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Lenin: Repeat A Lie Often Enough....

Location: Blogs Bob O'Brien's Sanity Check Blog    
Posted by:   bobo 12/6/2007 3:03 PM

Would it surprise any of my readers to find out that 'lilGW is caught red-handed (again!) being a lying liar, by a respected British publication, and in the process that Wikipedia is shown to be a tool of special interests deeply committed to controlling the "truth" about naked short selling?

Probably not. We've known that for years.

But the general public hasn't known it. Now it does. The impossible saga of one area on the entire planet where you cannot edit Wikipedia - Judd Bagley of Overstock's neighborhood - and one company in the world from which you cannot edit Wikipedia - Overstock - is an ugly, ugly revelation of how the supposedly unbiased online encyclopedia is actually being used as a propaganda machine by its senior editors, and apparently, it's creator.

Why should we care? Because it shows how badly the financial machine wants to keep a lid on the naked short selling saga, and how far it will go. And it also demonstrates that Wiki has been hopelessly corrupted by the bad guys.

So how can you believe anything you read on a site whose editor for naked short selling is its greatest enemy - or rather, its greatest defender/apologist/denial-meister?

You can't. That's the message. They lie. And they feel it is OK to lie, to you, about certain things, because they don't want you to know the truth - arguably, because the people pulling the strings and writing the checks are afraid you might get really pissed off, and stop playing, if you knew how badly you were getting screwed.

Read the article, and then DIGG it, so it gets lots of visibility. These scumbags really shouldn't be allowed the cover of darkness for their misdeeds any longer.
Copyright ©2007 Bob O'Brien
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Comments (39)
Re: Lenin: Repeat A Lie Often Enough.... By rtway on 12/6/2007 9:17 PM
When the day of full disclosure happens I will be the most curious soul on earth to find out how much GW made from this whole scam. Is it worth all the work and bullshit and lies and looking over your back to get enough sheckles to sell your fellow man down the toilet and risk lives or be responsible for those who might have lost their lives. Seems to me living a clean life and working hard has far greater rewards and recognition. I guess the operative word or words is working hard. Karma is a bitch.
Re: Lenin: Repeat A Lie Often Enough.... By rtway on 12/6/2007 9:22 PM
Some talented and honest scholar could take the torch away from Wiki and start anew with full disclosures and a board of directors with real credentials.
Re: Lenin: Repeat A Lie Often Enough.... By bobo on 12/11/2007 7:20 AM
Value: I don't discuss companies like US Express because, frankly, one of the dangers of being company specific is that if and when the company is shown to be a trainwreck, or the CEO a criminal, that tarnishes the collective effort. I have absolutely no doubt that the SEC behaves in reprehensible ways - I have seen it firsthand. I also don't know whether the CEO of US Express is a saint or a sinner. But I sure won't hang the credibility of this entire battle on a hope that he is a saint.

The reason I support Patrick is because his suit against the prime brokers will demonstrate effectively how absolutely corrupted the system is. Without the brokers acting as a criminal syndicate, a cartel, none of this would be possible in the US. They have to choose to allow these fails to remain open far longer than any rules allow, for personal gain, and in an organized and illegal fashion. That's RICO. If Patrick prevails, which I believe is highly likely, that is the ball game. Just discovery is the ball game, frankly, and I have opined in the past that he probably already has enough ammo to bury them, but wants discovery to corroborate what he has already dug up - in other words, if I am right, he could go to court tomorrow and prove conclusively that the prime brokers are behaving in a criminal and organized manner, to destroy companies for profit, so that their hedge fund customers, and their own internal trading desks, can make fortunes.

We don't need to hang our hats on US Express, or any other single company, because we have little things like a Senate report stating bluntly that the SEC is corrupt or incompetent, we have the SHO list showing the companies where the brokers refuse to deliver shares, we have the SIFMA $192 billion number on their own spreadsheet just for NYSE firms....

While I will follow the US Express case with interest, when SIFMA is showing $192 billion in fails, and that doesn't count the 10 times larger ex-clearing and international and desked trading of fails, we don't need to focus on single companies.

One could say it is a little bigger than that, now. My humble opinion.
Re: Lenin: Repeat A Lie Often Enough.... By Sean on 12/13/2007 3:01 PM
In a previous post I inadvertently indicated that the interview Dr. Byrne has given should not have caused his companies share price to dive the way it did yesterday and is doing so again today, I was wrong, Patrick also did mention that the system amy implode eventually with all the debt and cheap credit that its in and has created"the house of cards that is the US economy". These are the comments that are true but he and his company are being punished for. So there is my answer.
Re: Lenin: Repeat A Lie Often Enough.... By daven on 12/13/2007 3:03 PM
ValueInvestor, this is a point I have made on occassion. It doesn't matter if a company is a total scam (not saying anything about USXP as I don't know much about it), but that the pedigree of the company doesn't matter.

The money the investor used to purchase shares was real and the shares that they purchased should also be real.

Imagine if you bought a brand new car and when you demanded delivery, the salesman said "That car was a real lemon. I'm doing you a favor by not delivering it to you."

When I place a bet, it shouldn't matter if my bet is stupid or misguided. If there are more buyers, than sellers, the price should go up even if the underlying asset is worthless.

It's not up to Wallstreet to arbitrarily say an asset is overvalued, then take your money and deliver back nothing in return.

I just read an article about the subprime mess - the rating agencies committed criminal fraud by misrating the bonds. People could get arrested over this and the foreign banks that bought the bonds can sue to demand their full original money back.

The people behind counterfeiting shares are criminals. They may have friends in high places, but so did many other criminal cartels that have been arrested over the years.

We have all the power folks as there are way more of us than them.
Re: Lenin: Repeat A Lie Often Enough.... By oldfeller on 12/13/2007 3:04 PM
I`m happy to see these people resorting to tactics like manipulating wiki. That tells me the crooks are extremely afraid of the light. And the light is getting brighter every day. Let them waste their time trying to invent creative lies while the rest of us grow and learn more truth every day. I have not heard the old adage that humans only use 10% of their brain lately. Finally there is a way to share information and start using a little more of that gray matter for something besides dreaming. It`s going to be hard for them to dumb down the kids that are growing up now.
Re: The Devil May Care, but Apparently the SEC Does Not By rshazam on 12/15/2007 10:08 AM

While media and politicians obsess about steroids, dogfights and other drivel, there are sociopath mthrfkrs out ther stealing billions/trillions of our money -- and getting away with it because the people who are legally responsible for enforcing the laws on the books-- and protecting the investing public- are doing just the opposite; and no one, including the pretend financial press, is doing much of anything to hold anybody accountable. That's a basic messge to communicate as does the below release.





http://money.cnn.com/news/newsfeeds/articles/prnewswire/LATH03313122007-1.htm

Overstock Appears on the Regulation SHO Threshold List for 666 Consecutive Trading Days
The Devil May Care, but Apparently the SEC Does Not
December 13, 2007: 09:00 AM EST

SALT LAKE CITY, Dec. 13 /PRNewswire-FirstCall/ -- Overstock.com, Inc. announces that today marks the 666th consecutive trading day that it has appeared on the Nasdaq's Regulation SHO threshold list (see http://www.nasdaqtrader.com/aspx/regsho.aspx).

