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The Latest Spin From The NY Press; Are Whistleblowers In Danger?

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Posted by:   bobo 7/2/2006 3:04 AM

Someone sent me an article that appeared in Barron's over the weekend - that august publication that managed to pretend that there was no issue at Refco for months, and which credulously parrots the hedge fund party line at every turn - almost as often as the WSJ, but that's another story...

The article, written by Michael Santoli, contained typical misstatement we've come to expect from the NY financial press. It is only noteworthy because of the stunning amount of info that exposes the lie in the words:

"IT'S HARD TO MISS THE IMPATIENT hunt for scapegoats around the Street, and perhaps it says something about the mood among investors and the public at this market moment.

Last week saw hedge funds placed on mock trial in a congressional hearing room (see Roundtable Rascals?3), a venue once reserved for investigating treasonous acts or criminal enterprises. The forum featured several critics casting ominous but vague charges about the funds' rapacious tactics and nefarious motives.

(Funny, but with an average 3.4% return this year through June 20 for a broad Merrill Lynch hedge-fund index, just how ingeniously evil can hedge-fund managers possibly be?)

Earlier in the week came news that a couple of trading firms were suing several major brokerage houses, charging them with abetting "naked" short selling -- that is, selling shares short without first arranging to borrow them. This practice is improper, but the suggestion that the largest brokers are conspiring to encourage it indicates a certain inflated sense of grievance among those thrashing for villains to blame when their stocks go down."

A certain inflated sense of grievance.

Huh.

I suppose that the author didn't see the recent FOIA data showing that OSTK, one of the more visible players in this drama, had 25% of its float FTDs. That's 12.5% of all outstanding shares.

I wonder what level of "improper" trades in one's company's stock would result in "justified" grievance, if 12.5% being FTDs is causing an "inflated" sense of grievance? On one day, 107% of all the trading in OSTK was FTDs. Is that enough to cause justified grievance? Or is no amount of fraud worthy of Barron's acceptance of justified grievance?

Just another in a long string of NY press corps absurdity.

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

I was chatting with a friend this weekend, and we were speculating as to the actual level of danger whistleblowers and high profile players in this crisis are actually in.

Is a Gary Aguirre in more danger now of being hit by a bus, or having his plane go down, or choking on something, or dying of auto-erotic asphyxiation, or committing suicide by firing two bullets to the back of his head, than he was two weeks ago?

These are huge stakes being played for now. And it is looking like Wall Street is in real danger of being exposed.

Recall from the Pecora hearings that Anaconda Mining President James Ryan passed away under mysterious and sudden circumstances before he was ever able to take the stand, as did Percy Rockefeller - his longtime illness apparently became too much for him, fortuitously before he could testify.

Given that history tends to repeat itself, what is the likelihood that an Aguirre, or a Patrick Byrne, or an Easter Bunny, could suffer from bad luck?

We've already seen the SEC threaten Aguirre with civil and criminal charges, and we've seen Patrick now being probed by the SEC.

I know it is far fetched, but I wonder aloud how far the bad guys will go to make their problems and critics and whistleblowers disappear?

If I was Aguirre, or any other whistleblower, or even Byrne, I'd be watching my back. Less than lilly-white players have been known to operate on Wall Street, and I sense that this wouldn't be the first time a key player was harmed to send a message - recall the whistleblower in the mutual fund frontrunning case being hit in the face with a brick by an unknown assailant. Odd things can happen to those who take on the power structure.

I hope they aren't downplaying the level of personal risk involved in going against Wall Street. There is historical precedent for concern...

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

Chris Byron reprises his article from a year or so ago, wherein he calls for the SEC to be dismantled.

We apparently agree on something.

And the WSJ has a 2 page special on Refco, and how a ton of money was lost and hidden. Or rather, that is what it purports to report on - but nowhere does anyone explain what the exact nature of the bad debt was, or how precisely it was lost - this after a ton of ink, and two writers on the case.

It's wild that one of the bigger frauds can still be covered up like this - someone is STILL running interference over who did what to whom, and precisely what it was that was done.

No doubt the Journal feels that they have now done their final summary of the story, and can put it to rest.

