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SIA Sues Utah Over Anti-NSS Law

Location: Blogs Bob O'Brien's Sanity Check Blog    
Posted by:   bobo 7/29/2006 5:59 AM

UPDATE: Here's a quick news blurb including an interview with Dr. Byrne. Good piece. Click on the video button, or the little icon right below it, to see the TV news piece.

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

The Securities Industry Association did an abrupt about-face yesterday (that's journalism-speak for "they lied") on the Utah law that targets illegal naked short selling. After agreeing to back the law in exchange for a delay in implementation from July until October, they filed suit to block the law.

Apparently, the SIA doesn't like that it is now frowned upon to take investors' money, and refuse to deliver what the investors paid for. They feel harmed in some way at that being a no-no in Utah.

Nobody has been able to explain to me how an association that does not trade stocks is harmed by the law, and thus even has standing to bring the suit.

Further, nobody has been able to explain to me why the SIA is against a law that targets behavior that is already illegal. What's next, MANBLA suing to block child molestation laws, or the National Misogynist Association suing to overturn rape laws? I can understand why criminals would be against laws that hinder their criminality, but why is the SIA against an anti-NSS law, that simply requires brokers to report when they aren't delivered what their clients paid for?

Doesn't that seem a little odd? How do they defend this?

The WSJ obligingly wrote an article covering this farce, and I will excerpt a few choice bits for your reading pleasure:

"A Wall Street trade group filed a federal lawsuit Friday in an attempt to overturn a new Utah law that lets companies in that state collect fees from brokerage firms that don't disclose when they fail to deliver shares of those companies that have been committed to a bearish "short sale."

Yes. How shocking. Failing to deliver products investors paid for is illegal in Utah. How outrageous and abominable. Imagine - what were they thinking? How dare those bumpkins require Wall Street to deliver what they took money for. Do you have any idea how much profit it would eliminate if the brokers actually had to buy shares they "sold" their customers?

"The Securities Industry Association said the Utah law usurps federal
regulators' authority. The trade group filed suit in a U.S. District
Court in Utah seeking a temporary restraining order and has asked a
judge to prohibit application of the law.

Utah Governor Jon Huntsman Jr. signed the law in May. The legislation
was driven by Overstock.com Inc. Chief Executive Patrick Byrne, who
has long complained about traders he says have conspired to drive down
shares of his Internet-retailing company."

So, let me understand. When Byrne demonstrates that his company is being methodically ruined by those illegally naked shorting, using FOIA data as well as his OBO and ADP data, he's a whiner, a complainer. Huh. And yet the SIA, a lobbying group that doesn't do trades, and isn't affected by the law, suing to stall the application of it, is taking the moral high ground. I see.

"Short sellers sell borrowed stock in the hope of replacing that loan
later when the stock price has dropped, pocketing a profit on the
price difference.

Mr. Byrne has specifically complained about "naked short selling," in
which the traders sell shares they haven't borrowed and don't intend
to. Naked short selling is typically illegal. The Utah law puts the
onus on brokerages that help facilitate short sales, penalizing them
for such "failures to deliver." Mr. Byrne couldn't be reached for
comment."

Is that like "complaining" about criminals breaking the law? You know, if you call the cops and alert them to a robbery in progress, you are "complaining" about theft? Interesting use of pejorative language.

Imagine. A law that penalizes taking investor money, and refusing to deliver what the customer paid for. In any other industry, those doing so would be prosecuted for fraud. Wall Street clearly feels that it is above the law, and that when it commits fraud, it is somehow a more noble deed than similar scams. Why it believes that to be the case is unknown. It just seems that Wall Street thinks it is appropriate to defraud investors with no consequences.

And apparently the WSJ sees nothing odd about that.

Given that Carol Remond's hand was in this, I'm not surprised that the tone of the article is what it is. She has never written an article that didn't tout the Wall Street spin.

Here's one wag's take on this, and I can't say it any better:

"The  Association of White Collar Criminals on Friday said it has filed a lawsuit in federal court challenging a Utah law that aimed at stopping counterfeiting. The association is seeking a permanent injunction against the application of the rule of law to their profession. They say that the rule requires keeping track and disclosing how much they counterfeit, and they don't want to do this. The rule of law is scheduled to go into effect in Utah on Oct. 1."

I really can't think of anything to add to that.
Copyright ©2006 Bob O'Brien
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Comments (57)
Re: SIA Sues Utah Over Anti-NSS Law By Niel Storts on 7/29/2006 12:15 PM
If you glance at the q&a section from the www.sia.com beltch you will see the standard canned "questions", together with the canned "answers" that are the standard of the felons. This is nothing more than another of the numerous means being employed to mold public opinion. There doesn't seem to be any way to ask any other "questions". How odd. I really did want to enquire as to why the touted reg sho, that is so effective in combating fraudulant stock transactions, never actually seemed to do anything to cause a "cure" for some issues. Oh well. I am now assured that all is well in the industry. Has to be. Why, hells bells, I did read all about it ................. S.S.D.D.
Re: SIA Sues Utah Over Anti-NSS Law By SIA- WHERE 93 MILLION SUCKERS(INVESTORS) ARE SERVE on 7/29/2006 12:25 PM
SIA can't afford to play by the laws so they get the SEC to make rules that break the laws. Reg SHO written by the SIA for the SIA and they can't even adhere to that abomination.

The SIA's Chairman; James P. Gorman states that one of his goals is"To encourage and support transparency and effective, efficient regulation." Sure looks like that is what this lawsuit is about. Tranparency? NOT. The only thing that is transparent here is the crooks just can't allow anyone to try and stop their fleecing of America.

