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Circle Group Holdings Declares War On Naked Short Selling

Location: Blogs Bob O'Brien's Sanity Check Blog    
Posted by:   bobo 4/28/2006 4:00 AM

CXN.

Circle Group Holdings.

They make a fat replacement that can cut calories by up to 50%, without impacting taste or texture, according to their press releases.

Sounds great. So why care? I mean, why should we care here at this site?

Well, because today, after the bell, they filed an 8K that has one of the most remarkable letters to shareholders I've ever seen.

You can view it here. You should read it, and then consider what it means.

This is significant in a way that I've never seen before. Why? Because they are going to do a public test of the system, and have the O'Quinn law consortium standing by to sue the crap out of the miscreants, should they attempt to game the system.

What CXN is proposing is simple - they are doing a one-for-one swap on their paper certificates, with a new CUSIP number and name for the newly issued shares.

But more significantly, they are issuing a special class of share that will not carry a CUSIP, but will have substantial future cash value. And you can only get it from the company.

Because it doesn't carry a CUSIP, the system can't hypothecate the shares - meaning that the brokers can't just ledger over some bogus D share IOUs, created out of thin air. Which means that every person that owns or buys CXN in the next few weeks will need to get their certificates from their brokers, and then contact the company, to get the new shares AND the D shares. No paper, no D shares. Simple.

Why is that significant?

Because if there are millions of fake shares trading in the system, created by manipulators, then there are going to be millions of more shareholder requests for certificates than there are shares.

Ordinarily, I would guess that the brokers would just stall and tell their shareholders to pound sand at the end of the day. But O'Quinn's group is waiting for that, and it sounds like they are armed for bear, and are ready to file a class action suit for fraud against any of the brokers that try that.

And fraud takes you out of the arbitration area, and subjects you to legal redress in the courts.

Note that the CEO of CXN is Greg Halpern, who also wrote the Advanced Small Business Alliance position paper in this site's library section. So he understands the game the bad guys have been playing, and it sounds like he has created a mechanism to flush out the miscreants.

And because he has chosen to do so publicly, with O'Quinn on his side, instead of just lying to their clients, or waffling, the brokerage system has to behave, or face the mother of all suits - the one they never want to have to face, one that takes them into the courts rather than in their comfortable NY boy's club of arbitration, and one where it sounds like the proof will be ironclad.

I really don't see a way out of this for anyone naked short the company. And there are no grounds for the DTCC to "chill" trading - the CUSIP change is their prerogative, and if they want to do a one time non-CUSIP stock dividend, that is also within their rights as an issuer. There is no rule or law that requires them to do so within the DTCC system - the system that allows those shares to be hypothecated, and lent, or book-entried.

Folks, this looks like the perfect storm. Please spread this message far and wide, and especially to your elected officials, and to the SEC, and Senators Bennett and Shelby.

It would seem that these guys have done their homework, and have crafted a definitive test of the system that can't be faked or ducked by the brokers - and one that it is in our best interests to watch closely, along with the regulators and the cops. And if the SEC suddenly decides that non-CUSIP share dividends are a no-no, and changes the rules, we just got complete and total proof of their complicity in aiding stock manipulators, and trying to cover-up a systemic problem to the detriment of investors and shareholders - a de facto admission of complicity and culpability.

And it doesn't hurt that CXN is apparently a fan of NCANS and this site - who says that we can't effect change by spreading information? Talk about a bomb blast due to information dissemination. Wow.

Get this blog out to every message board and chat room you can think of. This is the single most significant event yet in our battle to end the rampant manipulation caused by a system run amok.

This could well be the little company few ever heard of that revealed that the emperor has no clothes. Trust me, this is a watershed event. I can't wait to see what happens next.
Copyright ©2006 Bob O'Brien
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Comments (46)
Re: Circle Group Holdings Declares War On Naked Short Selling By InTheKNow on 4/28/2006 4:51 PM
This sounds like the dividend issued by JAGH MEDIA HOLDINGS (JAGH) that stockholders are still trying to get!