How unexpected that Refco would ultimately be swept under the rug, in plain view, by the media lackeys of Wall Street?

On a somewhat related note, I do so love when these articles about hedge funds say they are "lightly regulated" - and some even point out that they are already heavily regulated, in that they are required to obey federal securities laws.

How dishonest can you get?

That is like saying that hedge funds are exactly as regulated as the Easter Bunny, in that I have to obey securities laws as well.

What a load of hogwash.

Who do they think is buying this pap? I mean, really...
Copyright ©2006 Bob O'Brien
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Comments (35)
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By bbhindyou on 7/3/2006 7:15 AM
Liars and theives act in predictable self serving ways.The payola is being passed .Anyone who helps hide the crimes commited will be compensated.The perps have a lot of stolen money and until aiding in coverup of a financial crime has severe punishments the press will go for the money.What we need is a honest man in power .HA HA HA.The fear is that someone the money can't influence will get the public to see the emperor has no clothes.When that happens no amount of money will be able to stop the masses from panicing.The only way I see out of THAT when it happens is at gunpoint.When joe sixpack finds out everything is gone and the government helped the crooks take it from him ,well the government had better get the national guard home they are going to need them to keep a gun trained on joe he's gonna be dangerous.Dictatorship dead ahead.Time to find a exit this party is going to get rough soon.
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By Selene on 7/3/2006 7:44 AM
Here's the irony. For this issue to really get through to the American people one of two things must happen. 1. Wall Street resorts to violence: this while in their nature is against their interest. 2. Market reformers resort to violence: this is not in their nature, but is in their best interest.

Reform will not come without blood. The pen is not mightier than the sword it only counterbalances it. To win, the reformers will have to use both or count themselves as cowards deserving the fate they have set for themselves. Talk has now become cheap. It will go knowhere in effectuating lasting reform.

Calling for the end of the SEC serves no lasting purpose. It obfuscates the real cancer of Wall Street and the ignorance of the American Investor and by default the American People.

The problem Bob is not Wall Street. The problem resides in the very people you are trying to protect. The problem is the American people.
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By daven on 7/5/2006 2:12 PM
More on the act referenced by Remond.

http://usgovinfo.about.com/library/bills/blapa.htm
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By daven on 7/5/2006 2:21 PM
This subchapter, chapter 7, and sections 1305, 3105, 3344, 4301(2)(E), 5372, and 7521 of this title, and the provisions of section 5335(a)(B) of this title that relate to administrative law judges, do not limit or repeal additional requirements imposed by statute or otherwise recognized by law. Except as otherwise required by law, requirements or privileges relating to evidence or procedure apply equally to agencies and persons. Each agency is granted the authority necessary to comply with the requirements of this subchapter through the issuance of rules or otherwise. Subsequent statute may not be held to supersede or modify this subchapter, chapter 7, sections 1305, 3105, 3344, 4301(2)(E), 5372, or 7521 of this title, or the provisions of section 5335(a)(B) of this title that relate to administrative law judges, except to the extent that it does so expressly.
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By kevin on 7/5/2006 2:41 PM
Hey, it’s for the good of the country (and also, usually, for the immediate good of the pocketbooks of the Wall Street insiders that circle the PPT).

http://www.nizenotes.com/2006/07/is-plunge-protection-team-bailing-out.html
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By SHUT these firms down,, and throw them in jail on 7/6/2006 4:04 AM
http://www.thestreet.com/_yahoo/markets/hedgefunds/10295126.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By Little Bo peep on 7/6/2006 7:02 AM
Can the media feature a story explaining to the American Public how long Mr Corzine has to meet the budget?
I do not think I understand how the gov. works. Ignorance on my part, I guess.
In business when you are given a budget. You have to meet it. It is not optional.
You meet it or your boss finds a replacement that can meet the budget.
How long will this be allowed? Can anyone explain this to me and my sheep?
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By Niel Storts on 7/6/2006 10:24 AM
Every one must understand the s.e.c. IS fullfilling their mandate. After all, the mandate was to maintain the publics faith in the market.......... Think about it. The constant buckets of porcine dung those fine folks are dumping on everyones head ARE an attempt to maintain the publics faith. If those scum sucking slimeball parasites ever admitted the truth regarding the way the markets are being constantly manipulated, the ammount of rigging that is standard........ Why the public might just lose faith. So the scam MUST be maintained. That IS the mandate, after all.
** UPDATE: SEC Wed Meeting On Soft Dollars, Delivery Failures ** By InTheKnow on 7/6/2006 5:23 PM
UPDATE: SEC Wed Meeting On Soft Dollars, Delivery Failures
.

