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Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look?

Location: Blogs Bob O'Brien's Sanity Check Blog    
Posted by:   bobo 2/23/2006 10:34 PM

 

I just got an email as I was logging out of the little Internet café I’m at, and it contained a truly remarkable piece from our good friend Herb Greenberg, of Marketwatch.com.

 

Apparently he received a subpoena from the SEC in the Gradient/SEC matter, requesting all his correspondence about OSTK, and 4 other stocks.

 

You can read his somewhat rambling piece here (everyone's a critic).

 

Now, when I was a kid, I had a dog that had a distasteful quality - he was fond of munching on his own little "treasures."

 

Some dogs are just like that - nobody knows what causes it, or how to stop them from doing it.

 

Anyway, whenever he would go into the yard and do his deed (he really was an inveterate poop eater), he would come back in, and have a certain look on his face.

 

I always thought of it as his “guilty dog look.”

 dog2.jpg

 

It was unmistakable. Really. I never understood his fascination with his digested meals, but I digress.

 

It's the look that's important.

 

When I read Herb’s indignant piece, as he wraps himself in the flag, and apple pie, and the Constitution, etc. filled with anger over the SEC (How dare they!!! This is about free speech!!!) subpoenaing his records pertaining to Gradient, and presumably Rocker, and perhaps other newsworthy hedge funds, I just thought – and I know this doesn’t mean anything….I thought……

 

Guilty dog.

 

Don’t know why. But there it is.

 

Maybe it's the whole lapdog thing. Maybe it's just something that popped into my head, unbidden. Don't know.

 

Just tossing it out there.

 

On a more personal note, here's some advice for another scribbler - although I am mostly into writing non-fiction lately, whereas Herb, well...you know:

 

Herb. Sweety. Babe. Deep breaths. The reason they are coming at you is because they are investigating stock manipulation. That is illegal. Save the whiny, acrimonious, “I talk to all kinds of sources” BS for someone who cares. This isn't Nazi Germany or Stalin's Russia and you are not being persecuted. The SEC’s job is to investigate stock manipulation, the shit is hitting the fan, and the previously untouchable network of smug, self-congratulatory parasites are getting subpoenas left and right, and this is just the start. So save it for the courtroom (assuming that there’s anything to all this).

 

Oh, and Herb? It isn’t about free speech. It's about conduct. As I've said all along.

 

This is just the first step as they slowly, methodically roll this up, is my hunch.

 

And you don't want to be like the "underprivileged youths" in COPS, who invariably when they are pulled out of the car they just drove in a 100 mile chase through a school district, will proclaim, "I din't do it." If you haven't done anything wrong, you have nothing to hide, no reason to mewl like a kitty. Celebrate the opportunity to vindicate your ethical superiority. Revel in it. The glass is half full...

 

But here’s a question for the Lickspittle, as he is affectionately called by some. I think it's a great question. I would hope someone emails him this question, and reports back to me with the answer:

 

Did you shut down your newsletter before, or after, you got the subpoena?

 

It’s just a question. Nothing more. Consonants and vowels with a bit of punctuation. Not even iambic pentameter. Just words.

 

I'm curious as to the answer...and it won’t necessarily mean anything - we all understand that. But I’m curious.

 

(UPDATE: Several readers have sent me emails indicating that they asked Herb the question as to the timing of the subpoena and his abrupt closure of his newsletter, but the usually loquacious pundit suddenly clammed up. I'll keep everyone abreast of this should he find his tongue again...)

 

As to the brave-in-the-face-of-adversity façade, and trotting out 7 year old hits with Aremisoft, puhleese. Either you are a guilty dog, and have been dining on forbidden and distasteful fruit, or you aren’t. No need for 1200 words on why you should be untouchable.

 

So now everyone needs to ask themselves the same question - are you a guilty dog, or not?

dog1.jpg

 

I suppose time will tell. But do spare us all the “I’m a victim” stuff. It doesn’t play – lacks the ring of sincerity, so to speak…

 

And this time is different.

 

Any brave reporters feel like calling Rocker now to confirm the subpoena story?

 

No?

 

Why is that, do you think?

Copyright ©2006 Bob O'Brien
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Comments (118)
Re: Herb Greenberg – Victim of Persecution By the SEC, or Guilty Dog Look? By Mark Faulk on 2/23/2006 11:02 PM
Hank wasn't complaining when Jim Cramer wanted to tromple all over Dave Patch's rights to free speech. Payback is a bitch, Hank....and I guess this is as good a time as any to post my recurring reply on the email exchange between the "conspiracy nuts cartel", since it applies to Greenberg so wel, and every one of his cronies:

I hate those sonsofbitches.
Re: Herb Greenberg – Victim of Persecution By the SEC, or Guilty Dog Look? By robelita on 2/23/2006 11:08 PM
I think Herb has his 1st Amendment rights mixed up with his 5th Amendments rights-smile-that was just too entertaining to pass up.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By Pervilis Nosthumus on 2/24/2006 6:47 AM
Bobo, there you go again. You assume the consumption of dog feces is disgusting but, have you ever really tried it? Perhaps you have been missing out all this time.
Myself, I have never had a dog, however, I have often noted dog owners smilingly telling their canine companions "good job _____" when the dog does his deed. The owner then puts the fresh produce in a plastic Grocery bag and carries it home. I have no idea what they do with it once home but, the grocery bag may hint at the intended use. dunno.

