Overstock Ruling Favors Public Companies Across Nation

For nearly a decade the prime brokers of Wall Street have sat back in total comfort knowing that the Securities and Exchange Commission had no interest in going after their illegal enterprise of selling massive quantities of unregistered securities to the unsuspecting public. Yesterday, in the Superior Court of California, County of San Francisco Judge John Munter kicked out one of the legs in that comfortable chair sending Wall Street prime brokers crashing to the floor.

In a favorable ruling for Overstock.com, Judge Munter ruled that Overstock and it co-plaintiffs have stated viable claims for market manipulation by the prime brokerage firms under California securities law. With the ruling comes the opportunity for Overstock.com to peek into the records of the prime brokers as discovery is obtained in the case. Such discovery could bring transparency to an issue where the data, and possible evidence, has been tightly controlled by regulators and members of Wall Street for years. That is until Judge Munter made his ruling.

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