Post by jcline on Nov 25, 2007 10:23:43 GMT -5
100 BILLION DOLLAR LOOPHOLE
Repost......OLDIE BUT A GOODIE!
By: guru11
11 Mar 2005, 11:28 AM EST
Msg. 30824 of 30844
Jump to msg. #
The Hundred Billion Dollar Loophole (05.07.02):
REPOST BY LIZDRUCKER
There's a rule that the market makers use ... a rule
that only has less than two hundred words in it ...
and that rule allows them to naked short an OTCBB or
Pink Sheet stock into oblivion. It allows them to
literally create, out of thin air, as many shares as
they need, to maintain an orderly market.
"(B) Proprietary short sales
No member shall effect a short sale for its own
account in any security unless the member or person
associated with a member makes an affirmative
determination that the member can borrow the
securities or otherwise provide for delivery of the
securities by the settlement date. This requirement
will not apply to transactions in corporate debt
securities, to bona fide market making transactions by
a member in securities in which it is registered as a
Nasdaq market maker, to bona fide market maker
transactions in non-Nasdaq securities in which the
market maker publishes a two-sided quotation in an
independent quotation medium, or to transactions which
result in fully hedged or arbitraged positions."
This rule allows a market maker to create a share in a
company by simply taking the money from the buyer and
making an electronic entry into their brokers'
account, and the broker then electronically credits
the buyer with one share of that company.
But several things that no one is aware of take place
in this transaction.
1. The buyer thinks that his share actually exists,
but unless he or she has read his account agreement
very carefully, he won't understand that all he did is
give money to someone other than the company and never
got any actual proof of ownership. His certificate,
presumably, is sitting at the DTCC.
2. The market maker filling the order for one share
has the buyer's money, and gave nothing except
electronic acknowledgement of receipt of it ... the
electronic entry in the buyer's account.
One very important thing to understand here, is that
at no point in this process, did the company in which
the buyer 'invested' ever get one single dime of the
money paid by the buyer for that share. There is a
tremendous misconception out there that causes many to
assume that when they buy a share of a company's
stock, the company gets the money.
This is only true if the buyer is buying an IPO, or a
private placement of shares from the company. In any
other sale or purchase of a stock by an investor, the
company does not even see the money.
This is particularly vexing when one begins to
understand what happens in naked shorting situations.
Situations where the provision that allows for naked
shorting to maintain an orderly market is abused.
Understand that whoever is doing the naked shorting is
the one receiving the money. They keep it. For as long
as it is convenient to do so. That is where the abuse
of the rule comes in.
That rule was created to allow for market makers, who
by becoming market makers, agree to 'make a market' in
certain stocks. That means that they will sell you a
share, or buy a share from you, even if there isn't
any available, or there are no other buyers for it.
The Market makers' job is at least partly, to provide
liquidity to the market. In thinly traded securities,
or securities where there is a small public float, the
market makers' ability to naked short is crucial to
the liquidity of the market in that security.
The abuse takes place when the market maker for
whatever reason determines that the market for a
particular security has become "disorderly". Too much
buying pressure, for instance, can cause a price spike
in that security that would have no relationship to
the true book value of the security. The market maker
then determines that he will naked short to fill
orders, knowing that by doing so, the price will not
explode on unusually high demand because he can
literally issue new shares under this rule. The market
maker then waits, with an open naked short position in
that stock, until the buying pressure subsides, and he
can buy enough shares back at lower prices to cover
his naked short position.
The rule does not have any time requirements and that
allows for the market maker to keep a naked short
position open for potentially years. In reality, until
the buying pressure subsides enough for him to buy
back at lower prices however many shares he needs to
fill previously filled orders that make up his naked
short position, it simply stays open, and the money
sits in his account.
Someone is going to ask the question, "So, how big are
all those naked short positions, anyhow?"
There is another provision that says that the market
makers do not have to publish their open naked short
positions. Never. At all. All OTCBB and Pink Sheet
securities can be naked shorted - indefinitely - by
market makers under this rule, and there is no way
that an investor can discover if there is an open
naked short position in a stock he may be interested
in, or even how big that short position is.
So far, the SEC does not see a strong need to correct
this situation, either.
Think about it. There are unlimited amounts of shares
that were never authorized or issued by a company made
available to the unsuspecting investor. They are
authorized and issued by the market makers under this
rule, and the company never gets any money from the
sale of shares created under this rule.
