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Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud

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Posted by:   bobo 8/25/2006 1:11 PM

Forbes again scooped the entire NY media machine with this hot-off-the-presses expose by Elizabeth Moyer, who is proving to be a tough but fair investigative journalist on this breaking crisis.

Her latest article, "Naked Horror" can be viewed here.

Some of my favorite bits:

"An SEC spokesman had no comment on the data, which showed Global Links trade fails totaling 27.3 million shares on Feb. 4, coinciding with the first day that Feb. 1 trades should have settled. They were 23 million the next day and tapered off from there."

Yeah. Uh huh. I'll just bet. What are they supposed to say? "Whoo, ya got us - nice catch!"? What can they say? "Hey, what's 25 times the issued and outstanding shares between friends?"

I'm going to bet that calls from Forbes are not on the favorites list at the SEC this next week. Call it a hunch. Talk about a bad day at the office. "Jim, there's a lady on line three wants to know how we allowed 25 times a company's stock to be sold to investors, especially after Congress told us to investigate it. You wanna take it?"

That's just not a fun call.

Or how about this pablum from the Commission:

"Regulation SHO is an important federal securities rule meant to protect the market and investors from short-sale abuses," said Susan L. Merrill, chief of enforcement, NYSE Regulation in a press release. "As these cases demonstrate, firms that fail to enact effective procedures and systems by the compliance date threaten to undermine the important policies served by this rule."

Despite the tough talk, the collective fines imposed were $1.25 million. "

For those following along at home, that amounts to .04 cents per share, which is less than the commission these guys made. Wooooo. Scareeee deterrent. I wish I could violate the rules, make $10 million, and pay $100K. That would be a nice business. Oh, wait, it is. To the tune of $10 billion a year in bonuses just for one firm.

Huh.

"Global Links was caught off guard by the events that transpired in February 2005 when it implemented a one-for-350 reverse split of its stock, the result of which would reduce its float from 350 million shares to 1.1 million.

That is not what happened.

The reverse split went into effect Feb. 1. In the first four days of trading, more than 143 million shares traded hands. This is despite the fact that the stock was trading under a new ticker and a new trade tracking number, and despite the fact that it had only 1.1 million shares issued. The Depository Trust & Clearing Corp., which handles the lion's share of U.S. stock settlement, had just 929,277 shares available for trading.

"It became very clear that we had no control of the volume or price of our stock in anyway," said Global Links' Dobrucki, in a March 15, 2005, letter to shareholders. "Outside forces were now manipulating our stock."

See, if I had an $800 million dollar budget and thousands of attorneys working for me, I could have figured that one out.

"Bobo?"

"Yeah..."

"Guy on the phone says 50 million shares traded in his stock today, but there's only 1 million issued shares."

"Huh. That's weird. Wonder why? Do you think it's an angry and vengeful God exacting some terrible punishment on the investors in the company, and thus none of our business? Or is it a bunch of crooks running amok, robbing investors blind?"

"What was the first one again?"

"Never mind. I'll go with crooks are stealing everything that isn't bolted down. Seems like the explanation every time I look at these."

Now, granted, that I am merely a festive holiday rodent. But even bunnies know when they are being had.

Here's my favorite bit:

"Some have said it is all a simple matter of broker error. Accounts showing 350,000 old shares of Global Links should have been adjusted by the broker to show 350 of the new shares, but some have said that didn't happen.

Pat Donahoo, the manager of marketing services for Global Links, said Friday, "The process of issuing the new symbol on Feb. 1, 2005, worked just as it should. If the brokers tried to trade the stock on the old symbol, they would not have been able to. It was no longer an active trading symbol."

Donahoo adds, "When we saw the trading taking place in February of 2005, all we could do is stand back and watch the parade march down the street in total disbelief."

Don't you love how Wall Street always tries the, "It's all a big mistake" line first? I can't recall the last time one of these mistakes resulted in investors getting more money then they should. It always seems like Wall Street's mistakes wind up making Wall Street a fortune, while investors lose their shirts.

How much worse does this have to get?

Special Prosecutor, anyone? Or maybe we should wait for TEN frauds to be unveiled? Twenty? Forty?

Elizabeth Moyer and her editors at Forbes should be commended for again scooping the entire NY financial press corps, and delivering fair, balanced journalism. While some are focused on the latest "Patrick's crazy" or "Who's Bob O'Brien" bits, apparently others are doing true investigative journalism. Might no hurt to drop them a line and let them know that you appreciate a job well done.
Copyright ©2006 Bob O'Brien
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Comments (77)
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By pulitzer submissions on 8/25/2006 2:55 PM
http://www.pulitzer.org/EntryForms/entry_forms.html
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By rtway1 on 8/25/2006 3:14 PM
Liz Moyers could teach some of her peers about intestinal fortitude. This women is beyond belief one of the most courageous individuals I have ever read. Some of her male counterparts could not qualify to fill her shoes. I am definitely a Forbes reader as of today. In fact I wish Steve Forbes would run again for president to replace all the Bozos who are vying for that job but he is to honest.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By Does_ it_really_mater? on 8/26/2006 8:25 AM
The Reg. Sho. has just hit an all time (that'since its inception) low with 219 stocks showing up. When we get to zero it will be "it was nice while it lasted" but the question will remain: what did this circus achieve? Everything is being settled with no short squeezes triggered with the whole shit moving from Reg. Sho. to ex-clearing.

