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From TheStreet.com - The Last Honest Man?

Location: Blogs Bob O'Brien's Sanity Check Blog    
Posted by:   bobo 4/17/2006 4:00 AM

Arne Alsin wrote about 800 words that will go down in history.

I suppose it's like that sometimes.

A guy taps out consonants and vowels, grouping them together in a manner that conveys, with no hyperbole, a seasoned player's understanding of a problem in the markets that is disturbing, real, and a fundamental assault on the integrity of the system.

You can read his column here:

http://www.thestreet.com/p/rmoney/investing/10279268.html

I don't have much to say, other than hats off to Arne for being genuine, candid, and enormously effective in his brevity.

When his first set of columns caught my attention, I expressed skepticism that there could possibly be honest commentators on Wall Street, much less at TheStreet.com.

Consider this an apology of sorts. There is one. Which is enough to create a sliver, a glimmer of hope, in my mind, just as it takes only one sun rising to give hope in the possibility of a new day.

That he wrote these words is phenomenal. That they got published is jaw-dropping. That they got published in TheStreet.com simply stops me in my tracks, as though I was struck in the head with a two by four.

Easter is a marvelous time. Impossible things occur.

Bravo, Mr. Alsin.

Sometimes it is just a matter of a few voices observing that the emperor has no clothes.

Frightening, and breathtakingly honest.

How sad is it that the latter is the exception in the financial press?
Copyright ©2006 Bob O'Brien
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Comments (49)
Re: From TheStreet.com - The Last Honest Man? By n-tres-ted on 4/17/2006 6:18 AM
I can't read it, Bunny. Proprietary at thestreet.com.
Re: From TheStreet.com - The Last Honest Man? By dave on 4/17/2006 6:19 AM
Can you summarize what he said? I'm not too excited about signing up for thestreet.com, even for a trial.

RE: voting from the last blog

Only Cede & Co. has the right to vote. As the actual owner of most shares in most companies, they file an "omnibus proxy vote". They take direction from the beneficial owners as recorded at the DTC. If they don't follow the direction, that is only a breach of contract - nothing criminal. IE. they control most public companies.

Since 90% of US brokerages keep their shares at tier 2 clearing houses, in many cases, Cede is taking directions from tier 2 clearing houses who may or may not follow directions from actual voters.

In my mind, loss of the right to vote will be key to successful lawsuits.
Re: From TheStreet.com - The Last Honest Man? By bobo on 4/17/2006 4:01 PM
Ed: I don't know if what you are saying is the truth or not, but I would think that if it isn't that Weiss would sue you for slandering him. Given that you aren't being sued, that is a large vote in my mind that you may be telling the truth. Be that as it may, this blog is not about 'lilGW and his completely forgettable non-contributions to the markets, so could you please cool it on the serial posting as to what a rat bastard he is? I think we all get your point.
Re: From TheStreet.com - The Last Honest Man? By Concerned Citizen on 4/17/2006 4:27 PM
Hey Bobo,

I understand you are trying to control serial posting but many of us are interested in learning more from Ed. For example, Dave asked:

Ed, do you know how Weiss is associated with the naked shorting conspirators? Is he related to a lawfirm, other reporters, hedge funds, etc.? What is his benefit in lying about naked shorting in his articles?

Is there a link to your lawsuit on the net somewhere?

Inquiring minds want to know about this rat bastard. Is he pertinent to this investigation and exposition? Is this the one and the same lil GW we have been reading about here?

Thanks.
Re: From TheStreet.com - The Last Honest Man? By bobo on 4/17/2006 5:25 PM
Concerned Citizen - why not go to his website at wallstreetscandals.com and look there, or email him with your questions? I dislike 'lilGW as much as anyone, but this is also my blog, and I do tend to try to keep it on point. If there is any proof that he is connected to the hedge funds or their associates, or is being paid by them, I'm all ears. But what I don't want to do is turn this into a forum for innuendo, or where even the most vile of the mindless are attacked whenever some commentator decides to change the topic from the one in the blog. So, again, to all, not trying to be mean-spirited about this, but the topic of today's blog is the article by Arne, and his inability to get shares for weeks - which frankly I'm not sure that he even got, as it wasn't clear from the article whether he got any cert or other sort of proof of delivery. Byrne was also originally told that his shares were delivered, and then when pressed, that turned out to be a lie.

