Naked Short-Selling

[peanuts]

Can this be the end of it? Will the open meeting by the SEC have any effect? Will the toxic offshore financing continue. Is the reg SHO list going to be the only step that the SEC will take?

Link to the SEC notice The open meeting starts at 10:00 today, June 13.

What is Naked Short Selling?

Video by Bloomberg on Naked Short Selling (part 1)

Video by Bloomberg on Naked Short Selling (part 2)

Video by Bloomberg on Naked Short Selling (part 3)

Have a great day!

[peanuts]

Can this be the end of it? Will the open meeting by the SEC have any effect? Will the toxic offshore financing continue. Is the reg SHO list going to be the only step that the SEC will take?

Link to the SEC notice The open meeting starts at 10:00 today, June 13.

What is Naked Short Selling?

Video by Bloomberg on Naked Short Selling (part 1)

Video by Bloomberg on Naked Short Selling (part 2)

Video by Bloomberg on Naked Short Selling (part 3)

Have a great day!

You heard it here, first. Grandfather clause and Market Maker exemption rule are voted to be put to an end.

This should be a good thing for fair markets, folks

But.... does anyone here even care

[Websman]

You heard it here, first. Grandfather clause and Market Maker exemption rule are voted to be put to an end.

This should be a good thing for fair markets, folks

But.... does anyone here even care

I do! jejeje

[jiesen]

mad as hell and not gonna take it (well, ok, I'm taking it in the shorts)

I do, too! You only have to look at what the bastards just did to LJPC today to see how I feel about the subject. (mirror the PII/II my a$$!! ask the 3 guys who put up the $66M for the trial - and then even more - if THEY think it's just gonna result in the same outcome as before)

[mimo_100]

You heard it here, first. Grandfather clause and Market Maker exemption rule are voted to be put to an end.

This should be a good thing for fair markets, folks

But.... does anyone here even care

I care, peanuts. Thanks for posting. This is huge.

[peanuts]

since some are interested...

It may be advantageous to explore the idea of buying some price-depressed stocks currently on the reg SHO list.

NYSE reg SHO list

AMEX reg SHO list (you have to put in the date to get the list)

If someone can post a link to NASDAQ's daily reg SHO list, I would appreciate it

from a Motley Fool Article:

Intrigue in the sock drawer
How bad is the problem? Listen to this story: On Feb. 3, a man named Robert Simpson filed a Schedule 13-D with the SEC describing his purchase of 1,158,209 shares of Global Links Corp. (OTCBB: GLKCE), "constituting 100 percent of the issued and outstanding common stock of the Issuer." As described in a story that ran on FinancialWire on March 4, Simpson stuck every single share of the company in his sock drawer -- and then watched as 60 million shares traded hands over the next two days.

In other words, every single outstanding share of the company somehow changed hands nearly 60 times in the course of two days, despite the fact that the company's entire float was located in Simpson's sock drawer. In fact, even as recently as last Friday, 930,872 shares of Global Links still traded hands. If Simpson's claim that he owns all shares is accurate, that is a staggering number of phantom shares being traded around by naked short sellers.

[mimo_100]

It may be advantageous to explore the idea of buying some price-depressed stocks currently on the reg SHO list.
<<<< clip >>>>>>>
If someone can post a link to NASDAQ's daily reg SHO list, I would appreciate it
<<<< clip >>>>>>>

Here ya go, peanuts.

http://www.nasdaqtrader.com/aspx/regsho.aspx

Scroll down to see the list.

Tim

[peanuts]

Here ya go, peanuts.

http://www.nasdaqtrader.com/aspx/regsho.aspx

Scroll down to see the list.

Tim

thanks, Tim

[peanuts]

finally, the NY Times writes an article

S.E.C. Ends Decades-Old Price Limits on Short Selling
By FLOYD NORRIS, NY Times

The Securities and Exchange Commission voted yesterday to end price restrictions on short selling, meaning that investors seeking to sell a share that they do not own will no longer be barred from doing so because the price of the stock is falling.