I can't wait to see the "there is no such FTD problem since there are fewer and fewer issues on the list. Reg. Sho. has been a success, no need for stinking rules from Utah, etc, etc" momo by the miscreants.

Next wall will be to force DTCC to open the books since we all know that it's where the gist of the matter and the stinkiest part are.

It's not like they are cheating in the shadows, look at how blatantly they are laughing at investors in the PGWC case. They feel they are above and beyond reach of the Law.

My American friends, your finacial system is rotten to the bones and I wonder whether the same cannot be said about your collective sense of ethics since good tends to appear as the exception rather than the rule. It will be up to you to prove whether you deserve it or not. I sincerely wish good will prevail but can't help feeling pessimistic watching the evil guys weeping every piece of dirt under the rug while always keeping one step ahead of the anti NSS side, playing by and out of the rules when needed. Using a sport metaphore, it's like watching a game between a team of tricky players versus a bunch of great ones taken individually but with no group strategy and always late on the ball. Guess who the odds tell us wins the game?

Getting the letters to the SEC about the Reg. Sho. ready when Reg. Sho. list is about to become a non issue because shrinking to zip... Talk about being late on the ball.

Good luck anyway
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By gregcable2002 on 8/26/2006 5:35 AM
I think Liz is starting to ask the right questions now,to the right people,in order to get to the truth,if there's no problem Liz will let us know,but,apparently there is because of what she found already,that little dutch boy is straining now,the dam of inquirery is about to break loose.Next news we get is one about a special prosecutor being appointed.There's no way around it now,to much of the scam has been uncovered.TIC TOC TIC TOC.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By gregcable2002 on 8/26/2006 5:47 AM
Oh,did I mention this is an ELECTION year.Anyone ever use a pressure cooker?
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By old duffer on 8/26/2006 8:24 AM
With this article we see that Forbes must have the guts to go against the other big money. One time and you may think that some editor just messed up by not killing her first one. This seems to prove that is not the case.

May I suggest that we all mail her a support letter and to show our support how about we all subscribe to Forbes. If you do be sure you also let them know why you are subscribing.

Support those who show some guts getting this story out there!
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By InTheKnow on 8/26/2006 8:28 AM
It is time that the SEC gets the same harrasement treatment that it gives any investor/CEO that upsets it's little Wall Street applecart!

Bring on the special prosecutor.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By rtway1 on 8/26/2006 6:21 AM
Bobo please reprint Jeff's statements and the answers and challenges that you threw back at him 3 or 4 days from now so that you might better expose this smarmy little crook and puppet for what he really is. This is something you have not done in the past and it would do well to again show the readers how these slime balls can be defeated at their own game by providing indisputable evidence to shoot holes in their misconstrued statements and figures.
Re: Selene Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By MarionPolk on 8/26/2006 8:27 AM
Global Links trading proves several important points.

There is no market mechanism to limit creation of counterfeit shares.

There is no market mechanism to require "fails" to be covered in a reasonable period of time.

The SEC and the DTCC do NOTHING to limit fraudulent market manipulation.

Who sold fake shares, why they sold fake shares, and how much they profited does not matter. What matters is the system is badly broken, and the corruption is plainly visable.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By Not a "journalist" on 8/26/2006 8:29 AM
So Carol's going as "selene" these days, eh?
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By bobo on 8/26/2006 8:51 AM
Selene: I've been more than gracious. Your time here has come to an end. The insults, the venom - not interested. We now have 8 examples of the same post - arguing over alternative hypothesis as to how the trading in GL took place. You studiously avoid the main points in each rant: Company cap reduced by 99.7%. Nothing stopping the massive naked short selling. Nothing requiring covering. SEC doing nothing to stop the madness. Statements in the Forbes article from the company indicating that your hypothesis is wildly improbable, at best.

We get it. Thanks for bludgeoning us with your view. Marionpolk says it best up a few posts. All the jabber fails to address his points, simple and eloquent as they are.

Thanks for your criticisms and all the insults. That works well to get your point across. Given that you have done exactly zero to promote this cause that I can see, and that you have spent an inordinate amount of time to try to, via innuendo, undermine Dave and my exposure of the level of fails that can occur in a company while the SEC stands by silent, I have to respectfully say that you are sounding exactly like some of the more unbalanced bashers on Yahoo. I won't have that here. So we don't need a 9th through 100th iteration of the same conspiracy theory mixed with accusations of error. We all understand what you are doing.

It was fun while it lasted.

Jeff: You made a number of statements intended to stand as some sort of alternative explanation - namely that the company was selling shares, that their filings IN THE CASE OF NUMBER OF SHARES DURING THE PERIOD REFERENCED were suspect or in error, that the SEC could be investigating, etc.

To which I responded by saying, wow, that sure is scaree, do you have anything besides your ability to type to support your innuendo and ideas?

To which you respond that you don't need any, that I have to prove my point.

OK. I have FOIA data showing 27+ million shares sold. I have SEC filings showing the true number of common shares outstanding, and the number issued over the relevant timeframe. I have statements from the company that there was no way this could have happened accidentally. I have the SEC doing press releases assuring us that Reg SHO would solve the NSS problem, and that it was working, and that we were all crybabies, even as a classic example of the lack of safeguards or any other meaningful deterrents to massive NSS was taking place in full view. I have the SEC subsequently assuring us that there is no problem, even as we get FOIA data showing NFI's daily trading as much as 40% fails, and OSTK spiraling out of control, and CALM being methodically worked to clear fails as investors are slaughtered.