The temptation to abuse this rule is irresistable.
Just do the math. A million naked shorted shares sold
by a market maker at 0.01 (one cent) is $10,000 that
the market maker keeps in his account, and that the
company does not get. At 0.10 (ten cents) the market
maker gets to keep $100,000. Now, that is for each
million shares that the market maker creates.
Under this rule, if a company and/or a group of
shareholders begin to suspect a short position exists
in their security, they can not discover this from any
published source. The price of the stock remains
constant, or goes down, even though there is unusually
heavy buying ... buying that goes on for years in some
cases.
The company thinks that there is someone illegally
shorting their stock in an attempt to ruin the
company. The shareholders think that the company is
illegally printing shares behind their backs and is
scaming them. Eventually, this distrust between the
company and it's shareholders becomes so great that
investors start selling, or the company, already
damaged by a supressed share price, is forced to issue
additional shares into the market because other
collateral-backed loans can not be made with share
prices so suppressed.
This is what the market maker is waiting for ...
sometimes for as long as years. In both cases, the
market maker eventually gets his naked short position
covered, and all it cost was the company's reputation,
the shareholders' money, and the SEC's full
cooperation by allowing this abuse of the rule.
There is a third situation that the market makers
naked short into ... a stock that is a likely prospect
for failure. In that case, they just continue naked
shorting no matter what, keeping the price suppressed,
and eventually the company files for bankruptcy, and
... the company goes out of business, the shareholders
lose their investment ... and the market maker keeps
the proceeds of his continued naked shorting.
A good question for the SEC would be, "Seeing as how
the companies that failed never got the proceeds of
the sale of stock over and above their issued and
outstanding, but the market makers did, isn't the SEC
allowing actual fraud to take place, and condoning it
by the creation and continued existance of this rule?"
Like it or not, the SEC has allowed securities fraud
to run rampant in the OTCBB and Pink sheet stock
markets by simply looking the other way and allowing
the market makers to target the OTCBB and Pink sheet
markets as a source of huge amounts of cash, literally
stolen from investors by the third party creation of
shares by an entity other than the the issure - the
company.
This rule is nothing less than blanket permission by
the SEC for market makers to become the issuers of
company stock, no matter what the company's official
authorized and issued amounts are.
And that, my friends and fellow investors, is
securities fraud on a scale almost beyond
comprehension.
Liz
The Hundred Billion Dollar Loophole (Part II):
In part one I showed how the rule for reporting of
naked short positions by Market Makers can be abused
very easily with no more than "maintaining an orderly
market" as an excuse. There is no visability in this
rule for OTCBB and Pink Sheet or Gray Market
securities. There is another operation performed by
financial insitiutions, and it is particularly
damaging when this service is performed by a financial
institution that owns or controls a trading operation.
That service, usually found under "corporate services"
at larger brokerage websites is closing escrow
services, where the brokerage offers a full range of
closing services for companies that are buying or
selling corporate assets, up to and including entire
businesses. Typically, these services are targeted at
the very small to mid-sized corporations - companies
that would not typically have this range of services
available other than through a third party, and
typically trade on the OTCBB, Pink Sheets and Gray
market.
Merrill Lynch, for example, even states on their
website that they will handle all aspects of corporate
sales and acquisitions of other companies, divisions -
everything that a growing young company would need to
do an acquisition or sell itself, even finding
suitable merger/acquisition candidates. Contained
within these services are "all aspects of closing the
deal"... including handling any escrow accounts needed
for the closing.
There are even brokerages offering "Mark-to-Market"
services, where an account containing corporate stock
used as security for an escrow account would be
adjusted - automatically - to maintain current equal
value by adjusting the amount of shares in the escrow
account for the price of the stock pledged, on a
daily, weekly, monthly, or quarterly time period.
Now, let's create an example of this "full Service"
brokerage and see how the interest of the brokerage
comes before the interest of their client:
XYZ company agrees to buy ABC company. Stock
representing the full ownership of ABC company is
placed into an escrow account with a financial
institution, which is handling the escrow account. The
value of ABC company has been established and is fixed
by the purchase agreement. The financial institution
has both parties to the escrow sign an "escrow
agreement" which contains the terms and limitations of
that account.
