Conflicting articles about today’s halt to the anti-NSS law passed in Utah abounded in the news – it seems nobody could get the story straight.
Forbes and the WSJ wrote that a compromise was reached in agreeing to suspend the law until June of next year. Reuters wrote that a Federal judge blocked passage of the law.
Which is correct? Who knows. I suspect that Forbes’ take is the most accurate: “Utah Governor Caved…”
Sounds about right. Wall Street turned up the heat in a big way, and brought all their power to bear to halt a law that protects companies and investors from naked short selling, by requiring brokers to report who is doing it to what companies.
We can’t have that, now can we? That would be like requiring those that violate the law to be reported for doing so. And there’s an entire lobbying group that has been pressing to do away with reporting this crime, so that it can continue unabated.
Not surprising, and totally expected in a kleptocracy, where the law is crafted for the benefit of a small number of super rich special interests, at the expense of the rest of the country.
But here’s my question in this proud moment for Wall Street:
How does an entity with no legitimate legal standing to sue to block the law, get to raise such a stink, and block it? The SIA is a lobbying group, nothing more. It doesn’t trade stocks, and it isn’t affected by the law. It has no standing. So how can this happen?
The follow on is that, if this is such a small issue, why does this lobbying entity have to press this in court in order to block it? Why the full court press to stop it from being enacted, or at least to stall it for another year? Could it be that the FTDs in OSTK are so large now that some of the larger prime brokers on Wall Street would be seriously at risk just from that one issue, if they were forced to comply? And that they can’t take the discovery that would come from the inevitable instantaneous suits?
The bashers on the board are acting as though this is a great victory, which should tell you about how the battle lines are drawn – those who prey on investors are giddy over this setback, and investors are aghast at it.
Patrick Byrne had this observation about the recent developments:
"Utah passed a bill in favor of the rule of law, and our governor promised to ride tall in the saddle in its defense," Byrne said Friday. "Since then, the SIA has been out here lobbying night and day against the rule of law. They won."
Correct. They won this round. Apparently they had a lot to lose.
Our quaint notions about fair markets, and delivery of property when it is paid for, and the right to transparency, are all silly. Wall Street and the markets are designed to redistribute wealth from the rank and file, to Wall Street, either legally, or illegally. It doesn’t much seem to matter which, if you can spend enough to block the enforcement of the rules, and buy off new laws that could hinder your scheme.
One funny aside is that my sources tell me that the SIA agreed to support the law when it was being drafted, if they could delay its implementation until Oct. 1. They got that concession in return for their support, and then promptly reversed – off Wall Street, that’s called lying. Now, they have successfully gotten Utah to delay implementation until June, 2007. Again, this is a group that HAS NO LEGAL STANDING TO SUE TO BLOCK THE LAW.
WTF is going on? And why is Utah allowing the crooks who are breaking the law every day, failing to deliver – effectively REFUSING to deliver the shares they were paid for – to let their lobbying organization stall laws from here to eternity?
When did it become OK in Utah to refuse to deliver people’s property? To defraud them out of their cash, and then simply say, “Nah, I’m not going to deliver, maybe not for a month, or maybe not for a year. Nobody is going to do anything about it, so go F yourself. And thanks for the cash, chump!”
This law only required the brokers to report what issues were being failed, and which entities were failing – essentially creating accountability for abuse, if abuse was found. That’s pretty much it. And yet it was such a disruption for the brokers, such a danger, they had to pull out all the stops to get it stalled, or killed.
So who is going to explain to the buyers of OSTK who can’t get their shares, and are watching their asset value get demolished, that some lobbying organization representing the white collar criminals who are defrauding them has more clout with their elected officials and regulators than they do?
Governor?
You have anything to say, now that your initial soundbites are off the air, and it came time to put up or shut up?
I wish I could say I was truly surprised.
FWIW, I said for a while that I thought the law wouldn’t have a lot of impact, as the brokers would just move the fails offshore or ex-clearing by October 1, and presto, no more companies would be on the SHO list that were domiciled in Utah. I had folks argue with me that the number of fails in Overstock was so huge that it would be impossible to do so in time, thus this law would have some real oomph.
Apparently they were right. Of course, all the bad guys did was buy themselves another 9 months to do so, making their lives far easier and more profitable.
And that’s what it’s all about. Bad guys’ profits, also known as your retirement savings.
Any questions?