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Shelby Out as Banking Committee Chairman!!! (A fond farewell)

Location: Blogs Mark Faulk's Blog    
Posted by:   mfaulk 11/8/2006 9:05 PM
The Democrats took control of the House of Representatives on election night, but that wasn’t the victory I was looking for. Ever since Senator Richard Shelby sold America down the river over a year ago by killing a Senate Banking Committee hearing on naked short selling, I’ve made no bones about the fact that I think he is the most immoral, dishonest, corrupt individual ever to set foot in the Halls of Congress…and believe me, that’s no small statement. I, and every other advocate for stock market reform, called him out on every opportunity, and he lied time and again, and sold out his country for a few pieces of silver…time and again.

While America was being raped, robbed, and pillaged, Shelby was sleeping with the enemy, not only ignoring the corruption that has plagued our financial markets for years, but fighting any efforts by others who had the backbone to stand up and try to do something to restore integrity and honesty to our stock market. When it came to protecting the American investor, he was our country’s worst enemy.

The bad news is that Senator Shelby wasn’t up for re-election yesterday, and in fact doesn’t have to “face the music” until 2010, so we’ll have to listen to his lying lies for another four years before we can run him out of Washington on a rail…but the good news is that because it was just announced that the Democrats have regained control of the Senate as well, SHELBY IS OUT AS CHAIRMAN OF THE SENATE BANKING COMMITTEE!!!

Okay, yeah I know that it’s not nice to gloat, but right now I’m picturing myself knocking Shelby on his ass on the football field and doing one of those pre-choreographed victory dances over his crumpled body. The man should be run of Congress, he’s a disgrace to our country.

New Speaker of the House Nancy Pelosi, in her speech to the American people last night, said that, “The American people voted to restore integrity and honest in Washington, D.C. And the Democrats intend to lead the most honest, most open, and most ethical Congress in history.”

After a Congressional regime, led by Senator Shelby, that allowed the SEC to literally remove integrity and honesty from their own mission statement, those words could not be more welcome, or more appropriate. The apparent frontrunner to replace Shelby as the new Banking Committee Chairman, Senator Chris Dodd from Connnecticut, issued a statement last night that included the commitment to “make America more prosperous by creating the most transparent and vibrant capital markets in the world.”

We can only hope that this historic event brings about real change in our financial markets, but one thing is certain, to quote the Beatles, “it can’t get any worse.”

I’ve written so many loving tributes to Senator Shelby that it’s hard to pick out my favorite to highlight his “accomplishments” as Chairman of the Senate Banking Committee, but since I’m suddenly feeling a bit nostalgic, I’ll link a few of my favorites, along with a line or two from each one. Come with me, as we take a stroll down memory lane:

Congress Sells America Short http://www.faulkingtruth.com/Articles/Investing101/1038.html

In yet another twist in the stock market scandal known as Stockgate, the Faulking Truth has learned that Senator Richard Shelby (R-AL), Chairman of the Senate Banking Committee, has shelved a planned Senate Subcommittee Hearing investigating the issue. Originally scheduled for February of this year, and then postponed several times, the hearing, which has been advocated by Senator Robert Bennett (R-UT), has been cancelled indefinitely.

Translation: Senator Shelby has sold out America in the name of special interests, and sold out the small investors to the hedge funds and their multi-millionaire clients.

Faulking Truth to Senator Shelby: PUT THE DAMN FIRE OUT! http://www.faulkingtruth.com/Articles/BlogFest/1056.html

Dave Patch of www.investigatethesec.com spoke with Senator Richard Shelby's aide Jonathon Grassio today, who told Patch that "the Senator did not derail any hearings and that the Banking Committee was 'committed to this issue.'" He also said that they were "monitoring Regulation SHO."

For starters, my article is 100% accurate, and although I called Shelby's office, and his Press Secretary's cell phone as well, they chose not to comment on my story. That says it all, in my opinion. I also emailed the article to the "Honorable" Senator Shelby, and he still hasn't responded to me. What's the matter, Senator, don't you like me anymore? If you have issues with my facts (and they are facts), then call me.....we'll talk.

