March 19, 2007
Senator Dianne FeinsteinUnited States Senate331 Hart Senate Office BuildingWashington, DC 20510
Dear Honorable Senator Feinstein
Wall Street has become a cesspool of fraud and racketeering. The stink from “The Street” is becoming unbearable.
The spiraling corruption problem on Wall Street demands your immediate attention - and the immediate attention of all other members of Congress as well. The corruption problem, due to stock counterfeiting, conspiracy and criminal manipulation, is growing much more serious with each passing day. My greatest fear is that we are probably past the point where the accumulated multi-trillion dollar damage to our capital markets can be repaired.
If you don’t believe me, just talk to Senators Bennett, Hatch, Specter and Grassley. There are several other members of Congress who are also aware of this growing menace. When we have another 1929-style market crash (soon), then none of your other economic programs will matter much. Interestingly, the very same financial corruption mechanisms that triggered the crash of ’29 are to blame for the current systemic problems that plague the market today.
You should demand an Independent Special Prosecutor to investigate and correct this collapse of meaningful regulation of our securities market, which is not only an economic threat, but a security threat to our country as well.
WE NEED THAT SPECIAL PROSECUTOR NOW!!!!
People, including most legislators in DC, are just too comfortable and busy in their daily lives to notice what is really going on. That’s what the crooks depend on – your continued complacency. You should stop and consider the accumulated liability and magnitude of risk that is now a menace to every law-abiding American. The DTCC and SEC now admit that MORE THAN ONE PERCENT OF ALL TRADES FAIL EVERY TRADING DAY! What if one percent of all jetliners that took off every day crashed? Would that be OK with you?
The illegal trading tactic that the prime brokers and hedge funds use is also known as NAKED SHORTSELLING, differing from legal shortselling because the crooks are flooding the market with shares, counterfeit shares, that they neither own nor have borrowed, a violation of multiple SEC regulations and 5th Amendment property rights..
SEC Chairman Cox admits - shareholders damaged by naked shortselling have every right to complain about naked shortselling and the breakdown of orderly settlement rules. Despite his admission, he does nothing to enforce the regulations that would protect companies and investors. I am utterly confounded by this situation. Where is enforcement? Why won’t Cox act? Do the crooks completely own the regulators? Is that it? Be a crooked, blind regulator and get a cushy consulting job on “The Street” afterwards? Blow the whistle and your car explodes? That appears to be how the system now works! The SEC Chairman Cox and Commissioners Atkins, Campos, Nazareth, Casey along with the SEC employees in enforcement should quit worrying about their post-SEC job opportunities and start doing their jobs!
Corporations and private investors are becoming wise to Wall Street’s treachery, knowing exactly how the financial crimes are committed. It is common knowledge: The market is completely rigged in favor of crooked hedge funds and the prime brokers. The crooks running the show are dealing from the bottom of the deck. The casinos in Vegas are much more fair. The absence of law enforcement on Wall Street is ruining this country’s economic future, no more ethical than a 3rd world banana republic due to the SEC’s non-performance. It appears that the Mafia runs “The Street” these days. Apparently the DOJ is too fearful to step in as well. This leads me to question: Who is really running this country? Do DC lawmakers have any remaining power? Are Senators now just puppets? Is the game really over, as it appears to be?
At present, hedge funds and prime brokers, the “investment bankers”, are able to buy thousands of “put” options in “targeted companies”. This options tactic then forces the Market Maker to naked short that stock, creating a tsunami of counterfeit shares. When done on a massive scale, this tsunami of counterfeit shares completely overwhelms the demand for the stock, forcing the price precipitously lower and lower. Then we are “treated” to serendipitously-timed negative press releases from certain complicit Wall Street financial writers, spreading fear, uncertainty and doubt regarding the “targeted company”. Understandably, investors become fearful and sell in panic, further lowering the price. Class action attorneys then swoop in like vultures with lawsuits, often for nothing more than negative headline value. Eventually, the “targeted company” is bankrupt and delisted. Jobs are lost along with technologies. The hedge funds and prime brokers walk away with BILLIONS. To add insult to injury, most of the time the crooked brokers and hedge funds never have to deliver the shares that they counterfeited - They are allowed to keep their profits entirely tax free!
It appears to be the perfect crime – with plenty of extra money to buy political favors, as needed.
Does this sound like America? It is not the America that I once knew, but this is the current playbook on Wall Street – the thieves running the market murder small companies for fun and profit. This stealing is really happening, every day, right under your nose, Senator Feinstein.
The time to take action against this criminal behavior is long, long overdue, Senator Feinstein. Why wait for a market collapse to act? Why allow your constituents, myself included, to be victimized by this elitist gang of criminals?
Why would ANY company want to be listed on a US exchange when their shares can be so easily and massively counterfeited? And why would ANY investor, who actually knows how grossly slanted the odds are, want to invest in US capital markets?
The SEC's inaction has led to a complete collapse in confidence in the US capital markets. The SEC needs to enforce “buy-in” regulations on failed trades - but does NOTHING. The SEC is therefore complicit with the criminals. Enforcement is a sham. There is no fairness, only rampant counterfeiting while the cop on the corner looks the other way. This situation is OUTRAGEOUS - and for any lawmaker to stand by and ignore this criminal behavior is a disgrace to our country.
I didn’t write this letter for my ego. I wrote it because I am disgusted and I want something DONE. Don’t bother to write me your perfunctory form letter reply like you have in the past. I’ll know that you have taken meaningful steps when I hear in the news that a Special Prosecutor is investigating the SEC, DTCC, prime brokers and hedge funds for corruption. I’ll congratulate you then. I am, however, rapidly losing hope that these sophisticated, influence-peddling, politically-connected crooks can be stopped. Do you have any ethics, Senator Feinstein? I’ll pray that you wake up and see the urgency of this matter.
Sincerely,
For more information about naked shortselling see www.thesanitycheck.com