You have innuendo, and alternative possibilities, which actually fail to do anything but, charitably, provide a possible explanation as to who was doing all the failing in Global Links.

That is nothing more than a thinly disguised "blame the company" riff, wherein you hint that they are dirty and bad and up to no good, and then build an entire theory on that, but fail to support your wild claims with a shred of substance.

That is a variation of the Selene riff, wherein again, the discussion is shifted from, "How could that level of FTDs happen, and why didn't the SEC stop trading and fix it, or admit what was happening so investors could be protected?" to "Maybe it is all an innocent mistake (ignoring the statements in Forbes) or maybe the company are a bunch of rat bastards". You not particularly nimbly hint that they were doing all the selling - ignoring that who placed the sell orders and failed to deliver the shares has exactly zero to do with my point - that massive fraud can take place, investors can get brutalized, and the SEC allows it to happen.

Maybe they are shifty rat bastards. I don't know. I don't care. What I care about is that here is proof positive that out of control levels of FTDs can and do happen, that the system allows it to happen, that when the SEC sees it, it fails to protect investors, but instead, covers it up.

That's about enough for me at this point.

If you have any substance, bring it on. I've never backed down from a fact-based discussion. If you have nothing but unsubstantiated claims and ever wilder theories, not interested. Jeff and Gary's blogs will be more than happy to accommodate you.

Thanks for dropping in, though. Always a pleasure.
fomr another board re: Global Links By clearthinker on 8/26/2006 9:30 AM
from the RB JAGH board

By: bluefish10012
26 Aug 2006, 01:07 PM EDT
Msg. 80537 of 80537
(This msg. is a reply to 80535 by positive_punch.)
Jump to msg. #
POS-so much for the reporters fact checking. There were 600 million free trading s-8 shares available to consultants and insiders on the day of the RS. They were RS proof.

And the real estate had been seized for non-payment of taxes.


bobo or Patchie....your response?

Thanks.....

BRING ON THE SPECIAL PROSECUTER! SETTLE THE TRADES!
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By InTheKnow on 8/26/2006 9:31 AM
By the by this fight is far from over... Reg Sho or no Reg Sho. Grandfather must and will be sent on his jet plane, ex-clearing must be investigated...

SETTLE THE TRADES OR SETTLE IN JAIL!

Bring on the special prosecutor for we all welcome it. Those who have have nothing to hide should have nothing to fear.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By SteveM on 8/26/2006 9:47 AM
The numbers don't lie. There is no way to make these FTD numbers fit the Shares Issued numbers. Period.

But, I believe this is just the tip of the iceberg. It is quite likely that the shares trading in EVERY STOCK ISSUE are well above the number of shares issued. Why not? Look at the mechanisms in place for buying and selling stocks. I no longer have to call my broker to trade. I don't even have to have a broker. I just mail a check to an on-line brokerage firm and buy and sell shares using my computer.

Everyone I know is doing it. More people are in the market now than ever before.

Yet stock prices have not reflected increased buying pressure. The supply vs. demand mechanism is damaged as it pertains to share price. Why? Why has an increase in buyers of shares, people giving their savings to the brokerages in exchange for the finite ownership in corporations, not increased the price of shares?

Because their are people counterfeiting shares... flooding the market with IOUs. Every broker/dealer in the secondary market is creating shares. Every market maker is creating shares. The foreign exchanges are creating shares. There is no limit to the number of shares available.

And, why is that? Because the SEC is not enforcing the laws and is contributing to the very problem that created them. That's all. For whatever reason, they are not doing their single purpose.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By bobo on 8/26/2006 3:01 PM
Clearthinker:

A couple of small problems with the full court press to blame the company for what was done to its investors (I'm not saying you, but that seems to be the sentiment of many of the apologists):

1) The statement is that there were 600 million freely trading s-8 shares AVAILABLE. I'll bite. How many were actually issued, and sold? Seems like a reasonable question. None? At all? 3.3 million, which increased the IS? I don't know. I say, tell me. Otherwise, this is all just throwing feces at the wall in the hopes that it sticks.

2) Assuming that some were sold, wouldn't they then have been delivered? If the idea being pushed as a full court press is that the company insiders "sold" real s-8 shares, why didn't they deliver them? The issue isn't, "who sold all the failed shares." That is what the bad guys are trying to make this into. It is called moving the goalposts. The issue is, "How did the system allow 27 million failed trades in a stock with 1.1 million issued shares? And why didn't the SEC halt trading, force settlement or unwind the trades? Why weren't investors protected against WHOEVER did bad things?"

I see that they are working all the boards trying to convert this from an indictment of the system, and the SEC's veracity, to a blame someone, anyone, and change the issue.

Won't work here.

And frankly, every time I ask, "Gee, that's a great theory, so why would they have to sell s-8 shares if they weren't going to deliver them? Why not just sell whatever the hell they wanted to call them - the key being that they didn't deliver them, so it doesn't matter what the bad guy hypothesis is?"

Let me break this down into baby talk.

Problem is fails.

Problem is not bad company. Problem is not conspiracy theories behind who sold what and why.

Problem is fails.

We have a word for selling s-8 shares. Word is, "Delivered." Good word. Means shares delivered.

