations. It's time that every one of us demand delivery of the stock that is rightfully ours, while we still can. It's time we stopped allowing the brokers and hedge funds to play by their own rigged rules, and see this for what it really is....FRAUD, by any definition of the law.
On My Mind The Irrelevant SEC Edward Siedle 11.27.06, 12:00 AM ET
In bed with the industry it's supposed to regulate, it needs a shakeup.
the senate finance committee and the Government Accountability Office are both taking a harsh look at the Securities & Exchange Commission. It's about time. One thing on the agenda is the SEC's questionable handling of an insider trading case involving a $7 billion hedge fund. But the bigger issue is that the federal agency charged with safeguarding investors is on the verge of becoming irrelevant. If you want protection from investment pitfalls, you're going to get it from the private sector.
Here's what's wrong with the SEC.
Political pressures Look who gets chosen for the important job of SEC commissioner. Not those with established records for fighting on behalf of investors. Rather, the post routinely goes to insiders, especially those who have devoted their careers to representing financial services firms. Former SEC chairman William Donaldson, cofounder of investment bank Donaldson, Lufkin & Jenrette, is one prominent example. Below the commissioner level, directors of divisions within the agency, such as market regulation and investment management, are also chosen according to how chummy they are with Wall Street's big guys.
The speed with which SEC managers find comfortable quarters within the industry after their period of government service is powerful evidence of how seldom these professionals seriously oppose the institutions they are supposed to regulate. Paul Roye, for example, worked as a lawyer representing the fund business before becoming its chief overseer at the SEC. Meanwhile, one of his former law firm superiors, Paul Haaga, became the industry's chief lobbyist. After the fund business stumbled into the biggest scandal in its history under this duo a few years ago, Roye rejoined Haaga at mutual fund giant Capital Research.
Reliance on self-regulation The commission is ever more willing to allow the brokerage industry to self-insure, self-adjudicate (through mandatory arbitration) and even control public access to the brokerage industry's criminal and disciplinary histories. Self-regulation involves an insurmountable conflict of interest and results in thousands of instances of avoidable fraud each year.
One almost laughable example of lame self-regulation: the BrokerCheck Program, run by the National Association of Securities Dealers, the brokerage industry's self-regulator. The NASD says it "should be your first resource to learn about the professional background, registration/license statuses and conduct of NASD-registered firms and their registered brokers." Would you believe that the program does not permit a broker or firm to respond "yes" to the question of whether the broker or firm has any disciplinary matters in his or its past? Only two answers are permitted: "no" and, get this, "maybe." That's what we call industry-friendly. For all of $5,000, I put together a disciplinary database a few years ago that showed the NASD underreports brokerage industry misbehavior by about 85%. Since the NASD blocked me in court from publishing it, investors remain perilously uninformed.
Transparency The SEC has allowed the financial industry to control the content and timeliness of disclosures to the public. For example, most of the SEC's money manager investigations uncover "deficiencies," some of them involving serious misbehavior. But the commission refuses to make its findings available.
Follow-through In May 2005 the SEC staff issued a report on conflicts of interest in the pension consulting industry. The staff concluded that the industry was subject to rampant conflicts and disclosure was abysmal. Were pension sponsors who may have suffered harm ever privy to the financial information the pension consulting industry provided to the SEC? Nope. Instead the SEC issued a vague warning to pension sponsors to more carefully scrutinize the investment consultants they hire.
This agency spends $888 million a year. If it were subject to disclosure laws the SEC would have to admit it could get a lot more bang for taxpayers' buck were it not so compromised by conflict of interest.
Edward Siedle, a former SEC Attorney and the President of Benchmark Financial Services.
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-------------------- "If you go the Extra Mile there will be no Traffic Jams".
posted
Excellent article! This ride is so crazy we have reached “ludicrous speed”, breaking the space-time continuum, enabling us to read into the future.
Edward Siedle 11.27.06 , 12:00 AM ET
quote:Originally posted by St. Matthew: Here's the link.
If I didn't DD all the players in this and was walking by and looked at it, I would laugh I think...
We may never know everything, but something is up here IMO...
My God, all this crap hitting the fan and there hasn't been a massive dumping of shares with huge volume, why?!...
Common sense would dictate that a penny that has had this much chit thrown at it would be subpenny right now. Something will bust ~ [hope it's not my accounts! LOL]
One thing is for sure.... "Time will tell all..."