(Updates with detail on proposals to amend Regulation SHO, starting in the third paragraph.) .

WASHINGTON (Dow Jones)--The Securities and Exchange Commission announced it will meet Wednesday to vote on whether to issue an interpretive release on "soft-dollar" transactions.

The SEC issued the release for public comment last fall. If approved, it would provide updated guidance on soft-dollar arrangements in which money managers pay above-average brokerage commissions in exchange for receiving research or other materials.

At the same open meeting, the SEC said it will consider whether to propose amendments to Regulation SHO, a package of rules on short-selling. One change being eyed would be aimed at reducing delivery failures by revisiting an exception for options market-makers and a "grandfather" clause that shielded older delivery failures from corrective action to close out the position.

A second change would affect an exception for unwinding net short index-arbitrage positions, which isn't allowed if the stock market declined by 2% or more from the prior day's close. The SEC will consider whether to change the market-decline limitation index from the Dow Jones Industrial Average to the New York Composite Index.

Short sellers sell borrowed shares, which are supposed to be delivered within two days of settlement, but critics say the stock-borrow system doesn't work well, evidenced by instances where short sellers don't borrow shares, or cannot obtain them to borrow. Regulation SHO, adopted by the SEC in 2004, sought to liberalize some older restrictions on short-selling while cracking down on abuses such as "naked" short-selling, in which shares aren't borrowed, and delivery failures.

-By Judith Burns, Dow Jones Newswires; 202-862-6692; judith.burns@dowjones.com .
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By hang them HIGH on 7/7/2006 3:58 AM
PIPES DAMAGE


DUBIOUS DEALS PROMPT HEDGE-FUND HEADACHES


By RODDY BOYD

--------------------------------------------------------------------------------
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July 7, 2006 -- Investments in controversial private stock deals in troubled companies are rattling the super-secret world of hedge funds, snaring one big player in a government probe and helping put another out of business.
Controversial for the better part of the past decade, so-called PIPES deals - the acronym stands for Private Investment in Public Equities - are getting new attention for regulators as they have become favorites of high-flying hedge funds.

HBK Investments, a high-profile Dallas-based hedge fund with $9.5 billion under management, is being investigated by the Securities and Exchange Commission for its role in shorting stock ahead of its deal to buy private shares of publicly traded Plug Power, an upstate New York fuel-cell company in November 2003.

Meanwhile, in Charlotte, N.C., Mangan & McColl Partners, which was earlier snared for similar PIPES violations by the NASD, is shutting its doors.

News of the HBK inquiry was the clearest sign yet that the SEC's yearlong crackdown into alleged abuses in a marketplace is on track to do nearly $48 billion in issuance, according to trade publication The PIPES Report.

Two other hedge funds have been fined $22 million for PIPES-related violations, and another three have received subpoenas.

Traditional short-sellers borrow shares of a company with the hope of buying them at a lower price at some point in the future. Shares in PIPES deals are usually issued at a handsome discount, making short-selling the stock ahead of a deal a risk-free return, since the new stock could be used to deliver against the borrowed shares.

Regulators take a dim view of this practice, however, given that traditional short-sellers not privy to the PIPES deal would have to go into the market and buy back stock at a higher price.

The SEC's inquiry, first reported by TheStreet.com, centers on illegal naked short sales of Plug Power.

Based on the company's price and volume data from the fall of 2003, it appears that word of the deal leaked.

Plug Power's stock in the month ahead of the deal traded between $6.50 and $7; its volume surged from a daily average of nearly 700,000 to more than 6 million the day before the deal, according to Bloomberg.

An HBK spokesman was unavailable to comment.