The good thing that will come out of the lawsuit will be the empowerment of the Anti-Naked Shorting cause and the exposure of the truth about these turds. Bring it on!
Re: SIA Sues Utah Over Anti-NSS Law By Take a Bite Out of NSS on 7/29/2006 11:17 PM
I wonder if Wall Street has any clue at all as to how egregious this whole debacle is. Floating endless worthless IPOs is one thing, as one can choose not to buy any particular company. But once the notion that there is an unlimited supply of shares on tap for any specific targeted corp, the whole basis of exchange on Wall Street collapses. Who in their right mind would buy a share if that share is open to the possibility of some day being diluted to death through infinite fake shares? The whole reason people buy shares is because they believe the pool is strictly limited and that this limited pool has potential for appreciation. This is a serious breach of fiduciary trust on Wall Street's part and, given enough time, will soil their entire nest. Trust is a difficult thing to attain and easily lost. And in this case, it may well take multiple generations to regain that trust.

Taboonss
Template email to everyone on my private email list. Cut and paste if you'd like, and recommend if you've done the same. By rvac106 on 7/30/2006 1:56 AM
This is what I'm sending out, to everyone on my own personal email list. Just a grain of sand.

>>>>>This is unbelievable. Whether you own stocks, or not, or whether you believe that you’re not affected by this problem, it’s quite obvious you are. We have a situation where someone who wants to buy a share of stock sends money to a broker, and receives nothing in return. That’s stealing. To add to the theft, the broker takes a commission on what he hasn’t delivered to you. He takes a slice of the money that you’ve sent him, reduces your purchase by that amount, and doesn’t send you anything anyway. Not everybody does it, but it appears that a great many brokers do, and on a regular basis. Now, the State of Utah has passed a law that says that Wall Street must report when they are unable to deliver what they have already taken your money, and their commission, for. Wall Street is objecting. Don’t you wish you could sell something, take the money, and not ever deliver what’s been paid for? Must be nice. The fact that this goes on in the Stock Market, where everything is done with electronic tallying, doesn’t make it right. Sure, you can’t do it with cars, or houses. They have laws against that. Unfortunately, there are no laws being enforced when it comes to protecting the wealth of Wall Street. What about the wealth of Main Street?

http://real.ksl.com/video/slc/1/138/13825.ram

www.thesanitycheck.com

I kid you not.>>>>>>>>

RVAC
Re: SIA Sues Utah Over Anti-NSS Law By InTheKnow on 7/30/2006 7:15 AM
Investors are being flleeced and companies are being driven into the ground and out of business all because these greedy scumbags support the biggest Ponzi scheme the world has ever seen!
Re: SIA Sues Utah Over Anti-NSS Law By Little Bo peep on 7/30/2006 7:33 AM
Hippty hop down the bunny trail.

Have a GOOD day!

Some interesting HOT potatoes.

One potatoe, two potatoe, three potatoe four.
Can't catch me, I want more, more, more!

http://www.washingtontimes.com/metro/20060727-121614-3198r.htm

http://www.citizensforethics.org/press/pressclip.php?view=2940

http://www.citizensforethics.org/activities/index.php

http://judicialwatch.org/abuse.shtml

http://www.alamo-girl.com/0333.htm

Anyone looked at Lipper's hedge fund?
Junk bonds game another story.
Lipper's primary convertible bond fund marketed itself as a relatively low-risk way for investors to achieve "equity-like rates of return." Lipper, a former New York City deputy mayor, Wall Street banker and Hollywood producer, used those connections to sign up more than 350 investors -- including actors, financiers and institutions including George Washington University and the CNA Employees Retirement Trust.
Re: SIA Sues Utah Over Anti-NSS Law By money flow on 7/30/2006 8:36 AM
Mr. Short borrows a stock and sells it.
1. He gets the money from the short sell.
2. He has to put up collateral to the broker of the borrower.
3. THE COLLATERAL SITS IN THE BROKER'S ACCOUNT COLLECTING INTEREST
4. If the pps of the stock goes down, the broker refunds an equal rebate to the short (broker still collecting interest on the rest) If the pps goes up, the short has to place more collateral with the lender's broker.(All of this is collecting interest for the broker.)
5. If the lender is in a cash account, he gets a small amount of money that is charged to the short for borrowing hard to borrow stocks. The fee for borrowing is not included with the interest that the broker is collecting on the lender's collateral that the broker has taken for his own.
6. Even stocks that have no borrow fee are profitable to the broker. They can collect overnight fed fund rates on it.
7. In a margin account, your broker can lend out your shares that you bought on margin. You are paying something above overnight rates to hold the stock. The broker lends out your shares, takes the collateral and collects (currently 5.25%)on that. Even on shares that are easy to borrow and have no borrowing fee, your broker is using your collateral to lend back to you at a higher rate, but basicially you have no shares in your account because they have been sold to someone else. You are paying 7 or 12% and the broker is collecting 7 or 12% on borrowed money. There is no money in your account. You borrowed the money from the broker to buy the stock so you should be short the cash and long the stock, but the stock has been lent out so you have niether the stock or the cash. The cash from the short sale is back in your broker's account.

One of the smaller brokers lent out 1.4 billion in stock last year. Collecting just the interest on it, charging an average of 8% for margin loans, the broker made a tidy 110 million in interest. That is exclusive of any borrow fees or commissions. And the broker put up no money! He is using the collateral from the stock loan to lend back to you.

In the case of Overstock, the brokers were lending more shares than exist. They were collecting collateral and putting the money in their capital accounts and collecting interest on it. They didn't even have the shares available to lend from margin accounts. They are creating bogus shares and collecting interest on them. This is on top of the borrow fees that they were collecting from the shorts who are suing them.

The lawsuit that the shorts brought does not address this, but it is basically failing to deliver as the shorts had to put up collateral besides the borrow fees. The short only gets money if the price of the stock drops. All monies collected as collateral sit with the broker. If the broker delivered bogus shares, he fraudulently collected collateral as well as fraudulently charged for the borrow fees.