Seriously though, I hear cayenne pepper is good at discouraging this behavior.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By Investigate Banc of America on 2/24/2006 7:31 AM

More on Biovail

http://www.theglobeandmail.com/servlet/story/LAC.20060224.RMARIS24/TPStory/Business
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By rtway1 on 2/24/2006 8:07 AM
As early as this week, maybe Mon. or Tue. night, Scum ball Cramer had Herbie on and they were doing a special on Overstock and Pat Byrne, and Herbie was was taking Overstock apart then with the bobble head agreeing and throwing in his lying bits of wisdom. I said this a year ago, The greatest show ever would be to see Herbie and Jimmy doing the perp walk with cuffs on. Bull-Ya Ski Daddy I,m going to jail. with Bubba. I wonder if Herbie is smiling now, I hope that pad of paper fits in his ass.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By WickedWorld on 2/24/2006 8:14 AM
Will we be treated to an Herbie and Crammer pow-wow soon? Will BOTH of them have been served by then? Will Herbie even need the notepad?
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By dawgman on 2/24/2006 8:17 AM
It is apparent that Herb is both spineless and mindless. He is probably the weakest link amongst the insiders who are running this scam. Authorities should squeeze him and scare the spit out of him to soften him up. After they have him pooping in his boxers - he ain't a tighty whitey kind of guy - they should offer to cut him the "deal if you squeal" thing. As I write this, I hate the way it sounds because Herb is one of the guys whom I would most love to eventually see wearing an orange jumpsuit. However, I do believe that Herb is the one who is most likely to spill the beans that could be used to bust this thing wide open.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By rtway1 on 2/24/2006 8:32 AM
Dawgman, I read it the same way. I see Herbie serving up his masters head on a platter for a deal. However if they get Cramer and him, there would be a new meaning to the Cockroach Motel. Ah yes the brotherhood.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By nabrum on 2/24/2006 8:33 AM
"they should offer to cut him the "deal if you squeal" thing."

Cut a deal shouldn't mean no jail time. Maybe just a separate cell from Bubba. Maybe some time in Rikers while he "decided" to obey the subpoena or not. And have him meet Bubba. HG is so frail - he'll break easily.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By flopsy on 2/24/2006 8:38 AM
Guess who's sitting in the catbird seat now?

http://www.funnypart.com/funny_pictures/catsmoke.shtml
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By AWS on 2/24/2006 8:43 AM
Bobo's Crack Team of SEC Investigators Posing For The Cameras

http://pg.photos.yahoo.com/ph/eurotrash01/detail?.dir=/3116&.dnm=7e44re2.jpg&.src=ph

AWS
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By mfairview on 2/24/2006 8:51 AM
The last thing you want to be known as is a liability. What usually happens with liabilities?
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By Kuma on 2/24/2006 9:00 AM
Someone posted awhile back about a journalist in the 1800's. He was addressing people at a party and he came out and said how the press is bought and paid for. I thought I had saved it but cannot find it. Can whoever posted that, can you post it again please?
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By jersey-devil on 2/24/2006 9:04 AM
Kuma-One night, probably in 1880, John Swinton, then the preeminent New York journalist, was the guest of honour at a banquet given him by the leaders of his craft. Someone who knew neither the press nor Swinton offered a toast to the independent press. Swinton outraged his colleagues by replying:
"There is no such thing, at this date of the world's history, in America, as an independent press. You know it and I know it.
There is not one of you who dares to write your honest opinions, and if you did, you know beforehand that it would never appear in print. I am paid weekly for keeping my honest opinion out of the paper I am connected with. Others of you are paid similar salaries for similar things, and any of you who would be so foolish as to write honest opinions would be out on the streets looking for another job. If I allowed my honest opinions to appear in one issue of my paper, before twenty-four hours my occupation would be gone.
"The business of the journalists is to destroy the truth, to lie outright, to pervert, to vilify, to fawn at the feet of mammon, and to sell his country and his race for his daily bread.
You know it and I know it, and what folly is this toasting an independent press?
We are the tools and vassals of rich men behind the scenes. We are the jumping jacks, they pull the strings and we dance. Our talents, our possibilities and our lives are all the property of other men. We are intellectual prostitutes."

