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A quick one from the holiday road

Location: Blogs Bob O'Brien's Sanity Check Blog    
Posted by:   bobo 12/26/2006 6:44 AM

 -----------------

Sign the Market Reform Petition Now!: View it here.

To view the SIA NYSE member firm spreadsheet showing $63 billion in delivery and receipt failures as of Q2, 2006, click here.

Visit the new "SEC/Gary Aguirre Cover-Up" section of this site for a compilation of Mr. Aguirre's efforts to expose the SEC's alleged obstruction of justice and whitewashing of insider trading by some of the biggest names on Wall Street.

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There's been a lot of news I've missed due to my holiday travels, but I want to at least try to offer up some nuggets of fun to keep idle hands engaged.

This article pretty much sums up why the SEC is as useless as sobriety tests in Russia.

The only thing they left out was that the SEC is now owned by Wall Street, and routinely lies to Congress, when they are willing to answer any questions at all.

And here, from Antisocialmedia.net, is the apparent identity of one of the more prolific presumably paid bashers who has plagued the NFI and OSTK boards - anyone doubting that the hedge funds short these issues hire teams of scumbags (i.e. that the notion of paid bashers is lunacy and hallucination) would best be served to read this. I can recall when David Rocker made his serendipitous massive put purchase just ahead of the completely unexpected 50% decline in NFI's share price, back in April, 2004 (driven by the largely bogus WSJ article that was followed within 24 hours by a Milberg Weiss suit and then an SEC probe) , several of this guy's IDs started posting 40 or more negative posts per day.

That appears to be vocational. But of course, the SEC, who is deeply respectful of these hedge funds' "juice" even if they lack respect for investors' rights, can't seem to find any links in all this.

Speaking of which, apparently there is confusion on Wall Street about flagrant market manipulation. Jim Cramer seems to believe that controlling the price of a stock is hunky dory. Don't believe me? Check out this pearl before swine. It's not so much that the crooks are in charge of the system, it is the apparent brazen glee with which they celebrate their stewardship that gets to me. Then again, the holidays are not my favorite time.

Easter is.

Ciao all. More later in the week. But I will be offline for the most part until early January.
Copyright ©2006 Bob O'Brien
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Comments (40)
Re: A quick one from the holiday road By sealman29 on 12/26/2006 8:21 AM
Cramer on video almost made me puke. Some of his snipets of wisdom for hedge fund year end payday are paraphrased below.

Dont do anything REMOTELY TRUTHFUL
Push the price down
Leak false stories to the press
Advocate Price Fixting
Implement strategy to maximize year end bonus
Create level of activity in futures market to move price down
Takes $5MM to drive a stock down, maybe $15-$20MM in bigger market
Its a FUN GAME to create negative view, drive down the price, control the market and make a Big Bonus
It is blatantly illegal to foment-but do it anyway-the SEC doesn't understand it-
Moron longs
Call a WSJ bozo and feed him lies, spread rumors or get out of the hedge fund game
And finally-I would not say any of this on TV

The video and story needs to go to every congressman, DoJ, FBI, SEC, etc. etc.
Re: A quick one from the holiday road By Sue on 12/26/2006 9:36 AM
I keep asking myself, where do all these billions of dollars in bonuses come from, and all I can come up with is the 401K plans that myself and the other hardworking Americans have deducted from our paychecks each week.

I only hope that I am wrong. Can somebody please show me where else the money could be coming from.
Re: A quick one from the holiday road By david on 12/27/2006 1:05 PM
Found it. The corrupt prime broker that facilitated the naked shorting was likely Bear Stearns.

Prime broker: Bear Stearns
Law firm: Sadis & Goldberg
Auditor: Rothstein Kass
Administrator: Olympia

I guess their auditor doesn't have a lot to be proud of either.

http://www.hfalert.com/NewPages/Index.cfm?Article_ID=1044669694
Re: A quick one from the holiday road By Iona Hogbin on 12/27/2006 1:08 PM
Can Cramer's video and article, The Games Hedge Funds Play, be used in the lawsuits that are showing how these scroundrels are manipulating the market and stealing from companies and investors?