There should be no collateral delivered to the broker until the shares are delivered. There should be no cash paid to the broker for long sales until the shares are delivered. On a long sale, there is only a commission earned by the broker, but he shouldn't get a commission until he gets the shares for the buyer. Just exactly what is the function of a broker? He is supposed to execute a trade.. not facilitate and participate in fraud. How is this happening? Thank you SEC and DTCC stock borrow program that makes it all possible.

Re: SIA Sues Utah Over Anti-NSS Law By InTheKnow on 7/30/2006 8:41 AM
Hence the PONZI scheme!
Re: SIA Sues Utah Over Anti-NSS Law By Mississipibluffs on 7/30/2006 8:53 AM
For whatever reason,

Executive Intelligence Review Feb. 6, 1998

is not mentioned in the Review's

"Tables of Contents of Recent issues of
Executive Intelligence Review"

See http://www.larouchepub.com/eirtoc/index.html

Pity.
Re: SIA Sues Utah Over Anti-NSS Law By UTAHLAWDOA on 7/30/2006 9:49 AM
Utah Law is cooked.

Very clear reasons why. SEC has Jurisdiction and not individual states.
Re: SIA Sues Utah Over Anti-NSS Law By Little Bo peep on 7/30/2006 10:08 AM
Mississipibluffs:

Is this the comment you were fishing for? Point please.

Refuting the lies against Sudan
Abdel Mahmoud Al Koronky
Executive Intelligence Review, Feb. 6, 1998, pp. 53-56
Abdel Mahmoud Al Koronky, press attaché at the Sudanese Embassy in London, addressed a Schiller Institute conference in Bad Schwalbach, Germany on Dec. 13 (1997).

Now, John Garang is a foreign investment project. We, as a government, are paying $1 million every day; I don't say how much blood-I leave this aside-or how many handicapped, or injured, or killed, or children in the South, at the   age of 19, who don't go to school, because of the war. But, we are paying $1 million per day for the military effort. Since the latest episode began, March 1983, we have paid over $4 billion, and we have very little money. The question is, who is paying the bill for the rebels in the South? It must be someone who is investing in them, who will give them almost free licenses for oil, agriculture, minerals, and so forth. And the latest map, provided by John Garang, to break up the country, included all the oil area, all the sources of water, all the uranium resources. And all of these are places that have been   documented as having rich reserves. That means, the companies that are now disguised, behind the scenes, tunneling money to Garang, are waiting for his success, so that they will have what they want, almost for free. You want gold? Take it! Uranium? Oil? And so forth.
Re: SIA Sues Utah Over Anti-NSS Law By dogfood on 7/30/2006 10:46 AM
He was referencing the issue that said Chris Cox is part of Dow Jones.

"The Bancroft family continues to be the most significant shareholder of Dow Jones and the Wall Street Journal today, through Hugh Bancroft's descendants, including Jane Bancroft Cook, a Journal board member; the Cox family (Christopher Cox sits on the Journal's board); and socialite Elizabeth Goth."

http://www.members.tripod.com/~american_almanac/wallst2.htm
http://www.members.tripod.com/~american_almanac/whatnew2.htm
Re: SIA Sues Utah Over Anti-NSS Law By dogfood on 7/30/2006 10:50 AM
The SIA and DJ lobbied for Cox to run the SEC.

Cox’s nomination has been universally hailed by business groups as heralding an end to “regulatory excesses” at the SEC under its outgoing chairman, William Donaldson, also a Bush appointee. Donaldson, a Rockefeller Republican, is considered a turncoat in Republican and corporate circles because he has on numerous occasions sided with the two Democratic members of the five-member SEC in implementing new regulations and fining corporations for wrong-doing.

Marc Lackritz, president of the Securities Industry Association, responded to Bush’s announcement by noting that Cox “has a particular sensitivity to costly and unnecessary regulation.” Lackritz continued, “He understands that the increased costs of regulation put an unnecessary tax on investors.” The Wall Street Journal editorial page, which has long championed Cox, declared on Friday, “We assume the appointment marks the end of the era of post-Enron regulatory overkill.”
Re: SIA Sues Utah Over Anti-NSS Law By dogfood on 7/30/2006 10:53 AM
Don't expect Cox to help the small shareholder. The SEC and politicians won't fix this. It will be angry shareholders, sick of getting ripped off who will force the industry to change.

---

More than anything else, his role in pushing through a 1995 bill known as the Private Securities Litigation Reform Act has won him the backing of Wall Street. The act, which was passed with bi-partisan support over the veto of President Clinton, significantly raised the standard of proof required in investor lawsuits against corporations and executives.
Re: SIA Sues Utah Over Anti-NSS Law By The Midas Touch co-author on 7/30/2006 11:34 AM
Hmmm...an organization that doesn't directly profit or lose from stock trades attempts to thwart Utah's new law that makes stock manipulation thru failing to deliver stock less profitable and harder to hide. Could it be that the brokerage firms who ARE interested and affected parties, are circumventing scrutiny by letting the Securities Industry Association lead the charge? Does this not shield the liable parties (brokerages, etc.) from discovery? This lawsuit may be nothing more than a death rattle. I can't imagine a judge with an IQ higher than 80 allowing this suit to proceed.

Unfortunately, I CAN imagine a judge with an IQ below 80. Let's hope they're not presiding over this case.
Re: SIA Sues Utah Over Anti-NSS Law By Disgruntled Shareholder on 7/30/2006 12:10 PM
The SRA, Shareholder's Rights Association, hereby nominates Patrick Byrne and the Easter Bunny for President and VP.

Anybody second the motion?

Our first order of business will be to initiate a lawsuit against the SIA.

Next month we will take on the SEC.
SIA-WHERE 93 MILLION SUCKERS(INVESTORS) ARE SERVED UP DAILY By SIA "LOVES" UTAH on 7/30/2006 12:19 PM
Midas - I think you are correct in the SIA is suing to keep the heat off from the brokerage firms being placed into discovery. Something they can't afford to do. I think that is why the SEC is not suing also. The SIA also makes the invalid claim that they "represent almost 93 million investors". Unfortunately the SIA is not run by investors nor is it trying to level the playing field for them.