--------------------------------------------------------------------------------
(Source: Labor's Untold Story, by Richard O. Boyer and Herbert M. Morais, published by United Electrical, Radio & Machine Workers of America, NY, 1955/1979.)
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By Bobo on 2/24/2006 9:05 AM
It is a bit stupfying how a guy who wrote 32 negative articles in one year bashing NFI, and whose articles almost ALWAYS resulted in frontrunning by parties unknown - see the analysis here: http://www.cxoadvisory.com/blog/reviews/blog6-16-05/ - is mewling and whining about his good friends the SEC looking out for the interests of investors. That is what going after stock manipulators is, Herb. It isn't trips to the Gulag and unfair prosecutions and secret tribunals - it's, "Hey, we have a mountain of evidence that O'Brien's "Anatomy of a manipulation" scenario is valid, and you might have a lot of evidence that will stitch the whole ugly thing together, so cough it up."

Herb doth protest too much.

As to 'lil GW, I stopped paying attention after seeing the book and web stats. Why argue with the bag boy about quantum physics? It wastes everyone's time.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By lenofus on 2/24/2006 9:18 AM
So, you're saying Herb is eating his own dung? I always thought so, too.

What kills me is, you take any good Mob movie. They know they aren't going to live to 80. They're going to get a small calibre round to the head. You knew that when you signed up. Whadya think, Herb? You were going to get away with this forever? You lived well. You were on TV. So, take it like a man. A little jail time, disgourgement, a reputation you justly deserve. Starting over. What' s the big deal to a stud like you? Shut up and take it like a man, like all the poor souls you helped devour, to take their jobs, investments. Law of the Universe, babe. Oh, yeah. Be sure to bring something to read. It'll get your mind off.... Well, you know.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By Kuma on 2/24/2006 9:21 AM
Thanks Jersey Devil
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By ledbottom on 2/24/2006 9:26 AM
Check this post out from MF:

Abelow is a former board member of the Depository Trust and Clearing Corp., and as anyone who has followed the issue -- at least from the perspective of the anti-naked-shorting conspiracy cult -- can tell you, the DTCC is up to its eyeballs in that horribleness. Abelow confirmed it thusly, according to the newspaper:

Abelow acknowledged the problem of "naked short selling" is "endemic." He said he personally never engaged in the abusive practice and, as an executive and a director of the corporation, took extensive precautions to try to minimize it.

Terrible isn't it? According to the dictionary, "endemic" means "prevalent in or peculiar to a particular locality, region, or people" -- the locality or region in this case being "Wall Street."

The only problem is that Abelow didn't say that. As a matter of fact, according to the archived audio feed of the hearing, he said the exact opposite: "The issue of fails to deliver of securities are endemic and occur as a matter of course and that my experience is that everyone at the DTCC and its participant firms work diligently to clean them up."

As Abelow had patiently explained to the committee, "fails" occur for a whole bunch of reasons. Sometimes, he explained, because the transaction is off by a penny. It's something that anyone who knows a blessed thing about the subject, including the regulators, have explained again and again and again.

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

Gee. He sounds just like me. Wonder why. Real world experience with FTDs, perhaps.

So now the Blowhards can string up their posterboy for not marching in step with the band. More likely, they'll just ignore the truth again.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By dave on 2/24/2006 9:33 AM
Karma, what comes around goes around...
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By AWS on 2/24/2006 9:33 AM
Wonder who wrote that???!!
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By adjpublic on 2/24/2006 9:37 AM
Guess Herb's attorney was busy and Herb didn't speak to him before 'the pen of freedom' wrote his article, but as I understand it there is no federal shield law.

BTW, Herb we all know your article on NFI that came out 45 minutes apart from the WSJ hatchet job was just a coincidence. We understand Herb.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By bobo on 2/24/2006 9:41 AM
I said I wouldn't bash 'lil GW, and I won't. The poster on MF though apparently has some reading difficulty, as well as cognitive impairment.

First, he does say it is endemic (correct). He then offers possible reasons it is endemic.

All of which are plausible until one introduces some data points. First, the SEC's own reasons for keeping the FTDs secret: It would cause market volatility, and would divulge proprietary trading strategies.

How would divulging the number of FTDs compromise trading strategies if it is mostly due to trades being off by a penny, or something innocuous, as is being suggested, I think, dishonestly, by Abelow?

It wouldn't.

So we have the SEC's own words conflicting with this poster's (and 'lil GW) apparent point.

Why do the apologists cherry pick the data, and have selective memory loss when they are building their arguments?

Either: A) The majority of FTDs represent trading strategies or open positions large enough to cause the sort of volatility that would concern the SEC; or, B) They are mostly innocent, and the above is incorrect.

Now, if the position is B, there are easy ways to test that. First, is that statement consistent with the SEC's explanation of grandfathering, and keeping FTD data secret?

No.

Does it explain stocks being on the SHO list for a year or longer, and long, long term residence there by companies for which there was no initial grandfathering?

No.

I could go on, but the point is that the stance the poster is taking conflicts directly with very significant, readily available data points.