As Securities and Exchange Commission Chairman Christopher Cox stated last year: "The need for Regulation SHO [effective January 2005] grew out of long-standing and growing problems with failures to deliver stock by the end of the standard three day settlement period for trades, some of which were symptoms of abusive 'naked' short selling. Selling short without having stock available for delivery, and intentionally failing to deliver stock within the standard three-day settlement period, is market manipulation that is clearly violative of the federal securities laws. In response to these problems, Regulation SHO imposed mandatory close out requirements on broker-dealers with fail to deliver positions in securities with a substantial level of persistent fails. A clearing broker-dealer now has to close out a fail to deliver position in a threshold security that has persisted for 13 consecutive settlement days by purchasing securities of like kind and quantity. A security becomes a threshold security if there is an aggregate fail to deliver position of 10,000 shares or more for five consecutive settlement days; if the position is equal to 0.5% of the issuer's total outstanding shares; and if the security is included on an [exchange's] threshold security list." (See http://www.sec.gov/news/speech/2006/spch071206cc2.htm.)

Despite the requirement that a clearing broker-dealer must close out a fail to deliver position in a threshold security that has persisted for 13 consecutive trading days, Overstock has been on the Regulation SHO threshold list for 666 consecutive trading days (and a total of 706 trading days). "Apparently, the SEC is not serious about enforcing the close out provisions of Regulation SHO or stopping 'market manipulation that is clearly violative of the federal securities laws.'" said Overstock chairman and chief executive officer Patrick Byrne. "For possible reasons for the SEC's indifference, I recommend you listen to a speech that I gave in October. It is at http://www.deepcapturethemovie.com."

Curiously, the Regulation SHO Threshold Lists only report companies that are victims of abusive and violative trading; they provide no disclosure of either the amount of fail to deliver positions or of the institutions who fail to deliver. A person can obtain information on the size of past (but not current) fail to deliver positions through petition to the SEC's Freedom of Information Act (FOIA) office, but then only many months after the request. For example, Overstock is still waiting for a response to a August 23, 2007 FOIA request asking for the aggregate amount of daily failures to deliver in Overstock from January 1, 2007 through May 31, 2007, notwithstanding a September 19, 2007 acknowledgement letter from the SEC.

In addition, none of the SEC, the Depository Trust and Clearing Corporation and the Nasdaq will disclose the names of the institutions failing to deliver, even through FOIA petition, as "fails statistics of individual firms ... is proprietary information and may reflect firms' trading strategies." (See http://www.sec.gov/spotlight/keyregshoissues.htm.)

"When I asked SEC Director of the Division of Trading and Markets Erik Sirri how Overstock could stay on the Regulation SHO threshold list month after month, Dr. Sirri responded that 'the SEC doesn't regulate for the corner cases,'" said Overstock senior vice president, corporate affairs and legal Jonathan Johnson. "That raises the question, does the SEC also not enforce the 'corner cases' either? That might explain how Overstock can perennially appear on the Regulation SHO threshold list."
Many companies, besides Overstock, continue to appear on the Regulation SHO threshold list for extended periods of time and, despite withering criticism from Members of Congress, the U.S. Chamber of Commerce, public companies and informed market experts, the SEC has been slow to adopt meaningful Regulation SHO reform. Recently, in a commentary published by The Washington Times (see http://www.washingtontimes.com/article/20071121/COMMENTARY/111210005/1012/COMM ENTARY), Johnson urged the SEC to put a stop to these manipulations by adopting the "G.O.L.D." standard in Regulation SHO reform: "G": eliminate Regulation SHO's "G"randfather clause; "O": eliminate Regulation SHO's "O"ptions market maker exception; "L": require short-sellers to "L"ocate and borrow shares before selling them; and "D": require the exchanges to "D"isclose fully and promptly the aggregate failure-to-deliver positions for every threshold list company.

To its credit, the SEC has now eliminated the grandfather clause. However, the SEC has yet to implement the remaining slate of necessary reforms.

On this portentous day, Overstock renews its assertion that the solution to the problem of manipulative naked short selling is the complete adoption of the G.O.L.D. standard and calls for the SEC to (1) eliminate quickly Regulation SHO's options market maker exception; (2) require short-sellers to locate and borrow shares before selling them; and (3) require the exchanges (or the DTCC) to disclose fully and promptly the aggregate FTDs for every company listed on the Regulation SHO threshold list. In addition, Overstock calls for the SEC to enforce the close out requirements of Regulation SHO so that no fail to deliver position ever persists for more than 13 days.
Re: Lenin: Repeat A Lie Often Enough.... By unitedstatesofenron on 12/15/2007 10:10 AM
One of the things that would get the brokers, hedge funds and governments attention is if shareholders and the companies that have been targeted jointly sued the hedge funds and brokers. Everyone currently knows there are at least 7 or 8 high profile suits winding their way to discovery. Maybe if and when discovery proves the level of wrongdoing then law firms will present themselves probono to feast on the brokers anyway. Could you imagine if every week there were 3 or 4 lawsuits coming out, sort of like Milberg Weiss in reverse. Boy , then you would here the government spring into action. I guess in the end the hedge funds have already moved all the loot offshore and the brokers will not be allowed to fail. The investors will be proven right, given some trinkets of appreciation while the media laments that it had been common knowledge all a long....
Re: Lenin: Repeat A Lie Often Enough.... By Anthony K on 12/15/2007 10:11 AM
Bobo , why woudnt Patrick sue the SEC ? he has a case ....OSTK has been on the regSHO list for more than 669 consecutive days , is it because he knows they would retaliate ?
Re: Lenin: Repeat A Lie Often Enough.... By Sean on 12/15/2007 10:12 AM

Is Google's 'Knol' a Wikipedia Killer?
Posted: 9 minutes ago
Filed Under: Tech News, Business News
Google challenges Wikipedia's free online encyclopedia with new user-generated pages called "knols." Whether the service will become as popular as Wikipedia remains to be seen, but as BloggingStocks' Tom Taulli explains, some might be interested in a key differentiator between the two. Quote: GOOG

Now ain't this a kick in the head???
Re: Lenin: Repeat A Lie Often Enough.... By bbhindyou on 12/15/2007 10:13 AM
Bobo
have you any idea what has happened to Bud Burrell?
I am begining to worry.
If he is just taking a well deserved break great.
If he is not I was worried some one might have shut him down against his will.
If you know I would appreciate a word.
I have enough to worry about!
Thanks,
bbhindyou.
Re: Lenin: Repeat A Lie Often Enough.... By bobo on 12/15/2007 10:14 AM
bbhin: Bud's fine, just busy. As always, or rather, more than always. Same thing happened to me.