Senator Shelby: "Naked short selling isn't fraud"....Wait, could you repeat the question? http://www.faulkingtruth.com/Articles/Commentary/1062.html

Here we go again. Today, in an interview on CNBC, after discussing the illegality of “back-dating options,” Joe Kernan asked Senator Richard Shelby point blank, “What about naked shorting?” It went something like this:

Kernan: "What about naked shorting? And I don't, uh...I'm not saying anything nasty...naked shorting of stocks...what about that?"

Shelby’s reply? “Well, that's been going on a long time, and I've never had anyone talk to me and tell me that's fraud.” The response on the internet was instantaneous and vocal, one of shock and disbelief.

The Chairman of the Senate Banking Committee, whose job it is to oversee the nation’s stock market, said on national television that naked short selling isn’t fraud? The same senator who a year ago killed a Senate Banking Subcommittee hearing into naked short selling? The same senator whose aide Jonathon Grassio told Dave Patch of www.investigatethesec.com in September of 2005 that the Banking Committee was “committed to the issue,” and has done absolutely nothing ever since?

In an interview with Senator Shelby’s aide Andrew Gray today, he put a spin on the day’s events that left me dizzy, and a bit nauseous too. I know I say this a lot, but….are you ready for this? Take a deep breath. Here we go:

While it’s true that millions of Americans did indeed hear Senator Shelby utter the words “No one has talked to me that’s said it’s fraud,” Gray told me today that....and I can hardly even say this with a straight face....that “Shelby didn’t hear the question.” That’s right, Shelby claims that the questions were flying so fast and furiously that he missed the “naked” part of “What about naked short selling?” In fact, he missed the word naked not once, but twice.

The Shelby Shuffle Continues http://www.faulkingtruth.com/Articles/LettersToEditor/1032.html

Note to Senator Shelby: Before you go on national television and claim that no one has ever talked to you and told you that naked shorting is fraud, be certain that there isn’t a trail of evidence behind you. You can’t play politics with lives forever and not expect to reap the consequences of your actions.

I emailed about ten different people at CNBC today, including Joe Kernan, letting them know that Shelby’s aide had retracted his statement about naked short selling to me, and asking if anyone from his office has issued an official retraction to CNBC. Since I’ve gotten no response from anyone at CNBC, I can only assume that he didn’t issue an “official” retraction, letting his comments that naked short selling has “been going on a long time” and that “I’ve never had anyone talk to me and tell me that's fraud” stand as spoken. As always, I’ll let everyone know if I hear otherwise.)

And so, I’d like to invite everyone to join me in wishing Senator Richard Shelby a fond farewell, and…GOOD RIDDANCE!!!!

And that’s the Faulking Truth. Mark Faulk is the Editor of The Faulking Truth, and the author of the upcoming book entitled "The Naked Truth: Counterfeiting the American Dream," due out in late 2006. For more information on the book and on the stock market scandal, go to http://www.faulkingtruth.com , and to pre-order your copy, go to http://www.theownersgroupinc.com/cart/
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Comments (18)
Re: Shelby Out as Banking Committee Chairman!!! (A fond farewell) By i'm so excited on 11/8/2006 9:25 PM
I'll let it go.
I'm so excited,
And I just can't hide it,
I'm about to lose control
And I think I like it.
I'm so excited,
And I just can't hide it,
And I know, I know, I know, I know

The slimebag is toast.
Re: Shelby Out as Banking Committee Chairman!!! (A fond farewell) By deja vue on 11/8/2006 9:44 PM
Sorry for the repost, but the best way we can fix this is to make it personal. We need to nail individuals and groups that are nailable.

This seems like lobbed ball and I'm not sure everyone had a chance to read the post to see how we can hit it out of the park.

The last SEC chairman was associated to this company. I believe the current one is associated with Dow Jones.

It's an incestuous brew.

