Forums

Welcome to the Sanity Check forums. You are welcome to browse the public forums, but you must be a registered user to post. If you are not a registered user, then please register. If you are a registered user, then please login.

Can't contribute to a forum?

You must be a registered user to post on these forums.

Click here to register now. If you are already registered, click here to login.

The Sanity Check Forum

Forum Home

Specific Stocks

Novastar Financial, Inc (NFI)

MW current even...

MW current events - frm NFI mb

mhatmccane

409 posts

Joined
1/20/2006

MW current events - frm NFI mb
Posted: 06 May 06 10:57 PM

Short Seller - Fed Criminal Indictments
by: ppltherealdeal

05/06/06 10:10 pm
Msg: 429352 of 429370

The first of many federal criminal indictments involving short sellers.

They are the law firm that is involved with David Rocker/Rocker Partners/The Street/Herb Greenberg and NFI

http://www.nypost.com/php/pfriendly/print.php?url=http://www.nypost.com/business /68094.htm
----------------------------------------------------------------------------------------------------
FEDS TARGET LEGAL EAGLES

May 6, 2006 -- The class action law firm of Milberg, Weiss, Bershad & Schulman is bracing for the ultimate nuisance suit: The federal criminal indictment of two of its name partners, according to published reports.

Steven Schulman and David Bershad are likely to be indicted "In the coming days and weeks," according to CNBC.

Capping a five-year investigation, the pair is allegedly complicit in a multi-year scheme to direct kickbacks to a California mortgage broker who acted as a plaintiff in dozens of class action suits against publicly traded companies.

Also, the report gave "a 50-50 chance" of the firm being indicted, a move almost certain to prove fatal to its lucrative class action franchise.

The mortgage broker, Howard Vogel, pleaded guilty last week to taking $2.4 million in kickbacks from Schulman and Bershad for letting family members act as plaintiffs in 40 separate class action suits from 1991-2005.

As a plaintiff under the 1995 securities reform act, Vogel and other plaintiffs had to declare that they were not paid to file suit.

The firm had previously insisted that any fees paid to Vogel and other plaintiffs were so-called "finder's fees."

Not named in the suit was firm chief Melvyn Weiss, or his longtime law partner, San Diego-based William Lerach. According to reports, earlier this year, the Los Angeles- based federal prosecutors spearheading the investigation determined that Vogel dealt exclusively with Schulman and Bershad.

A Milberg, Weiss spokeswoman declined comment

A Matrix Of Rocker-Shorted Companies Sued by Milberg Weiss, Investigated by The SEC, & Bashed by The Street

The slide linked below illustrates a very curious phenomenon, and one that is unexplainable as coincidence. Milberg Weiss apparently has sued just about every Rocker Partners short we know of, and the SEC has usually launched a probe within days, sometimes preceding the suit, sometimes immediately following it.

On the slide, you will see a list of companies that Rocker is either documented as being short, or which he is strongly suspected as being short, due to his SEC filings (his larger shorts typically show up with offsetting long positions).

The timing of the suits, the articles by Thestreet.com or Herb Greenberg, and the inevitable SEC probe is difficult to explain as anything other than coordinated. We aren't saying that it is, rather that this sort of coincidence is difficult to reconcile with statistical probability.

Here is the slide.
http://www.ncans.net/files/Ostktime.pdf

From left to right, there is a list of companies, the date of the SEC probem, and the date Milberg filed suit. Draw your own conclusions, but with Milberg in the hot seat now that they have been indicted, perhaps this is something that prosecutors would enjoy looking at. You might want to email them this page and alert them as to the marvelous and unfortunate series of events that Rocker shorts seem to enjoy.

Another question that seems reasonable is which SEC agents initiated these investigations? Was it the same one or two agents? If so, it would appear that they have some explaining to do. Perhaps this should also be sent to the SEC with a request for clarification, or for informational purposes.

Page 1 of 1

Specific Stocks

Novastar Financial, Inc (NFI)

MW current even...