Mangan & McColl Partners, a fund founded by the son of Hugh McColl, former Bank of America chairman, and John Mangan, a former Friedman Billings Ramsey executive, was snagged by the NASD for naked short sales of Compudyne in 2001.

The pair announced earlier this week in a letter to investors that they were closing due to a lack of "attractive investment opportunities."

Mangan & McColl, which had once run as much as $1 billion, had dropped to under $350 million in assets, said one former investor.

The fund, in addition to having remarkable connections in the banking industry, had letters of introduction provided by President Bush's brother, Marvin, who runs a private-equity fund in Virginia. roddy.boyd@nypost.com






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Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By Little Bo peep on 7/7/2006 6:56 AM
This time the talking heads do NOT have inside information.

Those that once considered, the American public to "dumb" to vote or
figure this shit out. Are not so "dumb" are they? They do not
believe everything the media now throws their way huh?

Can the pissing contest end and the focus be on solutions for the SAKE
of ALL Americans?

We are counting on the souls that have not been bought.
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By Little Bo peep on 7/3/2006 8:09 AM
No longer is this the "tin foil hat" crowd. The message is clear now.

Call it my "tin foil hat" thinking.
I remain optimistic. I say chapter 11 for the SEC.
Can we naked short the SEC? My sheep want to know.
Clean house and knock down a few political mouthpieces and let a few brokers blowup.


Do we get an extra life insurance policy or put our heads under the cover?

I think it is the American Spirit to get the additional insurance policy.


“Only Thing We Have to Fear Is Fear Itself". Franklin D. Roosevelt

March onward.
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By watch your back on 7/3/2006 8:17 AM
We know exactly what some of the press believe's a person's safety is worth. All of Wall Street wanted to unmask Bob O'brien after he had identified himself as private investor who had been advised to stay anonymous for his personal safety. Jesse Eisinger trespassed to do research and phone records were stolen and telephones bugged. This was all done in an effort to discredit Bobo and Patrick.

As more and more evidence comes out with testimony from former Gradient personal as to how business there was conducted and how the SEC stopped an investigation into insider trading due to political influence, and other CEOs are stepping up complaining about stock manipulation, it becomes apparent that somebody wanted to stop the messenger and the best they could do was to lie, and pretend that the victims of the manipulation were whacko. That didn't work.

The stakes keep getting higher as people at the SEC will be under investigation and influence peddling takes center stage. Anyone that did any favors by launching an investigation into a company during a take-down is at risk. The most proactive way of protecting oneself from the probable allegations and prosecution is to go public. The whistle-blower has more protection going public with the information as the information is what the criminal does not want to get out. Once the connections to the manipulators is in a pubic forum, the only reason to harm someone is revenge. Revenge doesn't have a good rate of return as does stopping someone before they tell all. Anyone that has knowledge of insider dealings that other criminals know about is in danger.
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By Niel Storts on 7/3/2006 5:36 PM
Selene. You are right.
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By Sean on 7/3/2006 5:53 PM
Does anyone else here find it strange that the SEC has "Neither denied or admitted guilt " In these accusations by Mr. Agiuure? Things that make you say hhhhmmmmnnnnn!!!!
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By dave on 7/3/2006 8:40 PM
I believe that like parasites, a group of criminals has gained control of some powerful institutions.

The 4th of July is a good catalyst to purge the system.

We aren't fighting the government or the SEC or the media or the brokerage community.

We aren't fighting the system.

We are fighting less than 500 scumbags that have gamed the system and are making so much friggin money that they can short circuit the country's immune system.

I say name names. Who are these 500 scum bags?

Some of them are politicians. Some are regulators. Some are in media. Some run hedge funds. Some own sports teams.

And they are all afraid as they watch the snowflakes pile.

The avalanche is coming.
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By dave on 7/3/2006 8:50 PM
Sean, the SEC doesn't admit guilt because crimes are committed by individuals.

I believe the vast majority of the employees at the SEC are honest, hardworking and incredbily frustrated. I wish more of them would make anonymous posts here.

Unfortunately, there are some specific scumbags at the SEC that need to be excised like a tumor. Who are they? We need to name names.