I see Motley Stupid Fool put out a new article today about shorting. They forgot to mention Cramer and his buddies have to help them by calling trading desks and lying.

"You can't short just any stock, though. To be shorted, a stock needs to qualify as 'marginable.' That means investors can purchase shares on margin, with funds borrowed from their brokerages. Most stocks on the New York Stock Exchange are marginable, and many Nasdaq stocks also qualify, while stocks trading for less than $5 per share often do not."

http://biz.yahoo.com/fool/061227/116724315635.html?.v=1

Nice quote by the General Counsel of Universal Express, Chris G. Gunderson:

"Naked shorting is a prevalent scandal of enormous scope for public companies and the future of American trading confidence, especially smaller public companies. This practice involves selling counterfeit shares to buyers which are never delivered. These naked shares were never issued by the Company and are unregistered and counterfeit."

"The Company believes the naked shorting of its shares on each market day over the past 10 years to be in excess of 20 times its outstanding shares, on a regular basis, during this period," concluded Mr. Gunderson.

http://biz.yahoo.com/bw/061227/20061227005172.html?.v=1

Another lawyer to keep in mind for our side.

2007 should be interesting.

Happy New Year To All Good People!
Re: A quick one from the holiday road By Kuma on 12/27/2006 1:40 PM
Up 60% on this news today.
http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20061227\ACQBIZ200612271038BIZWIRE_USPR_____BW5172.htm&symbol=usxp&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&selected=USXP&selecteddisplaysymbol=USXP&coname=UNIVERSAL%20EXPRESS%20INC&logopath=&market=OTCBB&pageName=Company%20News&mode=&kind=&timeframe=&intraday=&charttype=&splits=&earnings=&movingaverage=&lowerstudy=&comparison=&index=&formtype=&mkttype=&pathname=&page=companynews
here is the sec Complaint By newspaper on 12/27/2006 2:25 PM
As you can clearly see the SEC specially uses the words "naked short"

Hankins made these false and misleading statements to conceal the Fund’s substantial investment losses as a result of large, naked short positions in Google, Inc. stock.

http://sec.gov/litigation/admin/2006/ia-2506.pdf
Re: A quick one from the holiday road By InTheKnow on 12/27/2006 3:55 PM
Get rid of the Grandfathering Clause NOW! People are getting tired of the SEC ripping investors off and those scumbag friends of theirs stealing our money.

This won't go away is is getting bigger by the second! Those crooked scumbags must pay! Why are they not going after that scumbag Cramer?
Re: A quick one from the holiday road By Sean on 12/27/2006 7:05 PM


Sterling's Classroom Member Forum



« CLB01219 Message list | Reply to msg. | Post new msg. « Older | Newer »
By: dcal
27 Dec 2006, 09:34 PM EST
Msg. 335782 of 335784
Jump to msg. #
SEC fines hedge fund for Canadian shorting

2006-12-27 15:39 ET - Street Wire

by Mike Caswell

The U.S. Securities and Exchange Commission has reached a $435,596 settlement with Spinner Global Technology, a British Virgin Islands hedge fund that used cheap PIPE shares to cover shorts at a Canadian brokerage. In an administrative settlement made public this week, the SEC says Spinner took advantage of Canadian laws that made naked shorting easier in 2002 and 2003. (All figures are in U.S. dollars.)

A former portfolio manager at Spinner evidently bought discounted shares in three PIPE offerings, for Hypercom Corp., Novatel Wireless Inc. and Tripath Technology Inc., which traded on Nasdaq and the New York Stock Exchange. The PIPE shares were restricted for two to four months, but the fund effectively sold them immediately using naked shorts.