Life is what happens while you are making plans.
Re: Lenin: Repeat A Lie Often Enough.... By bbhindyou on 12/16/2007 6:21 PM
Thanks for the word,no worries.
Enjoy the holidays.
Re: Lenin: Repeat A Lie Often Enough.... By Sean on 12/16/2007 6:23 PM
You guys have GOT to see this video.

Ron paul on Jim Cramer's show Mad Money, talking about destroying the FED

http://www.bloggingstocks.com/2007/12/15/ron-paul-and-jim-cramer-trash-the-fed-together/
Re: Lenin: Repeat A Lie Often Enough.... By Sean on 12/16/2007 6:24 PM
Citigroup Puts SIVs on Balance Sheet
By MADLEN READ,AP
Posted: 2007-12-15 03:20:07
NEW YORK (AP) - It's been a big week for Citigroup : the bank named a new CEO and then, in an about-face, took control of the seven troubled funds it previously managed at arm's length.

Investors are viewing the two moves as steps in the right direction to restore the bank's shaken reputation, but also expect there is more to be done. With a month to go before Citigroup Inc. is expected to reveal its first quarterly loss in over a decade, investors remain uncertain how much the bank's financial muscle has atrophied amid the tight credit markets - and what bitter pills the bank must swallow next to regain its strength.

Responding to foundering investor confidence, Citi late Thursday said it will incorporate its seven "structure investment vehicles," or SIVs, onto its balance sheet. The SIVs have $62 billion in assets - or $49 billion excluding cash and cash equivalents - and $58 billion in debt. Citi had previously set aside $10 billion in liquidity aimed at keeping the SIVs operational, but Thursday's move makes Citi's obligation to the funds official.

SIVs are investment funds created by banks that sell short-term debt and invest the proceeds at a higher rate in long-term debt. When the credit markets tightened, SIVs had trouble finding buyers for short-term debt, while the value of many of their longer-term investments plunged.

Citi shares fell 31 cents to close at $30.70 Friday.

http://money.aol.com/news/articles/_a/citigroup-puts-sivs-on-balance-sheet/n20071215032009990006
Re: Lenin: Repeat A Lie Often Enough.... By rshazam on 12/16/2007 9:57 PM

The oblique approach. GM knows all about naked shorting-- but appears limited in what she can say about it.



December 16, 2007
FAIR GAME
Quick, Call Tech Support for the S.E.C.

By GRETCHEN MORGENSON
IT’S no secret that the Securities and Exchange Commission is terrifically understaffed and wildly underfunded compared with the populous and wealthy Wall Street world it is supposed to police. But a report by the Government Accountability Office to be released Monday indicates that in its battles against insider trading and market manipulation, the commission declines to use one of the sharpest tools in its arsenal: the internal audits conducted by the nation’s stock and options exchanges.

Moreover, S.E.C. investigators’ efforts to track questionable trading are hampered by a computer system that does not allow investigative referrals from the major exchanges to be searched easily and efficiently, the report said.

The new report on the S.E.C. focuses on its oversight of various stock and options exchanges, known as self-regulatory organizations, investors’ first line of defense The study was requested by Senator Charles E. Grassley of Iowa, the ranking Republican on the Senate Finance Committee.

Mr. Grassley asked for a review of the commission’s operations last year after his staff delved into a botched S.E.C. investigation ( ie: coverup) of possible insider trading at Pequot Capital Management, a major hedge fund. The G.A.O.’s report, “Opportunities Exist to Improve Oversight of Self-Regulatory Organizations,” is disturbing, he said.

“They’ve got a computer system that can’t search for the data the securities industry is reporting — that’s like working with one hand tied behind your back,” Mr. Grassley said in an interview. “And it was kind of shocking to know that the S.E.C. doesn’t review the exchanges’ internal audits. That’s inefficiency and there is no excuse for it.” (not just inefficiency)

There is no doubt that market mischief has enriched many players recently, especially during the mergers-and-acquisitions boom, when so much suspicious trading occurred in stocks of companies minutes before they received buyout bids.

Sure enough, the G.A.O. report noted that the exchanges’ referrals of possible trading improprieties have surged. From 2003 to 2006, the number of advisories to the S.E.C. increased to 190 from 5. Of the total during those years, 91 percent were insider trading advisories.

But when referrals come in to the S.E.C. from the exchanges, they enter a digital netherworld where investigators can search by stock ticker, date of the unusual activity and type of trading, but not by the name of someone or some firm who may be under scrutiny.

Information about who is behind suspect trading, which can help identify patterns of illicit activity by hedge funds, firms or individuals, is submitted in an attachment that must be opened individually under the system’s design. As such, it is not part of the searchable database, the G.A.O. said.

In addition, only branch chiefs in the office of market surveillance, a unit of the S.E.C.’s enforcement division, have access to the referral data. So S.E.C. lawyers working on a case have to ask market surveillance for help or contact the exchanges directly, rather than search for the information electronically, the G.A.O. said.

The report also said that because the referral and case tracking systems are not linked, the effectiveness of the referral and investigation process cannot be analyzed.

In a letter to the G.A.O. responding to its report, Christopher Cox, chairman of the S.E.C., agreed that technology changes might help the enforcement staff analyze trends, manage caseloads and focus on areas worthy of their investigation. “We will assess the feasibility of the recommended system improvements,” he concluded. (blame it on the bossa nova)

Even more troubling, Mr. Grassley said, is that the S.E.C. does not automatically receive reports from the exchanges of the internal audits and investigations they conduct. Instead, the commission simply asks that the exchanges permit access to these documents when the S.E.C. drops by for an inspection.

This is an odd approach for an agency that is supposed to be interested in efficiency. (and illegal activity!) By regularly reviewing what turned up in the exchanges’ internal investigations, the commission could identify problem areas and potential improprieties early on. Limiting its access solely to the times when it inspects self-regulatory organizations — once a year at best — means the commission is putting itself and investors at a disadvantage. (wonder why?)

BY the way, this isn’t the first time the commission has been urged to review exchanges’ internal reports more regularly. The G.A.O. made the same recommendation three years ago. As that report was conducted, however, S.E.C. officials told G.A.O. researchers that the routine use of internal audits and investigations might have a “chilling effect” on the relationships between audit staffs at the exchanges and other employees there.