Good night Board ~ Still long!
not what I'm asking....
ie, i could reply about pps...
BUT that's *not* what I'm asking.
My question--probably to be repeated over 'n over again is this: At what point would "longs," "da faithful," the admitted "kool-aid crew" say :
"That's it?"
make sense?
Am looking for some sensibility regarding risk/reward...
ie: Is *there* ANY POINT at which the "faithful" say, "DAMMIT!"
Or...do the "faithful" hold on for 10, 20 years...??? Perhaps even longer, for future generations?
in other words, to you, Chart--
Is *there* any point possible at which you'd say, "Dadgummit, this reverses my opinion."
Do you "back the company," no what what?
OR... do you have limits?
Nicely put Tex. I think lots of these folks still don't understand the ? and will continue to ignore it. I have always recommended "free shares" with many ignoring that and falling in "love" with this stock. Hurts now huh!?!
I lost a small bit on this POS so I'm not worried about it and I could afford to lose it.
IMHO if you are buying more you are filling the pockets of Rufus and friends with Christmas dough. Really a lifetime of dough......
PLEASE DON'T INVEST MORE WHEN YOU DON'T KNOW WHATS HAPPENING BEHIND THE SCENES. YOUR ARE A FOOL TO DO SO. No market makers with PPS at .15cents... <-- That says enough in itself.
posted
We were doing OK till the SEC punks came along. I can't say where we would be now if they did'nt but I think we would have been better off.
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It seems to me that many here make plays on runs. Doesn't seem to matter much if the company is anything more then a shell, idea, or scam. As long as there is a momentary spread to capture a little profit on, everything is fine. The average Joe who assumes the company is for real is duped into loosing money for the benefit of those who know the game. Pretty sick if you ask me.
-------------------- If you repeat a lie often enough it is perceived as truth
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You're naive if you think that playing the pennies is anything more than a speculator's game. If you find a company you actually believe in, play the run, exit into free shares as quickly as possible, and see what happens. Only fools play pennies as buy-and-hold stocks.
-------------------- "Entrepreneurship is the last refuge of the trouble making individual."
posted
good post kevin. i have made pretty good money flipping stocks i don't even know what the symbol stands for. of course, i don't hold them very long!
-------------------- I'm from Missouri - Show Me!
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quote:Originally posted by 6digits: Shareholder:Registration will end 11/23/2006 5pm Eastern.
I know we have hashed this out a lot already because of the information requested, but how many are signing up for the shareholder group? I had originally - haven't done it again as yet.
-------------------- Study before you buy, Sell before you think about it....
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You're naive if you think that playing the pennies is anything more than a speculator's game. If you find a company you actually believe in, play the run, exit into free shares as quickly as possible, and see what happens. Only fools play pennies as buy-and-hold stocks.
I applaud you Sir!!! You are very correct and this is for ALL pennystocks, which are $5 and below. VERY WELL PUT!
-------------------- I buy fast and sell faster!
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I signed up, the amount of info is'nt going to cause more thaan some spam mail, maybe not. The company knows the number on your certificate any way if you have one, whether you tell them or not. What ever, no big deal. I'm not worried about it.
quote:Originally posted by SherriT:
quote:Originally posted by 6digits: Shareholder:Registration will end 11/23/2006 5pm Eastern.
I know we have hashed this out a lot already because of the information requested, but how many are signing up for the shareholder group? I had originally - haven't done it again as yet.
You're naive if you think that playing the pennies is anything more than a speculator's game. If you find a company you actually believe in, play the run, exit into free shares as quickly as possible, and see what happens. Only fools play pennies as buy-and-hold stocks.
I applaud you Sir!!! You are very correct and this is for ALL pennystocks, which are $5 and below. VERY WELL PUT!
Pinks yes, but not all BB's.... some BB's are REAL companies that end up with amazing growth stories.
-------------------- Stick with Repo's plan in '07 - FRPT/DKAM!
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LOL. I have learned a lot from my first penny experience. Lost Anita, and thousands of dollars. May never get the money back. LOL Kind of like buying forclousres and stealing equity from couples who for some reason got over their head. Never did that, and will never do this agian. But, want to thank all of you for a valuable lesson and experience. Never thought so before, but maybe capitalism needs some restraints. In my business profit is made almost always by everyone, not by taking advantage of the unexpected. We can sleep at nights.
-------------------- If you repeat a lie often enough it is perceived as truth
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