Once the restrictions were lifted, the portfolio manager evidently covered the shorts with a series of prearranged trades. He phoned the fund's Canadian broker to tell him Spinner planned to sell its PIPE shares at a particular time and price. "Most or all of the buy and sell orders would meet, and the Canadian broker would use the PIPE shares that he had just purchased from [the fund's] domestic account to close out some of all of [the fund's] pre-effective date Canadian short positions," the SEC says.

Covering a short with PIPE shares, which are typically restricted for two to four months, is a violation of Section 5 of the U.S. Securities Act. "This is because shares used to cover a short sale are deemed to have been sold when the short sale was made," the SEC says.

Restrictions in the U.S. make naked shorting difficult, but in 2002 it was easy to run the shorts through Canada. In one of the largest examples, the SEC said New York fund manager Jeffrey Thorp made $7-million using Canada as a naked shorting conduit between 2000 and 2002. Mr. Thorp did not admit to any wrongdoing, but he and his funds agreed to pay $15.8-million to settle the allegations.

Two weeks ago the SEC sued a Texas hedge fund, Gryphon Master Fund LP, which apparently made $6.5-million shorting 35 stocks between 2001 and 2004. Like the other cases, including Spinner, the SEC did not identify the Canadian brokerage that served Gryphon.

Spinner did not admit to any wrongdoing in this week's settlement.
Re: A quick one from the holiday road By Stick That In Your Pipe on 12/27/2006 7:26 PM
Well after sitting around with enough information to shut down most of the pipers and their associates and get the DOJ to lock em up what does the SEC do? Settle for peanuts only after the law firms exposed the game to the world. The SEC already had the incriminating info years ago and did nothing. Now after their toes are being held to the fire they are starting to settle every thing they can to demonstrate they are no complicit in these offenses. Free passes for those that settle and at a SMALL FRACTION of the damages the illegal shorting caused. Are they(SEC) on the take? Look where all of the higher ups of the SEC end up when they leave. Some might call that bribery. Some might call it outright fraud that needs to be answered with jail time for these crooks.
Re: A quick one from the holiday road By Scumbag Thieves. on 12/27/2006 8:52 PM
Take your Grandfathering Clause and shove it up your Koola!
Re: A quick one from the holiday road By stavman on 12/27/2006 9:49 PM
give it to them alto babay
Re: A quick one from the holiday road By clearthinker on 12/27/2006 11:24 PM
If the Senate Banking Comittee isn't going to hold the SEC accountable for its actions, the Judiciary must intervene and appoint a special prosector. Having watched the Aguirre hearing a few times ( I could not believe my eyes and ears the first time), it is clear that Aguirre and Rivelin have a great deal of integrity and everyone else is trying to paint Aguirre as being "hard to work with". Problem is that EVERYONE who has seen the hearing can see that Aguirre's record is excellent and that he only became incensed when Berger, Hanson, Kreitman and co...started stonewalling a very well run investigation. No one is buying their BS and these ridiculous fines are just....insane....

Look at the Mark Valentine case, Bermuda Short. How could the SEC let this guy off so easlily after he destroyed the share prices of companies? If you or I did it, our feet would be singed, but not a guy like Valentine who was caught trying to sell tens of millions of shares he didn't own to the FBI in Bermuda Short.

It's well past time for the SEC's record to be held under a magnifying glass and answer to why they have let so many crooks off so easily, while the investing public must sit by and watch the charade.....

No more.....The Aguirre case must be the beginning of cleaning up our system....

No more gross, unjustified bonuses for Wall St firms that won't settle a trade
No more Golden Parachutes for CEO's who run companies into the ground and walk away with fortunes
No more protecting the rich and powerful at the expense of the integrity of our systems
No more companies on Reg SHO lists for years
No more manpulation by the media and hedge funds

Enough.
Re: A quick one from the holiday road By david on 12/28/2006 4:15 AM
Jon didn't naked short through Canada. He used Bear Stearns.