Problem is, 27 million shares not "Delivered."

Other problem is, SEC supposed to protect investors.

Investors who buy shares.

Problem is SEC didn't stop trading, didn't sound alarms. Didn't do anything. Investors unprotected from bad guys, whoever they are.

Third problem is SEC say, "Don't worry, nor problem, all good, anyone saying not is kook."

To summarize. Problem is failed trades, not unsupported speculations as to who sold what to whom. Problem is SEC supposed to stop funny business, and protect investors, and didn't. Problem is SEC saying no problem when there is big problem.

Now, I suspect the average beagle could get this now.

Question is, will the bad guys get it, or just bulldoze right over it and continue with their script:

"The company is bad (did this, or brought this on themselves), and Liz is a hack (attack the messenger), and Bobo and Patch got this wrong (what wrong? FOIA says what it says, filings say what they say, no interpretation required...)."

It's a very familiar script. They never change it. They used it on Patrick too (OSTK bad, Patrick crazy, anyone supporting him a nut or a hack, etc.). It is their standard mechanism. Milken used it. Boesky used it. It is the SOP of Wall Street crooks for generations.

Please don't waste my time with these posts - it is all just part of their game. I'm not playing.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By hemingway811 on 8/26/2006 9:55 AM
I was unclear on a couple of matters related to the 1:350 reverse split so I checked SEC filings. There were two 1:350 reverse splits. The first was effective Oct. 7, 2004 and this was reported to the SEC:

"Form 10-QSB

For Quarter Ended: September 30, 2004

The number of shares of the registrant's issued and outstanding stock as of
November 1, 2004 was 22,856,687 shares of common (adjusted for the 1 for 350 reverse split effected on October 7, 2004)and, 15,000,000 shares of series B preferred stock."

The second 1:350 reverse split was effective Feb. 1, 2005 and they reported this to the SEC:

"FORM 8-K

ITEM 3.03 MATERIAL MODIFICATIONS TO RIGHTS OF SECURITY HOLDERS.

Date of Report (Date of earliest event reported): January 14, 2005

Effective February 1, 2005, the Registrant implemented a one for 350
reverse split of its authorized, issued and outstanding shares of common stock.
The number of authorized and outstanding shares of the Registrant's common stock has been reduced in accordance with the one for 350 split ratio to 5,428, 571 and 1,158,064, respectively, following the February 1, 2005 reverse split."

So, 5,428,571 shares were authorized, 1,158,064 of which were outstanding. That means, pre-split, there were 1,899,999,850 shares authorized, of which 405,322,400 were outstanding.

I have been unable to find anything that reconciles the 22,856,687 shares reported as outstanding after the first split with the 405,322,400 that had to have been outstanding in order to reduce the number to 1,158,064 after the second split.

What am I missing?
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By SteveM on 8/26/2006 10:02 AM
Typo correction: "Because there are people counterfeiting shares..."

And for ther issue of where are the investors damaged by the fraud?

The original purchasers of the shares who are watching their investment taken down to zero are defrauded. The holders of the pre-reverse-split shares who see their holdings cut by 350 x in one day are damaged. Anyone who has bought an undervalued company and then sold their shares because of irrational downward pressure on the price is damaged. Capitalsim is damaged. America is damaged.

If the fraud were stopped today, stock prices would rise and the system would begin to heal itself. But the fraud is allowed to continue so that the criiminals can prevent a short squeeze and keep their ill-gotten gains.

Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By newspaper on 8/26/2006 3:04 PM
SteveM,

Have investors learned to consistently make money on declining share prices?
Have investors learned to consistently make money on declining share prices?

The Over the Counter Backdrop

The only U.S. over the counter exchange with fully reporting publicly listed companies is the Over the Counter Bulletin Board Exchange or OTCBB. NewMarket is listed and traded on the OTCBB exchange. The OTCBB as a permanent operation is less than ten years old. The OTCBB began operation as a pilot project in 1990 as part of the Penny Stock Reform Act past the same year. The OTCBB was approved for permanent operation in 1997.

Since 1997, the number of listed companies has declined from 6,408 to 3,111 as of today. The total average daily share volume (the cumulative number of shares traded across all listed companies) has increased substantially from 71 million shares to 1.5 billion per day. That is half the number of companies and twenty times more daily traded share volume. The average price per traded share has dropped from $2.46 in 1997 to $0.09 today. Ironically, the average dollar volume since 1997 has only declined 22% from $175,000,000 to $136,000,000. The daily share volume increased 2000%, half as many companies are listed, the average share price has dropped 96%, and the total daily dollar volume has only declined by 22%. Many more shares trading with many fewer companies to be traded at dramatically lower share prices, but only a modest reduction in the number of dollars committed to the OTCBB market. In my interpretation, these statistics indicate more investors are participating in the OTCBB market over time even though share prices are going down.

As you might imagine, average daily share volume; average daily dollar volume and average traded share price dropped dramatically between 2000 and 2001. Since 2001, average daily share volume and average daily dollar volume have increased substantially, while average daily traded share prices have steadily declined. The number of listed companies is continuing to decline slightly and therefore has little impact on volumes.

One might expect the growing share and dollar volumes to indicate overall increased investment. The declining share price in the face of increased dollar and share volumes is confusing. Why are more dollars going into a declining market? Have investors learned to consistently make money on declining share prices?