JAGH is represented by the O'Quinn constortium.
Re: Circle Group Holdings Declares War On Naked Short Selling By the anti-easter bunny on 4/28/2006 4:57 PM
Oh yeah I remember that Circle Group pump and dump.James Dale Davidson touted it in his 'Vantage `Point' tout mail fraud as a victim of 'naked shorting' back in 2004.
Too funny,Ester Bunny.Surely you jest.
Re: Circle Group Holdings Declares War On Naked Short Selling By jasper on 4/29/2006 5:39 AM
they can sell on a down tick. jeepers
Re: Circle Group Holdings Declares War On Naked Short Selling By gregcable2002 on 4/29/2006 6:17 AM
Like I said the other day,these crooks are dodging bullets left and right now and sooner rather then later a bullet will hit the heart.These guys are pretty jumpy now,sorta like a cat on a hot tin roof.
Re: Circle Group Holdings Declares War On Naked Short Selling By dave on 4/29/2006 6:39 AM
Jagmedia did something similar, dividending out a special class of shares.

The system had a solution. The people who had IOU's didn't get the dividend.

Then the SEC went after the CEO.
Re: Circle Group Holdings Declares War On Naked Short Selling By dave on 4/29/2006 6:40 AM
Jagmedia did something similar, dividending out a special class of shares.

The system had a solution. The people who had IOU's didn't get the dividend.

Then the SEC went after the CEO.
Re: Circle Group Holdings Declares War On Naked Short Selling By z3peru on 4/29/2006 6:45 AM
"CXN lacks any evidence of naked shorting. There is virtually no legal shorting
[Short Interest: 320,021 (0.53%)], and it hasn't been on the Reg.SHO list for 257 days."

Marion, congratulations! You just replaced me as the most naive person on the planet. Hartmann is a close second.
Re: Circle Group Holdings Declares War On Naked Short Selling By z3peru on 4/29/2006 6:52 AM
" I find it a bit implausible that a firm with only $25K in cash in hand (per Yahoo finance) could afford O'Quinn. If I'm right, they've taken on this battle due to the scent of money from deep pockets. "

I am guessing O'Quinn et al have made so much money winning against Big Tobacco that they realistically never have to work again. I'm not a big fan of lawyers, but I suspect they run up against cases they want to do because somebody needs to clean up a bad situation. Many of these cases are passed over because there is no money in them. Perhaps O'Quinn can pick and choose his cases based more on moral imperative and less on financial gain.
Re: Circle Group Holdings Declares War On Naked Short Selling By atteboy1 on 4/29/2006 7:01 AM
Bob, I just sent an email of congratulations to the company for what they are doing. But congratulations also must go to you for your tireless efforts and courage in fighting these crooks. You are a great person and a hero in my books. This is a watershed event, I believe.
Re: Circle Group Holdings Declares War On Naked Short Selling By bryedge on 4/29/2006 7:24 AM
Regulation SHO is a total failure and was never intended to be anything else.

For anyone to think the criminals have not been working on ways to circumvent ANY regulation the baffoons/conspirators at the SEC institute, can only be considered NAIVE. These criminals are very intelligent and to treat them differently only puts you in the line to be slaughtered with the rest of the sheep.

O'Quinn has far too much to lose to have taken on this very major responsibility without having considered any possible counterattack, and there will be one.

If this was found to be bogus, and I for one certainly do not believe it is, O'Quinn's head would be put on pike and paraded up and down Wall Street proclaiming everything he ever said and everything posted on this site, and others like it, about strategic naked short selling were all lies. I would also say that I believe by filing this in an 8-K creates more exposure/vulnerability for O'Quinn, but I also believe that by exposing one's self to the enemy is a good way to draw them out and get better shot at them. This has all the makings of a brilliant ambush.

It will be most interesting to see how much coverage this gets, and given Dr. Brynes involvement with O'Quinn, I would urge the "poopooers" to wait for his comments before joining the criminal choir. Bob, anything you could do to get those comments from Dr. Brynes would be much appreciated.
Re: Circle Group Holdings Declares War On Naked Short Selling By rtway1 on 4/29/2006 7:38 AM
The mere presence of the same old bashers that have been on every other message board that was involved in counterfeit shares should be enough to get the attention of any CXN share holder and do some homework on how these crooks work the game. At this web site you have volumes of proven information from people like Dave Patch, Mark Faulk, Bud Berrel, Dr. Jim DeCosta, Bob O,Brien who have spent thousands of hours on the research into this manipulation. They didn,t do it because they have nothing else to do, Dave Patch is an engineer. The bunny has paved the road of info for you for over 18 mos. all you have to do is walk down it and read all the proof. And if you think the gov,t is looking out for you, then you lost before you started. This is an effort by the people to get back what is ours and not to be taken advantage of again, by very wealthy crooks with no consience and would lie on their mothers grave. Get your shares back, you have nothing to loose and all to gain.
Re: Circle Group Holdings Declares War On Naked Short Selling By bryedge on 4/29/2006 8:05 AM
Regulation SHO is a total failure (for reform) and it was never intended to be anything else. The grandfathering of crime proves this.