____


I've been thinking about the disclosure that the previous Chairman Donaldson's firm, Donaldson, Lufkin & Jenrette Securities Corp (now known as Pershing) is responsible for so many phantom shares and it has made my blood boil.

The disclosures are provable and we have the power to force regulation.

Please consider sending variations of this letter to every state or federal regulator, politician or media outlet you can think of.

This is a provable, clear cut example of rules that aren't being enforced that are putting millions of investors at risk.

Dear Regulator:

As you know, it is fraudulent to use "smoke and mirrors" to sell someone something that doesn't exist.

The SEC has identified that some members of the brokerage community do exactly that. Because the clearing system makes it difficult to tell if a real share backs an electronic book entry, some participants have been able to sell "phantom shares" to the investing public.

In a speech from July 2006, Sec Chairman Christopher Cox said, "The Commission is particularly concerned about persistent failures to deliver in the market for some securities that may be due to loopholes in the Commission's Regulation SHO, adopted just two years ago."(1)

According to the DTCC, the central clearing organization, the total level of these phantom shares in the system total $6 billion.(2) This includes "fails to deliver" (shares owed from one participant to the National Securities Clearing Corporation) and "fails to receive" (shares owed from the National Securities Clearing Corporation to a participant).

Over 90% of brokerages are "introducing brokerages", that is they use a third party "clearing brokerage" to facilitate their back office functions. These third parties act as custodians and if they don't act with integrity, can put the assets of many innocent investors at risk.

It has come to my attention that the clearing subsidiary of the Bank of NY, Pershing LLC., which holds the assets of over 3.5 million retail customers(3) is responsible for $1.7 billion of these $6 billion phantom shares or 28% of the problem. They report(4) "Securities Fail to Deliver" of $730 million and "Securities Fail to Receive" of $968 million.

In their "Statement of Financial Condition"(4), they further disclose that they are exceeding the Net Capital Rule 15C3-1 by a billion dollars, putting over 3.5 million investors' assets at extreme peril. The SIPC only has reserves of $1 billion to protect the entire industry.

"At June 30, 2006, the Company’s regulatory net capital of $1,233 million was 16.24% of aggregate debit balances and in excess of the minimum requirement by $1,081 million."

When the terrorist attacks of September 11th caused the collapse of MJK Clearing, the Securities Industry Protection Program developed a report that identified the lack of enforcement of this miniimum asset requirement rule as one of the main causes of the failure.

"During an extended period of strong economic growth, regulators, market participants and politicians who supervise the Commission’s activities, may have overlooked the significance of a firm regulatory framework."(5)

I demand an immediate investigation into the activities of Pershing LLC and enforcement of the requirements that they:

A) Immediately honor all fail to deliver and fail to receive "IOU" obligations to deliver shares to the shareholders that paid for those shares

B) Either increase their assets according to rule 15C3-1 or begin an orderly wind down of their business activities

Sincerely



A Concerned Investor



(1) http://www.sec.gov/news/speech/2006/spch071206cc2.htm
(2) http://www.dtcc.com/Publications/dtcc/mar05/naked_short_selling.html
(3) http://ftp.sec.gov/rules/proposed/s71600/brueckn2.htm
(4) http://www.pershing.com/statementoffinancialcondition.pdf
(5) http://www.sipc.org/pdf/SIPC_fitch.pdf
Re: Shelby Out as Banking Committee Chairman!!! (A fond farewell) By rtway1 on 11/8/2006 10:22 PM
If I had a dime I wrote that piece of sh== a letter I would be rich. My only regret is that they won't put the bastard in jail for his failure to comply and also impede investigations.He makes Martha Stewart look like Mother Theresa. I hope this new guy does not have the carbon paper on how to defraud the public. Somewhere along the line someone needs Jimmy Hoffa reminder to bring us back to honesty.
Re: Shelby Out as Banking Committee Chairman!!! (A fond farewell) By Mark Faulk on 11/8/2006 10:57 PM
I was just looking back at my notes, and it was over two years ago that I was working with my contact behind the scenes, laying out the agenda proposal and witness list for the Banking subcommittee hearing. This was long before Patrick and Bobo were in the middle of this, but I had Patch and several other "pioneer advocates" on a list of people I wanted to put in front of Congress.