It is far more likely that Abelow was lying, smoothly, as one would expect from a Wall Street veteran, and that the apologists are trying to reinforce the lie and pretend that the conflicting data points won't get brought up.

They just did.

These guys are intellectually dishonest. The practice is endemic (as Abelow conceded), there are possible explanations for how they are mostly innocent, but when tested, those possible explanations fail the common sense test and conflict with the data set available. Simple. Why do all the apologists lack basic logical functioning?

Why is that?

You can feel free to post this at MF in rebuttal, BTW. I suspect there won't be a lot of comment.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By AWS on 2/24/2006 9:44 AM
Bobo-

You know I don't seek to muck up your forums with my thoughts. This is your crib. Peace, homes...You wanna wear tin foil? Be my guest. Looks good on you, bro.

But you can't blame me for someone linking Gary Weiss's thoughts on your blog. I'm innocent.

All I ask, don't confine my pictures of your SEC investigators to the Doggerel wasteland. Truth is, if your investigators are anything like my dachshunds, they'll eat any droppins they find out back, not just their own. Particularly Jackalope scat.

AWS
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By rtway1 on 2/24/2006 9:49 AM
Let,s say this for the 2,000th time. The way to settle this discussion is to settle on all the trades on reg. SHO and have the DTCC open its books up for all to see. It is our stocks in there correct? Or develop a more transparent, government regulated, for all to see, clearing and settling procedure, that human hands can not manipulate. Why do all these idiots keep coming up with trivial pieces of examples instead of addressing the problem, its the magic trick of take your eye off the ball.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By Bobo on 2/24/2006 10:08 AM
Note that I haven't been censoring 99.9% of the posts here, as divergent views are welcome - amusing pictures aren't good Doggerel.

I don't really care what Gary's limited thoughts or beliefs are. I was responding to the poster's comments, and pointing out the huge and obvious logical inconsistency in the position being set forth.

Frankly, that level of rhetoric and logical functioning isn't worth spending much time on - there are some who wish to learn or understand, some who wish to advance agendas.

If it is all so innocent, then why keep it a secret? That's the one they always stumble on - because it is inconsistent with their fanciful notions.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By rashomon on 2/24/2006 10:16 AM
how can anyone engage you when you again distort (intentionally?) the source? Abelow did not say the "practice" was endemic. He did NOT say naked short selling is endemic. He said FTDs are endemic to the settlement process. Yup there are plenty of naked shorts out there and plenty of intentional FTDs perpetrated by the collusion of funds and BDs. Agreeing with that. And there used to be a heck of a lot more. Now think bunny I know NSS is out there and is a problem but I still strongly disagree with most of your conclusions and remedies. I think you fix the system by making all outstanding shares borrowable -- that levels the playing field so even the little guy can short a scam. But somehow the idea is propogated that the act of borrowing shares to sell and and buy back at a late point itself is fraud.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By AWS on 2/24/2006 10:23 AM
Booyah, rashomon...


Bobo - the mysterious TMF poster also said this:

I'll put it another way (yet again.)

"If the critics of greater Wall Street, Patrick Byrne included, do a Mark Fuhrman-type-bloody-glove end-around with FTD data, they will succeed in framing a guilty group of "miscreants." The jury will acquit, and the justice you seek will not be served."

AWS
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By ifq1 on 2/24/2006 10:26 AM
if it weren't for hypocrisy and mendacity . . . we'd have nothing to talk about; thanks herb, you pos. while you failed to recognize your right to free speech and press has limits, you'll be glad to know that your rights to counsel, to remain silent and to having your guilt proven beyond a reasonable doubt all occur with virtually no exception. besides, club fed aint nearly as bad as downstate correctional.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By WickedWorld on 2/24/2006 10:35 AM
"But somehow the idea is propogated that the act of borrowing shares to sell and and buy back at a late point itself is fraud."

rash,

I can't believe you typed this. One of the largest and most obvious points made crystal clear in this blog is that shares are NOT borrowed first. Or ever, at all. Crooks pick up the phone and instruct their brokers to sell shares that they do not own OR borrow. The broker willingly looks the other way and complies so that he can get his commission. The crook gets the money from his NAKED short and heads for the Caymans.

One would literally have to be mentally retarded to misunderstand the difference between naked shorting as addressed in this blog and legal shorting.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By rashomon on 2/24/2006 10:43 AM
way to go with the insults wicked. read what i wrote carefully. i said you can do away with NSS by making all shares borrowable and when i have talked about this before and when i have tried to explain the mechanics of shorting it was obvious their misunderstanding of it logically includes legit shorting. What you said about the practice of NSS is absurdly wrong. You dont naked short a stock and walk away with the proceeds ... need i keep explaining how it all works? feels like a waste of time honestly
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By bobo on 2/24/2006 10:56 AM
Rash:

The law says that you have to borrow shares and deliver them by T+3. If you make a sales transaction, long or short, and don't deliver, the buyer's funds are held, but if the miscreant is successful in depressing the price, a portion of those funds are credited to the miscreant as the mark to market declines.

