Post by jcline on Oct 26, 2007 16:40:13 GMT -5
Judge Graham Mullen on Wednesday dismissed part of an SEC civil lawsuit alleging that a former executive at Friedman Billings Ramsey engaged in illegal conduct related to a securities offering. The claim alleged that John Mangan Jr. committed a so-called Section 5 violation involving a Pipe, or private investment in public equity. Representing Mangan: George Covington of King & Spalding in Charlotte and James Wyatt at Wyatt & Blake. Said Wyatt to the Observer: “We firmly believe (the case) will be resolved in his favor because we believe he has done absolutely nothing wrong.”
While the case is interesting — especially for those of you obsessed with the controversy surrounding Pipes and naked short selling — what’s interesting to us is this excerpt from the transcript of Wednesday’s oral argument on Mangan’s motion to dismiss.
Judge Mullen: Naked shorts are not legal, are they?
SEC lawyer Amy Greer: No. No, they’re just very risky, Your Honor.
SEC lawyer Catherine Pappas: And Your Honor –
Judge Mullen: They’re not illegal; they’re just risky.
Greer: Correct. Naked short sales are not illegal; they’re just risky, Your Honor.
Judge Mullen: Why in the world don’t you all make them illegal? Don’t you understand what happens in the market when you allow naked short selling to attack companies? I mean, do you understand that?
Greer: Your Honor, I think that that’s an issue for the United States Congress. I appreciate your concern –
Judge Mullen: Well –
Greer: — and I –
Judge Mullen: — the answer to my question is, yeah, I understand it or, no, I don’t.
Greer: I do understand your –
Judge Mullen: Do not try — okay.
Greer: I do understand, Your Honor.
Judge Mullen: Thank you for understanding it.
Covington: Your Honor, one thing –
Judge Mullen: Excuse the interruption.
Covington: No, sir.
Judge Mullen: Sit down, shut up, let the man talk. I’m not going to let him introduce (sic) you. Last warning.
Pappas: I’m sorry?
Judge Mullen: Sit down –
Pappas: Yeah, I got that.
Judge Mullen: — shut up, let the man talk. Last warning.
Pappas: Okay.
Judge Mullen: Understood?
Pappas: Okay.
Judge Mullen: Excellent.
Covington: With all due respect, Your Honor –
Judge: And you don’t interrupt her when she’s talking.
Covington: Yes, sir.
Judge: Proceed.
blogs.wsj.com:80/law/2007/10/26/federal-judge-tells-sec-lawyer-sit-down-shut-up/
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Ms. Greer & Pappas,
I am reading a log blog in the WSJ in which transcripts of the recent court hearing on John Mangan are presented by Peter Lattman. The transcripts presented read:
Judge Mullen: Naked shorts are not legal, are they?
SEC lawyer Amy Greer: No. No, they're just very risky, Your Honor.
SEC lawyer Catherine Pappas: And Your Honor -
Judge Mullen: They're not illegal; they're just risky.
Greer: Correct. Naked short sales are not illegal; they're just risky, Your Honor.
Judge Mullen: Why in the world don't you all make them illegal? Don't you understand what happens in the market when you allow naked short selling to attack companies? I mean, do you understand that?
Greer: Your Honor, I think that that's an issue for the United States Congress. I appreciate your concern -
Judge Mullen: Well -
Greer: - and I -
Judge Mullen: - the answer to my question is, yeah, I understand it or, no, I don't.
A law lesson for you Ms Greer and Ms Pappas, Naked shorting is ILLEGAL in some cases in in particular in the case before the judge. Market Makers execute the legal naked shorts under risk, clients execute naked shorts against the securities laws set forth by the Commission and the Self-Regulatory Agencies. Failing to understand the differences between the two is an admission of incompetence. To represent the agency responsible for enforcing such laws without understanding the law itself is inexcusable.
To the members of the Commission staff, clearly this judge understands the ramifications of a naked short and is concerned even if you are not. It is not an issue to be addressed by Congress as Ms. Greer would indicate but it is an issue that should be addressed by you - The Staff of the Securities and Exchange Commission.
