SEC Chairman Christopher Cox gave a speech to NASAA on Tuesday. It focused on protecting seniors from investment scams, and contained powerful rhetoric, which I will heretofore mock in my customary manner:.
"Today, we're building on these relationships to start work together on a new initiative - to better protect our nation's seniors.
It's always a terrible thing to steal someone's savings - but there surely is a special place in Hell for those who would prey on the Greatest Generation, and rip off the life savings of the children of the Depression who defeated Nazism, Fascism, and Communism."
Huh. Yes, there may be a special place in Hell, but apparently nowhere bad in this dimension - everyone just pays a few bucks, and without admitting guilt or innocence, proceeds along their merry way - like, well, every Wall Street scam artist for the last twenty years. Destroying emails? Tut tut, shame on you. Naked short selling, thereby stealing investors' dollars while defrauding them? You are a bad boy - pay this ticket, and go on vacation for a few weeks.
Hell?
Unless Connecticut is now officially the seventh circle, I would say that Hell is reserved for those that don't wield clout on Wall Street, from what I can see.
There's more where that came from:
"We are also expanding our efforts to reach out to local community organizations and enlist their help in educating older Americans about investment fraud and abuse......... And more broadly, as part of our collaboration with state securities regulators and the NASD, examiners in our SEC field offices will also share regulatory intelligence to better identify firms that may be preying on seniors. Then, we'll examine those securities firms to make sure their sales practices are lawful. And we'll be taking aggressive enforcement actions whenever we find that investors have been defrauded."
You know, like where companies are on the SHO list for a year or more, and have millions of provable FTDs and huge amounts of their daily trading taking place in bogus shares, and such. In fact, what I believe he meant to say was....."really soon we will start to do all this stuff"...because it sure isn't happening now.
I mean, I suppose I am old fashioned, but when the clear intent of Congress is for folks to get what they paid for in the market within 3 days, and it takes months or years to get delivery, if ever, I guess I have a hard time working up my cheerleading when a bureaucrat, who chilled the subpoenas for the journalists being investigated by the SEC, talks tough while holding the door for the bad guys as they cart off big bags of cash. Call me nutty.
His concluding statements struck a chord, as I actually knew a gentleman who lost everything in the takedown of NFI in April, 2004 (where David Rocker's suspiciously fortunate purchase of massive numbers of puts made him many millions) before dying from cancer last year, leaving a widow in dire financial straights.
"While helping protect experienced investors from the 21st century's latest scams, we've also got to remember that for every Alan Greenspan, there's a woman with dementia, or a man with heart disease, who can least afford to lose their life savings along with their health."
Wow. No kidding. Thanks for that. But never actually do anything to stop the practices that directly cause that sort of thing. No, I think it is far better to allocate resources to poring over OSTK's accounting with a fine toothed comb then pursuing massive stock manipulations that hacked off half of a company's market cap. Bravo, Chris, nicely done. Perhaps there is another large prime broker who will pay a few million to obstruct justice you can focus on? I mean, it isn't like you have known stock touts engaging in insider trading after receiving subpoenas or anything you could pursue. Again, there are far more ominous menaces lurking - maybe another badly damaged micro-cap needs to be delisted after their discovery shows NSS for years in the many millions...?
I'm sure that the widow I am thinking of is touched by the professed regulatory concern over her hypothetical wellbeing, rather than any actual indication of concern over her actual situation, and the malfeasance that landed her there.
I rest easier at night, secure in the knowledge that the fine folks who greenlit REFCO going public even as their management was negotiating sanctions for participating in a massive naked short selling stock manipulation, are working hard to assure us that NOW our savings are sacrosanct.
No really. This time we aren't kidding.
Here's the full speech link. I do hope I'm not sounding cynical or bitter. I don't want to sound that way....
http://www.sec.gov/news/speech/2006/spch050906cc.htm
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In other "news", the cockroaches are dancing in the spotlight, like little pestilent dervishes, giddy from the latest OSTK news. So worked up are they by the latest developments, where Patrick let one of the investors in the latest offering off the hook (for unknown reasons, but I suspect out of a sense of fair play he is known for) that they have been driven to new heights of hyperbole.
The NY Post declares it to be "devastating", and our old friend Jeff Mathews has taken it upon himself to rail at the OSTK board of directors for the company's issuing of a press release wherein Patrick said he was celebrating the receipt of an SEC subpoena - standard operating procedure (issuing subpoenas) when an investigation is moving forward, BTW, which I have learned from speaking with some ex-SEC guys over the last 24 hours.
Article after article from Roddy Boyd, Herb Greenberg, 'lil GW - it's like a Rainbird(tm) of venom is spraying the lawn with vitriol.
Thank goodness we have this group to alert us to the every nuance of OSTK's existence, and not reporting on things like Morgan Stanley's latest fine for obstructing justice, or the NASAA forum's findings on NSS, or any of that other silliness.
Here's my take, for what it is worth:
Dr. Byrne is the CEO of a publicly traded company. If he decides that he wants to bring on a strategic partner, or solidify an alliance, by selling an unknown party some stock, that is part of what he's chartered with doing. Whether or not his company needs cash is immaterial. Oftentimes, if heavyweights want a piece of a company, they will try to get it from the company directly, rather than from the secondary market - especially when article after article has appeared from institutional investors who have been unable to get their shares without a huge hassle, if at all, from the brokers that sold them the shares in the open market.
Now, much ado has been made about Patrick articulating that there was no pressing cash need, and then selling some stock to unknown parties. Ever think that there might have been some reasons other than liquidity for doing so?
I don't know anything more than you do, but I think that the effort to spray him with the S-gun has been rather clumsy and obvious of late. And from what I can tell it is unwarranted.
However, I do like to see that the entire gang of his admirers are all working so hard to provide up-to-the-minute, unbiased coverage for us cheap seats at home. Kinda restores your faith in human nature, not to mention the NY financial press.
And the beat goes on....