That is the topic of today's blog, not what a lying sh#tbag 'lilGW may or may not be.
Re: From TheStreet.com - The Last Honest Man? By InTheknow on 4/17/2006 5:40 PM
Richard Ney was one of the first persons on Wall Street to write about and say that the specialists had a license to steal. With that said and done it looks like all of Wall Steret jumped on the bandwagon.
Re: From TheStreet.com - The Last Honest Man? By rtway1 on 4/17/2006 5:46 PM
I would like to thank Mr. Alsin for his courage to step up and be a just and forthright reporter. I will definitely look into his fund. If his fund is any example of his committment to truth and honesty it is certainly something worth looking into to.
Re: From TheStreet.com - The Last Honest Man? By rtway1 on 4/17/2006 5:58 PM
The quote that Richard Ney said Lucky Luciano made was alledgely said right before he was being deported back to Italy. He said "If I had to do it all over again or a chance to come back again, I want to come back as a stock specialist, it,s a license to steal and not get caught". Mr. Ney had a semi daily Ney Report that he did on different T.V. stations like CNBC. He had a British accent and drove a Rolls. His theory was to do invest in what the specialist were investing in. Like you could find that out by dropping them a call at the office.Right. Bull-Ya
Re: From TheStreet.com - The Last Honest Man? By bbhindyou on 4/18/2006 3:02 AM
I'm worried.Why would this be here now?What 'change'has occurred which makes it OK for the street to start telling the truth?Who has altered their position in all this so as to allow the general public to get acess to a story stating naked shorting may be a problem?Are they now in a position to benifit from a panic?By stating overstock is experencing a problem in its stock delivery and maybe Byrne has a legitimate argument after all this is a complete reversal of the previous position of the main stream media.Whats up?I smell a rat,well more than usual.I repeat I'm worried.A resistance that has been so strong for so long suddenly giving way makes me wonder where the pressure has gone and where it will next be applied.As in martial arts a sudden change in position may be followed by a attack from a different position.If this had been a gradual change of position I would say we had forced it on them and I would not be as concerned,this sudden shift makes me feel that our opponent has taken this position for their benifit.I'm worried.
Re: From TheStreet.com - The Last Honest Man? By FreddoCazzo on 4/18/2006 5:34 AM
By browntrout on 4/17/2006.........."His article states that for four blocks it took up to three weeks for delivery. I know it should be three days but two or three weeks is not the end of the world. I would have thought that with the amount of FTD's it would be several months if at all. Are we missing something? Were the blocks small?"

Um....mr. trout, are you trying to minimize the fact that the rules governing t+3 are totally being ignored? How about I sell you a house, and dont let you move in for lets say.....oh 200 days. How would you feel about that? Better yet, how about after those 200 days, you finally come to move in, and find out I sold the house 10,000 times, would you not be a bit pissed?

It doesnt matter if the blocks were small or large. The pricipality of the issue is at hand.

"Also if he was getting deliver of an actual certificate 2-3 weeks is very reasonable for the process." .........and however that may be true, Patrick Byrne has waited countless days for delivery of shares in cert form he and his father bought months ago. (Lets not even open the can of worms surrounding the plight of CMKX shareholders to procure their certs!)

Try as you may to minimalize and,or skirt the issue people who have spent countless hours on this forefront educating themsleves, and voicing such eloquent words in the face of such adversity will surely prevail over rhetoric like yours.

Now take that house I hypothetically sold you and times it by a million. Now do you see the problem???

For Arne Alsin, Dave Patch, Bud Burrell, Mark Faulk, BoBo, Dr. DeCosta,Patrick Byrne et al, and the countless others, I wish I could adorn you all with riches! Your efforts have started to pay off! I absolutely from the bottom of my cold, little heart, thank you for your undying efforts. Keep up the good fight!

I am ecstatic to see someone like Arne stand up and kick adversity in the ding ding!
Maybe he has some damning info on Cramer........lets all hope slime like Cramer gets his oh so overdue time in the spotlight one day soon!!!!! Maybe the Judge will sentence him along with Eglindy. The investment world could only be so lucky! Boo-yah that Cramer!


Stop this nefarious failure to deliver! Stand up and scream at the top of your lungs!!!!!!