Do you disagree or agree with this description?

Forget naked short selling - that is a rhetorical trick. Try this: Doesn't matter if the stock is sold long, or short, the manipulator creates a deluge of sales transaction specifically in order to manipulate the price, perhaps creating windfalls in put profits, perhaps to bolster a legit short position. Whatever.

That isn't short selling. That is stock manipulation. Do you get the distinction?

Abelow says that FTDing is endemic to the settlement system. The reason for this is the disconnect between clearing and settling. If nobody got paid until a share got delivered, we'd have nothing to chat about.

Your argument is essentially, "I know all this stuff (how you know unknowable data is unclear) about this issue, and want to discuss the motivation behind short selling - legal, or illegal."

That's well and good. Except what we are discussing is the use of failing to deliver as a manipulative trading strategy by stock manipulators. Different topic.

Abelow said it is endemic, and that the fine folks at the DTCC are working hard to fix the FTDs when they occur, which is every day.

Do you disagree with that assessment? Call that A.

He then explains that there are all sorts of innocent reasons for failing. Call that B.

My point is that B is in conflict with the SEC's statements and SHO data.

A is irrelevant - I don't particularly care how hard the fine folks at the blood bank are working if 10% of the blood supply carries HIV. Just doesn't matter to me. At all.

So let's try to contain your sweeping statements to something more limited in scope.

Do you agree or disagree with my characterization of A, and do you agree or disagree with my characterization of B. Once we agree on the characterizations, we can debate the verity of A and B.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By rtway1 on 2/24/2006 10:58 AM
Why is it that the world is supposed to become intune to your interpetation of some trading scheme that somebody has spent months formulating and that the common investor could never understand. Or is it that the common investor should get out of the way of superior beings that know how to contort figures and phrases. We of little value to the world should never argue with you of superior class and intelligence and challenge your trading practises. Theft is theft, and you can,t leverage theft, because it creates more theft. We of little intelligence and class are the ones that make up the jury of 12.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By Bobo on 2/24/2006 11:02 AM
AWS - presumes that sharing data with regulators and law enforcement is doing a Mark Fuhrman end run.

Not even close to what is happening, IMO.

These guys aren't used to dealing with adults. They are used to tackling cubs, and whiny CEOs who don't want to piss anyone off. They, by tackling Byrne, and by extension, the market reform movement, have encountered, for perhaps the first time in their lives, a real, live, angry Grizzly.

The hubris and self congratulatory prep school smugness of having gamed groups unprepared to tackle them will be gone once they realize that they have created their own monster - a well funded, smart, PR savvy group that is at least as bright as they are, isn't as fat and lazy, and who wants their heads on a pike - if they are guilty.

As to what a jury of 12 truck drivers and postal workers will say when confronted with Grandma, who has lost her retirement due to being in stocks these miscreants took down, versus a bunch of privileged, rich white guys - call it a hunch, but if I was their counsel - I'd quit.

Oh, that's right. One already did.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By Sheepdog on 2/24/2006 11:10 AM

Seeing as how Yahoo won’t let me go where I want to go today, I will have to take all of you along on my trip

JC Spotted At The Zoo

http://www.kansascity.com/mld/kansascity/news/weird_news/13936633.htm
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By rashomon on 2/24/2006 11:16 AM
you made a ton of points so I will take them one by one
a) if i short with or without borrow, those proceeds are unavailable to me. In fact I have to put up margin -- frequently 50% but much higher if the stock is trading below $1 because I have to put up $1 even if it is 3 cents. NO BD will allow you to short without borrow. I do not receive proceeds from my short sale until I buy back and cover the position. PandL is internal accounting and yes some funds will pay themselves on unrealized gains but the short seller still has not "taken" any money from anyone yet until they cover. True, if the stock declines, my margin requirement goes down and those funds (which are my own funds) are released to me. Understand? This is how it works.
b) I have often wondered what level of selling (naked or legit) equals manipulation. Theres no precedent for it but the Feds and the hedge fund community basically informally agree that if you account for more than 20% of the volume on any day you are in manipulation territory. It also depends on how you do the selling -- washes, painting the tape etc.
c) AGAIN YOUR DEPICTION OF ABELOWS COMMENTS ARE WRONG. He did not say that nss is endemic!! He said FTDs are endemic. For some reason you equate FTD with NSS and that is just very very wrong. Its a self-serving distortion bunny. Again Abelow did not say abusive NSS or "the use of failing to deliver as a manipulative trading strategy by stock manipulators" is endemic to the system! So I do not agree with characterization A.
d) You are selectively chosing SEC comments. There are dozens of instances where they say that FTDs are not massive and are not all examples of abuse. SHO data is not so scary at all to me and does not support your characterization of this being a trillion dollar problem, the biggest scandal of the century etc. So I guess you will need to lay out all SEC comments on the issue (both those that can be bent to support your thesis and those that cannot) and your take on what SHO shows us.