We need to get the minutes of the meeting where the SEC decided to grandfather criminal counterfeiting of shares. Who was in favor of forgiving this crime? Who was against? What was discussed?

Did anyone discuss what authority they had to steal our constitutionally protected rights of ownership?

We need to dig into fails to deliver of bonds. This is from the secret service website. (If you want to report the massive hedge fund counterfeiting operation, you can reach them here: http://www.secretservice.gov/contact.shtml)

________

Manufacturing counterfeit United States currency or altering genuine currency to increase its value is a violation of Title 18, Section 471 of the United States Code and is punishable by a fine or imprisonment for up to 15 years, or both.

Possession of counterfeit United States obligations with fraudulent intent is a violation of Title 18, Section 472 of the United States Code and is punishable by a fine or imprisonment for up to 15 years, or both.

Anyone who manufactures a counterfeit U.S. coin in any denomination above five cents is subject to the same penalties as all other counterfeiters. Anyone who alters a genuine coin to increase its numismatic value is in violation of Title 18, Section 331 of the United States Code, which is punishable by a fine or imprisonment for up to 5 years, or both.

Forging, altering, or trafficking in United States Government checks, bonds, or other obligations is a violation of Title 18, Section 510 of the United States Code and is punishable by a fine or imprisonment for up to 10 years, or both.

Printed reproductions, including photographs of paper currency, checks, bonds, postage stamps, revenue stamps, and securities of the United States and foreign governments (except under the conditions previously listed) are violations of Title 18, Section 474 of the United States Code. Violations are punishable by a fine or imprisonment for up to 15 years, or both.
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By dave on 7/3/2006 9:11 PM
This is off topic, but it also isn't. I've had enough people tell me that laundered money creates LIQUIDITY for Wallstreet (tell me again why that is important?) that I don't think you can talk counterfeiting of public company shares without mentioning that money from high level crimes (bribes, thefts by dictators, drugs and arms dealing) is laundered through the stock market and they pay way bigger commissions than YOU do. Between hedge funds and dirty money, they control the stock market. You are the sucker they make money off of.

They control so much money that sometimes, their people become regulators and politicians. And you write to their people hoping they will help you.

You are like the warm body for the mosquito to suck. They invite you to the game the same way the rich novice is invited to the poker table.

Anyway, here's a secret. THEY hardly ever kill people, but when they do, they try to send a message to scare people. When they send that message, it is because THEY are scared.

They are like the bully that knows inately that if all the victims ever got together, the bully would cry for mercy.

Gary Webb discovered that the CIA ran cocaine into Mena Arkansas. Both Clinton and Bush were implicated.

He killed himself, get this, by shooting himself TWICE TWICE TWICE in the head.

Ask yourself why the media didn't tell you this and why it might be a bad thing for less than 10 people to control the media.

These scumbags play dirty and they can melt individual snowflakes, but they are scared to death that we will get together and snuff them in an avalanche.

____

Yet tragically “on December 10, 2004, Gary Webb was found dead from gunshot wounds to the head. While acknowledging that the two fatal shots that had entered through the back of his head was unusual, Coroner Robert Lyons determined that it was suicide. It subsequently became known that Webb had been suffering from clinical depression for many years.” Depression or not, it would pretty nigh impossible to shoot yourself with two shots to the back of the head. This sounds more like the good old American axiom of “no good deed goes unpunished.”

___

I believe its less than 500 scumbags. We need to root them out the way you'd try to get rid of a termite infestation. Name by name, we need to extricate the tumor.
October 28, 2003 By robelita on 7/3/2006 10:08 PM
http://www.sec.gov/rules/proposed/34-48709.htm

"In part, this action is designed to address the problem of "naked" short selling. "

Did the SEC succeed-I think not.
Independence Day Course Refresher By robelita on 7/3/2006 10:15 PM
When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. — Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

The King is dead-long live the Federal Government!