.............still Freddo.....and even more Cazzo!
Re: From TheStreet.com - The Last Honest Man? By robelita on 4/18/2006 5:47 AM
bhind,

I agree-I smell a rat too. It could be some offensive/defensive jockeying for position when the hammer falls too. It's not the so much the writer as it is the forum. TSCM has alot of baggage and this could be done as a mitigating factor in any civil/criminal court case. When you hear Cramer acknowledging NSS and FTD's then you know my theory is correct. It's no time to turn down the heat however-just the opposite.
Re: From TheStreet.com - The Last Honest Man? By browntrout on 4/18/2006 6:55 AM
Freddo- You miss my points. I agree all trades should settle in three days but if you are requesting a certificate that 2-3 weeks is very reasonable for that process. Arne did not 'splain whether or not he was talking about cert delivery did he? I also find it very hard to believe that with all of the FTD's as pointed out by Dr. Byrne and the amount held by the DTCC that anyone can even get delivery in three weeks let alone ever. The size of the blocks does matter because the larger the size the bigger the fail to deal with. Dr Byrne has indicated that he has talked with large holders who can't get delivery in months. Has that changed? If so why the shorter time frame for delivery? Are these trades going around the DTCC?
Re: From TheStreet.com - The Last Honest Man? By bobo on 4/18/2006 7:53 AM
browntrout: There is no way that he got certs. There is additionally the question of whether the only confirmation was his broker's say so. We don't know. Remember that Patrick's guy originally told him they settled, and then mysteriously, that statement turned out to be false. Brokers have been known to lie. Repeatedly. You might want to fire off an email requesting a clarification of how he knows what he knows. We may find out that delivered isn't what we, or Byrne, or Arne, originally thought.
Re: From TheStreet.com - The Last Honest Man? By stuck_holder on 4/18/2006 9:49 AM
One thing i still don't fully understand about this scandal and in particular, the seeming inaction by corporate CFOs & the governance committees.

CFOs in corporate America must (or should) be aware of the ongoing FTD abuses that may be inflicted on their company & its legitimate shareholders when they get a report from the transfer agent that the number of shares "registered" with DTCC (as well as those registered in the names of actual shareholders) as of the record date for their annual/special meetings exceeds what has actually been issued per the company's Transfer Agent.

To me, that obviously should raise a red flag that someone has sold & someone else has bought shares that don't legally exist.

For companies to not identify this fraud being perpetrated against their company & their shareholders & take action against it is imo, gross negligence on the part of the CFO & the governance committee.

the fact that so few companies have to date decided to do anything about this only adds to the frustration of being a shareholder.

corporate america, the SEC & the government better wisen up & soon and take decisive strong action against the complicit brokers & hedge funds, otherwise, they will find they won't have anyone left to fleece except themselves.
Re: From TheStreet.com - The Last Honest Man? By dave on 4/18/2006 10:42 AM
Companies can't get this information, stuck_holder. The positions at the DTC perfectly total to the numbers registered to Cede & Co. at the transfer agent.

Many of the positions at the DTC are tier 2 clearing houses and the company has no way of knowing how many shares the clearing houses and brokerages with positions at the DTC are SUPPOSED TO have.

IE. how many shares do their customers think they own?

A company can get NOBO and OBO reports, but they are unaudited and on the honor system and only for participating brokerages.
Re: From TheStreet.com - The Last Honest Man? By stuck_holder on 4/18/2006 11:07 AM
Thanks for the response Dave.

i am still not clear on how a company or at least its transfer agent (the entity that sends out the materials for the AGM including voting proxy, etc.) cannot know the total number of registered shares represented by DTCC, intermediaries & actual share certificate holders - perhaps those figures aren't disclosed to the transfer agent, but if they aren't, it seems someone is dropping the ball and imo, it is company management's fiduciary responsibility to ensure that there aren't more proxy votes outstanding than shares issued.

if they need to lobby the government to ensure that the DTCC & any broker intermediaries disclose the number of shares held (at least once a year for the company's annual meeting), i would think that is a much better alternative than to try to sue brokers/hedge funds after the damage has been done.

maybe that is why the price of gold is climbing. wouldn't surprise me if the hedge funds are long gold & commodities, realizing they are contributing to the collapse of the financial system & the paper that greases it.
Re: From TheStreet.com - The Last Honest Man? By dave on 4/18/2006 11:40 AM
I don't disagree on your comments on gold.

1. The transfer agent keeps track of who ACTUALLY own the shares. If you don't have your certificate, the shares are owned by Cede & Co., the mysterious nominee of the DTC. No one discloses who the shareholders of Cede & Co. are, but there are enough document from the 70's that indicate that it is a private partnership.