XYZ company, because they do not have ready cash to
complete the acquisition, places sufficient shares of
their own stock into the escrow account. The escrow
agreement gives the financial institution the duty of
maintaining an equal value on both sides of the escrow
account. XYZ company sends a copy of the Escrow
Agreement to their Transfer Agent, so that the T/A can
make any needed issuances of XYZ stock into the
account necessary to maintain the equal value.
So far, so good. But, remembering what happens with
any stock deposited with any financial institution for
safekeeping, we know that any shares placed into this
escrow account ultimately get deposited with Cede &
Co. That is common, and all shares in that escrow
account are restricted due to any number of reasons,
including not being registered with the SEC for public
ownership. Without a "Restricted" legend actually
placed on the certificate by the T/A, there is no way
for any one looking at Cede & Co.. to determine that
any of those shares are restricted.
In most cases, there is not even an actual paper
certificate, as entries at Cede & Co. are "paperless"
certificates. All Cede & Co. really does is keep
ledgers of who owns what. Any actual certificate
requests from beneficial owners are forwarded from
their brokers to the DTCC, which instructs Cede & Co.
to order the transfer agent of the company to transfer
on his books and issue the actual paper to the
beneficial owner. Cede & Co. then makes the necessary
transfer debits on the brokers' DTCC account. Any
other way of moving actual paper would be cumbersome
beyond all practicality, and the system would
literally topple from the weight of the paper.
The abuse of this situation starts taking place when
someone at the Market Making operation of the
financial insitiution operating the escrow account
either looks at Cede & Co. and sees those escrow
shares, or has coffee with someone from the escrow
department and finds out that XYZ has an escrow
account with a "Mark-to-Market" provision contained
within the escrow agreement.
That trader then can naked short against the escrow
shares, knowing that the value of the stock will drop
because instead of having to find sellers to match buy
orders, all they need do is naked short against the
escrow shares. At the end of the quarter, the escrow
department sees that the stock of XYZ company has
dropped in value and calculates how many new shares he
needs to maintain an equal balance and sends a request
to the T/A for the needed new escrow shares. The T/A
issues the new shares to the escrow department using
the escrow agreement as his authorization.
Those shares are received by the escrow department and
placed with Cede & Co., the market maker sees those
new, additional shares and continues naked shorting
against them, while waiting for enough sellers to come
into XYZ company at lower prices so he can flatten his
position.
But, the stockholders of XYZ company for whatever
reason, do not want to sell in great enough quantities
for the market maker to flatten his position, so he
continues to naked short into the "disorderly" demand
... the escrow department does their calculations
again at the end of that quarter ... new shares again
show up ... and the cycle repeats itself until someone
finally steps in and stops the death spiral.
An out of control escrow account can be disasterous to
a company that has pledged their stock as part of an
acquisition. With the stock price now in a freefall,
the ability of the company to come up with the cash
necessary to close the escrow is seriously degraded by
the continued erosion in their stock's price and
eventually the deal falls apart.
At this point, the company has very little hope of
completing the acquisition, and the deal is called off
in a company PR. With that, the escrow is closed and
the shareholders, disappointed, sell in sufficient
quantities that the market maker can finally flatten
his position.
Now, if XYZ company and ABC company decide to 'unwind'
the deal by issuing ABC company out to all
shareholders of record of XYZ instead of just going
their seperate ways ... things could get very
interesting, indeed. Especially if there has been
other, opportunistic naked shorting of XYZ's
securities by other entities, offshore or illegal, or
any combination of the two.
As long as the naked short position is controled by
the same entity, in this case, a broker that has a
market making operation and operates an escrow
department, everything remains somewhat under control,
assuming that the broker is very reputable. But when
others jump onto the shorting bandwagon, the situation
rapidly runs out of control and eventually, someone
sees all those "extra shares" and the regulatory
agencies get envolved.
Now, if the financial entity that is operating the
market maker operation and the escrow department is
also under a lot of pressure due to various
investigations, has had a rough year because of the
tanking markets, is publicly traded, and sees that
they are under pressure to perform, the possibility of
abuse to soften the damage to their bottom line is
almost irrestible.
With no visability of their naked short positions on
securities traded on the OTCBB, Pink Sheets and Gray
market, ie; with NO reporting requirements of their
naked short positions in those securities...
... the temptation to take the investors' money and
bankurpt XYZ company is going to be very great indeed.
Just one more way that the system is stacked against
the small publicly-traded companies and those that
invest in them.
