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Post by jcline on Aug 16, 2007 11:06:05 GMT -5
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Post by jcline on Aug 21, 2007 16:42:04 GMT -5
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Post by maverick333 on Aug 21, 2007 17:32:35 GMT -5
Thanks JC... Karma to you... mav
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Post by jcline on Aug 22, 2007 19:10:42 GMT -5
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Post by jcline on Aug 23, 2007 9:15:48 GMT -5
SIFMA instructs all to stop sending certsThis was sent to all SIFMA CEO's on Monday, August 20, 2007. SIFMA <distribution1@sifma.org> 08/20/2007 04:17 PM To "lmorillo@pershing.com" <lmorillo@pershing.com> cc Subject The phasing out of stock certificates and the Direct Registration System August 20, 2007 Dear SIFMA Member Firms: There are 250 million reasons to eliminate physical certificates! Based on an industry survey, the costs to maintain, process, provide safekeeping, and mail physical certificates amount to over $250 million annually... Approximately $49 million of this total cost relates to lost and stolen certificates, and is primarily borne by individual investors. Many other participants in our industry have taken steps to stop using physical certificates, including our stock exchanges and several broker-dealers. It is now time for the entire broker-dealer community to step up to the plate and help achieve the goal of eliminating physical certificates. With this letter, we are asking all SIFMA member firms to decide to discontinue providing physical certificates for Direct Registration System ("DRS") eligible securities by January 1, 2008. This date is consistent with that set by the primary exchanges in recent rule changes requiring that all exchange-listed issues be eligible for DRS by January 1, 2008. The overall costs and risks associated with holding physical certificates make it imperative to utilize viable alternatives for evidencing securities ownership. The primary alternatives that are available include the DRS for customers that choose to be registered on the books and records of the company, or for customers to hold their positions at a bank custodian or broker-dealer ("street name"). The DRS, which was developed by DTC and transfer agents in the late 1990s, offers automated linkages between the record keeping systems maintained by transfer agents for corporate issuers and those recordkeeping systems maintained by broker-dealers and banks for their customers. DRS thereby enables a shareholder or their registered representative, for example, to electronically direct the movement of a position in a security from an issuer’s transfer agent to the shareholder’s account at a broker-dealer of their choice and eliminates the negotiability document requirement for our customers. In addition, firms can easily choose DRS as a default setting within their vendor systems (i.e. Broadridge, Sungard, Thomson, etc.) Unfortunately, even though DRS is available for many securities, many DTC participants either are not aware of it or have chosen not to use it; instead, they continue to provide physical certificates to customers. This practice results in unnecessary costs and risks for investors. For example, from 2004 to 2006, the total cost to member firms for obtaining physical certificates through DTC – despite DRS being available – was $25.9 million. In 2007, we are looking at adding another $10 million to that total, and DTC has advised its member firms that these fees will increase still further in 2008. In addition, today almost 75% of physical certificates deposited by broker-dealers and bank custodians at DTC were issued within the last six months of the deposit date. What this means is that we are providing physical certificates to our customers only to have them returned in a short period of time. This doesn’t make sense and just results in unnecessary expense and added risk. It is critical that we all get the word out regarding the benefits of using DRS or holding positions in street name. SIFMA plans to help do so through an extensive education program for investors, sales representatives, operations management, transfer agents and related vendors. Hopefully, this program will assist SIFMA member firms in meeting the recommended January 1, 2008 date for using DRS for eligible securities. We all know that the goal of the securities industry is to provide our customers with products and services for asset growth and to meet their financial needs. However, we strongly believe that a parallel goal should be to not perpetuate the use of physical certificates, as it has no bearing on investors’ account performance and just adds unnecessary expenses and risks for these individuals. As such, we urge you to discontinue providing physical certificates for DRS eligible securities by January 1, 2008 and discuss this important step with your sales representatives and operations managers. Thank you for your consideration of this request, and we look forward to hearing from you on this matter. If you have any questions or require additional information, please do not hesitate to contact John Panchery, SIFMA Managing Director, at: 212-618-0559 or jpanchery@sifma.org. In addition, you can also view more information on this subject by visiting SIFMA’s Paperless Web Page at: www.sifma.org/services/techops/stp/html/paperless.shtml. Sincerely, Noland Cheng SIFMA Operations Committee Chair Lawrence Morillo SIFMA Operations Legal & Regulatory Sub-Committee Chair www.stai.org/letters/sifma_member_firms.html