The handful of prime brokerages, including Bear Stearns net obligations using repo agreements, effectively allowing naked shorting / share counterfeiting by virtue of their role as a custodian.

They think they are bankers and they think share obligations are some sort of fiat currency.
Re: A quick one from the holiday road By One Big Happy Family on 12/28/2006 4:17 AM
http://www.100womeninhedgefunds.org/pages/about_us.php
Re: A quick one from the holiday road By ginger on 12/28/2006 7:56 AM
I'm not certain Old duffer.
Re: A quick one from the holiday road By Who's scamming who? on 12/28/2006 2:59 PM
Did they put in Reg SHO to pay off the Hedge Funds and the MM's?

Reg SHO screwed the investors and gave the Hedge Funds and MM's carte blanche to run wild. Where is all the bonus money from?
Re: A quick one from the holiday road By old duffer on 12/26/2006 10:06 AM
I know the tough time you can have with bashers and their power on the BB's. About three years ago I was in a BB struggle with a basher named DueDillinger on Raging Bull, the DataMeg (DTMG) thread. DueDillinger showed up on several boards at that time,first I noticed was the GeneMax short squeeze. I spared with him for over a year and was working on tracking him or his alias down.

I to this day don't know for sure if I was successful but this is what happened. I followed internet leads which made me believe that he/she may be a UK citizen by the name of Andrew Goldberg, who advertized a business consulting service.

To test my finding I conducted a posting test on the Raging Bull DTMG board. I sent a funny little message to DueDillinger in which I asked him if it were true that as he,little Andy was being born that the attending Dr. was so offender by his appearing that as the story went the Dr. slapped his mother in respose. I expected his normal smart sharp retort. What I got was a instant lost of posting privilage on RB plus 4 or 5 email meassages,one after the other saying I was to be suspended from RB for increasing periods of time. A few hours later I was told I was gone for good. And am to this day banned from that board.

If anyone knows if I was on to something with this DueDillinger poster I would like to know.TIA

old duffer,
Re: A quick one from the holiday road By gregcable2002 on 12/26/2006 12:55 PM
Sue,you hit the nail on the head,welcome to reality.Also they sell nonexsistent shares of stock to us retail investors and get paid a commission on the trades to boot.They take it all and give us entitlements,iou's,but we can trade our iou's if we want sothats why the sec has no problem with it.We americans are getting bled dry.
Re: A quick one from the holiday road By Sue on 12/26/2006 3:16 PM
So when Cramer & Company are ringing the register they are wringing out the money from my retirement savings account, the bulk of which they are buying ferraris and picasso's etc, with and then they give a small portion of my money to charity to assauge their guilt. Didn't they just pass a law that I now have to opt out of my 401K so they can fool me into thinking that it is for my own good to have them take the money out of my paycheck? Now they can just skim everybodies money at their leisure. Most 401k contributors have no idea what is going on, or believe you me, they would all opt out, as I am going to do. The robbing of our retirement money by these greedy crooks is a disgrace. How much money do they need?
Re: A quick one from the holiday road By ginger on 12/26/2006 3:45 PM
old duffer, DueDillinger hung around RB as DD until September 06
when he got bumped...

http://ragingbull.quote.com/mboard/memalias.cgi?board=all&member=DueDillinger

since then he has been back, mainly on the SUGG board under a multitude of aliases... the latest being ÿinvalid_sender

And RB TOSD me too for calling him Andy.
Re: A quick one from the holiday road By wsj on 12/26/2006 3:47 PM
I won't pay money for any Dow Jones propaganda publication, including the Wall Street Journal.

Look what they think of blogs like this one. I think they are scared.