“Given that S.R.O.’s are entrusted with direct regulation of the securities industry, there is no excuse for them being anything less than completely transparent to the S.E.C.,” Mr. Grassley wrote in a letter late last week to Mr. Cox. “I would appreciate an explanation of why the S.E.C. has been so slow to act on this matter and a description of your plans for ensuring that the S.E.C. begin to routinely obtain and review internal S.R.O. audits and investigations.”

Mr. Grassley asked Mr. Cox to reply by Jan. 4.

As the G.A.O. pointed out, the commission is unusual in its reluctance to use contemporaneous reviews of exchanges’ internal investigations. Federal bank examiners base their risk assessments of the institutions they oversee at least partly on internal audit reports produced by these institutions. By not including internal audit information in its planning, the S.E.C. may duplicate the exchanges’ efforts or miss opportunities to uncover new areas of investigatory interest, the report said.

The bad news is that these regulatory lapses seem so basic that it is hard to believe no one at the S.E.C. has resolved them by now. The good news is, because they are so basic, they can be fixed promptly.

And if they aren’t? Call it one more data point for those who increasingly wonder whose side the S.E.C. is on.
Re: Lenin: Repeat A Lie Often Enough.... By rtway on 12/6/2007 9:38 PM
I don't want to steal the board but I have one last observation. After looking at the proof of this very costly fiasco, one has to think of the validity of all of the other definitions this site has spewed to people who put blind faith in the truth of this sites observations or descriptions of any given word or adjective noun or verb. One has to question the validity.
Re: Lenin: Repeat A Lie Often Enough.... By daven on 12/6/2007 10:34 PM
I look at guys like lying stu, cramer, carol redmond / alias remon, greenberg, lil gw, etc. and wonder how it can take so little money for these guys to sell out the rest of us.

All it took for Greenberg was for a few hedge funds to "buy" hundreds of subscriptions to his paid site so he could deny it was a bribe. Stu and Lil GW seem to do it as a part time gig for the DTCC.

Don't they understand that people can become violently angry when the truth comes out and it WILL come out. I wouldn't want my face on the poster when the mobs come with pitchforks, torches and guillotines.

Snowflakes are falling and the avalanche is coming and it is going to come hard. I'm one of the few that don't think it will be bad for us and it won't be another 1929 if this comes to light in time. How can making the bad guys go bankrupt as they get bought in, driving up our share prices be bad? It sounds like a wealth transfer from their wallets to ours.

The reason they are trying to gut the constitution and take away our rights is because they are freaked out that we plan to hold them accountable if the country remains a democracy.

The bad guys can be arrested. The bad guys must be REALLY scared for Jimbo to get personally involved in censoring wiki articles on the criminal cartel that has been siphoning so much wealth out of the stock market through counterfeiting and bribing politicians and media.

I bet a good detective could pull these characters together - how does Jimbo know lil gw for instance? Wasn't Jimbo a high flyer on Wallstreet?

http://www.thesanitycheck.com/Portals/0/PrisonHerb.jpg
http://www.thesanitycheck.com/Portals/0/cramersubpoena1.jpg
http://www.thesanitycheck.com/Portals/0/cramersubpoena2.jpg
Re: Lenin: Repeat A Lie Often Enough.... By bobo on 12/6/2007 10:49 PM
Rtway: Question away. Really. The best defense against intellectual laziness is a constant and vigorous curiousity, and a consistant skepticism - prove it. It is one thing to disbelieve. It is entirely another to disbelieve when confronted with unassailable facts.
Re: Lenin: Repeat A Lie Often Enough.... By theTurtle on 12/7/2007 7:06 AM
If most people look up Wiki through Google, and if Google's motto is "don't be evil," then should Google list Wiki results in their searches?

theTurtle
Re: Lenin: Repeat A Lie Often Enough.... By fc..... on 12/8/2007 4:32 PM
"In a time of deceit telling the truth is a revolutionary act!" ~ George Orwell
Re: Lenin: Repeat A Lie Often Enough.... By kevin on 12/8/2007 4:33 PM
This is not a political post, but Ron Paul is the only presidential candidate who wants the government to print a new US dollar to compete with the privately owned Federal Reserve Note.

The banksters that control the prime brokerages and media can't let him win, so they are rigging the polls.

Here's proof (watch it all the way to the end).

http://www.youtube.com/watch?v=VSYiUAaBd1U

The last president to attempt to have the treasury issue money was Kennedy and he was assassinated a few weeks later.
Re: Lenin: Repeat A Lie Often Enough.... By rtway on 12/7/2007 3:06 PM
this speaks volumes for Wiki. and its credibility. Recs: 3 The altered tape measure
This sounds so simplistic but it really is a good analogy. There is not a day that goes by that thousands or maybe millions of people will use Wikipedia as a source to draw a conclusion or to be guided in a decision making progress. Therefore I give my example of the altered tape measure. If I were the manufacturer of a company that produced tape measurers and for what ever reason I wanted to wreak havoc on a particular location or all of the country all I need do is to alter the dies or the proof reading machines that determine the accuracy of the tape measure being produced by a mere 10% or 15% of the distance between the increments on the tape measure and then distribute them into the market, there would be havoc of mass proportion before someone uncovered the plot. I think I have just described Wikipedia and what power they have to wreak havoc by lies of omission or altered stories.
Re: Lenin: Repeat A Lie Often Enough.... By mhelburn on 12/8/2007 4:34 PM
Hasn't lil GW refuted the claim that he posted from the DTCC address? The stance that naked shorting is a valid way to stop penny stock promoters and the regulator's allowing this as an "enforcement" tool is counter to the rule of law. Any company can be taken down by whoever wants to take it down and has the use of his broker's exemption. Instead of having arguments that counter the request for responsible enforcement, the criminals attack the messenger.
The most recent example of attacking the messenger is the letter to the editor written by Jonathan Johnson in the WT http://www.washingtontimes.com/article/20071121/COMMENTARY/111210005/1012/COMMENTARY
and the response it generated from Stuart Goldstein of the DTCC. http://www.washingtontimes.com/article/20071129/EDITORIAL/111290007
Goldstein and his attacking the messenger is identical to the MO that lil GW has used. These two letters need to be read side by side to see how warped Goldstein's response is. How do you trust the DTCC when one of their representatives is so vitriolic and lies in a public forum? Has Goldstein intentionally attributed to Johnson something that Johnson did not say or is Goldstein so mentally challenged that he can't understand what Johnson said and misinterpreted it? If the DTCC representative found anything erroneous in Johnson's letter, he didn't address it. Instead he shows that Goldstein is ill-suited for his position as a spokesman for the DTCC. If his superiors approved his response, they are also ill-suited for their positions. Conversely, if the DTCC is knowingly complicit in the fraud on the market, perhaps these people are perfectly suited for their jobs. Since the DTCC is owned by a group of market makers many of whom abuse their exemptions and allow fails to remain in the system, is the DTCC just serving those who perpetrate the fraud. Is the DTCC just a mouthpiece for the criminals?