Anyone thinking that the criminals do not work diligently to circumvent ANY regulation the baffoons/conspirators at the SEC institutes, can only be considered NAIVE. These criminals are very intelligent and to treat them otherwise is to put yourself in line to be slaughtered with the rest of the sheep.

O'Quinn has far too much to lose by taking on this very major responsibility. You can be very certain that O'Quinn has considered the counterattack this will generate, and there will be one.

If any part of this was found to be bogus, and I do NOT believe it is, O'Quinn's head would be put on a pike and paraded up and down Wall Street while proclaiming everything he ever said, and everything ever posted here, and other sites like it, about strategic naked short selling were all lies.

I do believe that by filing this in an 8-K that this makes O'Quinn more exposed/vulnerable, but by exposing yourself , it allows you to draw out your enemy in order to get a better shot. I think this has the makings of a brilliant ambush.

I think it would be great to hear Dr. Brynes' comments on this and would urge everyone to wait to hear his comments before poopooing anything concerning this effort. Bob, I would certainly appreciate anything you could do to get those comments.
Re: Circle Group Holdings Declares War On Naked Short Selling By InTheKnow on 4/29/2006 8:07 AM
What I find interesting is how the SEC went after the CEO of JAG Media for selling some 100,000 plus shares of Jag Media that was not marked as letter stock back in 1999 and which was bought back by the CEO soon thereafter.

But why doesn't the SEC care about the shares that have never been delivered or the dividends that have never been delivered or the proxies that have never been delivered nor do they give two shits about the naked shorting in the stock? Why?

No one was hurt by anything the CEO did, however investors are being destroyed by the naked shorters and the SEC doesn't give a rats ass.
Re: Circle Group Holdings Declares War On Naked Short Selling By browntrout on 4/29/2006 8:49 AM
If there is a large naked short here it was not done by some broker in his own account at a brokerage firm. The facts are not available to us but I believe O'Quinn is not there just because he is bored in life. This company's stock took off like a rocket several years ago before the shorts could regain control. If there truly is a large naked short here my quess is that the DTCC and Regulators do their best to prevent the certificate pull in order to protect the crooks.
Re: Circle Group Holdings Declares War On Naked Short Selling By robelita on 4/29/2006 9:45 AM
Here's a little Saturday morning ditty-enjoy!

Texas lawyer on our side

Booyah, Booyah

Tobacco win and corporate sin

Oh, the booyah day

Gonna sue the blight, gonna make them pay

Miscreant shorts and reporter cohorts

Investors will have their day

(Sung to Camptown Races by Stephen Foster)

A little humor goes a long way.

HASENPFEFFER
Re: Circle Group Holdings Declares War On Naked Short Selling By clearthinker on 4/29/2006 11:50 AM
tickets marked long - shares not owned....Now, ask yourself the question...how did the CITI broker get away with doing this for 1 and 1/2 YEARS before he was caught. How can a settlement system designed to protect BOTH sides of a transaction be SO BADLY broken that he could have made more than 100 TRADES and not get caught as soon as first few failed delivery. THIS IS THE QUESTION that must be pounded on with the SEC, the NASD and the DTCC. WHO was asleep at gthe switch to allow the non-delivery of 100 TRADES over an 18 month period of time??? This should IMMEDIATELY be put before a congressional hearing and our esteemed Chris Cox should sit in that chair until he promises to immediately FIX this BROKEN SYSTEM and SETTLE ALL of the trades that have CREATED FAILS.

PERIOD...END OF STORY.
Re: Circle Group Holdings Declares War On Naked Short Selling By happyswede on 4/29/2006 12:00 PM
Bobo,

Tis sad to see Marionpolk undercut your efforts here with his insulting posts. Let's
just watch to see what happens with the CXN plan before judging the outcome.

To Marionpolk, you have called out on the NFI board a couple other times lately.
Your credibility is slipping with us, come on man stay with us in these efforts.

Regards,

Tom
Re: Circle Group Holdings Declares War On Naked Short Selling By InTheKnow on 4/29/2006 12:09 PM
The SEC seems to think everyone else has problems and they have none. The GAO seems to think the SEC has pproblems. Investors who are getting ripped off seem to think the SEC has problems. The companies on the SHO list think the SEC has problems. The companies that have major fails in ex-clearing think the SEC has problems.

