http://www.bloomberg.com/apps/news?p...TCA&refer=home
This is a must read! Very long, so grab that cup of coffee first!
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http://www.bloomberg.com/apps/news?p...TCA&refer=home
This is a must read! Very long, so grab that cup of coffee first!
I'm glad to see this thing getting some wheels.
People have been writing to the SEC long before the financial melt down regarding naked short selling.Overstock.com was another example of naked short selling and the SEC does nothing.
Until enforcement is put under the Dept of Justice nothing will change.Once people go to jail, others get the point.
imho
vaporgold
Brandon,good morning to byou and all..excellent report,but i doubt as you can see in their conclusions itis known,talked about and reaction is So WHAT!!
The Gaul of the bastards........Good start for shining light for retail investors
to see what the Stock market really is,LEGAL BOOKIES !!!!!!!
Bloomberg has always been better than most media agencies. They still have a lot of negatives, but its good to see this article written at least. I definately think you cant do worse than Cox, and they might be looking to find some "villians" in the mess when its all said and done. Look for one big naked short selling case to come to light in the near future. This of course will be well after the market has rebounded. As will the uptick rule reinstatement. RIght when its the least effective. But who knows. I guess anything is better than nothing. More importantly we need to adjust the laws that allow hedge funds to operate outside of public SEC knowledge and filings. They are a company that makes money. Investors enter into it. Money is used to literally manipulate the market.Quote:
Originally Posted by Brandon Matthews
If they were forced to track their transactions, even if we see them once a month, I think you would force them to become more of an investment company, or institutional investment company, as opposed to just a large block of money trying to cheat to make gains.
Hedge funds dont invest, do you think they really invest? (Generalized "you", not you Brandon.) They could care less about fundamentals. There only concern is a guaranteed quick buck, by overloading some poor stock with sell or buy orders, and a million other tactics, mostly covered in deep capture. Looks like email complaints might actually hold some merit now, as I still then encourage daily reports to the SEC from hundreds of investors, everyday it happens, until they stop it. What else can the common investor do? At least you feel you have done all you could. And if something comes of it, maybe Malone and Mel are working right now with politicians to uncover their corruption in how their stock has been traded. You never know whats going on. If its happening, be sure Liberty is now involved in becoming aware of this problem.
Good article Brandon.Quote:
Originally Posted by Brandon Matthews
The Good:
>>SEC Chairman Mary Schapiro, who took office in January, has vowed to reinvigorate the enforcement unit after it drew fire from lawmakers and investors for failing to follow up on tips that New York money manager Bernard Madoff’s business was a Ponzi scheme. She has “initiated a process that will help us more effectively identify valuable leads for potential enforcement action,”<<
The Bad:
>>The way the SEC processes complaints hinders its ability to respond, the report said.<<
The Ugly:
>>While naked short sales resulting from errors aren’t illegal, using them to boost profits or manipulate share prices breaks exchange and SEC rules and violators are subject to penalties. If investigators determine that traders engaged in the practice to try to influence markets, the Department of Justice can file criminal charges.
Market makers, who serve as go-betweens for buyers and sellers, are allowed to short stock without borrowing it first to maintain a constant flow of trading. <<
My opinion: Not much will change anytime soon. When passed uptick will help...a little but not much in given exteme cases.
All in all remember. Yes naked shorting helped take down LEH, BSC, FNM, FRE etc.. but let's face it. The word was out on those and you also had major players plain jumping out their 40th floor windows as well. When the word gets out the ship is sinking it's every man for his or her self.. no uptick rule would have saved those SPs from crashing..people just wanted out..and fast.
If you combine naked short selling with false rumors associated with the company your shorting, as was outlined in Brandon's referenced article regarding Lehman Brothers, then outright fraud is the case for prosecution... I completely agree that the Division of Enforcement located within the SEC needs to be moved to the DOJ. The SEC punitive measures are primarily CIVIL in nature and not Criminal.... In General Law the process usually works the other way when damages are a result of laws being violated... Criminal Prosecution first then Civil Action after Conviction or in many cases even without Criminal Conviction. The OJ case is the most prominent of these in recent times... Civil action resulted was prosecuted even after Criminal Conviction failed.... Currently the SEC does not have either the will or resources to conduct proper investigations or to generate criminal indictments for law breaking activities....IMO..Quote:
Originally Posted by vaporgold
No but there are tons of easy things they could do tomorrow to help stop it.Quote:
Originally Posted by cos1000
1. Require all transactions to be resolved in 3 days. Any Market Maker in violation, or a client using their platform is in violation, will be immediately fined 1 million dollars a day until shares are settled. With computers, this is open and shut, and I will never be convinced this isnt possible immediately.
2. Require all short sales to be recorded and reported every quarter by funds, institutions, banks, etc... Since they must report share ownership, they must also report shares shorted.(Exposing these short sellers would end the practice immeditately if you found out JP Morgan was shorting Bear Sterns stock, or companies or funds in relation to them, etc..
3. When level 2 shows suspicious trading activity, that MM is given a warning to locate the client doing it and stopping it. 2nd warning results in a "continued monitering status".
3rd warning results in the MM losing the ability to trade for one day.
4th warning... Complete shut down of that MM for one week.(this would of course destroy their reputation, and would hurt their business, so they would never let it get to this point.)