From Goldstein: "The article is disingenuous at best to suggest that electronic records of securities trades create an unknown number of phantom stock shares when a trade fails. The Securities and Exchange Commission has rejected this idea as unfounded.
Every trade in a security, involving a physical certificate or an ownership record on a computer, is a legal obligation, and investors retain rights and recourse if that contract is not fulfilled. If you deposit $100 in your bank account, you aren't entitled to get the same exact bills you deposited, but you do retain the legal right to get $100 back."
Nowhere in Johnson's letter did he suggest that the number is unknown. The number is known... but just to those who control the system and if one wants to know, he has to get it with an FOIA request. Not everyone is allowed to get the information, and if he does, it is not current.
Goldstein tried to make the case that a "security entitlement" has the same value as a stock certificate. He ignores the supply/demand of an honest market and that watering an issue with phantom shares will distort the price and will likely keep one from getting his money back in full.
What is wrong here? " is a legal obligation, and investors retain rights and recourse if that contract is not fulfilled." What is causing these contracts to not be fulfilled? The recourse for those who know what is happening is taking it to a jury. The retained rights involve someone deciding which votes to count when over-voting occurs and being able to resell the phantom shares back into a market with a sell-side bias. Don't throw up a smokescreen and deny the problem.. just deliver the shares. Real shares issued by the company, not counterfeited share entitlements created by market makers who abuse their exemption that destroy companies' capitalization while allowing manipulators illegal profits.
Goldstein also said, "Our U.S. capital markets are the most efficient and safest markets in the world and have the lowest costs, which helps attract the flow of capital that helps fuel the U.S. economy. "
One has only to look at what "Operation Uptick" uncovered and the company that was attacked by criminals to question exactly what Goldstein considers "safe". If you happen to be an investor in such a company, Goldstein's bravado is just more lies. While knowing about the criminal behavior and eventually prosecuting some of those involved, the regulators did nothing to help the investors or the company. When a company is destroyed, how do the regulators compensate the victims? Did they help or hinder the victims in their seeking justice? Why didn't the regulators halt the trading in the stock and give the victims an exemption in reporting so that those responsible for creating phantom shares had to make direct retribution instead of the SEC delisting the victim company. The U.S. markets are the safest in the world.. for the criminals with lax enforcement, petty fines, spotty prosecution, and firing of whistleblowers.

The criminality could not exist without those who protect the criminal activity with lies. Is lying criminal when it helps destroy the market and helps steal money from investors? Saying the U.S. markets the safest in the world is a lie. Do all markets allow the failure to deliver? Do all markets allow brokers to charge for the storage of metals they never bought for their clients? Did the market regulators make good on the silver fraud scam of the broker or did the customer have to go to court? Do other markets use tips from short-sellers to instigate inquiries and investigations into companies without looking into the validity of these claims and looking at the self-interest of those who would benefit in the negative publicity these investigations bring and the ensuing depression of the shareprice? Did the U.S market regulators recognize the manipulation of shares by the corrupt class action attorneys and investigate those who front-ran the announcement of their lawsuits? Safe? Come on in, the water's fine... for sharks.
Johnson responded to Goldstein's comments with the following:
From: Jonathan Johnson
Sent: Wednesday, December 05, 2007 6:40 PM
To: 'sgoldstein@dtcc.com'
Subject: RE: WT Letters to the editor: Trading places

Dear Mr. Goldstein:

I write in response to your November 29, 2007 letter to the editor of the Washington Times (copied below).

Contrary to your assertion, my commentary (also copied below) was not an "attack on our capital market system." Rather, it was proposal of workable solutions to solve the problem of companies chronically appearing on the Regulation SHO threshold list. The proposal was not "ill-conceived," but rather was one that has been put forth by the U.S. Chamber of Commerce, Members of Congress, state officials, academics, other public companies and even a former Chairman of the SEC.

As of today, Overstock has appeared on the Regulation SHO threshold list for 660 consecutive trading days. As you know (since it is the DTCC that compiles failure-to-deliver data), the number of failures-to-deliver during 2006 in Overstock stock peaked on March 20 at over 3.8m fails -- an extremely high number given the amount of Overstock shares issued and outstanding on that day, the amount of Overstock shares in the public float on that day, and the amount of Overstock shares deposited in the DTCC on that day. [Note: Overstock has been unable to obtain failure-to-deliver data for any day in 2007. Please have the DTCC send me that data for 2007 (i.e., the aggregate amount of daily failures-to-deliver in Overstock stock for each day during 2007).]

It cannot be that the failures-to-deliver that have kept Overstock on the Regulation SHO threshold list for such an extended period of time or that the large volume of failures-to-deliver in Overstock stock stock result from "administrative errors." Further, your comment that "[i]n instances of long-standing failed trades, a broker dealer has the right to force a buy-in to complete the trade," is disingenuous because, as you well know, broker initiated buy-ins rarely occur.

If there is shame to be had, it belongs on a DTCC which chooses to attack (and lie about) a company that has been perennially on the Regulation SHO threshold list rather than participate in a finding a solution to the very real problem of chronic failures-to-deliver.

Regards,

Jonathan Johnson


*******************
http://www.washingtontimes.com/article/20071129/EDITORIAL/111290007

Article published Nov 29, 2007
Letters to the editor

November 29, 2007

Trading places

The Commentary column "Phantom shares" (Nov. 21) by Jonathan E. Johnson III, senior vice president of corporate affairs at Overstock.com, was grossly misleading and filled with inaccuracies.

At Depository Trust and Clearing Corp. (DTCC), we clear and settle the trading volume from all equity markets in the United States (New York Stock Exchange, Nasdaq, American Stock Exchange, regional stock exchanges and electronic communication networks, or ECNs , which may include more than 11 billion shares traded, with a value exceeding $1 trillion, on a single day.

The article is disingenuous at best to suggest that electronic records of securities trades create an unknown number of phantom stock shares when a trade fails. The Securities and Exchange Commission has rejected this idea as unfounded.

Every trade in a security, involving a physical certificate or an ownership record on a computer, is a legal obligation, and investors retain rights and recourse if that contract is not fulfilled. If you deposit $100 in your bank account, you aren't entitled to get the same exact bills you deposited, but you do retain the legal right to get $100 back.

Less than one-tenth of 1 percent of trades may not settle within three days after the trade, as required. The SEC has pointed out that trades can fail for a variety of reasons, most of which are associated with administrative errors (e.g., incorrect signature on stock certificate). When there is a failed trade, 85 percent of these fails are resolved within 10 business days.

In instances of long-standing failed trades, a broker dealer has the right to force a buy-in to complete the trade. The SEC has taken a number of steps to reduce these long-standing failed trades. Most recently, it amended Regulation SHO to eliminate a clause that allowed fails incurred before a security went on the threshold list to remain open as fails.