This dialogue now open to public ridicule should be viewed as yet another embarrassment to the SEC. The dialogue illustrates the level of incompetence and the level of denial that exists within the agency. The attorney's in question here should be demoted and/or terminated for their performance instead of being allowed to linger within the agency to accumulate SEC credentials that will be used to foster high paying jobs in the private sector some time down the road. If Gary Aguirre can be illegally terminated through the use of job performance certainly these two can be terminated on the legal grounds of poor performance.
Shame on you all.
Dave Patch
www.investigatethesec.com
While the case is interesting — especially for those of you obsessed with the controversy surrounding Pipes and naked short selling — what’s interesting to us is this excerpt from the transcript of Wednesday’s oral argument on Mangan’s motion to dismiss.
Judge Mullen: Naked shorts are not legal, are they?
SEC lawyer Amy Greer: No. No, they’re just very risky, Your Honor.
SEC lawyer Catherine Pappas: And Your Honor –
Judge Mullen: They’re not illegal; they’re just risky.
Greer: Correct. Naked short sales are not illegal; they’re just risky, Your Honor.
Judge Mullen: Why in the world don’t you all make them illegal? Don’t you understand what happens in the market when you allow naked short selling to attack companies? I mean, do you understand that?
Greer: Your Honor, I think that that’s an issue for the United States Congress. I appreciate your concern –
Judge Mullen: Well –
Greer: — and I –
Judge Mullen: — the answer to my question is, yeah, I understand it or, no, I don’t.
Greer: I do understand your –
Judge Mullen: Do not try — okay.
Greer: I do understand, Your Honor.
Judge Mullen: Thank you for understanding it.
Covington: Your Honor, one thing –
Judge Mullen: Excuse the interruption.
Covington: No, sir.
Judge Mullen: Sit down, shut up, let the man talk. I’m not going to let him introduce (sic) you. Last warning.
Pappas: I’m sorry?
Judge Mullen: Sit down –
Pappas: Yeah, I got that.
Judge Mullen: — shut up, let the man talk. Last warning.
Pappas: Okay.
Judge Mullen: Understood?
Pappas: Okay.
Judge Mullen: Excellent.
Covington: With all due respect, Your Honor –
Judge: And you don’t interrupt her when she’s talking.
Covington: Yes, sir.
Judge: Proceed.
blogs.wsj.com:80/law/2007/10/26/federal-judge-tells-sec-lawyer-sit-down-shut-up/
------------------------
Ms. Greer & Pappas,
I am reading a log blog in the WSJ in which transcripts of the recent court hearing on John Mangan are presented by Peter Lattman. The transcripts presented read:
Judge Mullen: Naked shorts are not legal, are they?
SEC lawyer Amy Greer: No. No, they're just very risky, Your Honor.
SEC lawyer Catherine Pappas: And Your Honor -
Judge Mullen: They're not illegal; they're just risky.
Greer: Correct. Naked short sales are not illegal; they're just risky, Your Honor.
Judge Mullen: Why in the world don't you all make them illegal? Don't you understand what happens in the market when you allow naked short selling to attack companies? I mean, do you understand that?
Greer: Your Honor, I think that that's an issue for the United States Congress. I appreciate your concern -
Judge Mullen: Well -
Greer: - and I -
Judge Mullen: - the answer to my question is, yeah, I understand it or, no, I don't.
A law lesson for you Ms Greer and Ms Pappas, Naked shorting is ILLEGAL in some cases in in particular in the case before the judge. Market Makers execute the legal naked shorts under risk, clients execute naked shorts against the securities laws set forth by the Commission and the Self-Regulatory Agencies. Failing to understand the differences between the two is an admission of incompetence. To represent the agency responsible for enforcing such laws without understanding the law itself is inexcusable.
To the members of the Commission staff, clearly this judge understands the ramifications of a naked short and is concerned even if you are not. It is not an issue to be addressed by Congress as Ms. Greer would indicate but it is an issue that should be addressed by you - The Staff of the Securities and Exchange Commission.
This dialogue now open to public ridicule should be viewed as yet another embarrassment to the SEC. The dialogue illustrates the level of incompetence and the level of denial that exists within the agency. The attorney's in question here should be demoted and/or terminated for their performance instead of being allowed to linger within the agency to accumulate SEC credentials that will be used to foster high paying jobs in the private sector some time down the road. If Gary Aguirre can be illegally terminated through the use of job performance certainly these two can be terminated on the legal grounds of poor performance.
Shame on you all.
Dave Patch
www.investigatethesec.com