Getting the right judges will be important both now and during the appeals process. Unfortunately I don't have alot of faith in politically appointed judges.
Re: SIA Sues Utah Over Anti-NSS Law By Little Bo peep on 7/30/2006 3:51 PM
You don't think that Mr John Mack talked to anyone at
SIA about a lawsuit do you?

a little of this and that.........
about a few of the SIA BOARD OF DIRECTORS
James P. Gorman
Morgan Stanley's new CEO, John Mack, named Gorman to the new role a week after laying off 1,000 unprofitable brokers at the firm--and a month-and-a-half after retail chief John Schaefer stepped down.

John Mack, Credit Suisse First Boston's Chief Executive Officer and co-CEO of Credit Suisse Group, said, "We are pleased to have reached this agreement with The Bank of New York. Pershing is a strong company with a solid reputation in the correspondent clearing marketplace, and The Bank of New York has a global leadership position in securities servicing. We believe both companies and our customers, including those of CSFB Private Client Services, will greatly benefit from this transaction."
Richard F. Brueckner, chief executive officer of Pershing, said, "We are excited that our clients and management team will have the opportunity to join The Bank of New York, whose commitment to this segment of the market is recognized around the globe. Pershing's clients will benefit from the Bank's wide range of product offerings and its commitment to meeting their needs."

Michael LaBranche, who runs the LaBranche specialist firm at the NYSE, said Grasso should resign "in the interests of the New York Stock Exchange."
"The New York Stock Exchange needs for Mr. Grasso to leave in order for it to move forward and restore investor confidence," he said.
LaBranche was fined $150,000 and censured by the NYSE last month for failing to turn over employee emails in an investigation of its trading practices. The company is appealing.

At a dinner in his honor last night organized by the Securities Industry Association, Grano said Wall Street was under- represented in Washington. He urged SIA president Marc E. Lackritz to defend securities firms against over-regulation.

Robert J.McCann is the recent merger of Advest. His advantage in this instance is that he was vice chairman of distribution at AXA Financial, Advest's parent

All of the awards and perks are contingent on Phil Purcell staying away from Wall Street. Should he take a similar job with a Morgan Stanley competitor, he has to give it all up.
Phil Purcell is the brother of Paul E. Purcell, Milwaukee-based Robert W. Baird & Co. president and CEO.
Morgan Stanley declined to comment Thursday on Purcell's package.
Purcell's replacement, John Mack, is guaranteed to receive an annual salary and bonus package equal to the average compensation of Morgan Stanley's top four competitors, with a cap of $25 million per year.

Thomas A. Russo.  What Mr. Russo is doing is trying to harmonize procedures used in different types of financial instruments, swaps and other derivatives, in the event of a default by one of the parties to a contract. 
      Mr. Russo idea's seem good and fool proof, but they compare this idea to the problem of flushing toilets in the same building.  The toilets may flush good  on a normal basis but if for what ever reason all of them had to be flushed at the same time, the pipes in the building may give just as the market may give.  Such different groups in hedge funds and corporate treasure branch od Wall Street are among those whom are opposed to this new idea created by Mr. Russo.  What they believe is that this idea is written from merely a dealer's point of view, says Patrick McCarty, the general counsel of Managed Funds Association.

Christopher J. Williams, Chairman and Chief
Executive Officer of The Williams Capital Group, L.P., and Williams Capital
Management, LLC, has been appointed to serve on the Harrah's Entertainment
Board of Directors, subject to regulatory approvals.

Wal-mart stores Inc. Director
Wal-Mart said in a Securities and Exchange Commission filing that Glass, 70, who will remain a board member, will be replaced on the executive committee by independent board member Christopher J. Williams. Glass will not be replaced on the stock option committee.

Merrill Lynch Global debt chief Seth Waugh is out of the firm's senior executive in charge of risk management.

Governor George E. Pataki said, "This settlement signals an important step forward in our effort to rebuild Lower Manhattan and honor the memory of those lost at the World Trade Center. Because of this agreement the Deutsche Bank building can be razed, clearing the way for implementation of Daniel Libeskind's vision for the site and construction of the memorial. Deutsche Bank, Allianz, and AXA should be commended for their willingness to put the future of Downtown first and expeditiously reach a settlement.
How much did they get?
Seth Waugh, CEO for Deutsche Bank Americas said, "We applaud Senator Mitchell's leadership and thank him, Governor Pataki and Mayor Bloomberg for their roles in expediting an agreement on this issue. As one of the largest employers in Lower Manhattan, we actively support the area's redevelopment and are very pleased with this significant step forward."

Re: SIA Sues Utah Over Anti-NSS Law By piddly_sum on 7/30/2006 4:48 PM
Tommy is correct.

I spoke with a friend of mine this evening who is a legal scholar.

In order to challenge the law, SIA first must prove that they have a standing in the case, which they clearly do not. They may file an amicus brief, should it get that far, but since it is a not for profit whatever they are which, will not be impacted by the law, the suit should be dismissed.

Let them find one of the miscreants to step up and file suit instead of hiding behind SIA. Now that would be interesting for one of them to put their cards on the table.
Re: SIA Sues Utah Over Anti-NSS Law By the Gnome of Zurich on 7/30/2006 8:47 PM
Corvette

Imagine if there is a natural demand for 1000 Corvette's per year. Furthermore, imagine if a small group of phony car dealers (or Ford dealers) colluded to sell 300 Corvette's that they don't own and don't intend to deliver, though they do intend on collecting the cash up front.