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Post by jcline on Sept 2, 2007 8:15:18 GMT -5
-------------------------------------------------------------------------------- Dear Reader, Since early 2005 I have been making some bold assertions regarding our nation’s financial system. Recent news stories have displayed confusion about those claims. Therefore I will restate them here in a way that will be difficult for others to misunderstand or misconstrue. Then in eight subsequent posts I will review evidence that has emerged over these past two years and evaluate the degree to which that evidence has confirmed or falsified my assertions. My theory can be reduced to eight simple sentences: 1. The SEC, regulator of our nation’s capital markets, has been at least partially captured by financial elites to the point that it favors Wall Street over Main Street. 2. A clear regulatory violation (in fact, a crime) is routinely occurring in our capital markets, but it is enormously profitable for Wall Street banks and hedge funds so they prevent the SEC from addressing it. 3. As a result of this crime, while Wall Street profits, corporate governance in America has been shattered. 4. As a result of this crime, while Wall Street profits, companies (often innovative tech and biotech companies) are damaged or destroyed and Americans are robbed of their savings (often without any awareness on their part beyond the losses they and their pension plans suffer in the stockmarket). 5. This crime has become so extensive that it may have created in our country's financial system a crack so deep it could trigger a systemic collapse. 6. The relationship between Wall Street and the financial media is inappropriately cozy. 7. Though economists have produced data supporting the view that this has the makings of the financial scandal of our lifetime, most in the financial media have proven themselves incapable of bringing a critical mindset to this issue because of their too-cozy relationship with Wall Street (and some elements of the financial media actually seem to be engaged in a cover-up on behalf of financial elites they cover). 8. Within “social media” (blogs, message boards, and wikis) evidence for the preceding points has been pieced together, but as a result, there is a campaign to hijack the discourse within social media, and working within that campaign are some of the same Wall Street and media figures who are behind the cover-up in the mainstream financial press. To many, the preceding will appear a bald and unconvincing tale, too far-fetched for even the loopiest Hollywood thriller (in fact, when I first began discussing these claims, the New York Post ran a photo-shopped picture of me with a flying saucer coming out of my head). For two years the profession of financial journalism has demonstrated that in its view there are, in fact, two subjects beyond critical examination: Wall Street, and the profession of financial journalism. In the posts that follow I will examine evidence that has emerged over the last two years and the degree to which it confirms or falsifies these claims. I will include in each post a 15% discount coupon, limited to several days’ duration, to thank you for the courtesy of your visit and the gift of your attention. Your humble servant, Patrick M. Byrne forums.auctions.overstock.com:80/viewtopic.php?t=17929 |
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Post by jcline on Sept 6, 2007 9:46:03 GMT -5
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Post by jcline on Sept 7, 2007 18:17:32 GMT -5