(Tongue firmly in cheek ;)
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By j.c. on 7/4/2006 10:01 AM
the scope of this scandal is so large that wars have been started in the past in an attempt to divert attention...oh that's right...we are in a war.
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By n-tres-ted on 7/4/2006 10:17 AM
Dave,

I don't think the SEC actually "forgave" any crimes by the grandfathering clause of Reg. SHO. The clause simply excludes FTDs occurring before the effective date from coverage by Reg SHO. Technically, that means all those FTDs are still violations of statute; they just haven't been prosecuted. That's where SEC's shortcoming in failing to enforce the law occurs. I've seen no indication SEC has done anything to clear up FTDs that occurred before 2005, at least in terms of punishing infractions.
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By bobo on 7/4/2006 10:29 AM
n-ter-ested: It is much, much worse than that. All fails that occur prior to a stock winding up on the SHO list are grandfathered, even ones that occur last week. For instance, when NFI dropped off the SHO list for a few weeks, and then plunged in price, followed almost immediately by re-entering the SHO list, all the new fails that occurred to drive the price down prior to the stock re-appearing are now grandfathered.

It's called one more bite of the apple.

And it is institutionalized forgiveness of ongoing larceny.

I wish I was making this up.
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By kevin on 7/4/2006 11:35 AM
OT: how the middlemen control the banking system. It reminds me how the middlemen control the buying or selling of shares - something that could easily be handled by a computer program.

http://wakeupfromyourslumber.blogspot.com/2006/07/net-neutrality-americas-last-defense.html
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By InTheKnow on 7/4/2006 12:24 PM
It seems to me that some very smart people designed a system to rip off all the investors of any company that these scumbags decide to do in. I think they call this a Ponzi Scheme and guess who's part of it!
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By mhatmccane on 7/4/2006 2:07 PM


Required to obey???? required by whom ? enforced how ???
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By jo o on 7/5/2006 7:01 AM
"We've already seen the SEC threaten Aguirre with civil and criminal charges, and we've seen Patrick now being probed by the SEC"

why would the SEC spend tax payers money to investigate Patrick why ignoring needed reforms to make reg.SHO effective. what kind of priorities to safeguard U.S.markets does this SEC have. i think management decisions must be opened to oversite so we, the U.S. investors can be assured policies & management are working for us.
i want $, time, efforts being spent to invesigate Patrick Byrne explained clearly to the investing public.
the rub By piddly_sum on 7/5/2006 7:47 AM
We all assume that in order to get off the hook with OSTK and the Utah law in October, is that the FTDs will be moved from DTCC into the system using ex-clearing etc. in order to clear OSTK from the Reg SHO list.

Now, with the increased legal scrutiny and also financial risk involved if things start melting down, which prime broker wants to be the one to accept more IOUs in such an issue?

They must all agree (i.e. collude) to soak up these FTDs, since I don't see anybody jumping up to be the hero here. This presents a much more difficult problem, as in then you officially become a member of a conspiracy, and whom you can even trust. At this point, you don't want to be on the other end of a telephone or e-mail conversation that turns out to be a sting operation if another prime broker decided to find a chair, or maybe the only chair, before the music stops.

You have got to figure some of these folks can sense that the music is about done. I wonder how they sleep at night nowadays?

The first one, two or three prime brokers to find a chair will find it very expensive. The next few will find it to be a near death experience. The last one or two will probably be in denial right up until the day the firm is liquidated.
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By darren on 7/5/2006 8:11 AM
Cramer's article today. I didn't want to sign up, so this is as far as I got.

Did you ever notice that this naked short-selling issue never comes up with the stocks of good companies? Can you recall an instance where a money-making, decent company has been involved in a naked-short-selling tailspin? I can't. There's been a massive amount of ink spilled about...
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By bbhindyou on 7/5/2006 9:30 AM
IF the investigations continue and the hearing with Aguirre's information dosn't just go away do you think for a moment the crimanils WON'T bring the whole market down to send a message to the powers that be? How low will it go before the heat comes off?How can these people be brought to justice when they have the markets by the throat?Dictatorship is here just not a open one.Yet.
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By mhatmccane on 7/5/2006 11:21 AM
re Darren's post about Cramer's article

the old nonsense about only bad stocks being on the SHO list---like NYX and GM
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By CAROLATITAGAIN on 7/5/2006 11:58 AM
=DJ IN THE MONEY: EagleTech Loses Battle To Avoid Delisting

By Carol S. Remond
A Dow Jones Newswires Column


NEW YORK (Dow Jones)--Despite its best efforts to turn its regulatory woes into a forum against naked short selling, Eagletech Communications Inc. (EATC) has lost its fight to remain a publicly traded company.