While we understand that Overstock.com continues to feel that short selling (instead of its earnings) is depressing its stock price, shame on Mr. Johnson and his company for pursuing an ill-conceived and misleading campaign of attack on our capital market system.

Our U.S. capital markets are the most efficient and safest markets in the world and have the lowest costs, which helps attract the flow of capital that helps fuel the U.S. economy.

STUART Z. GOLDSTEIN
Managing director
Corporate communications
Depository Trust and Clearing Corp.
New York City

********************************
http://www.washingtontimes.com/article/20071121/COMMENTARY/111210005/1012/COMMENTARY
Phantom shares
Jonathan E. Johnson III
November 21, 2007
In the late 1800s, American financier Daniel Drew refined the art of selling counterfeit shares. Drew's biographer wrote, "There is no limit to the amount of blank shares a printing press can turn out. White paper is cheap... printer's ink is also cheap." Today, it is possible to counterfeit shares electronically — and it happens with such frightening regularity and impunity that Drew would be proud.
In modern stock markets, stock ownership has been separated from stock certificates through a process known as "dematerialization." As a result, when investors buy or sell stock, they are actually trading "security entitlements" — not actual stock certificates.

The Securities and Exchange Commission's Division of Market Regulation Director Erik Sirri explains: "The beneficial owner's [i.e., the investor's] ownership cannot be tracked to a specific share... [T]hey own a bundle of rights defined by federal and state law and by their contract with the broker. ... That's news to a lot of people." News indeed.

Brokers in U.S. equity markets receive commissions when buyers pay for shares, not when sellers deliver those shares. Thus, incentives to deliver share are so weakened that some brokers and large institutional customers (e.g., hedge funds) regularly use loopholes to avoid delivering shares at all. The result is a "failure-to-deliver" (FTD).

FTDs can be caused in several ways, but they commonly result from short sales in which the seller does not borrow or even locate the stock he sells (the infamous "naked" short sales). Regardless of how an FTD occurs, for each share not delivered the system creates a "phantom" entitlement the market treats as a real share. These "phantom shares" are supposed to be temporary in duration and few in number. Loopholes, however, are exploited on such a scale, and phantom shares are so persistent, they are corrupting the U.S. equity markets in three ways.

(1) Phantom shares warp corporate governance by inflating the number of voting shares. Bob Drummond (Bloomberg Markets) reported in April 2006, "The results of high-stakes company decisions may hinge on the invisible influence of millions of votes [i.e., phantom shares] that shouldn't be counted." In an analysis of 341 corporate votes in 2005 by the Securities Transfer Association, there was evidence of overvoting in all 341 cases.

(2) Phantom shares distort share prices by flooding the market with excess supply. In July 2006, SEC Chairman Christopher Cox said "abusive naked short sales ... can be used as a tool to drive down a company's stock price to the detriment of all of its investors." The creation and sale of phantom shares has become a common means to manipulate share prices in U.S. equity markets.

(3) Phantom shares create systemic risk. According to the Depository Trust and Clearing Corp. (DTCC), on any given day "fails to deliver and receive amount to about $6 billion daily ... or about 1½ percent of the dollar volume." Bradley Abelow, a former DTCC director, says FTDs within the settlement system "occur as a matter of course with great regularity," and calls them "endemic." The stock market has turned into a game of "musical chairs" where claims of ownership exceed shares issued. What happens when the music stops?

In a weak attempt to curb abusive naked short selling and reduce outstanding FTDs, the SEC implemented Regulation SHO in January 2005. Regulation SHO requires the stock exchanges to publish daily a list of "threshold securities" — companies that through no fault of their own have FTDs in excess of 0.5 percent of their outstanding shares. More than 6,000 companies have appeared on these Threshold Lists — many for hundreds of consecutive trading days. For these companies, Regulation SHO does not work.

Freedom of Information Act (FOIA) data received from the SEC reveal that FTDs have been as high as 10 percent of the average daily trading volume on the New York Stock Exchange and Nasdaq. FOIA data also reveal that, for many companies, FTDs are a significant portion of their total shares outstanding — in at least one case more than 45 percent.

Economists, the U.S. Chamber of Commerce, members of Congress, public companies, and hundreds of informed investors have urged the SEC to adopt a G.O.L.D. standard: G, eliminate Regulation SHO's Grandfather clause; O, eliminate Regulation SHO's Options market maker exception; L, require short-sellers to Locate and borrow shares before selling them; and D, require the exchanges to Disclose fully and promptly the aggregate FTDs for every Threshold List company.

To its credit, the SEC is working to fix two significant loopholes in Regulation SHO by eliminating the grandfather clause (final phase-in on Dec. 3, 2007) and by proposing to eliminate the options market maker exception (proposed, but not yet adopted).

However, these half-measures will not stop the creation of phantom shares. Will the SEC finish the job? That remains to be seen. According to a recent Senate Judiciary Committee report, the SEC is riddled with conflicts of interest that prevent it from properly policing brokers who are guilty of securities crimes. If the SEC does not act to protect investors, it falls to Congress to adopt the G.O.L.D. standard and bring an end to market distortion caused by phantom shares.

Jonathan E. Johnson III is senior vice president of corporate affairs and legal at Overstock.com Inc., a Nasdaq-listed firm on the Regulation SHO Threshold List for 642 consecutive trading days and counting.
Re: Lenin: Repeat A Lie Often Enough.... By bbhindyou on 12/8/2007 4:35 PM
To get a idea where this all started and where it is going I recomend this book The coming deflation its dangers and opportunities by C.V.Meyers copyright 1976.
It's a oldie but a goodie and should be a part of the educational process of everyone.
Better put it on your christmas list or better yet dig up a copy and start reading today.
The deflation described in the book was delayed by massive counterfieting of all assets.
By selling things that didn't exist the powers that be delayed the deflation.
Now too many people have figgured out that what they bought dosn't really exist and this process is falling apart.
Its hard to sell something to someone when they have realized they never got what they paid for the last time they bought something from you.
What are they going to do now all the suckers are getting wise?
I don't usually recomend this but you might want to start at the back of the book the 'how to prepare for you familys survival section'.
Best wishes for all.
bbhindyou
Re: Lenin: Repeat A Lie Often Enough.... By wrh on 12/8/2007 4:36 PM
Whatreallyhappened.com just covered the wikipedia story. It should get a ton of attention now.
Re: Lenin: Repeat A Lie Often Enough.... By bobo on 12/8/2007 4:44 PM
Mhelburn: No, he never disproved anything, he merely railed, and shreiked, and stamped his feet, and hurled feces. He can't disprove it. All he can do is lawyerly lying and sleight of hand. "Nobody can definitively know anything, really, so how can Judd know that was me?" and so on. I recall the siliness of his softball responses at the time, and sort of only remember the pathetic crookedness of ths responses. Maybe Judd has it all wrong. But I doubt it.

