Scott moritz guilty of fomenting?
According to Scott Moritz' employer at the Street, quote:
"A lot of times when I was short at my hedge fund—meaning I needed [the market to go] down—I would create a level of activity before [the market opened] that could drive the [pre-market] futures [down]. … Similarly, if I were long, and I wanted to make things a little bit rosy, I would go in and [buy] a bunch of stocks and make sure that they were higher …
It's a fun game, and it's a lucrative game. You can move [the market] up and then fade it—that often creates a very negative feel. … That's a strategy very worth doing. … I would encourage anyone in the hedge fund game to do it. Because it's legal. And it is a very quick way to make money. And very satisfying."
Mr. Moritz' employer further states:
"[Y]ou've really got to control the market. You can't let it lift. When you get a [bellwether stock that is soaring like] Research in Motion, it's really important to use a lot of your firepower to knock that down. … So, let's say I were short. What I would do is hit a lot of guys with RIMM [sell a lot of Research in Motion stock to a lot of investors]. "
Additionally, Mr. Moritz' employer says this about fomenting:
"Now, you can't "foment." That's a violation. You can't create yourself an impression that a stock's down. But you do it anyway, because the SEC doesn't understand it. [my emphasis]. That's the only sense that I would say this is illegal. But a hedge fund that's not up a lot [this late in the year] really has to do a lot now to save itself.
This is different from what I was talking about at the beginning where I was talking about buying the QQQs and stuff. This is actually blatantly illegal. But when you have six days and your company may be in doubt because you're down, I think it's really important to foment—if I were one of these guys—foment an impression that Research in Motion isn't any good. Because Research in Motion is the key today."
and finally, here's what the FCC says:
According to the SEC's Web site, market "manipulation" is:
intentional conduct designed to deceive investors by controlling or artificially affecting the market for a security. Manipulation can involve a number of techniques ... [such as] spreading false or misleading information about a company … or rigging quotes, prices or trades to create a false or deceptive picture of the demand for a security. Those found guilty of manipulation are subject to criminal and civil penalties.
can't get enough Scott Moritz??
neither can I . . . check this out, by Daniel Eran Dilger from "RoughlyDrafted" magazine:
"The iPhone’s launch was regarded as the most blockbuster for any consumer electronics device ever. Yet Scott Moritz published a Street report saying that it had ”missed a 1 million unit sales target and rivals are rejoicing.“ Moritz wasn’t just inventing something to say to get airplay. He was seeding false information to manipulate Apple’s stock price downward.
His report was purportedly based upon inside ”whispers,“ but the reality was that he misrepresented the position of analysts covering the iPhone.
He conveniently failed to point that analysts had really set targets between 150,000 and 300,000; during the launch, some raised their estimates for the weekend to twice that. None had ever set a million units as a realistic goal, let alone a minimum threshold of failure. Moritz clearly lied."
"Moritz subsequently announced that Apple was earning fantastical profits on the iPhone from its revenue sharing plan with AT&T and insisted that the deal was unprecedented. This wasn’t true, as RIM also quite publicly earns a revenue cut from service providers. Moritz then issued a sudden warning–falsely attributed to an investment group that doesn’t even cover Apple or tech stocks–that Apple was cutting its orders with suppliers in half.
These continual cycles of false reports tug investors up and down in short term manipulations. Even worse, they serve as protofacts for junk science journalists piecing together theories that otherwise have no support apart from the ramblings of those who are intentionally seeding false information, either for their own benefit, for that of their clients, or a bit a both."
Link to SEC Complaint form
here's some more on Moritz from "RD Magazine"
Great Job With the Consistently Wrong Coverage.
In a video published by the Street, Cramer praised Moritz for his coverage of Apple, which included his story of ”speculation“ that Apple was cutting its iPhone orders in half. When asked for details, Moritz described the story as coming from a ”boutique research shop“ but also conceded that ”it doesn’t make much sense.“
The nonsensical story said that Apple pre-ordered 9 million phones but then canceled half its order. Apple doesn’t maintain a year of channel inventory for any of its products. The Street invented this. Moritz claimed to be reporting the reasons why Apple’s stock dipped down, but his fake reports are the reason. Cramer even credited his reports as ”self fulfilling.“
When asked about over the top reports complaining about the iPhone’s battery needing replacement in two years, Moritz also had to concede ”I’m not sure it’s an issue.“