Imagine how much damage the American people could have been spared had Shelby not killed that hearing, and instead moved agressively to fix the system.
Re: Shelby Out as Banking Committee Chairman!!! (A fond farewell) By Senator Shillby on 11/9/2006 4:10 AM
Mark,

The ACAT system allows a broker to be short a stock and gives them 60 days to clean up the books. You give your broker money and he desks the trade because the stock is "overbought". They keep your money and give you an electronic click in your account. If you keep that position at the brokerage, the broker is under no pressure to buy the shares, but if you transfer the position to another broker, the first broker has 60 days to clean up his books if he uses an ACAT transfer. There might be a delay if you use a DTC transfer because they don't give this "grace" period. DTC just has the SBP with a 30c fee for borrowing.. and the fees are returned to the participant based on volume participation.

It makes me wonder if the accounts at ACAT clearing are audited when counting fails. That would be another place to hide fails.

Dodd has got to be an improvement.

Re: Shelby Out as Banking Committee Chairman!!! (A fond farewell) By joseph on 11/9/2006 4:41 AM
Do you really think there is anyone in congress who is not on the payroll? Railing against the bad guys is such a waste of time. Knock one down and another Mr. Smith takes the place.

Who are the good guys? Who will represent fair play in banking? Give your attention to those working for this principle and build an audience and power around the action to be created instead of the corruption decried.

Banking has always been contempt. It is only because of communication that the average joe is becoming aware. This work is no reformist, it's historical, it's revolutionary because the general population has never been considered a peer in the world of finance, banking, and investment (stock trade).

Let's sound like bold pioneers instead of wimpering, shouting malcontents.
Re: Shelby Out as Banking Committee Chairman!!! (A fond farewell) By Alan DeGracia on 11/9/2006 6:55 AM
As soon as the new chairman is named, he should be informed or reminded of the naked shorting issue and all the other scams related to it. We took time and effort to contact Shelby to resolve the problem with no results. We need to start informing the new replacement right off the bat and start each communication with a lead in stating that his predecessor has done nothing to solve the problem. New blood doesnot always mean that new action will follow, but we can always remind the new chairman about the Dems stated committment to addressing corruption and that applies to all areas in congress.

Thanks Again for Your Efforts Dave

Alan
Re: Shelby Out as Banking Committee Chairman!!! (A fond farewell) By trading on 11/9/2006 7:10 AM
Stock trading may be fixed, but at least our elections are fair.

http://www.dailykos.com/storyonly/2006/11/8/183154/217
Re: Shelby Out as Banking Committee Chairman!!! (A fond farewell) By trading on 11/9/2006 7:21 AM
The criminals will where whatever color shirt the winning team has on. Shelby had no trouble switching from blue to red to join the republicans.

That said, they are a bit more timid when they first get in power. We have a good chance with the politicians who recently replaced the incumbents to get to them before the bad guys do.
Re: Shelby Out as Banking Committee Chairman!!! (A fond farewell) By call on 11/9/2006 7:29 AM
I called Senator Shelby's office a couple years ago when Mark first published the phone number. They said he would call back (he didn't), but they also said he was getting a lot of calls from the public.

He was aware of this problem and chose to stand behind the criminals.

Good riddance.
Re: Shelby Out as Banking Committee Chairman!!! (A fond farewell) By theyhangtraitors on 11/9/2006 8:44 AM
http://www.cliffordcroft.com/politics/index.asp?senator=52

"Right now, we are working on getting our grandfather provision on PUHCA repeal into the senate version of the energy bill… We have a plan for participation to get a seat at the table, which has been approved by David the total package will be $31,500 in hard money (individual), and $25,000 in soft money (corporate). Right now, we have $11,500 in immediate needs for a group of candidates associated with Tom Delay, Billy Tauzin, Joe Barton and Senator Richard Shelby."