Maybe it is time to look for the problems running around the SEC.

SETTLE THE TRADES.
Re: Circle Group Holdings Declares War On Naked Short Selling By nopec2001 on 4/29/2006 1:44 PM
So after reading the 8k I see no provisions for shares held in IRAs where one can not take posession without it being considered a distribution. I do not own shares of CXN, but if this is successful I can see it spreading to NFI, which I do own in IRAs.

Thanks, Karl
Re: Circle Group Holdings Declares War On Naked Short Selling By Cynic on 4/30/2006 12:39 PM
President's name = Steve Cohen HA HA HA HA HA HA HA That's funny.
Re: Circle Group Holdings Declares War On Naked Short Selling By antny@singsing on 5/2/2006 11:59 AM
bobo, what happens to all the FTD's of the old stock when the new stock is issued? will we see mandatory buyins? I've been doing a little bb/pink sheet research. the number of securities under a dollar with any 1 or more of the following mm's is quite astonishing: BEST,NITE,SBSH,UBSS. any comments?
Re: Circle Group Holdings Declares War On Naked Short Selling By antny@singsing on 5/3/2006 9:15 AM
not sure how this would work. If a stock is naked shorted then there will be more holders than certs. The buyers having bot shares that don't exist. Pulling certs won't do anything but show exactly how many FTD's there are. After that, the company would have to decide who gets the new stock? Would an exchange trigger mandatory buyins? othe wise the buyers who paid for the stock and think they actually own it will be out in the cold . Would the Fails be broken? Lots of questions.
Re: Circle Group Holdings Declares War On Naked Short Selling By browntrout on 4/28/2006 5:03 PM
Bobo- I cou;d be wrong but I think this company was recommended by James Dale Davidson a year or two ago. I am sure this will bring out Tony Ryals babbling manically to the world.
Re: Circle Group Holdings Declares War On Naked Short Selling By Ahmed on 4/28/2006 5:07 PM
JIHHHHAAAAADDDDD!
Re: Circle Group Holdings Declares War On Naked Short Selling By bobo on 4/28/2006 5:35 PM
The only ones with any reason to fear something here, as far as I can tell, are those who may have illegally naked short sold CXN, and marked the sales long, a la CITI. If the CEO is right, they would be fried, with no way out.

Whether the company sucks or not is immaterial. It will be a public test of the system.

And the JDD tout or non-tout changes nothing whatsoever. Again, doesn't matter. If the CEO is smoking crack, and it is all in his imagination, then nobody has anything to worry about.

Wanna bet that O'Quinn didn't take this on based on a whim?

I fully expect a full frontal assault on the company, but what will be really funny is the hard facts of the cert pull. Good, bad or ugly, this will test the system, and whether the company is a POS or pure gold won't change it.

This is going to get very funny from here on out...
Re: Circle Group Holdings Declares War On Naked Short Selling By Yoda on 4/28/2006 5:48 PM
bobo can you clarify something for me...

Did I read right that you cannot short CXN? If you can't why is that? Is it a rule of the OTC stocks? Would this technique only work for stocks that cannot be sold short, otherwise it would be stock manipulation? (Forcing a short squeeze)

Thanks for the post. I hope the bad guys get fried. As it is now they have no fear of anything.
Re: Circle Group Holdings Declares War On Naked Short Selling By JustMe on 4/28/2006 7:03 PM
Aremissoft tried the same thing, it didn't work out.
Re: Circle Group Holdings Declares War On Naked Short Selling By nabrum on 4/28/2006 7:11 PM
While I reread the 8K a couple of times, it seems that they are going for the jugular and seemed to have figured out a way to make it bullet proof. And hiring O'Quinn was sheer genius in that, as the say in the 8K, they can stay focused on managing the company. BRAVO CXN!

Also, "A small company in the Midwest just detonated a nuclear device in the war on naked short selling..." Well it takes Midwest gumption to do something like this. Oh wait, NFI is a Midwest corp. Do they not have any balls?

Geez, I wonder what Annette Nazareth is saying now?

Cox, are you awake? The Titanic is sinking and there is no way to politically save it.
Re: Circle Group Holdings Declares War On Naked Short Selling By stanley on 4/28/2006 7:16 PM
$5 and below you can't short. Just checked out the CXN board and all the NFI and OSTK bashing crowd are suddenly there. They seem to sense that they have something to lose on this one. Will it tighten the screws more on all illegal shorting, now that CXN looks like they are going to expose a big ugly?
Re: Circle Group Holdings Declares War On Naked Short Selling By yoda on 4/28/2006 7:29 PM
thanks stanley
Re: Circle Group Holdings Declares War On Naked Short Selling By MarionPolk on 4/28/2006 7:36 PM
Bob, SHAME ON YOU!