Cede & Co. files an omnibus proxy vote covering all their shares. Presumably, this has some loose relationship to the voting instructions we send in to them.

2. The DTC is a trust company and they keep track of who the beneficial owners of those shares. From their point of view, the beneficial owner is the participant at the DTC (either a brokerage or tier 2 clearing house) not you. That's why there is no restriction on lending those shares. From their point of view, the shares are institutionally owned by the participants.

3. The participants own shares on behalf of other customers (introducing brokerages in the case of clearing houses). It is common for participants to own less shares than they should.

ADP provides a service where they contact the participants in the US and ask them how many shares they should own. Depending on how honest the participants are and how many respond, the company can get a lower limit on the number of shareholders they should have.
Re: From TheStreet.com - The Last Honest Man? By mhatmccane on 4/18/2006 11:42 AM
Bud Burrell has a "cut and paste" copy of this article on his blog. I used it to send copies to Sen Boxer, Sen Feinsrein, and Rep Gary Miller who sits on the House finance committee that oversees the SEC.
Re: From TheStreet.com - The Last Honest Man? By dave on 4/18/2006 11:45 AM
As a further clarification on voting:

The transfer agent gives Cede & Co. votes equal to their total shareholdings.

Presumably, if Cede is honest, they vote according to instructions from the participants. The votes are allocated percentage wise based on participant holdings.

If the participant owns less shares than they should, they either scale the instructions from customers back, so you only get a half vote or they give you a full vote, using up instructions from customers who don't bother voting.

Note this isn't actually a vote. It is a voting instruction and no one audits Cede to make sure they vote the way they are instructed. If they don't vote according to instructions, it is only breach of contract and isn't criminal.

Technically, Cede & Co. is the controlling shareholder of most public companies and in theory could use this power to get at least one friendly board seat as per Mr. Ney's claims.
Re: From TheStreet.com - The Last Honest Man? By dave on 4/18/2006 11:51 AM
What this means is that Cede & Co. votes on behalf of all the beneficial owners, possibly following the beneficial owners' instructions. Unless you own your certificate, what you mail in isn't a vote. It is a voting instruction. Note the difference.

"It is an ideal situation. When you control a corporation's proxies, everyone is sympathetic to your point of view and your choice of directors. This is the other reason why nearly every major corporation listed with the Exchange (NYSE, M.T.) has a broker or a broker's banker on its board. It gives the exchange a pipeline to that corporation" (1Ney, 90).
Re: From TheStreet.com - The Last Honest Man? By stuck_holder on 4/18/2006 12:01 PM
thanks for the explanations dave. appreciate the insights, though i am now more acutely aware that without having certificates in my name, i basically own paper that may very well be worthless. (and not just me, but probably the vast majority of shareholders out there.)

i'm sure even if the government wanted to avoid a financial crisis or panic, i don't think they would be able to, and it seems doubtful they want to avoid this disaster in the making.

time to close my margin account, request share certificates delivered in my name, and buy more gold.

thanks again.
Re: From TheStreet.com - The Last Honest Man? By ginger on 4/18/2006 1:48 PM
FreddoCazzo ... are you joking?

Do you know what cazzo means? I think you are here to lark around and I won't take you seriously.
Re: From TheStreet.com - The Last Honest Man? By Freddo on 4/18/2006 6:16 PM
Thank you browntrout for the response, and you are correct sir. I missed your points, and I appreciate the clarifications. (There seem to be so many grey areas concerning T+3.) I will surely look forward to the coming days when Aslin's words fall upon more important ears (so to speak). I was a lil on fire browntrout, so I hope no offense was taken with my post. "You" is often taken so directly when its meant with such generality, especially when responded to someone else's words. I wish tone were easier to decifer!

Either way I am sure we are both happy to see such a huge mass being spun into this issue of basic failure to deliver. (Poor Refco). I hope the rest of my post wasn't taken as a blast to anyone but the ones responsible for creating a mockery out of simple, green investors, and seasoned professionals alike.


I wish i could personally thank every person who is responsible for taking this issue head on and not looking back! Never giving up. Thank you from the bottom of my Cold lil heart!!!!!!! You have enable peons like myself to have a front seat to the most thrilling ride I have ever seen, much less been part of. Thank you all.




Bobo, please feel free to delete the bottom of this post if you feel necessary, or the whole post. This is your house in the end for sure! I was not trying to detract from the essence of the post, but felt necessary to respond to Miss Ginger.