Again, NSS exists, it has been used to manipulate stocks and reap illicit gains, but i see no evidence pointing to the calamitous scope you shout and shout about.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By rashomon on 2/24/2006 11:17 AM
sorry in the third line I meant "NO BD will allow you to short wihtout margin" not borrow, dont jump on that I know NSS exists.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By the swami knows on 2/24/2006 11:26 AM

Bob,
You give them too much credit. They could have gotten away with their scams forever except for the fact that they were so smarmy that they thought they could do it right out in the open and we wouldn’t see.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By mhelburn on 2/24/2006 11:36 AM
Herb didn't mention the affiants.. those several disgruntled former employees who seem to be at the center of this. If all this came about because someone got their pink slip for cause and they were seeking revenge on the company, wouldn't the SEC be able to see through it? I believe them since the affiants told the same story and it has been consistent. One who quit and didn't get fired. There goes the revenge thesis.

Freedom of speech. That works as long as you don't maliciously cause harm. Say you don't profit from what you said except that you make your living from hurting others, but you cause harm that is provable. You don't have profits to give back, but the liability is still there. And anyone who reads the reams of material that Herb has written will see the malice. Those truckdrivers and postal workers can read and they can understand malice. They can apply the vicious attacks to their circumstances and know that they could lose a job or retirement from this kind of "freedom of speech".
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By ecce on 2/24/2006 11:41 AM
>>Herb did'nt reply to my email<<
Wise up! Would you lend him your computer?
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By AWS on 2/24/2006 11:43 AM
//
As to what a jury of 12 truck drivers and postal workers will say when confronted with Grandma, who has lost her retirement due to being in stocks these miscreants took down, versus a bunch of privileged, rich white guys - call it a hunch, but if I was their counsel - I'd quit.//

Let's be clear. Most of the time, Grandma gets cleaned out because she bought shares in a worthless company being pumped up by miscreants, the the shares subsequently go to zero. The crime is in the pump, not worthless companies going to $0.

OSTK's situation is different. [If I may be so bold to discuss it in this thread] It is not clear that it is worthless. Patrick had a post over at TMF where he talked about gangs of murderers going after bad guys. When bad guys ended up in short supply, they went after jaywalkers. When those were gone, they went after folks who walked a little funny, with the implication being that OSTK would amble thusly. Grandma can't get cleaned out of her slice of OSTK if the company becomes profitable and doesn't need to rely on public equity funding.

There undoubtedly are nasty dealings going on in OSTK. It is a ripe short candidate for all the reasons discussed by Cuban and others. It is heavily shorted. Grandma should not be involved in this sort of stock at her age. The shares are tough to borrow, and long-lenders are being bought out by non-lenders making the borrow even tougher leading to FTDs. That may not be the only soruce of the FTDs in OSTK ------- I'm trying to accomodate you right here...your whole mission can fit right in here ------- BUT too many of your proponents (what's the politically correct word for your adherents? I don't mean to scoff) choose to ignore the more boring explanations for FTDs in VERY heavily shorted stocks with a tough borrow. They like to tell me, "but that's illegal!", or "Reg Sho won't allow for that." Clearly, the naughty-naughties have found work-arounds but not all of them are Dr. Evil-inspired Sith Lords. They're gaming the system - we agree.

To put my mind at ease, show me a counter-example. [I hope I'm not drifting too far OT] Find a company for Grandma with a short interest similar to OSTK's as a % of float, with a large group of non-lenders (like the Byrne's) where there are not high numbers of FTDs. This would show me that OSTK's case could be explained by a targeted effort by illegal NSS.

We all know that in a world where all of Grandma's shares were borrowable/lent there could be infinite short interest and no FTDs. In a tight borrow situation, one is dealing with a disk that needs defragging and FTDs are the result. I'm getting repetitive, I know. This is the part where you say, "That may all be well and good, but it doesn't explain all these other problems...." I don't have all the answers to all the problems that Grandma could face. Blue hair dye might be right up your alley. :)

AWS
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By rtway1 on 2/24/2006 11:51 AM
Mary, you again have explained my point even better. I am tired of listening to the rhetoric of the Rolex wearing, condecending, cowardly, spoiled pieces of humanity, who think the world should render them any thing they want, without rendering anything of value in return. Because you are a(choose your title) or not, does not make you impervious to the average Joe,s view of social justice. They seem to forget that the rubes make this country work. We are shit under their shoes, but in number we are a bunch of bad ass people that make the ultimate decisions, without leveraging, options, or derivatives.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By rtway1 on 2/24/2006 11:59 AM
Hey Aws , who made you Jesus, if you beleive in him. Everybody is supposed to kiss your ring and make sure that you give the nod on what is a good investment for Granny. Enron was a great company, the S&L,s were a good place for Granny, and Granny liked Martha Stewarts towells. I beleive AIG is without reproach, take off the crown of thorns, you ain,t him. Anybody can manipulate any stock even this dummy knows that, but I only have a Timex.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By Bobo on 2/24/2006 12:03 PM
FTDs are failing to deliver.