w/r/t Rodney Young and Eagletech... 8 The New York State Supreme Court granted Eagletech its DTC and NSCC trading records. The unprecedented ruling denied the DTCC’s request for a protective order. NSCC CNS (Continuous Net Settlement) Reports confirm that those short sales failed delivery for 252 trading days (one calendar year), making them illegal Naked Short Sales. 9 DTC participant 5099 reportedly a secret account at the CDS (Canadian Depository for Securities, the CDS is a subsidiary of the DTCC) failed delivery for 212 days. DTC Participant account 5099 is reportedly a special account that clear(s)(ed) through Euroclear for seven Canadian brokerages: Thompson Kernaghan, Wolverton Securities, Global Securities, Pacific International, Canacord Capital, Yorkton Securities, Research Capital, with now defunct TK being replaced by TD Waterhouse. 10 Forensic Economist and former Undersecretary of State Robert Schapiro analyzed three years of Eagletech’s CNS reports. He concluded that 37 DTC Participant firms used the NSCC ‘Stock Borrow Program’ to fail delivery of Eagletech stock in excess of the three day delivery rule and to continue delivery failures for up to 252 trading days. In light of DTCC Deputy General Counsel Larry Thompson’s revelation that the NSCC ‘Stock Borrow Program’ is used to cure only 18% of daily aggregate fails, it could be reasonably concluded that these 37 DTC Participants manipulating Eagletech’s stock represent only the tip of the iceberg, while the other 82% of daily aggregate fails promulgate through the Ex-clearing system. www.investorvillage.com/smbd.asp?mb=155&mn=5560&pt=msg&mid=86329 |
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Post by jcline on Sept 11, 2007 17:33:12 GMT -5
STOCKGATE TODAY Sept 11 An online newspaper reporting the issues of Securities Fraud Canadians Regulators Resurrect Solutions to Settlement Abuses – September 11, 2007 David Patch For many Americans we consider the US Capital Markets the most predominant markets in the World and consider our regulatory regime the most secure of all nations. Our perceptions would be different if we objectively looked outside the bubble we live in. Australia and London have beefed up their capital market regulations and have done so with ingenuity instead of blind arrogance. They have come out to fight the battles of abuse instead of placating the financial stability of the members for whom they regulate. These worldly markets have grown over time while the US capital markets have simply stagnated in an environment of conflicts of interest and chaos. This week the Canadian regulators, long thought of as the bastard child to the US, proposed regulatory changes to short sale rules that could once again put the Securities and Exchange Commission at the back of the bus relative to the issues of settlement failure abuses. The Canadians had the luxury of watching gaffe after gaffe come from SEC’s attempts to promote safety and utilized the discarded options the SEC left at the corner trash barrel. Consider that in 2005 the SEC released Regulation SHO to the markets to address the market abuses of long standing and potentially abusive settlement failures. The SEC was responding to the growing concerns of SRO’s, public issuers, and investors who were losing confidence in the safety of these markets due to the increasing levels of trade failures in our markets. During the period of public comment for regulation SHO the NASD proposed to the SEC their own short sale rule changes that provided clear insight as to why failures persisted indefinitely. In March of 2004 the NASD highlighted that settlement failures that persisted beyond 10 days past settlement date was an anomaly and must be treated differently. The NASD suggested that all fails of this age or greater must be reported to the Division of Market regulation and that the firm responsible for the fail must provide a daily report on why this trade remained in a failed status and why it could not be closed out. More importantly, in that draft proposal the NASD stated “cost could not be a factor” when justifying a failed trade. This statement clearly aimed at member firms who were simply sitting on failed trades until such time as it was financially beneficial to close out that trade at the financial expense of the investor and issuer involved. What happened to this language? The SEC requested that the NASD pull back this proposal and await the release of their Federal level proposal. The SEC wanted to the NASD to sit back and wait for Regulation SHO. Tem months later SHO became a federal rule and missing from that rule was any clear guidance on how to address persistent settlement failures. The NASD language and the NASD objective were lost in a myriad of subjective loopholes, and one grandfather clause. This week such language was resurrected as a means of meeting the necessary and safe standards of settlement necessary for the protection of a capital market. The language was not resurrected in the US, it was being proposed as part of a short sale rule in Canada. The Canadian markets, once known as a conduit for US Organized crime families to launder their proceeds through was now looking to crack down on settlement failure abuses by member firms and do so in a manner the SEC would not consider due to the potential costs to member firms. I contacted SEC Media Relations spokesman John Heine about whether the SEC would be re-considering the language previously discarded based on the