CXN lacks any evidence of naked shorting. There is virtually no legal shorting
[Short Interest: 320,021 (0.53%)], and it hasn't been on the Reg.SHO list for 257 days.

Any CEO can claim "naked shorting", such as the totally phony claim made by LFWK, but that doesn't make it so.

Promoting unsupported claims distracts attention from cases of real, and proven, abuse, such as OSTK and NFI.
Re: Circle Group Holdings Declares War On Naked Short Selling By topangan90065 on 4/28/2006 7:48 PM
Bob,

I'm sorry for all my lies on the NFI board. I shorted it 3 years ago and can't afford my meds anymore after paying more in dividends than the short was for.
Re: Circle Group Holdings Declares War On Naked Short Selling By rtway1 on 4/28/2006 7:51 PM
Marion, it won,t distract anything from anybody, and A good lawyer doesn,t do frivolous law suiits for free. Something is here and unless you know the whole story, let it play out.
Re: Circle Group Holdings Declares War On Naked Short Selling By teacheric on 4/28/2006 7:55 PM
As far as i can tell, the number of legit shorts has no bearing on the number of naked shorts, Marion. And the fact that NFI is no longer on the reg SHO list ought to clue you in that you don't have to be on the list to be a heavily manipulated stock. They have somehow found a way to keep NFI off the list. The list, as far as I can tell, is just made up by someone that may decide, due to common interests, to just leave certain companies off the list.
Re: Circle Group Holdings Declares War On Naked Short Selling By topangan90065 on 4/28/2006 7:56 PM
rtway's right, Marion. O'Quinn's boys don't go on snipe hunts for microcaps. They fight small battles that win wars. Some fronts are in the midwest, some are on the western front, all's quiet on the eastern front. For now. NFI kicked my bashing butt though. Getting called off assigment on the NFI board, operation hartman is being called off.
Re: Circle Group Holdings Declares War On Naked Short Selling By rtway1 on 4/28/2006 8:21 PM
Topper I still trust you as far as I can throw this computer. Once a crook always a crook. Why not just get a real job and enjoy weekends. You do make me sick.
Re: Circle Group Holdings Declares War On Naked Short Selling By dave on 4/28/2006 8:40 PM
OTC companies are not listed unless they also trade on a legitimate exhange in another jurisdiction.

The SHO list ignores most OTC companies because the SEC chooses to believe they are not listed companies.

When you bring the OTC into it, the fails are zillions of times higher.
Re: Circle Group Holdings Declares War On Naked Short Selling By Sick & Retired on 4/29/2006 12:17 AM
Who will take the lawsuit for us IRAers. We cannot get certificates in our retirement funds. Who will sue for our rights. Don't we have equal protection under the law. Don't we have the right to own Overstock, or NFI or CXN and get our certificates if we want to.
Re: Circle Group Holdings Declares War On Naked Short Selling By bobo on 4/29/2006 12:55 AM
Marion - I replied to your rather insulting posts on the three boards where you posted the identical message, and will do so again here.

I am not promoting anything.

I don't know if these guys are crooks, or saints.

I do know that if this is some PR stunt, they chose a terrible way to do it - a short term, definitive result stunt is the worst kind, as unless you are right, it blows up and bites you.

There are two possiblities I can see. One, they are nuts, or are trying to drum up publicity. In which case, everyone will be able to get their certs, and this will be much ado about nothing.

Two, they know something about their trading, and it doesn't add up. In other words, they are legit. If that is correct, and if their contention that many shares have been created out of thin air (a CITI broker was just fined for marking naked short sales "long" to avoid being prevented from selling short, or triggering any alarms) is correct, then I expect the S to hit the fan bigtime.

If they are right in what I read them to be saying, they believe that the SI is incorrect, and that there are large numbers of "hidden" bogus shares in their stock - illegal by definition, as there can be no way they could have been done legally.

If that is the case, then the system is going to go frigging nuts, as the brokers and specialists who have been gaming this illegally try to figure out a way to not have to comply - I would expect, if that is the case, to see a nonstop barrage of ugly slams at the company, message board bashing, the DTCC and the SEC and such condemning the cert pull - basically a bunch of totally guilty dogs in a frenzy to escape the inevitable consequence of this cert pull and D share issuance.