The Securities and Exchange Commission on Wednesday ruled that Eagletech's securities will be deregistered because the company failed to file required financial reports since 2001.

The SEC had issued a deregistration order last year but Eagletech had appealed the move, blaming its failure to file financial reports on alleged criminal conduct by third parties.

It's unclear whether Eagletech will exercise its right to appeal the SEC's order in front of a U.S. court of appeals.

'Get Shorty' Legal Consortium Loses Another Battle


Eagletech is one of several small companies represented by a legal consortium led by Texas class action lawyer John O'Quinn. Companies represented by O'Quinn generally claim that their stocks have been illegally depressed by short sellers Vthrough chronic and widespread failures to timely deliver stock to close out securities transactions.

Short sellers typically borrow shares to sell them, hoping that they will be able to replace them with stock bought at a lower price later. Trading without a borrowing agreement is called naked short-selling. It's illegal for most investors, but legal for firms that make markets in stocks and bring liquidity to the market.

Over the last four years, O'Quinn and his corporate clients have mounted a comprehensive legal and marketing campaign to attract attentions to their claims. But so far, they haven't been very successful with most cases thrown out of court by judges who ruled either that the firms were unable to prove their allegations or rejected the lawsuits on jurisdictional grounds. Other cases are lingering in courts.

In the case of Eagletech, the company acknowledged its failure to file required financial reports, arguing that two separate manipulations, including alleged naked short selling, had led to financial difficulties and its failure to file.

SEC Rejects Eagleteach Affirmative Defense

The SEC noted in an opinion issued Wednesday that although Eagletech blames others for its financial crisis, "alleged criminal activity does not alter the fact of Eagletech's failure to file its quarterly and annual reports or its present inability to cure these deficiencies."

In its opinion the SEC also rebuked Eagletech's claim that a deregistration of its stock would constitute unconstitutional "taking of property."

Eagletech had argued that Regulation SHO, a short selling rule adopted by the SEC early last year, deprived its shareholders of property, violating the Fifth Amendment of the U.S. Constitution, when it excluded earlier failure to deliver stock from stricter settlement rules.

"This deregistration proceeding is not the appropriate forum in which to argue a claim that adoption of Regulation SHO somehow resulted in an unconstitutional taking. Regulation SHO was promulgated and adopted pursuant to the requirements of the Administrative Procedure Act and all interested and affected persons were afforded ample process in that rule making to assert their rights," the SEC said.

Responding to Eagletech's claim that the SEC engaged in selective prosecution when it failed to take action against individuals the company believes engaged in naked short selling, the commission said: "Eagletech has failed to allege, much less prove, any of these elements, and we find that Eagletech was not a victim of improper selective prosecution."

(Carol S. Remond is an award-winning columnist who won a Gerald Loeb Award in 2005 for best news service content with "Exposing Small-Cap fraud," a series of articles that described how three small companies unscrupulously pumped up their stocks.)


-By Carol S. Remond, Dow Jones Newswires; 201 938 2074;

carol.remond@dowjones.com


(END) Dow Jones Newswires



05-07-06 1904GMT



Copyright (c) 2006 Dow Jones & Company, Inc.
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By ginger on 7/5/2006 12:06 PM
Deregistration... I see another one of these:

http://www.cmkxownersgroup.com/nasdcomplaint.pdf

Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By mhatmccane on 7/5/2006 12:54 PM
re Eagletech

Isn't it time for the SEC to be sued in Federal Court for exceeding the Congressional mandate that created them? I do not remember forgiveness of past illegal acts as part of the mandate.
Re: The Latest Spin From The NY Press; Are Whistleblowers In Danger? By piddly_sum on 7/5/2006 1:53 PM
I do not think the SEC wanted to do this.

As Rod said to me, once this happens he can then depose them (the SEC) as they become parties on equal footing.

I think he has had this gameplan in place from the start and is going through the required steps in order to check all the boxes along the way and maintain his arguement on Constitutional grounds.

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