GM, the maker of Corvettes, knows within a degree of certainty that there will be a demand for 1000 Corvettes this year. They invest the time and money to produce 1000 Corvettes, but because of the phony dealers, only 700 buyers show up. The other 300 buyers purchased the phony "NAKED" Corvettes and now have their money tied up with the phony dealers.

Clearly the 300 buyers of the phony Corvette's are harmed, but GM is also harmed because the natural demand for their cars are diluted. GM will be forced to sell the 300 legitimate Corvette's at a lower price to fill in the demand that was taken away by the Corvette fakes. This in turn will put a lower resale value on the other 700 Corvette's. etc...

The same thing works for stock certificates. There is a natural demand for a companies stock (at a given price), and there is a natural supply of that stock (at a given price). Now, if we imbalance the market by selling phony stock we can drive the price down just the same as the car example above. Furthermore, the lower unatural price may cause the demand to decline. Think of it in terms of the next year Corvette buyers. They now percieve the Corvette as less desirable. What economist would call not only a shift in the supply curve, but a shift in the demand curve as well. Selling begets selling, and if buyers push back, the con men just sell more phony shares.

How does this harm the underlying fundamentals of the company? Well, that's a thorny topic, but let's try a few examples. 1. the employees of the company may receive less compensation than they deserve if they had forgone sallary and instead accepted options on stock. Kind of like if you collected your paycheck and under OASDI and Medicare taxes was another line item that read WSP tax (for Wall Street Porsche tax). I know there are many ills around employee and executive stock options, but let's assume that these are on the up and up accounting for both retained earnings and time... So how long would you, the valuable employee, stay at the company with the WSP tax when accross the street is a competitor with paychecks that aren't burdened by this tax? 2. Stock is like currency. Think AOL when it bought Time Warner. Now clearly AOL's currency was a skosh overvalued, but nevertheless, it allowed them to pick up some very valuable assets at TW. But even if the shares aren't overpriced, but instead fairly valued, then this is currency that a company can use to make strategic acquisitions. On the other hand, a stock price that is unaturally low does not allow for such flexibility. 3. Debt service. If a company needs to borrow money it may find that the low market value of it's equity raises the suspicions of its bankers. In turn, the banker may add a percent or two (maybe 5) to the borrowing cost of the company. Good luck explaining to the banker that the market is wrong. Afterall, he went to a fancy business school where they taught the EMH (the Encino Man Hypothesis). 4. Suppliers and Customers. If your suppliers think you are on the outs then they may choose to divert there products elsewhere or else do business with you on terms not to your liking. Customers may turn to a competitor that they feel has more staying power. This may be done to insure a stable supply for goods that are needed, or for support on something like software etc...

Note to Patrick: Sometimes people can surprise you. Sometimes they have a great capacity to hear the turth. It has been no accident that you were given a place to stand 4 times, now move the world.

Regards,

the Gnome of Zurich
Re: SIA Sues Utah Over Anti-NSS Law By traderdan on 7/30/2006 10:21 PM
We shouldn't debate whether we are getting victimized. It's a given.

The counterfeiters and the media, regulators and politicians they employ are stealing from us. Duh. We get it.

Some victims go, "how can that be?" Surely the media, regulators and politicians don't understand the problem.

You know what? The bribed get it. They are getting rich off it.

Their fear is that you might tell your friends, relatives and other victims and the victims might get angry and force an end to the corruption. The danger is the victims might even demand jail time for the bribed.

The counterfeiters and bribed's hope is that the victims will instead turn to bought media, regulators and politicians who can delay them until the victims get frustrated and sell their IOU's for a fraction of what they paid for them.

"Don't worry, just stop protesting for the next six month "comment period" and things will be better a year from next July."

They are hoping that you keep this quiet. The problem is that the snowflakes are piling up. We all send letters and tell friends and call politicians and argue with brokerages. We may feel we aren't making a difference. But each little thrust from anyone in this forum is like a snowflake drifting down onto a mountainside. Eventually, it only takes one snowflake to cause the avalanche of change.

Like a see saw, we go from one stable state to another. One state is that the scumbags own the system and steal from us.

The other stable state is investors own the system and the scumbags are in leg irons, dreaming about their estates that are going up for auction.
Re: SIA Sues Utah Over Anti-NSS Law By bobo on 7/30/2006 10:39 PM
If the SEC has exclusive jurisdiction over this, why, precisely, does each state have a securities regulator?

They do, you know. And if you read the NCANS Amicus brief, you will see that the notion that the SEC tries to advance is specious. The state has full right to say, if you are going to do business here, in addition to the federally mandated minimum standard you need to meet this additional standard.

Think emissions, and think California's tougher than Federal standards. The EPA sets the federal standard, but California can enact tougher ones. Which they have.
Re: SIA Sues Utah Over Anti-NSS Law By anon on 7/30/2006 11:12 PM
http://www.nytimes.com/2006/07/31/business/media/31observer.html?ex=1155009600&en=a63de3679af244a5&ei=5065&partner=MYWAY

"Developer’s Son Acquires The New York Observer
By KATHARINE Q. SEELYE
Published: July 31, 2006

Jared Kushner, the 25-year-old son of a wealthy New Jersey developer who was sentenced to prison last year, has bought The New York Observer, paying what one person familiar with details of the sale said was nearly $10 million for a majority stake in the weekly newspaper.

Jared Kushner bought The New York Observer, the weekly newspaper. He said he was attracted to the marquee property in the media capital of the world.

“I own The New York Observer,” he said yesterday.

Mr. Kushner said that he bought the newspaper because it was a marquee property in the media capital of the world, and that the opportunity to buy a newspaper did not come around very often. The paper’s relatively small circulation — 50,000 — belies its influence, particularly in New York’s media, political and real estate circles.

---

Charles Kushner was sentenced last year to two years in prison after pleading guilty to 18 counts of tax evasion, witness tampering and illegal campaign donations. He also admitted to hiring a prostitute to seduce his brother-in-law and having a videotape of the encounter sent to his sister, the man’s wife, in an attempt to get back at her for cooperating with a federal investigation into his business activities.