(thank you for your time mr. o'brian)

(Ginger, I coulda left it out, sure. It was just a title that was handed to me from a few hundred literal kids I helped moderate in a national rock band's chat room. It was impossible to stand for any malarky for sure, so I understand what you mean. ........400-500 kids, sometimes over 800 teenagers could be totally unbearable in cyberspace, let me tell you, so they handed me that title. It just stuck around ya know? Sorry to offend anyone here. Next time i will leave it off....maybe............and btw, I don't care if you take me seriously or not, but with the current subject of the thread, I would never be here to lark around. Maybe in a rock bands chat room, but not here. Thank you.)


..............................still Freddissississimo! Porco cane!
Re: From TheStreet.com - The Last Honest Man? By Millerd1 on 4/18/2006 9:40 PM
No rat to smell.

This whole article defends the hedge fund that has threaten to file suit on the brokers who did not deliver loaned shares. Completely in keeping TSCM objective, support the hedge fund positions, that teh brokers are the bad guys not their funds.
Re: From TheStreet.com - The Last Honest Man? By bbhindyou on 4/19/2006 6:03 AM
If the hedge funds demand delivery of the borrowed shares be made by the brokerages and a public panic of cert pulls starts due to media sudden 'exposure' of the problem who would have the certs that the public will now demand?Who would determine who pays to settle the failed trades?Who would pay this settlement?Would the hedge funds have a majority of the certs in their possesion?Would the brokerages be forced to buy them? At what price? WHO really will pay? I feel the prickling on the back of my neck that means instead of the frontal attacks we have seen before this time the enemy may just bbhindyou.
Re: From TheStreet.com - The Last Honest Man? By dave on 4/17/2006 6:22 AM
NEW YORK (Dow Jones) -- Wachovia Corp said Monday its first-quarter net income rose as credit quality improved and both loans and deposits rose.

The company (WB) earned $1.73 billion, or $1.09 a share, compared to $1.62 billion, or $1.01 a share a year ago. Excluding merger costs, the company said it earned $1.12 a share.

The $1.12 a share included $98 million of costs for a new accounting method for options. The average analyst estimate of $1.12 included the cost for the new options accounting rule.

The firm said its average loans rose to $260.57 billion from $221.18 billion a year ago. Average core deposits rose to $290.2 billion from $271.10 billion a year ago.
Re: From TheStreet.com - The Last Honest Man? By Tenerife on 4/17/2006 6:25 AM
Here's the article.

Investing
Why Does Failure to Deliver Go Unpunished?
By Arne Alsin
RealMoney.com Contributor

There is a systemic problem in the equity market, but the magnitude of the problem is impossible to gauge because the parties involved refuse to answer a simple question: Why?

My mutual fund purchased five blocks of stock in Overstock (OSTK:Nasdaq) during the first quarter. There was a failure to deliver shares in four out of the five purchases, with delays for delivery lasting as long as three weeks. Nobody can tell me why shares were not delivered within the requisite three-day settlement period -- the so-called T+3 requirement.

This is not a single isolated occurrence, or a one-in-a-million bookkeeping bump in the road. The Securities and Exchange Commission recently acknowledged that $6 billion in stock have failed deliveries each day. Out of 6,000 publicly traded stocks, over 300 are currently experiencing significant delivery problems.

There are two common ingredients to every financial scandal that has rocked Wall Street over the years.

The first is that the perpetrators have power or influence that the average investor does not have. While small investors have to play by the rules, market players with power or influence work around the rules or simply break them.

For some sellers of stock, it appears that property can be delivered at a time of their choosing. It's not T+3. It's T plus when they get around to it. In one of my purchases of Overstock, it was T+21. The vast majority of investors do not have the luxury of delivering stock that they sell at a time of their choosing. A market is unfair when some market participants can ignore rules that others have to follow.

The second common ingredient to past scandals is greed. Greed causes market participants to break the rules. Implicit in the failure to deliver shares to my fund is this: Delivery was delayed because it was financially advantageous to the seller. The seller, in effect, grants himself a free option to take extra time for delivery. The seller's unilateral modification to our agreement (giving the seller as much as three weeks for delivery) is made without my prior notice and consent.

If this implication is correct, that the only logical rationale to delay delivery is because it financially benefits the seller, then any gain to the seller is an ill-gotten gain.

It is an either/or situation for the sellers that failed to deliver Overstock shares to my fund: Either they had my property in their possession and decided to keep it for awhile, or they sold the shares to me without having possession. While the first possibility is a serious infringement of the rules, the second possibility is particularly disturbing.