A more recent look at the OTCBB presents perhaps an even more dramatic and telling example of the counterintuitive relationship trend between share volume, dollar volume, and share price. The total year-to-date volumes through October 2004 were 16 billion shares and $2.9 billion. The total year-to-date volumes through October 2005 were 29 billion shares and $3.1 billion. The 84% increase in total share volume and 9% increase in total dollar volume resulted in a 47% average traded share price drop from $0.19 to $0.09 per share.

http://www.newmarkettechnology.com/newsreleases/20051219_1.htm
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By clearthinker on 8/26/2006 3:11 PM
bobo -

I have been waging a war against FTD's and naked short selling for more than 5 years. I am ONLY concerned about maintaining the credibility of our side...not cause any problem. I agree with you that the other side ALWAYS digresses into a discussion of the weakness of the company's financials etc... and I also totally agree that this is about FAILS. The number of shares that were outstanding, available for sale etc... is of secondary interest (no pun intended), but it should NOT be a point of digression from the FAILS issue.

I understand your "testiness" from the Selene posts.....let's move forward....

C
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By Kuma on 8/26/2006 3:16 PM
Shares in Ford Motors have been rising in the wake of reports that Ford Motors might be considering going private, according to The Wall Street Journal.

USA Today has reported that, in order to buy some time to restructure and salvage its operations, the Ford family - which owns 5% of the automaker’s outstanding shares, and controls 40% of the company by way of a separate class of stock - is thinking about privatization.

The paper cites a source close to the situation, who says, "The family is willing to look at anything," said the confidential source. "A lot of different scenarios are being gamed out." That could include selling off some of Ford’s unsuccessful brands, cutting more workers and shutting down factories - or even partnering with another competing manufacturer.

Thomson Financial says that close to 600 banks or investment firms have a stake in Ford, while some 790 mutual funds also own a piece, according to the article. "The biggest benefit to taking it private is just not having to answer to all the external stakeholders they have to answer to today," Kevin Reale, an analyst with AMR Research, tells USA Today.

Ford shares are exceptionally undervalued, according to the paper, and its market cap is $14.5 billion - which accounts for only 25% of the much smaller DaimlerChrysler.

" ‘The assets are tremendously undervalued,’ said David Cole of the Center for Automotive Research. A private equity firm could be eyeing a future share price of $20 to $40, he said," USA Today reports.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By InTheKnow on 8/26/2006 4:09 PM
The SEC never protects the individual investor and turns a blind eye. Example:

1. The SEC OK'd Refco going public.
2. The recent Vonage debacle.
3. That crooked law firm operating for years.
5. The press and the subpeona supression.
6. The FTD's and the Grandfather clause.
7. THE STONEWALLING OF THE SENATE FINACE COMMITTEE
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By mitchell's post on 8/26/2006 4:11 PM
Bobo,

Jeff has been a long time Elgindy follower. My take is he is a trader that goes both long and short.

Jeff does seem to be getting it, slowly.

http://www.siliconinvestor.com/readmsg.aspx?msgid=22753947

As per his post, all street form shares are registered at the transfer agent on mass in the name of the mysterious partnership, Cede & Co. The transfer agent has no idea how those shares are allocated among the various participants or how the participants allocate them to the beneficial owners.

His analogy is actually pretty good. The bank co-mingles deposits of cash the same way the DTC co-mingle deposits of shares.

His comments on reporting to the IRS, etc. are off base. Once the shares are registered to Cede & Co., the transfer agent has no idea who the IOU's associated with those shares are allocated to. They have no way of separating out retirement shares from other types of shares.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By gregcable2002 on 8/26/2006 1:11 PM
When Liz Moyer use'es the heading NAKED HORROR for her article and calls for a special prosecutor guess what? She gets it,won't be long now,that house of cards is begining to fall.TIC TOC TIC TOC.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By hemingway811 on 8/26/2006 1:29 PM
Gregcable,

I sure hope both of you are right about the special prosecutor. It's long overdue. I've been following Liz's articles since April when she reported on the ETG lawsuit and later that month on the Quark lawsuit. I sent her an e-mail this morning to encourage her to do a follow-up on the inquiry initiated by Senators Grassley and Specter.

To show my appreciation, I processed a subscription to Forbes. If you use the option to pay online by credit card, it's only $ 24.99.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By Goofy on 8/26/2006 3:14 PM
"Ta-Dah"

There is a busy little private company you probably never have heard about, but which you should. Its name is the Depository Trust & Clearing Corporation. See their website www.dtcc.com. Looks pretty boring. Some kind of financial service thing, with a positive slogan and out there to make a little business. You can even get a job there. Now, go and take a look at their annual report. Starts with a nice litte Flash presentation and has a nice message from the CEO. And take a look at the numbers. It turns out that this company holds 23 trillion dollars in assets, and had 917 trillion dollars worth of transactions in 2002. That's trillions, as in thousands of thousands of millions. 23,000,000,000,000 dollars in assets.

As it so turns out, it is not because DTCC has a nice website and says good things about saving their customers money that they are trusted with that kind of resources. Rather it is because they seem to have a monopoly on what they do. In brief, they process the vast majority of all stock transactions in the United States as well as for many other countries. And - and that's the real interesting part - 99% of all stocks in the U.S. appear to be legally owned by them.

For rest of article:

http://ming.tv/flemming2.php/__show_article/_a000010-000923.htm
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By bryedge on 8/26/2006 4:14 PM
BobO,

Now, I suspect the average beagle could get this now.