The 5-to-0 vote, ending a rule that had been in place since 1938, when short sellers were blamed by some critics for having caused the 1929 market crash and the Depression that followed, came as the commission also voted to make it harder to engage in naked shorting, the practice of selling shares that have not been purchased or borrowed.

Christopher Cox, the S.E.C. chairman, called naked short selling “a fraud that the commission is bound to prevent and to punish.”

When a naked short sale is made, it leads to a failure to deliver the stock when the trade settles three business days later. There are many other reasons for fails, but such sales are believed to be the primary one for many stocks.

The S.E.C. adopted a rule, known as Regulation SHO, in 2004 that was intended to reduce naked short selling by requiring the publication each day of a list of securities with heavy fails. Brokers are required to cure the fails within 13 days. But fails existing before the stock went on the list were grandfathered.

Yesterday’s vote will remove the grandfather provision, and the commission said it was also considering removing an exemption from the rule for options market makers who need to sell short to hedge an options position.

The new rule will take effect 60 days after it is published in the Federal Register, and traders will have 35 days after that to clear up fails that had been grandfathered.

The commission says naked short selling has been reduced by Regulation SHO, but some stocks have remained on the Regulation SHO list for many months. The leader in that regard is Overstock.com, which has appeared for 538 consecutive trading days. It has also been the leader in condemning such sales and has sued many Wall Street firms for facilitating such trades.

The commission does not regularly release the exact number of fails in stocks on the list, although figures can be obtained on a delayed basis through the Freedom of Information Act.

James A. Brigagliano, an associate director of the commission’s division of market regulation, said that the S.E.C. would release such numbers on a quarterly basis, with a delay, as soon as details were worked out.

The ban on selling short while a share price was declining, called the tick test since it barred selling unless the last change in price was an uptick, had come to seem irrelevant. A test that repealed the rule for many stocks seemed to make little difference in their trading, and that part of the rule change was adopted with little controversy.

The commission said that it was proposing for comment a rule to eliminate the exemption to Regulation SHO for options market makers, but it would also ask for comments on possible ways to narrow the exemption.

[jiesen]

another perspective...

Bob Obrien on the latest SEC action

http://www.thesanitycheck.com/BobsSa...8/Default.aspx

It Was The Best Of Times.....

Location: Blogs Bob O'Brien's Sanity Check Blog Posted by: bobo 6/14/2007 4:20 AM There are two Americas. Two distinctly different worlds under one flag.

There are two banking systems - one for you and I and most, where every move is scrutinized in ostensible wars against crime, drugs, terror, whatever boogieman suffices for the headlines...and one where anonymous pools of money move billions of dollars internationally without any reporting, using the markets as their liquidity mechanism.

There are two justice systems - one for poor black kids selling $20 worth of drugs in an effort to make ends meet in their grim world, one where you go to jail for robbing liquor stores, or defying the IRS, or being violent or criminal....and one where criminality, fraud, theft are celebrated and protected by our most powerful institutions.

There are two information systems - one where mouth-breathing illiterates are expected to drool over the latest developments on second rate talent shows or dimwitted soap operas while their "news" consists of the exploits of substance abusing skanks and the latest domestic violence atrocities (a predictable bi-product of a polarized consumer society that's a pressure cooker entirely predicated on material gain and amoral avariciousness)....and one where those in the know smugly control what makes it to the masses.

In the midst of this, the SEC had their largely ceremonial meeting yesterday, and the result was precisely as predicted.

The unlawful grandfathering of delivery failures was eliminated. Sort of. As of some date. Assuming anyone obeys, and enforces, any of the rules.

The unbelievably egregious market maker exemption, which enables speculators in the options market to lay their options hedging costs off onto unsuspecting equity investors, directly and obviously harming them (which absolutely nobody contests as being the case) was waffled into another delaying period, whereby these extremely rich and powerful options speculators can continue to directly and dramatically harm equity investors, while the SEC "seeks further comment" on the issue.

Funny, I thought the 1934 Act, which forbids exemptions unless they are necessary for the protection of investors and in the public interest, was the last word on that. Apparently not. What Congress should have said is, "Exemptions aren't allowed unless you are really rich and powerful and can buy the commission's allegiance, in which case you get a hall pass to rape and pillage at will."