Selling shares without possession is known as a "naked short". That is, naked shorting is selling shares that are not owned and haven't been borrowed. While market makers are granted the flexibility to naked-short in order to maintain liquidity, that exception should not apply here. Overstock shares have plenty of liquidity. The entire float of Overstock turns over every 13 days. By comparison, it takes 50 days for the entire float of Amazon.com (AMZN:Nasdaq) to turn over.

More importantly, the market-maker exception is not available when a company has had repeated problems in share delivery. Companies with share-delivery problems are placed on a "Threshold List" per regulation SHO, promulgated by the SEC in 2005. If a company has been on the Threshold List for 13 consecutive days, the market maker-exception is no longer available. When I bought Overstock for my fund it had been on the Threshold List for more than 200 days.

Why Is Naked Shorting A Problem?
The problem with naked shorting is that it represents an attack on the fundamental fairness of the market. At the heart of a fair market is a respect for supply and demand. Once the supply component of supply and demand is tinkered with, all bets are off as to the fairness of the marketplace. If there is no cap on the supply of shares -- because market participants are able to sell stock that they don't have -- prices are subject to manipulation.

Manipulation occurs when sellers sell large chunks of stock -- stock that they don't own and haven't borrowed -- in order to drive down the price. Increased supply overwhelms buyers and the stock price is crushed. Sellers then can profit handsomely by buying back the stock at low prices to cover their short position.

For the most part, the fail-to-deliver problem is largely hidden from the average investor.

Investors are generally not informed by their broker when there are delivery problems. The bank that has custody of my mutual fund's assets readily provides me with the information when there are delivery problems. But not my brokers. I bought Overstock shares simultaneously for my mutual fund and for privately managed brokerage accounts. So far, I can't get delivery information from the brokers.

I can't gauge the magnitude of the problem because I can't get answers to some simple questions:

* Why can't I get delivery of Overstock shares on time?

* Why is T+3 not uniformly enforced?

* Why are sellers of Overstock shares keeping my property for a few weeks, or, alternatively, selling me property that they do not have?

* How is it possible for Overstock to have more shares sold short than actually exist in the float?

When evidence suggests problems at the heart of the market involving supply and demand, manipulation of prices, or unevenly applied or unenforced rules, then it is reasonable to say that there is a systemic problem in the market that requires attention.

.............

At time of publication, Alsin and/or ACM was long OSTK, although holdings can change at any time.

Arne Alsin is the founder and principal of Alsin Capital Management, an Oregon-based investment advisor, and portfolio manager of The Turnaround Fund, a no-load mutual fund. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Alsin appreciates your feedback; click here to send him an email.
Re: From TheStreet.com - The Last Honest Man? By harryofanguslane on 4/17/2006 6:29 AM
We need to get the widest possible distribution of this marvelous piece. It could have profound affects on the markets.

I would be very happy to invest some money in a large ad because I know that it would be a superb investment.
Re: From TheStreet.com - The Last Honest Man? By dawgman.. on 4/17/2006 6:43 AM
Candid and right-on! How strange that this should come from a TSCM publication!!
Re: From TheStreet.com - The Last Honest Man? By browntrout on 4/17/2006 6:57 AM
His article states that for four blocks it took up to three weeks for delivery. I know it should be three days but two or three weeks is not the end of the world. I would have thought that with the amount of FTD's it would be several months if at all. Are we missing something? Were the blocks small?
Re: From TheStreet.com - The Last Honest Man? By mhatmccane on 4/17/2006 7:19 AM
I might be more impressed if he were to publish his letters to the SEC, NASD, and other SROs and their responses. When I look back at Dr. Byrne's presentation of the 6 million share shotfall, I surprised he (Arnie) got any shares at all.
Re: From TheStreet.com - The Last Honest Man? By frogman on 4/17/2006 7:24 AM
Arne did not say if he got his shares in ledger form or in actual certs. If the shares were in ledger form they may be bogus. Comments please?
Re: From TheStreet.com - The Last Honest Man? By browntrout on 4/17/2006 7:25 AM
Also if he was getting deliver of an actual certificate 2-3 weeks is very reasonable for the process.
Re: From TheStreet.com - The Last Honest Man? By InTheKnow on 4/17/2006 7:25 AM
This should be required reading by the DTCC, the SEC and every member of the U.S. Senate and House of Representatives and the Executive branch.