---

____

“Every pile of money that is enough to buy a newspaper is disturbing if you look closely enough at it,” he said. “But I don’t think he has any reason or need to protect the existing press barons from scrutiny. This is an exciting move.”"
Re: SIA Sues Utah Over Anti-NSS Law By traderdan on 7/30/2006 11:25 PM
The states ARE the answer.

Also, local police forces ARE the answer.

I dream for the day when some junior at a brokerage is arrested for mail fraud because she sent out a brokerage statement that falsely claimed someone owned shares when the reality is they only owned IOU's.

The thing about arresting the juniors is they fink on their bosses.

These are REAL crimes with REAL people who can fit leg irons.
Re: SIA Sues Utah Over Anti-NSS Law By For The Legally Consumed on 7/30/2006 11:28 PM
http://www.northcountrygazette.org/articles/072506OhioStyle.html
Re: SIA Sues Utah Over Anti-NSS Law By particleswaves on 7/31/2006 3:49 AM
I found it good therapy to email all SEC principals the following:

"So, if I understand your law suit against the State of Utah, you compromised meatballs have a problem with Utah’s requirement that one needs to actually deliver what one purportedly sells. Posture as you may, no one seriously believes your agenda lies anywhere but in protecting Wall Street crooks. Despite all efforts by you and your cohorts to keep up the charade, the elaborate and persistent (not to mention highly illegal) “failure to deliver” dance is just about over. If I were you I’d circle the wagons (or run for the hills) because an angry swarm of deceived investors is hovering and poised to descend on you and your smarmy ilk. Have a nice day. Rude letter to follow."
*** Naked Shorting Now Affecting Politics" By InTheKnow on 7/31/2006 4:56 AM
Hedge funds touchy issue for Lamont
Peter Urban

On more than one occasion in his 18 years in the Senate, Joe Lieberman has bemoaned the "gotcha" politics that belittles public debate.
But as the three-term Democrat faces his first real political challenge as an incumbent, it seems the gentleman has disappeared.

Lieberman's campaign has spent the last two weeks complaining that Democratic challenger Ned Lamont would not release his tax returns.

Moreover, they claimed Lamont to be a hypocrite for opposing the Iraq war while owning stock in a company that has profited from it.

Lieberman, meanwhile, had his own investments in the same firm.

Lieberman's camp knew of Lamont's investment because he had already released a federally mandated financial statement for 2005 that documented his wealth. The 90-page document showed that he had invested between $15,001 and $50,000 in Halliburton through one of 15 accounts managed for him by Goldman Sachs.

Lieberman's financial statement for 2005, which ran about a dozen pages, showed he invested between $1,001 and $15,000 in Columbia Marsico Focused Equity and Victory Diversified Stock Fund. The two mutual funds hold investments in Halliburton, whose subsidiary received $10 billion in Iraq contracts.

Lamont dismissed the investment as trifling and said he would divest from Halliburton if it was a problem.

In retrospect, Lamont should have sold the stock before it became a campaign issue just as he had done in quitting the Round Hill country club. He dropped his 16-year membership in the swanky Greenwich club this year, telling The New York Times the club was not as diverse as it should be. In 1963, Lieberman went to Mississippi to march for civil rights with other Yale students. But, I digress.

While Lieberman wants to play "gotcha" over Halliburton, he misses the bigger picture. Lamont has multi-million dollar investments in hedge funds, a controversial financial vehicle that is under congressional scrutiny.

He has between $3 million and $15 million in hedge funds run by Goldman Sachs Asset Management, which is now the world's largest hedge fund manager with more than $21 billion in assets, according to a survey released last month by Institutional Investor's Alpha magazine. Connecticut Attorney General Richard Blumenthal testified last month at a congressional hearing, urging further regulation of these funds.

Hedge funds "are a regulatory black hole — lacking even minimal disclosure and accountability required of mutual funds and other similar institutions," he said.

"We need to monitor this field. Hedge funds are the Wild West of our financial markets," said Sen. Orrin Hatch, R-Utah, who chairs the Senate Judiciary Committee that held the hearing.

Much of the controversy centers around short-selling — a way of betting that a stock price will fall — by hedge funds, according to the Wall Street Journal. "Short sellers usually sell borrowed shares of a stock, in hopes that they can buy the stock back later at a lower price to repay the loan. But in some cases, traders sell stocks they haven't borrowed — a controversial, and potentially illegal practice called "naked short selling." Some critics charge hedge funds are using such tactics to manipulate the market," the Wall Street Journal recently wrote.

If Lamont is elected to the Senate, he will likely be asked to vote on regulating hedge funds. Voters have a right to know how his personal interest in these funds will shape his judgment. He should begin now by explaining how he plans to handle his personal wealth should he become a senator. Will he put it in a blind trust?

Will he trim his investment options to standard money markets, mutual funds and bonds? Or will he continue to dabble in hedge funds, mezzanine funds and venture capital investments that pose financial as well as political risks?

Peter Urban, who covers Washington, can be reached by e-mail at purban@ctpost.com.

Re: SIA Sues Utah Over Anti-NSS Law By sealman29 on 7/31/2006 9:05 AM
I certainly agree we should use the COUNTERFEIT word or COUNTERFEITER to describe the naked selling operatives.