http://newstandardnews.net/content/index.cfm/items/1370

"Federal investigators concluded that Sen. Richard C. Shelby (R-Ala.) divulged classified intercepted messages"

http://www.washingtonpost.com/wp-dyn/articles/A40886-2004Aug4.html

"So Cerberus pitched to Shelby in classic Washington style: the fund threw a fundraiser, netting the senator’s leadership PAC $99,500 in a single day from Cerberus executives and allies."

http://www.hillnews.com/thehill/export/TheHill/News/Frontpage/050406/hedge.html

Senator Shelby, they reserve a special spot in hell for people like you.
Re: Shelby Out as Banking Committee Chairman!!! (A fond farewell) By MoneyMachine on 11/9/2006 8:55 AM
Why don't we use the system against them? We can start our own NCANS hedge fund!

Imagine this scenario:

1. A strong company like NFI starts buying companies that have ridiculous levels of "fails to delivers" for shares. They could probably buy a company like CKMX for $100,000. The pedigree of the company is irrelevant.

2. They pay for the purchase with shares. The company being bought has to dividend shares of the purchaser to their shareholders.

3. There aren't enough shares to go around. The shorts have no choice but to buy shares in the parent. It would either cause a squeeze or it would transfer the billions of shares of fails to the parent.

We can bankrupt the criminals and their scam by taking advantage of their lies.
Re: Shelby Out as Banking Committee Chairman!!! (A fond farewell) By MoneyMachine on 11/9/2006 9:02 AM
I believe this technique would also work on delisted companies. Just because the company is delisted doesn't mean it doesn't have shareholders.

Who gives your brokerage the right to delete a stock out of your account when it is delisted?

Shouldn't you be listed directly on the company's shareholder list? Shouldn't the DTCC have to reconcile the ownership when they stop representing the company?

Why should the counterfeiters get a 100% profit when a company is delisted, but doesn't go bankrupt?
Re: Shelby Out as Banking Committee Chairman!!! (A fond farewell) By scum on 11/9/2006 9:43 AM
"WASHINGTON — Sen. Richard Shelby yesterday accused federal law-enforcement officials of abuse after a newspaper reported that federal investigators had concluded he leaked to the media classified messages from the eve of the Sept. 11 attacks."

"WASHINGTON — Sen. Richard Shelby yesterday accused federal law-enforcement officials of abuse after a newspaper reported that federal investigators had concluded he leaked to the media classified messages from the eve of the Sept. 11 attacks.

"I hear he [Shelby] may have a Larry Flynt problem," said Limbaugh.

"Second term U.S. Senator Richard Shelby of Alabama has recently found himself the parent of a drug offender. Claude Shelby, 32, was apprehended at Atlanta's Hartfield airport after arriving on a flight from London. With the help of dogs, Custom agents discovered 13.8 grams of hashish in his possession"

http://www.november.org/razorwire/rzold/09/0913.html
Re: Shelby Out as Banking Committee Chairman!!! (A fond farewell) By Mark Faulk on 11/9/2006 5:54 PM
It looks like Shelby's antics extend into every arena, not just as the friend of stock market fraudsters. In all honesty, it's not that I think the Dems will magically fix things (I actually voted for a Republican congressional candidate in Oklahoma), but Shelby has shown that he really is a gangster....Patrick Byrne was right on target on that one.
Re: Shelby Out as Banking Committee Chairman!!! (A fond farewell) By stryker-ny on 11/12/2006 5:23 AM
Meet the new boss...same as the old boss...Do you believe Sen Todd is any better than Shelby..this clown is for deregulation...both sides of the isle are corrupt......
Re: Shelby Out as Banking Committee Chairman!!! (A fond farewell) By TruthnandJustice on 12/13/2006 10:15 PM
Mark,

You have some pull with Debi Kiontke. Will you please ask her to come over to http://cmkxtruthandjustice.blogspot.com/ and explain a few things about a short in CMKX.
Re: Shelby Out as Banking Committee Chairman!!! (A fond farewell) By crstphr2 on 1/5/2007 8:49 AM
Where's your book?

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