The Blog Mob
"Written by fools to be read by imbeciles."

http://www.opinionjournal.com/extra/?id=110009409
Re: A quick one from the holiday road By WeWantItAll on 12/26/2006 5:29 PM
Sue,

Your Social Security money!
Re: A quick one from the holiday road By mhatmccane on 12/26/2006 7:58 PM
Bobo,

Thank you for the continued education and entertainment. The Article you cited was extremely informative. Bit off the beaten path of the SEC's failings but educational.
Re: A quick one from the holiday road By rtway1 on 12/26/2006 8:32 PM
If there is a lower form of life than Cramer please advise me. I have not seen anyone on this earth with a desire to screw his fellow man more than him and smile and laugh while doing it. I would hate to be his kids as they must have to change their names or where a bag over their heads when seen with him. One thing is for sure in this world' what goes around comes around. Guys like him usually go down in a blaze just like Dorfman and Calandra and Miliken. My only wish is that he spends the rest of his life behind bars or in misery. Somehow Cramer thinks he carries around a pocketful of God. He does not know the difference. God can't be bought off.
Re: A quick one from the holiday road By Bobo on 12/26/2006 8:50 PM
I'm sort of tied up for the next couple weeks, but I want everyone to know that the alarm I feel as I watch stocks like NFI get gamed in full view of whatever gods may be, by miscreants confident in their invulnerability, dismays me. I long ago protected my financial interests so these types of shenanigans would have little effect on my net worth, and will be within a year to the point where all my shares are free, however I am still in awe how the markets tolerate the scum to run them.

No wonder nobody wants to play anymore. Hong kong, bravo. London, here I come. When I sell my NFI, if I ever do, that will be the last I play in the US system. I'd rather buy Costa Rican beachfront than any listed issue - way higher chance of fair value and fair treatment.

Do they really think that we will never figure this out? No wonder they hate the blogs, and pretend they don't exist, or are a sucker's bet. We are eating the mainstream's lunch, and everyone knows it, and they despise a meritocracy. Despise it.

I don't blame them. I would too.
Re: A quick one from the holiday road By fairmarkets on 12/26/2006 9:20 PM
European based Clearstream and international repos seem to be as big or bigger problem than the DTC or the biggest custodians and their $60 billion problem.

It would be a mistake to think the transnational thieves would care which market we play in. All they would have to do is list the stock against the company's permission in a low regulatory regime (Berlin in Germany, for example) and arbitrage would allow the games to continue.

The rest of the world wants to play American stocks. The smartest thing we can do is force all shares traded in the US to be either held in cert form or held in a US based custodian on a one IOU, one share basis.
Re: A quick one from the holiday road By rtway1 on 12/26/2006 9:45 PM
I just got finished watching Jay Leno and he had on Martha Stewart and many memories rushed through my head of her being hauled off to jail and wearing the obligatory jump suit and all of the demeaning stories that accompanied the photos along with the injustice that was done to this woman. I was suddenly overwhelmed by the thought of that not one womens organization has come to step up to the plate and say "Hey, you chauvinist bastards, you have gotten away with millions of dollars of uncontested fraud and the very government who put our sister in prison is complicit in more scams that can fit on this page. If ever they had a cause to make an injustice out of a famous female this was it, and not a word. More interesting is that they could take the video of Cramer to the next NOW meeting and show how the injustice works in a self declared uncontested public statement. Again, I will make the statement, we have become a third world country run by rich white guys that want more. And they will get it until someone goes to jail.
Re: A quick one from the holiday road By Wjere are the Subpoenas? on 12/27/2006 4:01 AM
They put Martha Stewart in jail, those crook scumbags.

When is Cramer going to jail you crooked scumbags?
Re: A quick one from the holiday road By old duffer on 12/27/2006 6:55 AM
Thanks for the info. Do you know if Adrew Goldberg is in fact his real name? I know the fatherinlaw of one of the GeneMax people who would really like to make this connection.