PERIOD.
Re: From TheStreet.com - The Last Honest Man? By happyswede on 4/17/2006 8:10 AM
Bobo.

What a refreshing surprise to be able to read a news report like this from Arne Alsin!
Give that dude a huge pat on the back.

Arne, if you're reading this blog please fill us in as to whether you took cert delivery
or just booked into your fund?

Regards,

Tom
Re: From TheStreet.com - The Last Honest Man? By n-tres-ted on 4/17/2006 8:23 AM
My read of the piece is that the author was only looking for delivery of the shares, not certificates or even just direct registration. I was told by my broker last week that the DTCC does not permit direct registration (meaning shares registered in the name of the owner rather than the "street name" of the broker). Explanation by my broker was that DTCC allows direct registration only in the very large public companies like MSFT, et al. Wouldn't you think that direct registration would make more sense in the small issuers, since fewer shares are traded? Makes no sense in the world according to laws, but plenty of sense in the world of the naked shorters.
Re: From TheStreet.com - The Last Honest Man? By n-tres-ted on 4/17/2006 8:24 AM
Clarification: I was requesting direct registration of shares of OSTK, which my broker said is not permitted by DTCC.
Re: From TheStreet.com - The Last Honest Man? By smuopr8r on 4/17/2006 8:28 AM
A terrific piece. Doesn't mean the miscreants are looking to shut-down the machine any time soon, but definitely another indication that the elephant's no longer going unnoticed, and he knows it.

I'm changing the picture I have of the elephant in the room that no one is talking about. I've now see it as the largest elephant-shaped ballon flying in the Macy's Parade, a.k.a the largest kiting operation ever. It's just getting the attention it deserves now because the with the wind whipping up as it is, it's too big for the handlers to hang onto without the crowd noticing the danger. Pink with purple polka dots, can't imagine how it sailed in realitive anonymity this long, but I guess enough of the crowd has to be seriously hurt before the parade marshalls will do anything about it.
Re: From TheStreet.com - The Last Honest Man? By dave on 4/17/2006 8:32 AM
http://www.dtcc.com/Publications/ccp.pdf

pg. 9.

15% of all cross border trades fail.
Re: From TheStreet.com - The Last Honest Man? By cynabear on 4/17/2006 8:33 AM
I would sign up for his columns only I won't sign up for thestreet.com, not a good investment, but I agree with Harry it may be time to take out another full page ad, perhaps get him to write it?
Re: From TheStreet.com - The Last Honest Man? By teacheric on 4/17/2006 8:51 AM
Regarding the delivery of shares: Is it possible when the brokerages start offering higher percentages to their customers to "loan" your shares that they are using them to deliver to customers that are actually asking for them in certificate form? Sure they can naked short the stock forever, but they can't deliver more certificates than what exists. If people would just stop loaning their shares and, instead, request their certificates, they just might finally run out shares, and people will have some serious complaints when they don't get their requested shares.
Re: From TheStreet.com - The Last Honest Man? By dave on 4/17/2006 8:59 AM
How the DTCC guarantees that trades will settle.

http://www.dtcc.com/AboutUs/2004annual/follow_trade_ar_insert.pdf

Teacheric - I've had the experience of having a brokerage refuse to give me my share certificate. There's not much you can do except to sue the brokerage in the state where the company was incorporated.

They just keep saying "It's coming, you have to wait." as six months or more goes by.
Re: From TheStreet.com - The Last Honest Man? By dave on 4/17/2006 9:10 AM
One thing that is strange to me. It says securities move out of net short brokerages into NSCC's account, then to net long brokerages.

I've never seen NSCC listed as owning any shares in any security position report. As far as I know, they aren't even a participant at the DTC.
Re: From TheStreet.com - The Last Honest Man? By edward manfredonia on 4/17/2006 9:56 AM
My e-mail address is edwallstr@hotmail.com

I am writing this addition to your blog to inform your readers that Gary Weiss, a voluble proponent of "naked shorting," is a fraud.

I initaited an action against Gary Weiss, who is commonly referred to as "pissher," because Weiss lied about me in an article, Offering Credence to the Crank." In this article, Weiss lied and stated that I was not his source of information for the option price fixing and illegal trading by specialists sections of the 26 April 1999 BusinessWeek cover story, Scandal On Wall Street.