So let me see if I get this SIA suit correct. The SIA suit says that if you are a counterfeiter operating in the state of Utah, (or any other state in America for that matter), and you sell counterfeit shares of public company securities in that state, you are totally immune to ANY state laws??? Your only fear is the FEDS???? Or the SEC???. What are these SIA guys smokin?
Re: SIA Sues Utah Over Anti-NSS Law By n-tres-ted on 7/31/2006 9:32 AM
Sorry, but I don't think "counterfeiting" fits the bill, because it relates to printing fake currency. This gives the victim the chance to recognize the fakery by examining the document. That doesn't apply with the shares sold and not delivered. Nothing is received to be examined; just an electronic entry of numbers. It is just stock sale fraud, because the seller intends to get money for stock he neither owns nor plans to deliver for the money received.
Re: SIA Sues Utah Over Anti-NSS Law By InTheKnow on 7/31/2006 9:59 AM
A PONZI scheme!
Re: SIA Sues Utah Over Anti-NSS Law By bueller wants to know... on 7/31/2006 10:22 AM
someone mentioned a possible way to disuade utah from fighting the federales would be to deprive the state out of any federal aid. this must be watched carefully. the federales have the power of the national purse...our income taxes!!!
...which dont seem to go to creating adequate regulatory systems!
now about this SIA suit having merit.
is this association just a lobbying group? does it get any govt protections or benefits when it is working to guillotine small investor rights?
anyone....bueller?
Re: SIA Sues Utah Over Anti-NSS Law By anon on 7/31/2006 2:01 PM
yes, the goy currently have a tremendous interest in all things non-goy due to the rapid availability of information via the internet.
Re: SIA Sues Utah Over Anti-NSS Law By dissent on 3/31/2007 10:39 AM
Bob you do fantastic work! Please tell me you've been contacted by Mel Karmazin of Sirius Satellite radio. I believe that SIRI is being illegally manipulated down by abusive naked short selling. Please investigate SIRI when you find the time.

Thank you for confronting the SEC. Just remember that the American investor knows that people like you and Patrick Byrnes are on our side! We appreciate your efforts and support you 100%!
Re: SIA Sues Utah Over Anti-NSS Law By mhatmccane on 7/29/2006 12:50 PM
It was my understanding that the Utah law complied with Federal law:


It's very very easy to just fall in to traditional thinking and SEC rules think, when the 1934 Act says something else.

My position is that the provisions of the 1934 Act will always preempt a conflicting SEC rule. The SEC is making all sorts of exceptions with a rule book a mile high that seems to conflict with the 1934 Act.

Let's think this through again :

Naked short selling is not delivering shares, there for effecting a trade without any transfer of ownership. check

Section 9 makes it illegal to effect a trade or illusion of a trade without the transfer of ownership. check

I think that's it.

Also if Section 17A of the 1934 Act of linking all settlement and clearing facilities were adhered to, no failing would happen anyway. But the 1934 Act covers it from both angles, seems to me.
Re: SIA Sues Utah Over Anti-NSS Law By tommytoyz on 7/29/2006 12:54 PM
I think the lawsuit can be dismissed simply on the grounds that the SIA has no grounds to sue. The lawsuit needs to come from a party that is affected. The SIA itself is not affected by this Utah law.

In any case, the Utah law does not require any parties to report anything more than they are already required to report to their SROs and the SEC.
Re: SIA Sues Utah Over Anti-NSS Law By davidn on 7/29/2006 1:11 PM
In late breaking news, Utah Daily News has learned that the drug cartel, colloqioally known as the Mafia has filed suit against a recent justice department crack down on mob related "hits".

"We always assumed that mob murders would be regulated by the federal government", complained Mob CEO Guido Fillipepi. "We've spent a lot of money explaining the importance of our business to federal judges and police and this recent change of jurisdiction is going to have a huge negative impact on our business.

This new government red tape is going to really impact our profits going forward.

We're already looking at laying off drug mules and low level hit men - I think the state government hasn't thought through how this is going to impact the state economy.

The federal government has always turned a blind eye to our drug hits and it is important that we sue to protect our right to do business the way we think it needs to be done."
Re: SIA Sues Utah Over Anti-NSS Law By davidn on 7/29/2006 1:23 PM
We shouldn't let reporters refer to this problem as short selling. Instead of calling it "naked short selling", I've been using tommytoyz' suggestion to call it "naked selling".

Unless you sell because you need money, all selling is a negative bet. Even long sellers are selling because they are no longer believers. Does that mean I am doing something for God and country when I dump my long position? What we are complaining about is "failure to deliver" what was purchased.

TRADITIONAL SHORT SALE:

1. The customer signs a margin agreement with their brokerage. In exchange for the ability to buy stock on margin, they are willing to allow their shares and associated voting and dividend rights to be lent to a third party.

2. When the third party enters into a short sale, they deliver real shares, including voting and dividend rights to the buyer.

3. The process is inherently limited because on a moment's notice, the lender can ask for his or her shares back, thereby squeezing the short.

NAKED SALE:

1. The seller takes real hard earned money from the buyer and uses it as collateral to send the buyer an IOU. The buyer is cheated out of voting and dividend rights and the value of the purchase is diluted by the extra supply.

2. As the endless float of IOU's depresses the share price, the seller is able to withdraw some of the collateral. They receive hard earned cash even though they have never delivered anything but a promise.

3. If the supply of IOU's reaches a level where the IOU's can never be honored, the regulators allow the sellers to flood infinte numbers of IOU's to try to bankrupt the company, thereby making the problem go away. If necessary, the regulators initiate an investigation into the company to try to further depress share price.

The buyer is unable to get a share certificate or a refund on the trade.

________

This is FRAUD and CRIMINAL BEHAVIOR. The only reason it happens is the criminals control the politicians, regulators and media.

We don't live in a dictatorship (yet!) and we have the right to NAME NAMES and demand that these criminals be arrested. There are individual human beings that need to be taken from their mansions in leg irons.