All of my six beagles are offended. When I read your first explanation to them, they understood just fine. Of course, I think they are a bit above average. -lo
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By bobo on 8/26/2006 8:16 PM
mitchell's post:

You really want to get ugly, think about the SBP and the way it co-mingles all shares, on the honor system, creating a virtually bottomless, self-replenishing lending pool to satisfy FTDs with. With nothing but the brokers' honesty to keep them from depositing cash account and retirement account shares.

And yet there STILL are gazillions of FTDs.

If Jeff doesn't completely get why this is off the hook, he is bright enough that with a bit of investigation, he will. Whether he personally benefits from the system remaining as it is is another topic.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By rtway1 on 8/26/2006 4:28 PM
You know BYREDGE I did the same thing with my chocolate lab and had the exact same results as your beagles. However when I read him the post by Jeff Mitchell he raised his leg and started to---------,well I then took him out.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By hemingway811 on 8/26/2006 6:29 PM
i don't know the sentiment of anyone else, but I don't care to read another response to Selene.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By rtway1 on 8/26/2006 7:09 PM
This is the same person I assume who also had complaints that Pat Byrne answered personally and managed to put a muzzle on her(it) . She or (it) always shows up with baggage attatched. I agree with Hemingway I wish he or (it) would not be heard here again, unless to expose who he or she or it is and what the agenda is.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By Popeye on 8/27/2006 5:16 AM
Cause I eats me spinach. I'm SEC Cognizant.

http://www.washingtonpost.com/wp-dyn/content/article/2006/08/26/AR2006082600582.html
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By Get_Martha on 8/27/2006 5:30 AM
And the SEC puts Martha Stewart in jail.

Let the rich get richer and the investors get naked shorted!
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By gregcable2002 on 8/27/2006 6:00 AM
A person would have to be a total idiot not to see whats going on,either their profiting from an endless supply of shares or just plain stupid.With ALL the info coming out now why hasn't anyone in authority come out and give us a good explanation on whats going on? Instead they try to cover it up and change the subject,well that don't get it anymore,grandpa and grandma has been informed and are seeking a remeidy.TIC TOC TIC TOC.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By browntrout on 8/27/2006 6:24 AM
Jeff Mithchell- I am sure the SEC is investigating the Global Links situation. They probably re-opened it after Patch received the smoking gun info just like they have re-opened the Aquirre investigation of Mack after being exposed for holding a fraudulent and political investigation. I could be wrong because maybe they never closed their investigation but were just dragging it out until everyone hopefully forgot about it much like their "investigations" of naked shorting, SHO, etc. Seven years and they have effectively done nothing to shut down the crooks.

I am not telling you anything you don't already know, just things you don't like to see in print.

Now do us all a big favor here and slink off and go post on Elgindy's board some more disinfo about Elgindy serving the public's interest, innocent, blah, blah, blah.............
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By MarionPolk on 8/27/2006 6:49 AM
My email to Euromoney Magazine today:

In April 2005, Helen Avery wrote a very interesting and comprehensive story about naked shorting of stocks in the United States.

Featured in that story was the case of Global Links, were one investor bought 100% of the legally issued stock, yet the stock continued to trade many times the legally issued number of shares.

Recently the SEC, in response to a Freedom of Information Act request, revealed that on February 4, 2005, there was "failed delivery" of 27.3 million shares, when the stock had only 1.1 million legally issued shares. The information revealed that "fails" had been reduced to 14.2 million shares by March 1, but Global Links is still listed on the Reg.SHO list well over a year later, and after the company has issued many more millions of shares.

Some NYSE companies have never left the Reg. SHO list since it was created over a year ago, even though even mild enforcement of the rules by the SEC should have prevented this lengthy persistence.

I hope you can update your coverage of this issue, so that your readers are aware of the dangers of purchasing stock of companies traded on US capital markets.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By Patchie on 8/27/2006 7:28 AM
Global links was not naked shorted..it was manipulated. By the definition of manipulation you must havean impact on teh stock price in a manner of illegal trading activities.

The Excessive FTD's was created by Wall Street's clerical error. They forgot to adjust shareholder accounts thus allowing shareholders to sell excessive amounts of shares post split. That in itself is not fraud.

Fraud comes into play when they realize teh mistake and do nothing about it. Then, they willfully decided to have an impact on teh market cap of Global links - definition of Fraud.

Consider you receiving a payroll check from your company. When you deposit the check $1,000, the clerk actually deposits $10,000 in your account. Clerical error. Soon the bank gets an acciounting error as deposits do not match checks. They identify the problem and correct the mistake. If the perdson has already spent the extra $9,000 they must pay it back. pretty simple.

In the case of Global Links, Wall Streets reaction would be the equivalent to the bank not addressing the extra $9,000 but instead debited your company an additional $9,000 to cover their mistake. And they did it many times over. They stole the money to protect the mistake.

Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By piddly_sum on 8/27/2006 7:37 AM
It seems to me, the SEC can't deny the FOIA requests at this point, the data they are releasing is not proprietary to any firm, and the precedent has been established.

Why then should they not upload this data for all issues and make it available to the public? Why the rigor and delay for each and every request which must have limited scope.

In theory, such a move would benefit both the SEC and the public. Obviously they have it all in a database and the hour of "research" they charge $28 for is merely punching in a ticker symbol and two dates and out pops a spreadsheet.