What's next? Does Wiki start blocking everyone who tells the truth or is critical of their scam? That's an ugly way to go - if one's only offense is connecting the dots, and you can have a whole neighborhood blocked as a result of your living there, what does that tell you about the character of the people running the show at Wiki? I discovered a long time ago, when I edited some naked short selling section and it was immediately reverted to a Gary Weiss book advertisement featuring the DTCC's propaganda spin, that the site is bent to the point of being useless for anything. I never use it. I just assume that much of it is rubbish, as the NSS article is rubbish.

For christ sake, we have SIFMA with 192 billion if fails, not counting any ex clearing, or international or desked trades. And then liars like Stu and Gary claim that this is a trivial problem consisting of lost certs and administrative glitches? How many trillions is it reasonable to explain away as glitches?

The whole thing sickens me, as that money has obviously been spent corrupting regulators, buying the press and politicians, and ruining the value of the country for the rest of the citizenry, who presumably are too busy with iphone purchases to notice that they now are living in a place with no resemblance to what their forefathers fought for.
Re: Lenin: Repeat A Lie Often Enough.... By mhelburn on 12/9/2007 10:14 AM
Credibility is a delicate commodity.

GW's greed and need for speed in promoting his book with sock puppets speaks volumes. Volumes that will go unsold. Getting an edge resulted in his slitting his commercial wrists.

Now he attacks those who unmasked his deception. The more he squeals, the more he reveals.
Re: Lenin: Repeat A Lie Often Enough.... By FC........... on 12/9/2007 10:15 AM
Bobo....
(my synopsis of said article)

Emily Biuso wrote an interesting blurb (NY Times Magazine) about a 24 year old hacker named Virgil Griffith who after hearing reports of Congressional staff members altering Wikipedia for their boss, decided to basically write a program that identifies the offices where edits are made, since it's impossible to pinpoint a particular editor. When anonymous edits are made, a public record of the person/entities I.P. address are left behind. Griffith's program basically matches those addresses on a wide array of registries with an impressive 34.4 million edits linked to 190,000 organizations.

WikiScanner has found numerous egregious edits like those from a Dupont employee deleting the health risks of polytetraflouroethylene, and interestingly enough someone at the beloved Diebold trashed a bunch of info regarding security-industry concerns over thier wonderful voting machines, and the of course the news relating to Diebold's CEO raising money for the shrub himself.

Basically WikiScanner puts some major investigative power into the hands of regular people.

http://wikiscanner.virgil.gr/
Re: Lenin: Repeat A Lie Often Enough.... By wiki on 12/9/2007 9:24 PM
This is a great tool, thanks. One thing that is funny is seeing how often government employees post on personal topics from work, like the presumably conservative by the book IRS employee making posts about erotic spanking.

Some is more revealing like the SEC employee who changed:

"To press criminal charges, the SEC must work with [[List of law enforcement agencies#United States|law enforcement offices]] to bring actions against violators."

to

"The SEC does not have criminal authority, but may refer matters to the criminal authorities."


It took me a second to figure out how to use it, but we should all search the hedge funds, media outlets, politicians, etc. that are working against us.

Step 1: Put in the name of the organization in the first box (name)
Step 2: It will list all the matches to that name. Check the boxes if it is the right organization and there is a number under the EN Edits (English Edits) column. Click Wikipedia Edits Ahoy
Step 3: Click on the link in the difference column to see what has changed.
Re: Lenin: Repeat A Lie Often Enough.... By wiki on 12/9/2007 9:25 PM
The SAC Capital wiki posts are interesting

- articles about Mona Lisa and other paintings
- Stewie from family guy
- changed elimination uptick rule to be effective in 2007 instead of 2003
- articles on plausible deniability encryption. If a court order demands the key, give the dummy key that decrypts to different text than the real secret message
- added "Lou Ricciardelli, father of prime brokerage, legend on wallstreet" as a New Jersey noted resident
- posts on various journalists, famous people, Fred Thomson
- post on pro-pedophile article to say they were sick
- using Blackberry to access Bloomberg terminals
- one post on swaps to simulate a call off balance sheet.

"The first swaps were commonly used as a way to hedge exposure to market risk for a low fee. For instance, if a trader decides to short sell a stock, there is considerable "market risk" if the stock price rises. In order to hedge that risk, the trader could enter a swap agreement for the same stock, paying a small fee to "hold" it while not actually having to pay for the stock itself. In this case if the stock price does rise, they simply end the swap and use the stock to pay off the short. In effect, they are buying insurance against their position. Known as total return swaps, in these contracts all cash flows, dividend payments for instance, are payed or received by the holder as if they owned the stock directly. Yet for accounting purposes they are off-balance sheet and do not appear as an asset (they do not legally own the stock in question)."

http://en.wikipedia.org/wiki/Swap_%28finance%29

Edits:

http://wikiscanner.virgil.gr/f.php?ip1=69.74.41.0-255&ip2=167.206.132.0-255&ip3=12.149.140.128-191
Re: Lenin: Repeat A Lie Often Enough.... By wiki on 12/9/2007 9:26 PM
This swap thing could be REALLY important.

As I understand it:

Let's say Mr. Short has attacked a victim company and is short $10 million worth of that company's stock. He is at great risk if the stock goes up, so he does a deal with the prime brokerage. He explains to them that he is going to continue to short the sh_t out of the victim company, so it likely won't go up, but he enters into this deal.

He agrees to pay the prime brokerage the 5% interest on $10 million if they agree to pay him any capital gains and dividends on $10 million worth of the victim shares.

He hasn't put up a dime for this agreement. At 5%, he pays $42,000 per month to in effect insure his short position. He pays them interest on money that doesn't exist and they agree to pay him the upside on shares that don't exist. Because the SEC has said a long contract is the same as owning the shares, he isn't technically short. His long contract cancels out his short position, so he doesn't need to borrow real shares.

Example:

He shorts 40 million shares of victim co. at $25
He needs to put up 102% of the net value, but he has the proceeds from the sale, so he has to put up 2% or $200,000 as collateral.

A) Outcome A, stock down 20%: He's bet well and the stock has gone down to $20 six months later. He's only tied up $200,000 of his own money + ($42,000 x 6). He buys back in at $20, for 8 million and the prime brokerage gives him back his $200,000 collateral.

He makes $10 million - $8 million - $252,000 in swap fees or $1,748,000. I'll say it again, on risking $200,000 in collateral and promising to pay $42,000 per month, he has made almost $2 million.

B) Outcome B, stock running like stink and is up 100% to $50. No problem, he just collapses the swap. His profit on the swap is exactly equal to his loss on his short position.