Long or short.

The extent to which they are being used to manipulate a certain number of stocks is unknown - to you, and to me.

You believe it isn't a significant problem. I disagree. There is no data to definitively settle this disagreement.

Abelow said FTDs are endemic. You say all FTDs aren't NSS. Correct. How many is the question. There is no way to resolve that question absent the data that the SEC keeps secret.

The amount of margin that is put up is super duper, and assumes that all brokers, including prime brokers, demand the same amount from all customers big and small, and that further they don't have high leverage from accommodating offshore financial institutions.

Here's the short version. No matter what you or I say, there isn't enough data to definitively answer the question, thus this is a waste of time.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By janie on 2/24/2006 12:10 PM
If NSS and FTD are not closely related, and in some instances the same, can someone please explain to me why some of the stocks listed on the SHO thresh hold securities lists continuously have open positions which have never been settled? Where are the mandatory "buy ins" the regulation calls for? And why has the pps of some of these companies tanked, since lingering endlessly on this list, if manipulation isn't the reason?

The boys and girls at the DTCC could set all of us "knuckleheads" straight, considering they have nothing to hide. Provide the data. With a little needed transparency, my questions could be answered.

Don't bother using the BS argument that trading strategies would be revealed causing volatility in the market. That excuse is ridiculous and insulting.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By Bobo on 2/24/2006 12:30 PM
AWS: CALM comes to mind.

But you do stray from the point.

I am talking about criminal stock manipulation where FTDs are one of the components. You are talking about company fundamentals and short sellers.

There is a difference. Again, if this group of miscreants is without guilt, then they have nothing to fear. If their argument is going to be that pump and dumps rob grandma, thus their robbing grandma by defrauding her out of her money is desirable, best of luck with that before the jury.

You say: "There undoubtedly are nasty dealings going on in OSTK. It is a ripe short candidate for all the reasons discussed by Cuban and others. It is heavily shorted. Grandma should not be involved in this sort of stock at her age. The shares are tough to borrow, and long-lenders are being bought out by non-lenders making the borrow even tougher leading to FTDs. That may not be the only soruce of the FTDs in OSTK ------- I'm trying to accomodate you right here...your whole mission can fit right in here ------- BUT too many of your proponents (what's the politically correct word for your adherents? I don't mean to scoff) choose to ignore the more boring explanations for FTDs in VERY heavily shorted stocks with a tough borrow. They like to tell me, "but that's illegal!", or "Reg Sho won't allow for that." Clearly, the naughty-naughties have found work-arounds but not all of them are Dr. Evil-inspired Sith Lords. They're gaming the system - we agree."

The problem is that we don't know which explanation is correct - because the data is kept secret. Again, if we had the data, we would know how large a problem there is. For your edification, Reg SHO mandates buy-ins after T+13, so situations like OSTK do NOT fall into your possible explanation field - if the rules were being followed, delivery failures would be limited duration - especially the innocent ones. You have a viable (to you) explanation as to why they have large FTD positions - the stock is just tight, there are a lot of problems getting genuine shares, etc. All plausible, but as Patch pointed out, not supposed to happen for months at a time with a declining stock price on a SHP stock. I believe that what is happening is that the prime brokers are abusing their MM status and just selling these stocks into the ground, and are doing so for financial gain of their house accounts, as well as for their large hedge fund customers, and that they correctly understand that any fines that might come around 3 years after the fact are far outweighed by the immediate wealth and benefits. That explanation explains everything we see, and I have yet to hear why it is wrong. I'ver heard possible alternative explanations, but none which explain and predict everything. Mine does.

I do get a bit tired of the "she dresses provocatively, thus was asking for it" argument in favor of rape. Here's a suggestion - stop arguing whether or not the companies deserve it, and focus on whether they have been manipulated. We will all find it much easier to stay on point, then. Also stop arguing whether Grandma brought it on herself by investing in companies that were asking for it. It wears thin. Grandma should expect that whatever she invests in has the same basic protections under the law, whether or not a group of rich east coast bully boys agree with the business model.

Otherwise we are back in Animal Farm, with the sign trumpeting that all pigs are equal, only some are more equal than others.

You do me, and yourself, a disservice with this line of argument, as it is a tangent at best, and a red herring at worst. And it seeks to shift the discussion into one of "find me rape victims that weren't hussies" rather than "can rape be condoned under any circumstances, and if so, which circumstances, and who gets to play god?"
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By AWS on 2/24/2006 12:22 PM
//can someone please explain to me why some of the stocks listed on the SHO thresh hold securities lists continuously have open positions which have never been settled?//

We're drifting from Greenberg and doggie doo-doo a bit, but here goes.