If the SEC changes the rules to make it illegal, then you can pack it up, as that will be a point blank admission that they are trying to prevent a catastrophic event - which could only be catastrophic if Wall Street is stealing whole cloth, and the company is both correct, and legit in wanting to expose this.

I don't know, but this doesn't smell like a scam to me. This smells like some guys that are pissed off and are going to do something about it.

And O'Quinn isn't here because he thinks they are nuts, or scamming. If they are, there is nothing to sue over. If they are legit, this could be the one that blows it wide open, and gets them discovery into the brokers they have been shooting for for years.

I say we watch, skeptically, to see how this turns out. One big clue will be how the system reacts.

My gut says it goes ballistic.
Re: Circle Group Holdings Declares War On Naked Short Selling By mig on 4/29/2006 1:03 AM
I have to say I agree with marion on this one. It doesn't look to me like there is evidence of NSS. I checked the AMEX on which the company is listed and there are only 320,000 shares short out of 50 some million outstanding.

This does not look to be a good test of the system in my opinion, and using a bad test can only get bad results.

Kudos to the CEO though for a plan that should encourage share holder loyalty.
Re: Circle Group Holdings Declares War On Naked Short Selling By InTheKnow on 4/29/2006 3:14 AM
Mig... I beg to differ, you haven't a clue as to what goes on to hide the naked short, to hide the size, to hide it from SHO.

And I know, you know better than John O'Quinn and his team. LMAO...
Re: Circle Group Holdings Declares War On Naked Short Selling By x. trapnell on 4/29/2006 3:25 AM
Three points that speak to the situation of CXN:

1. My brokerage (Schwab) will not allow shorting; chancss are it cannot be legally shorted, nor are there any listed options. Hence the "pull of the dark side" and the possibility it may exist.

2. I'm not a lawyer, but I believe lying in a document such as an 8-K filed with the SEC could have potentially dire consequences, particularly if a company has already provoked the ire of the powers that be in the securities regulatory community. This filing strikes me as very dangerous for the comapny officers if it is disingenuous.

3. I find it interesting that among the institutional holders of this obscure, unprofitable company with a $75M market cap are to be found Bear Stearns, Goldman Sachs, UBS, and Citadel. Could be entirely straightforward, or could be something else. . .
Re: Circle Group Holdings Declares War On Naked Short Selling By x. trapnell on 4/29/2006 3:42 AM
One further point: note the press release from April 17, 2006 concerning the possible retention of O'Quinn's firm. I find it a bit implausible that a firm with only $25K in cash in hand (per Yahoo finance) could afford O'Quinn. If I'm right, they've taken on this battle due to the scent of money from deep pockets. The stock exchange would be the first step in identifying and proving massive NSS fraud.

"We are initiating a period of inquiry and will be looking very deeply at Circle Group Holdings' stock activity," said day-to-day manager of the legal consortium, attorney Wes Christian. "We will not rest until we have made a clear and solid determination as to whether or not CXN's stock was manipulated down."

http://biz.yahoo.com/prnews/060417/cgm013.html?.v=41
Re: Circle Group Holdings Declares War On Naked Short Selling By tellitlikeiseeit on 4/29/2006 5:14 AM
not to distract from good conversation, but did anyone notice the Circle Group president's name. A little unfortunate. Carry on.
Re: Circle Group Holdings Declares War On Naked Short Selling By Ranger on 4/29/2006 5:31 AM
Just need some clarification. I have read here that folks do not think naked shorting was done here. I thing the CITI broker was caught and it makes more sense as to how this is being done. If you sell shares you do not own and you do not borrow them it is a naked sell. If you sell shares that are borrowed then it is a legal short sale. What is it called when you actually sell shares into the system that you do not own but you indicate on the ticker/dtcc entry that they were long shares that were sold! Think about this for a min and you get the impact of what happened. The CITI broker sold shares he had not borrowed and did not have yet he marked the trade as a long sell. This means he sold shares he owned into the market. This would result in creating shares that did not exist and would not be added to the total number of outstanding shares and would not have a borrow because they were never considered borrowed. If this CITI broker could do this for a year what else had been done? This is why they want to replace shares on a one for one basis. There are illegally created long shares in the system that have cannot be identified because of the criminal behavior. Very sad state of affairs. It makes me want to take my money out of the markets and invest in commodities!
Re: Circle Group Holdings Declares War On Naked Short Selling By jasper on 4/29/2006 5:39 AM
It also avoids the short sale rules

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