Liz
ragingbull.quote.com/mboard/boards.cgi?board=CLB00529&read=30824
Repost......OLDIE BUT A GOODIE!
By: guru11
11 Mar 2005, 11:28 AM EST
Msg. 30824 of 30844
Jump to msg. #
The Hundred Billion Dollar Loophole (05.07.02):
REPOST BY LIZDRUCKER
There's a rule that the market makers use ... a rule
that only has less than two hundred words in it ...
and that rule allows them to naked short an OTCBB or
Pink Sheet stock into oblivion. It allows them to
literally create, out of thin air, as many shares as
they need, to maintain an orderly market.
"(B) Proprietary short sales
No member shall effect a short sale for its own
account in any security unless the member or person
associated with a member makes an affirmative
determination that the member can borrow the
securities or otherwise provide for delivery of the
securities by the settlement date. This requirement
will not apply to transactions in corporate debt
securities, to bona fide market making transactions by
a member in securities in which it is registered as a
Nasdaq market maker, to bona fide market maker
transactions in non-Nasdaq securities in which the
market maker publishes a two-sided quotation in an
independent quotation medium, or to transactions which
result in fully hedged or arbitraged positions."
This rule allows a market maker to create a share in a
company by simply taking the money from the buyer and
making an electronic entry into their brokers'
account, and the broker then electronically credits
the buyer with one share of that company.
But several things that no one is aware of take place
in this transaction.
1. The buyer thinks that his share actually exists,
but unless he or she has read his account agreement
very carefully, he won't understand that all he did is
give money to someone other than the company and never
got any actual proof of ownership. His certificate,
presumably, is sitting at the DTCC.
2. The market maker filling the order for one share
has the buyer's money, and gave nothing except
electronic acknowledgement of receipt of it ... the
electronic entry in the buyer's account.
One very important thing to understand here, is that
at no point in this process, did the company in which
the buyer 'invested' ever get one single dime of the
money paid by the buyer for that share. There is a
tremendous misconception out there that causes many to
assume that when they buy a share of a company's
stock, the company gets the money.
This is only true if the buyer is buying an IPO, or a
private placement of shares from the company. In any
other sale or purchase of a stock by an investor, the
company does not even see the money.
This is particularly vexing when one begins to
understand what happens in naked shorting situations.
Situations where the provision that allows for naked
shorting to maintain an orderly market is abused.
Understand that whoever is doing the naked shorting is
the one receiving the money. They keep it. For as long
as it is convenient to do so. That is where the abuse
of the rule comes in.
That rule was created to allow for market makers, who
by becoming market makers, agree to 'make a market' in
certain stocks. That means that they will sell you a
share, or buy a share from you, even if there isn't
any available, or there are no other buyers for it.
The Market makers' job is at least partly, to provide
liquidity to the market. In thinly traded securities,
or securities where there is a small public float, the
market makers' ability to naked short is crucial to
the liquidity of the market in that security.
The abuse takes place when the market maker for
whatever reason determines that the market for a
particular security has become "disorderly". Too much
buying pressure, for instance, can cause a price spike
in that security that would have no relationship to
the true book value of the security. The market maker
then determines that he will naked short to fill
orders, knowing that by doing so, the price will not
explode on unusually high demand because he can
literally issue new shares under this rule. The market
maker then waits, with an open naked short position in
that stock, until the buying pressure subsides, and he
can buy enough shares back at lower prices to cover
his naked short position.
The rule does not have any time requirements and that
allows for the market maker to keep a naked short
position open for potentially years. In reality, until
the buying pressure subsides enough for him to buy
back at lower prices however many shares he needs to
fill previously filled orders that make up his naked
short position, it simply stays open, and the money
sits in his account.
Someone is going to ask the question, "So, how big are
all those naked short positions, anyhow?"
There is another provision that says that the market
makers do not have to publish their open naked short
positions. Never. At all. All OTCBB and Pink Sheet
securities can be naked shorted - indefinitely - by
market makers under this rule, and there is no way
that an investor can discover if there is an open
naked short position in a stock he may be interested
in, or even how big that short position is.
So far, the SEC does not see a strong need to correct
this situation, either.
Think about it. There are unlimited amounts of shares
that were never authorized or issued by a company made
available to the unsuspecting investor. They are
authorized and issued by the market makers under this
rule, and the company never gets any money from the
sale of shares created under this rule.
The temptation to abuse this rule is irresistable.