He gets back his collateral, so that doesn't matter. His loss is only 6 x $42,000 or $252,000.

C) Outcome C, stock goes to zero. He makes $10,000,000 - $252,000 or $9,748,000

Both sides can't lose. The prime brokerages don't care as they've agreed amongst themselves to just net to create infinite numbers of claims on real shares. They know they can't ever be bought in and they make fees on every transaction they do with their hedge fund customers. Most of the time it will go down and they get paid interest on money that doesn't exist. They also keep the interest on the 102% cash while it is being held as collateral and his profit will likely continue to sit in their coffers for the next deal.

The hedge funds can manipulate stocks down without any fear of a squeeze. The worst that can happen to them is they lose their interest payments for the time they were short.

The contract is off balance sheet and not taxable to either party as no one bought anything and there is no capital gains. It's only a swap of cash flows that nets to nothing.

Imagine if you are the SAC Capital sized hedge fund manager. For the cost of the interest payment, you can balloon your assets by 50 times, then collect your three percent management fee, EVEN IF YOU LOSE.

What I've described is an equity swap, but they do it for interest rates, currencies, etc., putting the whole world financial system at risk. No wonder they are afraid to buy anyone in.

"The five generic types of swaps, in order of their quantitative importance, are: interest rate swaps, currency swaps, credit swaps, commodity swaps and equity swaps.

The Bank for International Settlements (BIS) publishes statistics on the notional amounts outstanding in the OTC Derivatives market. At the end of 2006, this was USD 415.2 trillion (that is, more than 8.5 times the 2006 gross world product)."

The reason they are called "OTC derivatives" is these agreements trade over the counter similar to the way options trade and the cash flows are tied to the percentage change in the underlying asset.
Re: Lenin: Repeat A Lie Often Enough.... By Wiccan Pedia? on 12/10/2007 10:31 AM
Check this out this has been lifted from www.worldreports.org he just wrote about Wiccapedia you can read it in the archives.

It is fraud to mislead and edit the truth as Wiccapedia does. Now what do feet have to do with wiccans? Ask Mark about asking Mahue about Christopher Story the editor of worldreports.

Read this legal advise and MAKE SURE PATRICK GETS IT!!!

Step 1: Fraud in the Inducement: “… is intended to and which does cause one to execute an instrument, or make an agreement… The misrepresentation involved does not mislead one as the paper he signs but rather misleads as to the true facts of a situation, and the false impression it causes is a basis of a decision to sign or render a judgment” Source: Steven H. Gifis, ‘Law Dictionary’, 5th Edition, Happauge: Barron’s Educational Series, Inc., 2003, s.v.: ‘Fraud’.

Step 2: Fraud in Fact by Deceit (Obfuscation and Denial) and Theft:

• “ACTUAL FRAUD. Deceit. Concealing something or making a false representation with an evil intent [scienter] when it causes injury to another…”. Source: Steven H. Gifis, ‘Law Dictionary’, 5th Edition, Happauge: Barron’s Educational Series, Inc., 2003, s.v.: ‘Fraud’.

• “THE TORT OF FRAUDULENT DECEIT… The elements of actionable deceit are: A false representation of a material fact made with knowledge of its falsity, or recklessly, or without reasonable grounds for believing its truth, and with intent to induce reliance thereon, on which plaintiff justifiably relies on his injury…”. Source: Steven H. Gifis, ‘Law Dictionary’, 5th Edition, Happauge: Barron’s Educational Series, Inc., 2003, s.v.: ‘Deceit’.

Step 3: Theft by Deception and Fraudulent Conveyance:

THEFT BY DECEPTION:

• “FRAUDULENT CONCEALMENT… The hiding or suppression of a material fact or circumstance which the party is legally or morally bound to disclose…”.

• “The test of whether failure to disclose material facts constitutes fraud is the existence of a duty, legal or equitable, arising from the relation of the parties: failure to disclose a material fact with intent to mislead or defraud under such circumstances being equivalent to an actual ‘fraudulent concealment’…”.

• To suspend running of limitations, it means the employment of artifice, planned to prevent inquiry or escape investigation and mislead or hinder acquirement of information disclosing a right of action, and acts relied on must be of an affirmative character and fraudulent…”.

Source: Black, Henry Campbell, M.A., Black’s Law Dictionary’, Revised 4th Edition, St Paul: West Publishing Company, 1968, s.v. ‘Fraudulent Concealment’.

FRAUDULENT CONVEYANCE:

• ‘FRAUDULENT CONVEYANCE… A conveyance or transfer of property, the object of which is to defraud a creditor, or hinder or delay him, or to put such property beyond his reach…”.

• “Conveyance made with intent to avoid some duty or debt due by or incumbent on person (entity) making transfer…”.

Source: Black, Henry Campbell, M.A., ‘Black’s Law Dictionary, Revised 4th Edition, St Paul: West Publishing Company, 1968, s.v. ‘Fraudulent Conveyance’.
Re: Lenin: Repeat A Lie Often Enough.... By swap on 12/10/2007 10:30 AM
To simplify the explanation of the swap:

- neither the bank or the fund needs to own any underlying shares
- the bank agrees to pay any dividends and upside on the stock. In exchange, the fund agrees to pay the bank interest, no matter what.
- because the fund owns a derivative, the SEC calls this contract a long position in the stock, which can be used to offset the short position without any real shares

The difference between a call is you don't get the right to actually buy the stock. You just get the right to any upside or dividends in the stock as long as the swap is outstanding.

The swaps mean that the options market maker exemption doesn't matter and even if eliminated wouldn't fix the problem. Why would a short want to buy a short with the cost of time value and intrinisic value, when he can get a swap for free.

He effectively gets a call for free. All he has to do is agree to pay interest on the underlying value of the stock the call represents.

One way we could quickly circumvent this loophole is to force the prime banks and large hedge funds to disclose this huge contingent liability that is currently off balance sheet.
Re: Lenin: Repeat A Lie Often Enough.... By Sean on 12/10/2007 10:30 AM
Dr. Patrick Byrne has a very cordial and enlightening interview with Dillon Radign and the so called Money Hunny maria Bartiromo on Friday last to discuss Overstock and what he considers to be a very positive outlook on the companies' Christmas Season. Well I guess the Wall Street people did not like what he had to say because the have demolished his share price today . It is currently trading @ less than $20.00 per share down more than $4 for no apparent reason. This can't get any worse..but watch it!!!
Re: Lenin: Repeat A Lie Often Enough.... By ginger on 12/10/2007 11:17 AM
The high grade structured enhanced credit leaveraged fund.

http://www.youtube.com/watch?v=SJ_qK4g6ntM&eurl=http://www.americablog.com
Re: Lenin: Repeat A Lie Often Enough.... By clearthinker on 12/10/2007 9:44 PM