I know, my question is rhetorical, the SEC would only do this if forced to do so kicking and screaming, but perhaps this should start to be asked (e.g. by reporters) as to what else are they covering up in there?

On a related topic, I seem to recall tommy submitted a request for total number of NFI shares counted by beneficial ownership (something else the SEC should have with a few keystrokes). Is this the case, and if so how long ago was that and what is the typical time frame for fulfillment/denial of these requests? As with the FTDs, with no propriety info for individual firms given up, it seems reasonable that one of those honest people over there at the SEC should grant the request.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By davidn on 8/27/2006 8:03 AM
Get_martha,

Rocker is a big Martha investor. No evidence whatsoever, but I wonder if she was set up so someone could come clean on a position. It seems dangerous to have your company associated with this guy.

Read the long / short strategy. Funds that declare themselves long often aren't.

http://www.asensioexposed.com/longshort.htm
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By Little Bo peep on 8/27/2006 10:03 AM
Silent Media, silent fart.

It will be a "Big" pile when it breaks to print.
Could it be like eating jalapeno peppers?
Plenty to drink or ass in a creek?
That could be "shit creek" to some.

Those silent farts can be eye watering. "Stinky"

Sometimes one just smells the shit before the source is determined.


A few more dumb questions.

William E. Ford sold 2,100,230 shares of NYX for 126,580,862.
Does he know anyone at Ford. stock symbol F?

Are ALL of the F trades/options marked properly? I have no position in F. Media attention lately. Why? Did all the shorts cover at 6 so now they are ready to play on the upside? Who knows the rest of the story? Nobody would ever attempt to manipulate F or GM stock to get what they want huh right?

Does Robert Rubin know William E. Ford from the NYX board?

Look at the marbles in SSA Global Tecnologies Inc.

http://www.chicagobusiness.com/cgi-bin/news.pl?id=20857&rel=1


New name-www.infor.com
combined marbles now......Did that all work out like planned?
follow the yellow brick road....................tough to keep up with new names.

How are www.nyse.com and www.dtcc.com connected?
Is there any special interest there?


As the truth gets near,
the personal attacks and scare tactics will get
louder and more often, computers hacked for info/tracking etc.

I want to grow up and be a closer or is that closure.
Sounded very smart huh? Please post 101 marketing schedule soon, so I can sign up and learn how to pitch and be a
closer/closure.

Anyone think some tummies are in for a "queasy" ride?
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By iscore4evr on 8/27/2006 10:32 AM
This is an interesting speech to congress by a former Chairman of the Banking and Currency Committee. He sure pegged a bunch of the miscreants of his day and OURS. It just keeps on keeping on.

On May 23, 1933, Congressman, Louis T. McFadden, brought formal charges against the Board of Governors of the Federal Reserve Bank system, The Comptroller of the Currency and the Secretary of United States Treasury for numerous criminal acts, including but not limited to, CONSPIRACY, FRAUD, UNLAWFUL CONVERSION, AND TREASON.
The petition for Articles of Impeachment was thereafter referred to the Judiciary Committee and has YET TO BE ACTED ON.

Read it in the entirety. This is our government at work. From which our current SEC was born to fix the problems on Wall Street. What a joke!

http://home.hiwaay.net/~becraft/mcfadden.html
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By bobo on 8/27/2006 10:34 AM
Patchie: Precisely. The manipulation came from doing nothing, and the SEC cover-up of that fraud while concurrently assuring us that there was no problem is what stinks to high heavens.

That is my problem with all the posts theorizing that it is the nefarious bad company insiders doing bad things, versus Wall Street doing bad things.

Who is doing it is a different question than why didn't the system catch it and fix it, and why did our regulators allow it to happen, instead of doing their job to protect investors?

It seems that a certain contingent wants to change the discussion to fruitless speculations over who was being bad.

At this juncture, I don't really care. At some point in the future, that might be another interesting topic. But at this point, it isn't the issue.

The issue is, how were 27 million FTDs allowed to be created, and why didn't the SEC and the system rectify the problem once it became obvious, and do its job to protect investors?

Put another way, how can investors have any confidence in a system that allows that sort of GROSS creation of FTDs (for whatever reason), and a regulator that allows it to happen?

I don't see it as complicated. I note that all the folks from the other side refuse to tackle that simple, linear progression, and instead take it to the "those guys are crooks, they were screwing their shareholders, blah blah blah blah" place.

Which may well be true, or untrue, but has nothing to do with the question of why investors were allowed to be defrauded, while the SEC did nothing to stop it?

To me, that question is the only one, and the pedigree or rap sheet of the company is immaterial. Because one does not alter the other.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By NO on 8/27/2006 11:03 AM
Two wrongs don't make a right. To illegally short a stock because one thinks they deserve it is WRONG. I do not trust these hedge fund sloths that steal millions with illegal activities.

Who made them judge, jury, and stock murderer? You are right there is a lot of fraud in the market place, and it committed by the SEC in collusion with the Hedge funds and Investment banks that steal the common citizen’s money.

They short illegally and they cover up illegally. Why would why should we think this is the only thing they do that is illegal? They are no better than average thief who mugs you on the street. In fact they are worse the mugger only gets your wallet; these scum buckets take your entire life savings.

The sad part about people attacking the small OTCBB companies that have been decimated by naked shorting (FTD, or SEC forgetting to R/S, or simple math errors) is that they flaunt the companies faults.