To say that I'm beyond disgusted in the US market system as well as our regulatory framework is an understatement. A grandfathering provision that was passed against all SEC rules requiring a comment submission, which has caused incalculable harm to investors so that hedge funds and prime brokers and market manipulators can run amok in the capital markets, was finally shot down, after years of damage. Gee. That's nice. And now we can expect the massive unlawful loophole for market makers to remain unchallenged for as long as the SEC can stall.

Is anyone at all fooled by this any more? Max Keiser's great video (the topic of the previous blog) spells it out in under half an hour, in terms a chimp could grasp, and yet the see no evil SEC pretends that is is all a mystery, while the wholly bought and paid for politicians act baffled as to what is going on.

Anyone that thinks those with different colored skin or different political or religious beliefs are the greatest threat to the American way should carefully consider how corrupted that way has become. An idea of representative government, a republic where the citizen/individual's rights and protection are paramount, has been replaced by a kleptocracy, where the resources of the many are stolen by the few special interests who direct the military/industrial/financial complex's actions for their own direct benefit, both nationally, and internationally. That's the way it is. Sorry folks. No other conclusion can be drawn.

And yesterday's meeting merely confirmed it.

[peanuts]

bobo's conclusions are based on the same wide array of assumptions which give the SEC all the more reason to delay their ruling on the Market Market Exemption. Until the ugly facts begin rolling in, and pure manipulation is caught, and that entity is used as an example, the SEC doesn't have too much ammunition to use against the exemption.

What would be more a more important avenue to explore is determing the reasons behind the Market Maker exemption rule in the first place. As they have decided that the "tick test" from 1938 is widely deemed irrelevant in today's world, they too should then determine whether the founding reasons behind the Market Maker exemption are relevant in today's world as well, or not. The manipulated framework for this abuse to take place must have had a foundation of fundamental financial facts. Are these fundamentals still relevant today? Is it just the framework of the exemption which has been used as a loophole in the system? What exactly needs to be fixed, here? Or, should the SEC add protectionist ammendments to the exemption and cart offenders off in handcuffs? The further exploration by the SEC should not be assumed to be "stalling" on their part. It is their duty to keep a fair market system in place. The exemption rule may be necessary for this to happen, or not, but the abuse of the exemption is what needs to stop.

To assume that the politicians are "bought" by the big money is a step in the argument that goes too far. It may have been used to incite an emotional response from the reader to take action. But a course of action was never suggested.

[Tatnic]

you might get a short-term pop out of some of those, but they're on that list for a good reason and it has more to do with being poorly run companies.

It may be advantageous to explore the idea of buying some price-depressed stocks currently on the reg SHO list.

NYSE reg SHO list

AMEX reg SHO list (you have to put in the date to get the list)

If someone can post a link to NASDAQ's daily reg SHO list, I would appreciate it

from a Motley Fool Article:

Intrigue in the sock drawer
How bad is the problem? Listen to this story: On Feb. 3, a man named Robert Simpson filed a Schedule 13-D with the SEC describing his purchase of 1,158,209 shares of Global Links Corp. (OTCBB: GLKCE), "constituting 100 percent of the issued and outstanding common stock of the Issuer." As described in a story that ran on FinancialWire on March 4, Simpson stuck every single share of the company in his sock drawer -- and then watched as 60 million shares traded hands over the next two days.

In other words, every single outstanding share of the company somehow changed hands nearly 60 times in the course of two days, despite the fact that the company's entire float was located in Simpson's sock drawer. In fact, even as recently as last Friday, 930,872 shares of Global Links still traded hands. If Simpson's claim that he owns all shares is accurate, that is a staggering number of phantom shares being traded around by naked short sellers.

[ParkTwain]

The junkier Nasdaq stocks are also traded on exchanges in Europe, where the naked shorting rules don't exist, right? A player can crush a stock while naked shorting it over there as well, with impunity as far as I know. That situation was described on the chat boards a while ago.