The problem, with computers now, is correctible tomorrow, if the SEC wanted too. They dont have to "proof" anything, until the MM or client of the MM sues the SEC, then forcing them to take the case to court. If the MM wants to open up their books, and go to court, then they will lose again, even more embarrassingly. So the SEC will have their enforcement, without ever needing to take these issues public. It would all be behind the scenes to avoid the MM's having to be embarrassed.
Interesting video to go with my full disclosure arguement. Interesting they mention Ergen and Apollo group, was about to make a longer, fascinating point, and watch him be interrupted by the fat, angry, jerk of an SOB.
http://www.cnbc.com/id/15840232?video=1066940681&play=1
relmor, in my statement of the SEC not having the Will or Resources I mean that they won't do what is necessary... They are a highly politicized division of government that was put into effect during the last depression to create the Illusion of transparency, and to have investors beleive the government was leveling the playing field.... Their hasn't been any major reform since then. All of the suggestions in the world won't get them to enforce existing laws, let alone generate new ones, not to mention that any changes will go to their rules committee and never come out.
Even reinstating an already once existing Uptick Rule will not be meaningful unless accompanied by some % or set Uptick Value, such as a 1/8, .125 cents, or even 1/16, .0625 cents. Without some value assigned, the uptick will be a joke especially for those stocks that trade to 4 decimal places. Keeping the SEC as the responsible agency for enforcement, while trying to maintain the guidelines for reporting of publicly traded companies, monitoring exchanges for proper trade executions, and educating the public and businesses on how to report, is just not realistic. They need to be able to pass off and support the DOJ and FBI in their investigations and eventual procecutions of wrong doers, while maintaining their status as a Commision that establishies the rules and educates the public and businesses on how to comply, and then monitors compliance passing off violators to the DOJ or other Law Enforcement agency as necessary.
Great video, and I guess the fat SOB is buying debt that he doesn't want to report.... great point was being make by Garabelli that Appollo has to report their 5% ownership in shares but, debt holders like Ergin secretly buying up company control through owning debt don't have to report...Quote:
Originally Posted by relmor2003
Quote:
Originally Posted by cos1000
Rel, cos1000...
As said up there a piece, I applaud anyone who wants to try to bring about reform, but you might as well try to reform our politcal process..not much difference in the undertaking. So I would never discourage anyone frm their activism. But my opinion is streadfast in that the SEC is in no position to be reorging the way Wall Street trades. And cos1000 is right. The reason the uptick was discontinued was because decimals shortened the wider spreads that fractions produced. Now as said, I think it's better to bring it back than not because even if it helps some here and there, it's worth having. Or even as a psychologocal effect for some. Again better having it in the main house in plain sight than out in the garage underneath a pile of junk. Certainly won't hurt anything. But as far as the naked shorts go, does anyone really think MM's will have to observe uptick?? I don't. They will be able to continue their own naked shorting because everyone knows it is a tool in their tool box...given to them by the SEC. That's what we have to keep in mind. There is a lot of ta-doo going around right now about MM's and their manipulative ways. Don't forget, these are the guys who MAKE THE MARKET. In a sense, they are sanctioned as a group almost as a proxy for the SEC. If not them, who exactly would route billions of trades per day? Enabling all of us to make trades in the first place. It's a very complex undertaking and I think MM's have been given powers by the SEC that are not in favor of the common investor. But also remember, the common peon is not supposed to make money in the market. That's why we have just been raped of Trillions in wealth diestruction of the middle class. This control over wealth is done in the market and it's accepted by the powers that be (including the SEC) that this is de rigeur. So as far as them reforming manipulation of MM's, I wouldn't count on it since they (government) actually count on that upper hand to keep us at bay. I say, use the battlefield. If you figure out how they work, which we do, then you adjust your strategies to be in sync with what they are doing. If you really want reform, you better have some important heavyweight lobbyists, senators, and activists in your camp. IMVHO...
Ok - getting my coffee - thanks for posting this.... will throw in my 2 cents once i'm through it..Quote:
Originally Posted by Brandon Matthews
If this doesn't spell it out in big neon bold faced letters dripping with blood -
Nothing will:
Also:Quote:
The daily average value of fails-to-deliver surged to $7.4 billion in 2007 from $838.5 million in 1995, according to a study by Trimbath, who examined data from the annual reports of the National Securities Clearing Corp., a subsidiary of the Depository Trust & Clearing Corp.
ok and this is just plain political double talk:Quote:
Trimbath attributes the almost ninefold growth in the value of failed trades from 1995 to 2007 to a rise in naked short sales.
WHAT!! Of course it caused the lower prices ..... Are they kidding me...Quote:
While the correlation doesn’t prove that naked shorting caused the lower prices, it’s “a good first indicator of a statistical relationship between two variables,” she said.
Good reading - thanks again for posting it...
Does the DOJ need permission from someone like the SEC to pursue these guys? After all, isn't naked shorting considered theft of some sort, and couldn't systematic, coordinated naked shorting be prosecuted under RICO statues? From where would criminal complaints have to originate?Quote:
Originally Posted by vaporgold
I don't think we should disparage Bookies by comparing them to these guys. A bookie hopes just as many win that lose. They just want their 10 percent "Juice" or commision. If these guys were bookies they would be in the Superbowl locker rooms with a lead pipe.Quote:
Originally Posted by JohnnyIrishXM
I don't think the average retail investor will have faith in the market until they bring out the pretty orange jumpsuits and start locking these guys up. Whats funny is that RICO was created to stop just this sort of thing. Instead its being used to nab the 10 Yayhoo's that set up a pot selling ring.Quote:
Originally Posted by bananaz