Just do the math. A million naked shorted shares sold
by a market maker at 0.01 (one cent) is $10,000 that
the market maker keeps in his account, and that the
company does not get. At 0.10 (ten cents) the market
maker gets to keep $100,000. Now, that is for each
million shares that the market maker creates.
Under this rule, if a company and/or a group of
shareholders begin to suspect a short position exists
in their security, they can not discover this from any
published source. The price of the stock remains
constant, or goes down, even though there is unusually
heavy buying ... buying that goes on for years in some
cases.
The company thinks that there is someone illegally
shorting their stock in an attempt to ruin the
company. The shareholders think that the company is
illegally printing shares behind their backs and is
scaming them. Eventually, this distrust between the
company and it's shareholders becomes so great that
investors start selling, or the company, already
damaged by a supressed share price, is forced to issue
additional shares into the market because other
collateral-backed loans can not be made with share
prices so suppressed.
This is what the market maker is waiting for ...
sometimes for as long as years. In both cases, the
market maker eventually gets his naked short position
covered, and all it cost was the company's reputation,
the shareholders' money, and the SEC's full
cooperation by allowing this abuse of the rule.
There is a third situation that the market makers
naked short into ... a stock that is a likely prospect
for failure. In that case, they just continue naked
shorting no matter what, keeping the price suppressed,
and eventually the company files for bankruptcy, and
... the company goes out of business, the shareholders
lose their investment ... and the market maker keeps
the proceeds of his continued naked shorting.
A good question for the SEC would be, "Seeing as how
the companies that failed never got the proceeds of
the sale of stock over and above their issued and
outstanding, but the market makers did, isn't the SEC
allowing actual fraud to take place, and condoning it
by the creation and continued existance of this rule?"
Like it or not, the SEC has allowed securities fraud
to run rampant in the OTCBB and Pink sheet stock
markets by simply looking the other way and allowing
the market makers to target the OTCBB and Pink sheet
markets as a source of huge amounts of cash, literally
stolen from investors by the third party creation of
shares by an entity other than the the issure - the
company.
This rule is nothing less than blanket permission by
the SEC for market makers to become the issuers of
company stock, no matter what the company's official
authorized and issued amounts are.
And that, my friends and fellow investors, is
securities fraud on a scale almost beyond
comprehension.
Liz
The Hundred Billion Dollar Loophole (Part II):
In part one I showed how the rule for reporting of
naked short positions by Market Makers can be abused
very easily with no more than "maintaining an orderly
market" as an excuse. There is no visability in this
rule for OTCBB and Pink Sheet or Gray Market
securities. There is another operation performed by
financial insitiutions, and it is particularly
damaging when this service is performed by a financial
institution that owns or controls a trading operation.
That service, usually found under "corporate services"
at larger brokerage websites is closing escrow
services, where the brokerage offers a full range of
closing services for companies that are buying or
selling corporate assets, up to and including entire
businesses. Typically, these services are targeted at
the very small to mid-sized corporations - companies
that would not typically have this range of services
available other than through a third party, and
typically trade on the OTCBB, Pink Sheets and Gray
market.
Merrill Lynch, for example, even states on their
website that they will handle all aspects of corporate
sales and acquisitions of other companies, divisions -
everything that a growing young company would need to
do an acquisition or sell itself, even finding
suitable merger/acquisition candidates. Contained
within these services are "all aspects of closing the
deal"... including handling any escrow accounts needed
for the closing.
There are even brokerages offering "Mark-to-Market"
services, where an account containing corporate stock
used as security for an escrow account would be
adjusted - automatically - to maintain current equal
value by adjusting the amount of shares in the escrow
account for the price of the stock pledged, on a
daily, weekly, monthly, or quarterly time period.
Now, let's create an example of this "full Service"
brokerage and see how the interest of the brokerage
comes before the interest of their client:
XYZ company agrees to buy ABC company. Stock
representing the full ownership of ABC company is
placed into an escrow account with a financial
institution, which is handling the escrow account. The
value of ABC company has been established and is fixed
by the purchase agreement. The financial institution
has both parties to the escrow sign an "escrow
agreement" which contains the terms and limitations of
that account.
XYZ company, because they do not have ready cash to
complete the acquisition, places sufficient shares of
their own stock into the escrow account. The escrow
agreement gives the financial institution the duty of
maintaining an equal value on both sides of the escrow
account. XYZ company sends a copy of the Escrow
Agreement to their Transfer Agent, so that the T/A can
make any needed issuances of XYZ stock into the
account necessary to maintain the equal value.