multiple failed attempts at locking this issue down. John had no comment outside of directing me to the SEC Rule proposals up for public comment for which, none address this particular issue with this particular language. But as the Canadians took the good scraps left behind by the SEC they also took hold of some of the SEC’s failed attempts as well. The Canadian proposal seeks to eliminate the “tick test” put in place to eliminate bear raids in a collapsing market. The proposal highlights that such a request is in response to the SEC’s removal of this protective tool earlier this summer and utilized a poorly conducted pilot program the SEC used as justification for the change. Let’s just hope the Canadian markets are not witness to the same market volatility the US markets undertook immediately after the rule change was implemented. Likewise the Canadian proposal does not seek to eliminate naked short sales as the SEC has elected to do. Naked short sales through Canada have long been a problem in the US markets with Phil Gurian and other reputed crime family members using this venue to launder money into the US. Naked short sales through Canada were also the venue used by convicted felon Anthony Elgindy. The regulators have addressed some of the abuses that could come through naked short selling by imposing some regulatory responses to potential abuses. Unlike the SEC, the Canadian regulators have presented rules that would allow them to impose a moratorium on short sales in companies they feel may be abused by naked short sales and rules that would allow them to cancel trades on short sales executed where settlement failures persisted beyond 10 settlement days after the settlement date. While these policies would require higher supervisory levels they do offer the opportunity to bring conclusions to abusive trades instead of relying on the SEC’s honor system for the crooks and criminals. The Canadian Regulators have thrown down the gauntlet once discarded by the SEC. Will the SEC’s Division of Market Regulation have the integrity to look back on these past 2+ years of failed attempts and consider a venue once proposed by the NASD and presently proposed by the Canadian Regulators? The ‘not invented here attitude’ is old school and the SEC Division of Market Regulation needs to drop the arrogant attitude and listen to the solutions presented by others to a global problem recognized around the world. How serious are the Canadian regulators at addressing this problem? Consider that Canadian regulators were the first to bring an enforcement case against a member firm for violating regulation SHO rules. To date the NYSE and NASD have brought additional cases forward but the SEC has yet to take a regulatory action for SHO violations. What they are waiting for we would all like to know. I would offer that those who are interested in commenting on the new Canadian proposal should do so as defined on the Market Regulation Services Inc. website located at www.regulationservices.com. Look for Market integrity Notice MIN 2007-017. The proposal, as presented, has it points and its flaws and we owe it to the MRS to identify each appropriately. For more on this issue please visit the Host site at www.investigatethesec.comCopyright 2007 |
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Post by jcline on Sept 14, 2007 8:21:30 GMT -5
SEC v 10 defendants in unlawful trading scheme. www.sec.gov/litigation/complaints/2007/comp20278.pdf "Typically, Defendants learned about PIPE transactions from placement agents who offered issuer securities to Defendants and other hedge funds in private offerings. In connection with Defendants' purchase of securities f?om the issuer in the unregistered PIPE transactions, Defendants sold short the issuer's stock. As a condition of the PIPE transactions, the issuer promised to file with the Commission a resale registration statement that, once effective, would permit Defendants to sell the issuer securities that they had acquired through a PIPE transaction. Later, once the Commission declared the resale registration statement effective, Defendants used the PIPE shares to cover the short positions -a practice prohibited by the registration provisions of the federal securities laws. To avoid detection and regulatory scrutiny, Defendants employed a variety of deceptive trading techniques, including wash sales, matched orders, and pre-arranged trades, to make it appear that they were covering their short sales with open market shares, when, in fact, Defendants were on both sides of the transactions and were covering with their PIPE shares." |
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Post by jcline on Sept 14, 2007 11:40:23 GMT -5
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Post by jcline on Sept 17, 2007 8:38:00 GMT -5