Grandfathered fails. Marketmaker exemptions. Bed & Breakfasted share-borrows from A long (such as Rocker) to himself at other BDs.

Dealers hedged flat (OTC options vs common) have only one way to trade out of their risk-flat position. By not extending options trades as they near expiration. If their client's options are long-dated there may no n/t recourse.


Sorry Bob - back to the poop.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By rashomon on 2/24/2006 12:30 PM
congrats RTWAY, exquisite blustering of brown-shirt rage ideology. they raged and raged about social justice too and had a simple solution: purge the "parasites" by any means necessary. tell us who and what else you hate? um, the Jesus comment tells me one group you loath. you feel empowered being part of the seething mass without realizing that you yourself are being manipulated. You are the coward. And I wear a Baume Mercier not a Rolex tho I can't speak for AWS. I hope his disgusting diatribes dont have an audience here tho I have always suspected this kind of what they call petite bourgeoise rage and resentment ideology underpins this "movement".
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By mfairview on 2/24/2006 12:33 PM
70 posts on a topic about Herb eating intestinal sculptures. Who would have thunk it? Meanwhile, Jeff Matthews, (remember him?) goes quiet and its_strange writes the SEC to complain about the unfair treatment of lapdog (and demands everyone on Jeff's blog do the same no less). What a difference a few months make.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By bobo on 2/24/2006 12:42 PM
Rashoman. You posted a prior post that wound up in Doggerel, suggesting that this was an anti-Semite movement or sentiment. You again introduce Nazis (brownshirts) into your rhetoric, and seek to make it about Christians versus others - which pre-assumes that those others are doing the multitude of the manipulating. If you feel that your above comment ads something to the discussion about Herb Greenberg's being served, or FTDs, or whether or not there is a manipulation involving the media and research firms and hedge funds, your powers of observation are lost on me, as I can't find it. So some advice: lose the religious rhetoric and chastising tone. Fair warning. As to RTway, same advice. Keep on point. Leave Christ out of the rhetoric - it isn't necessary or desirable.

As to Baumes and Rolexes, Baumes aren't bad - simple - and IMO Rolexes are pedestrian, usually new money wanting to show it off. They are for guys that haven't figured out that the only thing to wear is a PP 3970 in rose gold or platinum - but that usually takes decades to figure out.

I've had mine for about 5 years, and can't complain.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By AWS on 2/24/2006 12:42 PM
//
I do get a bit tired of the "she dresses provocatively, thus was asking for it" argument in favor of rape.//

You have Ladysnowblood trained well, sire. She quotes you mercilessly and cuts/pastes commentary back and forth dutifully.

LSB - please don't bother cutting this too.

The pumper conspiracy theorists have arguments just as strong as the dumpers. Each accuses the other of an orchestrated, well-funded scheme to defraud Grandmas worldwide. Of course, they're all Robin Hoods.

Yes, indeed...the laws of the land protect the pumpers quite nicely. "How did I know that I was fleecing her out of her last bingo ticket?" they cry in court. "My job was to sell!"

I'm not accusing you of being financially alligned with the pumpers, Bobo. Not to worry. And you know that Gradient ain't 'zactly footing my kids' orthodontist bills. Leave the rape arguments at the door.

There IS a high degree of correlation between crappy money-losing companies with high short interest, screamming "the NSS Conspiracy sunk me and my company...now show me some Franklins!" You can't deny this. Yeah yeah yeah, the law is supposed to coddle them...giving them time to beg some hesitant lender to shell out a little funding. I'm sorry...I'm just not that sympathetic. EagleTech (sp?) is simply roadkill...food for the crows.

The interesting stories are the OSTKs, NFIs, ACASs, ALDs, etc. where there are so many juicy unknowns. They are all certainly going concerns. The last 3 have funny accounting and assets with valuation issues. It just makes sense that someone like Herb would latch onto them all..and write something about them that longs would hate.

So if you can please send me that example that I asked for - heavily shorted as % of float, high non-lending ownership, low FTDs. We'll call that the "control" sample.

rtway - Hope you liked that picture of you and your 2 buddies. I can hook you up with an orthodontist if you like.
Re: Herb Greenberg – Victim of SEC Persecution, or Guilty Dog Look? By mhelburn on 2/24/2006 12:43 PM
Rtway,
We must be brilliant cause we think alike. I'm just a pragmatist. I've been on juries. I was in college and sat on a jury for a young man accused of importing hashish. It took us 5 minutes to convict. But the really sad part was when I went to a Phi Kappa Phi honors dinner later that week (as a guest) and I saw the young man there: the cream of the crop with all the talent in the world. You break the rules, you suffer the consequences. I think that is what we are seeing here, people with a lot of ability and un