So far, so good. But, remembering what happens with
any stock deposited with any financial institution for
safekeeping, we know that any shares placed into this
escrow account ultimately get deposited with Cede &
Co. That is common, and all shares in that escrow
account are restricted due to any number of reasons,
including not being registered with the SEC for public
ownership. Without a "Restricted" legend actually
placed on the certificate by the T/A, there is no way
for any one looking at Cede & Co.. to determine that
any of those shares are restricted.
In most cases, there is not even an actual paper
certificate, as entries at Cede & Co. are "paperless"
certificates. All Cede & Co. really does is keep
ledgers of who owns what. Any actual certificate
requests from beneficial owners are forwarded from
their brokers to the DTCC, which instructs Cede & Co.
to order the transfer agent of the company to transfer
on his books and issue the actual paper to the
beneficial owner. Cede & Co. then makes the necessary
transfer debits on the brokers' DTCC account. Any
other way of moving actual paper would be cumbersome
beyond all practicality, and the system would
literally topple from the weight of the paper.
The abuse of this situation starts taking place when
someone at the Market Making operation of the
financial insitiution operating the escrow account
either looks at Cede & Co. and sees those escrow
shares, or has coffee with someone from the escrow
department and finds out that XYZ has an escrow
account with a "Mark-to-Market" provision contained
within the escrow agreement.
That trader then can naked short against the escrow
shares, knowing that the value of the stock will drop
because instead of having to find sellers to match buy
orders, all they need do is naked short against the
escrow shares. At the end of the quarter, the escrow
department sees that the stock of XYZ company has
dropped in value and calculates how many new shares he
needs to maintain an equal balance and sends a request
to the T/A for the needed new escrow shares. The T/A
issues the new shares to the escrow department using
the escrow agreement as his authorization.
Those shares are received by the escrow department and
placed with Cede & Co., the market maker sees those
new, additional shares and continues naked shorting
against them, while waiting for enough sellers to come
into XYZ company at lower prices so he can flatten his
position.
But, the stockholders of XYZ company for whatever
reason, do not want to sell in great enough quantities
for the market maker to flatten his position, so he
continues to naked short into the "disorderly" demand
... the escrow department does their calculations
again at the end of that quarter ... new shares again
show up ... and the cycle repeats itself until someone
finally steps in and stops the death spiral.
An out of control escrow account can be disasterous to
a company that has pledged their stock as part of an
acquisition. With the stock price now in a freefall,
the ability of the company to come up with the cash
necessary to close the escrow is seriously degraded by
the continued erosion in their stock's price and
eventually the deal falls apart.
At this point, the company has very little hope of
completing the acquisition, and the deal is called off
in a company PR. With that, the escrow is closed and
the shareholders, disappointed, sell in sufficient
quantities that the market maker can finally flatten
his position.
Now, if XYZ company and ABC company decide to 'unwind'
the deal by issuing ABC company out to all
shareholders of record of XYZ instead of just going
their seperate ways ... things could get very
interesting, indeed. Especially if there has been
other, opportunistic naked shorting of XYZ's
securities by other entities, offshore or illegal, or
any combination of the two.
As long as the naked short position is controled by
the same entity, in this case, a broker that has a
market making operation and operates an escrow
department, everything remains somewhat under control,
assuming that the broker is very reputable. But when
others jump onto the shorting bandwagon, the situation
rapidly runs out of control and eventually, someone
sees all those "extra shares" and the regulatory
agencies get envolved.
Now, if the financial entity that is operating the
market maker operation and the escrow department is
also under a lot of pressure due to various
investigations, has had a rough year because of the
tanking markets, is publicly traded, and sees that
they are under pressure to perform, the possibility of
abuse to soften the damage to their bottom line is
almost irrestible.
With no visability of their naked short positions on
securities traded on the OTCBB, Pink Sheets and Gray
market, ie; with NO reporting requirements of their
naked short positions in those securities...
... the temptation to take the investors' money and
bankurpt XYZ company is going to be very great indeed.
Just one more way that the system is stacked against
the small publicly-traded companies and those that
invest in them.
Liz
ragingbull.quote.com/mboard/boards.cgi?board=CLB00529&read=30824