I believe they may have plans for the bashers.
Re: A quick one from the holiday road By old duffe on 12/27/2006 7:06 AM
Last one was for Ginger.
Re: A quick one from the holiday road By rtway1 on 12/27/2006 7:46 AM
You know old duffer if I was a paid basher I would be as nervous as a cat in a dog pound. When they start plastering pictures of who these rats are they are now in the eyes of the public. If they were resposible for someone loosing their future or their well being that someone might want a get even card from the justice fairy. In the old days in Chicago, I don't think a basher would have made 6 mos. before taking a permanent vacation.
Re: A quick one from the holiday road By kevin on 12/27/2006 9:35 AM
He lost $20 million of other people's money naked shorting google, then lied to cover it up, court records show.

http://www.knoxnews.com/kns/local_news/article/0,1406,KNS_347_5238872,00.html
Re: A quick one from the holiday road By kevin on 12/27/2006 9:36 AM
Notice he was charged with wire fraud - selling shares that don't exist is a crime, despite what the SEC claims.
Re: A quick one from the holiday road By SteveM on 12/27/2006 10:03 AM
The article claims, "He lost a cool $20 million of other people's money engaging in a little naked short selling of Google stock and then lied to try to cover it up, court records allege."

Which PRIMARY BROKER sold the shares naked? The article later says he sold SHORT, and they use Uncle Fred's tractor as an example, which is a real asset.

Where is the NAKED short?
Re: A quick one from the holiday road By SteveM on 12/27/2006 10:06 AM
Losing hedge fund investors money in a bad shorting bet is the investors' problem and the hedge fund needs to be brought down.

Selling naked shares into the market is our problem. If true, the system needs to be brought down!
Re: A quick one from the holiday road By gregcable2002 on 12/27/2006 11:39 AM
Jon had a large naked short in google according to the sec,if Jon would have made money here he would be considered a hero,isn't the very act of naked shorting illegal? and he set the plan in motion in 2004,isn't that conspiricy to commit fraud? all he gets is a case for lying to his investors? I bet those investors of Jon's had juice.
Re: A quick one from the holiday road By COX SENDS SIGNAL on 12/27/2006 11:59 AM
Cox being trapped by the Aguirre scandal and the growing noise about naked shorting and other crimes against investors is starting to throw a few bones to the masses. Hopefully no one buys his token offerings as a sign that things are changing at the SEC. They aren't and won't until Joe Sixpack revolts. Publicizing a few token cases while the crooks continue the daily process of destroying thousands of companies with the SEC looking the other way just doesn't get it. Going after a few small fish and old stale cases that they failed to do anything about five years ago sends the message that if your a large hedge fund, prime broker or a large investor with juice you can continue to rob Mom and Pop.

Happy New Year!
Re: A quick one from the holiday road By Sean on 12/27/2006 12:44 PM
Universal Express CEO to Discuss Naked Short Selling on MN1 PrimeNewswire
Mr. Richard Altomare, CEO of Universal Express, Inc. (OTCBB:USXP), will be featured live on Market News First (www.mn1.com) for an exclusive interview with the MN1 news team. The interview is slated for Dec. 29, 2006 at 11:00 a.m. CDT.
Re: A quick one from the holiday road By david on 12/27/2006 12:59 PM
We need to contact Jamie and explain the difference between shorting, which most approve of (as it creates pent up demand and smooths volatility) and naked shorting / counterfeiting, which is a crime (fraud).

Jamie Satterfield may be reached at 865-342-6308.
satterfield@knews.com

Good point, SteveM

Can't the investors get control of the fund Tenet Asset Management LLC, then have the fund sue the prime brokerage for fraud and misrepresentation as they facilitated fraudulent transactions?

If we can find the court transcripts, we should be able to find out who the scammy prime brokerage is.

Jamie should be doing a story on the scammy prime brokerages that send buyers IOU's instead of real shares instead.

I bet readers in Tennessee would be more interested in a story about how they are being ripped off, then how some guys with juice lost money in a hedge fund investment.
Re: A quick one from the holiday road By david on 12/27/2006 1:02 PM
He steals $20 million from the buyers of google shares who received IOU's instead of real shares.

The SEC fined him $400,000

http://www.sec.gov/news/digest/2006/dig040306.txt

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