In April 2004 I sent letters to the Board of The IRE Journal. Weiss was forced to resign from BuisinessWeek for lying in articles. But Weiss did more than lie about me. Weiss is such a congenital (derivative in "pig latin" without genitals) and pathological liar in addition to being a racist that Weiss attributed the murders of Al Chalem and Maier Lehmann to the Italian Mafia when Weiss knew that the Russian Mob had murdered Chalem and Lehmann. Weiss lied to sell books.
Weiss was not the only individual at BusinessWeek, who knew that the murderers of Chalem and Lehmann were Russian. Seymour Zucker, a senior editor at BusinessWeek, knew that the Russian Mob had murdered Chalem and Lehmann. Zucker's good friend, Feivel Gottlieb, had invested in the stock frauds of Maier Lehmann.
Feel free to e-mail me.
Thank you.
Sincerely,
Ed Manfredonia
Re: From TheStreet.com - The Last Honest Man? By dave on 4/17/2006 10:01 AM
Ed, do you know how Weiss is associated with the naked shorting conspirators? Is he related to a lawfirm, other reporters, hedge funds, etc.? What is his benefit in lying about naked shorting in his articles?

Is there a link to your lawsuit on the net somewhere?
Re: From TheStreet.com - The Last Honest Man? By pinkice on 4/17/2006 10:09 AM
arnie alsin - deep value investor IMHO, generally buys when there is blood in the street - thus his analysis and investment in OSTK. i have been a subscriber to realmoney for severa years - like the diversity of writings and there are some very solid contributors to the website. that said with alsin being a value investor not afraid to take a risk opposite the street by deep value investing, perhaps he also wants to distance himself within the tscm contributors group and kramer, especially kramer.

interesting this piece comes out on the heels of rocker announcing his coming retirement. let the hedgies/tutes smell blood and take each other apart. may others see what alsin has seen and take a stand also. a positive step to cleaning up fraud street.

bobo, pb - hope you both had a blessed easter!!!!!

arnie - if you read this - my hat is off to you for taking this stand.
Re: From TheStreet.com - The Last Honest Man? By ed's letter on 4/17/2006 10:33 AM
http://wallstreetscandals.com/NEW.08042004/Gary_Weiss/IRE-Board-Weiss-harbor-houston-1%201.doc
Re: From TheStreet.com - The Last Honest Man? By dave on 4/17/2006 2:24 PM
"The story is told that after he had been deported to Italy, Lucky Luciano granted an interview in which he described a visit to the floor of the New York Stock Exchange. When the operations of floor specialists had been explained to him, he said, 'A terrible thing happened. I realized I'd joined the wrong mob'" (1Ney, 8).

http://w3.trib.com/~fredj/ney.html

The New York Stock Exchange is not an auction market (2Ney, 86), though many investors still hold onto that image. It is a rigged market. Volume is an effect of price. Prices are controlled absolutely by the specialists, the 'market makers' in individual stocks. It was this discovery that led Mr. Ney to eventually give us small investors a priceless gift: enlightenment.
Re: From TheStreet.com - The Last Honest Man? By ed manfredonia on 4/17/2006 2:25 PM
Here is an interesting, at least for me, story.

Jonathan Q. Frey is a specialist at the American Stock Exchange. Frey is the senior partner in Streicher & Co., an AMEX specialist firm.

Jonathan Frey engaged in price manipulation of the stocks in which he specialized.

Frey performed one of his better tricks when sell orders would be entered. If there were many sell orders, Frey would sell the stocks on a minus tick, even if he were short the stock.

Thus, Frey would sell the stock short on a minus tick of stocks in which he specialized. The American Stock Exchange, especially, Tony "Crackhead" Boglioli, Vice Chairman of the AMEX, permitted this illegal trading.

Many years ago there was a case involving an individual, Philip Peltz. Peltz sold 1,700 shares of Georgia Pacific short on a minus tick.

What happened to Peltz. Peltz went to jail.

What happened to Frey. Frey was fined $125,000 and Streicher & Co. was fined $125,000.

But Frey earned in excess of $250,000 by trading illegally.

And the American Stock Exchange never disciplined Frey for selling stocks, in which Frey specialized, short on a minus tick.

Gary Weiss knew of this, but could not include this in his book because I stated that I would sue Weiss if he utilized my material.

Gary Weiss, formerly of BusinessWeek, and currently unemployed is a liar, a thief and a perjurer.

Thank you for the opportunity.

Sincerely,
Ed Manfredonia
edwallstr@hotmail.com

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