"The company was a scam anyway!" "They were just stealing innocent investor’s money!!"

So the SEC comes in and imposes high cost SARBOX which kills small companies, forgets to reverse split or fails to deliver the companies shares to the buyers.

Was the profit that was created by the FTD’s was it donated to orphanages?

Was that profit given back to the injured shareholders?

NOPE they kept it all of it. Pleb low class shareholders this is what you get for investing in a company like Global L.

Enough with the hedge fund hero talk who only target bad stocks.
ENOUGH with the scam company talk; what about the scam the SEC DTCC and Investment banks are pulling on us. Where is their accountability? Who is investigating them?

When there is no one to watch the watchers watch out.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By MarionPolk on 8/27/2006 11:56 AM
March 26, 2005

Mr. Larry E. Thompson
DTCC First Deputy General Counsel
DTC General Counsel
By fax to (212) 855-3215

Dear Mr. Thompson,

I found your recent “questions and answers” about the DTCC’s role in “naked short selling” to be remarkably uninformed.

I would like to pose one specific example, and receive a specific answer regarding the DTCC’s actions.

In very early February, one investor purchased 100% of the issued shares of GLKCE. In early March, a second investor purchased an additional 15% of the issued shares.

To the best of my knowledge and belief, both investors have asked for, but not received, certificates for their shares.

Prior to mid-February, GLKCE was added to the Reg. SHO list, where it remains to this day. In spite of appearing on the Reg. SHO list, and in spite of 115% ownership by two investors who have demanded share certificates, GLKCE has traded over 100 times the legally issued shares.

While I am aware of the fact that GLKCE may have issued additional shares in March, which may or may not be restricted or unregistered, this should not have allowed the DTCC to operate a “stock borrow” program in February, when there were clearly no legal shares available to be loaned out.

Please investigate your firm’s role in this illegal trading as soon as possible, and please investigate your firm’s role in facilitating continued violation of Reg. SHO rules in the trading of all securities appearing on all the Reg. SHO lists.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By InTheKnow on 8/27/2006 12:50 PM
Something really stinks at the SEC and the only way anyone can get to the bottom of this is a special prosecutor. PERIOD!
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By Little Bo peep on 8/27/2006 1:18 PM
Look it's a bird,
no it's a plane,
no it's a satellite and
we are going to control the world with our new technologies!
My name is, Mr Richie Rich and my partner is Mr Secrets Secret.

uh just one question boss.
What happens if the puppet strings break?

A few more dumb questions.

Who is that William E. Ford guy? Does he know anyone at the Ford Auto company.
Did he know of future satellite technology that would be upcoming in all the rides?
Did he get all of his 15,763,327 shares of his SSA Global Technologies, Inc for 11 bucks a share?

SSA Global technologies, Inc.

Tell us about that bankruptcy and Cerberus backing in 2000.
Look at those dots and see who collected the marbles.

Did any of those boys or girls know anything about satellites, GPS, IPTV, set-top box combining internet, satellite, VOIP, broadband, telecom?

Who are these boys and girls Golden Gate Capital and Cerberus Capital Management?
Do they know any good secrets?


Thrane & Thrane, the world’s leading manufacturer of terminals and land earth stations for global mobile satellite and radio communication, chose SSA Global ERP LN for its scalability, manufacturing functionality and ability to support global operations.
Thrane & Thrane is the world’s leading manufacturer of terminals and land earth stations for global mobile satellite and radio communication. The company is founded in 1981 and has since established a strong position within global mobile satellite services based on the Inmarsat system.
Is intelsat a big brother to inmarsat?
Do they have secret board members also?
Where is that Mr John Mack? Does he know any answers?

Funny how shit happens when one least expects it.
What a tangled web of FRAUD.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By bbhindyou on 8/27/2006 2:36 PM
Hey peep do you mean to say that all of our communication and information services have been aquired by those most likely to make the best use of it for themselfs?Do you honestly think there MAY be some originazation trying to get control of our communication and information acess and somehow influence it?Our government wouldn't allow that would they? My you got me so worked up I thonk I need to take one of those little pills the doc gave me.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By scott on 8/27/2006 4:33 PM
CSHD might be next cover stock for nss
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By rtway1 on 8/27/2006 5:33 PM
Bobo if you made a $40 error on your income tax statement the IRS or Gov't. would spend thousands of dollars to collect it even though it is a miniscule amount in the grand scheme of everything. The shoe has to be worn by all parties no matter what the size.
Re: Forbes Again Breaks Story on SEC Cover-Up and NSS Fraud By gregcable2002 on 8/28/2006 4:30 AM
AUGUST 28, 2006 | SAN DIEGO, CA
KFMB STATIONS: News 8 | 100.7 JACK FM | 760 KFMB



Prudential to Settle Rapid Trade Dispute

Last Updated:
08-26-06 at 9:14AM

AP -- _ On Monday, state and federal authorities are expected to announce a civil settlement with Prudential Financial Inc.'s securities unit, according to a published report.

The pact will settle allegations former Prudential brokers helped investors rapidly trade mutual-fund shares, The Wall Street Journal reported in its Web site Friday, citing two people familiar with the situation.

The settlement is expected to be one of the largest resulting from a broad probe of so-called market timing that has rocked the fund industry for the past three years. In 2004, Bank of Am