Our best hope is at the state level as the criminals didn't think it was important to control state media, regulators and politicians.
Re: SIA Sues Utah Over Anti-NSS Law By gregcable2002 on 7/29/2006 2:19 PM
To be sure the great state of Utah knew this was coming and they will be ready for anything these crooks dream up.We'll more then likely see the federal government try to cut off all federal aid to the state next if they don't get in line.There are more countrfiet shares in the system then real ones and it's impossible to cover,thats why the government is so adament about keep the real #'s secret.
Re: SIA Sues Utah Over Anti-NSS Law By gregcable2002 on 7/29/2006 2:28 PM
I guess the goy cattle aren't goy anymore.
Re: SIA Sues Utah Over Anti-NSS Law By Paladin on 7/29/2006 2:35 PM
Let 'em know how you feel and include the link to this blog....

http://www2.sia.com/hr/staffPage.jsp

Click on a name to send an email... :-)

******************************
Re: SIA Sues Utah Over Anti-NSS Law By ckza on 7/29/2006 3:09 PM
Here's an interesting question after watching an outstanding program on some history surrounding currency "counterfeiting" and "money laundering."

Where is Lincoln's "Secret Service" on the NSS issue today?

All of this legal wrangling which is designed to continue the "delay, delay, delay" process, needs to be swiftly cut off at the pass by a powerful U.S. organization that contains the "teeth" to bring swift justice against criminals.



Re: SIA Sues Utah Over Anti-NSS Law By x. trapnell on 7/29/2006 3:30 PM
Check out the TV coverage on KSL TV--click on the "Video" button. Patrick Byrne is featured and as usual has some memorable quotes concerning NSS.

http://www.ksl.com/?nid=148&sid=388415
Re: SIA Sues Utah Over Anti-NSS Law By counterfeiting on 7/29/2006 3:45 PM
You could always ask the secret service why they don't investigate counterfeiting of public company monetary instruments

http://www.ustreas.gov/usss/contact.shtml
Re: SIA Sues Utah Over Anti-NSS Law By IMPEACH COX NOW on 7/29/2006 3:49 PM
Let me get this right. The SEC has refused to enforce the laws concerning naked shorting. Instead the SIA drafts Reg SHO along with flunkies from the SEC to further delay any enforcements. Cox changes the mission of the SEC to exclude "maintain the integrity of the securities market". Something that he has NO power to do but that doesn't seem to stop him. An SEC investigator gets fired when he tries to investigate the rich and powerful. Suddenly Cox decides to hold the investigation after the Senate Judiciary Committee exposes the SEC's crimes. COX after tearing up subpoenas ,pardoning barred criminals , forgiving fines for criminals now holds a meeting in front of elections to maybe modify Reg SHO. Now John Nester, an SEC spokesman, said that the agency had no plans to file its own lawsuit. He didn't rule out that the SEC would filed an "amicus brief" to back up the arguments outlined in the SIA's lawsuit. He said only that no decision had been made. Who in hell is protecting the investors? It sure as hell is not the SEC or the SIA who have done nothing to stop this fraud. In fact they have perpetrated the fraud hand in hand. Have I missed anything?
Re: SIA Sues Utah Over Anti-NSS Law By dogfood on 7/29/2006 3:59 PM
Thanks X. Trapnell.

Bobo, you should post this on your front page in a really big font.

It is the best explanation for the problem I've seen yet.

http://real.ksl.com/video/slc/1/138/13825.ram

"Grandma eats dog food so some guy on Wallstreet can drive a Porsche..."
Re: SIA Sues Utah Over Anti-NSS Law By dogfood on 7/29/2006 4:05 PM
impeach,

The one thing that might be missed is this quote in the Executive Intelligence Review that makes the claim that Chris Cox is part of the Bancroft family that owns Dow Jones. Every slanderous article against naked selling has come from either "thestreet.com", "Dow Jones" or Dow Jones affiliates (CNBC).

"The Bancroft family continues to be the most significant shareholder of Dow Jones and the Wall Street Journal today, through Hugh Bancroft's descendants, including Jane Bancroft Cook, a Journal board member; the Cox family (Christopher Cox sits on the Journal's board); and socialite Elizabeth Goth."

http://american_almanac.tripod.com/wallst2.htm

The crooks wouldn't appoint one of their own to run the SEC, would they?
Re: SIA Sues Utah Over Anti-NSS Law By dogfood on 7/29/2006 4:15 PM
In case you want original sources, this was from Executive Intelligence Review Feb. 6, 1998

You can find dozens of articles written by Chris Cox in the Wallstreet Journal:

Example:

http://www.opinionjournal.com/editorial/feature.html?id=110005384

and other articles about his role as a congressman made it clear that they were referring to him.

The democrats, republicans and SEC are not going to fix this. They are going to stall you to save their rich criminal friends.

You need to get the word out to your friends and family and tell them to get the word out to their friends and family.
Re: SIA Sues Utah Over Anti-NSS Law By Little Bo peep on 7/29/2006 5:15 PM
davidn says:

This is FRAUD and CRIMINAL BEHAVIOR. The only reason it happens is the criminals control the politicians, regulators and media.
With Money.

You hit the nail on the head.
You are exactly right and everyone KNOWS IT.

The truth is there for ALL to SEE. They do NOT want to see it.
Delay is the program now with lawsuits, in order to allow the
THUGS to get all of the shit covered up and moved around.

The cowards do NOT have the courage to stand up and face the music. They will continue to lie, cheat and steal. Until they have their FACES put in public surrounded by shit. Then watch the scape goats appear one by one.

The rotten EGGS will get broken. They can no longer hide now all they can do is try to delay and shred paper. To silly to know that the data tracks cannot be erased no matter what. Who will they call to bail them out then?
You can smell the rot through your pc connection.

Everyone knows it is a Big pile of SHIT.
Regardless how they try to wrap it.

The media continues to use the term short sell on purpose. Instead of using Naked short selling correctly. They want to keep us Americans as confused as they possibly can. Because they know once everyone gets their teeth into all of this FRAUD it is going to get very ugly.

This show is going to be full of FIREWORKS. COUNT ON IT.

Bunny and company are doing excellent work behind the curtains and we have some wild cards they haven't been played.

Never under estimate a Pissed off American.