A.R. CAPITAL SCANDAL NOW COMPLETE WITH PROFESSIONAL TOUCH By JOHN AIDEN BYRNE September 16, 2007 -- Professionals associated with the alleged phony hedge fund A.R. Capital - including lawyers, accountants and the brokers that cleared its trades - are all in the legal crosshairs of victims of the fraud, The Post has learned. Robert S. Banks, the Portland, Ore.-based lawyer for 10 victims of A.R. Capital, said a lawsuit against the principals of the now-shuttered hedge fund and its professionals was being readied and could be filed in either New York or Albuquerque, N.M., shortly. "As evil as the [A.R. Capital] promoters were," said Banks, "they could not have gotten away with their scheme without the help of lawyers and accountants to do the necessary paperwork, and lay the groundwork for the crime." As The Post first reported exclusively last week, at least five fraudsters, playing off Americans' fascination with the high returns of hedge funds, scammed dozens of investors out of a total of $30 million over three years by posing as successful hedge fund managers. They were able to continue the alleged fraud by sending investors phony statement showing rosy returns. It was all a fraud and A.R. Capital, run out of a seventh floor office at 39 Broadway, is now shuttered and the executives are into the wind. One victim, an 81-year old retire engineer, lost as much as $700,000 to the scam. He initially invested $5,000 after he received a cold call from one of the executives. The victim, Edward Bacon, then increased his investment after getting statements showing his cash had doubled in six months. The FBI and the Securities and Exchange commission are said to be investigating the matter. In addition, a sealed indictment in the case is said to have been handed up by a grand jury empaneled by Michael J. Garcia, the U.S. Attorney in Manhattan. Spokespersons for each office declined comment. Banks said investors are unlikely to recover much. Federal authorities are said to have frozen assets that reputedly belonged to the disgraced hedge fund. However, the amount involved is said to be miniscule, perhaps as little as $50,000, according to a person familiar with the situation. A.R. Capital had a relationship with HSBC, according to Banks, and provided foreign exchange prime brokerage, executing and trading services. HSBC has not been charged or implicated in any alleged A.R. Capital fraud. A spokesperson for HSBC Bank declined to comment. www.nypost.com/seven/09162007/business/a_r__capital_scandal_now_compl.htm |
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Post by jcline on Sept 17, 2007 11:20:24 GMT -5
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Post by jcline on Sept 18, 2007 8:51:49 GMT -5
GAO report says SEC failing to close cases, distribute funds to harmed investors WASHINGTON (Thomson Financial) - The Securities and Exchange Commission has failed to distribute about 80 pct of the funds set up in a 2002 program aimed at compensating investors injured due to violations of US securities laws, the Government Accountability Office said in a report released today. GAO also said the SEC has harmed targets of securities fraud investigations by officially keeping investigations open long after the SEC has stopped investigating. 'We heard an allegation last year that many of the cases that the SEC tells Congress it's pursuing are really just at a standstill, waiting to be closed, and this report confirms it,' said Senator Charles Grassley, the Iowa Republican who requested the report. 'That's not fair to those under investigation and it misleads the public by implying that the SEC is more active than it really is,' he added. The GAO report said the SEC's failure to distribute funds to harmed investors may be related to the fact that many cases remain open even though all activity has ceased. Specifically, GAO said that only 1.8 bln usd has been distributed to investors out of the total 8.4 bln usd that has been awarded since 2002. The report said SEC officials cite problems identifying harmed investors and other barriers to distributing money and closing the cases. However, the GAO report said the 'decentralized approach' to managing the program at the SEC may also be to blame. It added that keeping the cases officially open for longer than needed is unfair to targets of these cases. The report said that as of March 2007, 300 of the cases open in one regional office were more than two years old or were no longer being pursued. As a result of these findings, GAO said the SEC needs to develop new procedures for closing these investigations, as well as written policies and criteria for approving new investigations. GAO also said the SEC should create a 'comprehensive plan' to clarify how money is distributed to harmed investors. pete.kasperowicz@thomson.com pik/wash/wash www.forbes.com:80/markets/feeds/afx/2007/09/17/afx4126408.html |
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