SI
SI
discoversearch

 Microcap & Penny Stocks | Naked Shorting-Hedge Fund & Market Maker manipulation?


Previous 10 | Next 10 
From: rrufff1/20/2012 5:54:54 PM
   of 4998
 
Bloggers Beware - you may not be considered a journalist and you may have to face the consequences.
===========================================================================

rapidcityjournal.com

Federal judge: Montana blogger is not journalist
The Associated Press | Posted: Thursday, December 8, 2011 11:31 am

A federal judge in Oregon has ruled that a Montana woman sued for defamation was not a journalist when she posted online that an Oregon lawyer acted criminally during a bankruptcy case, a decision with implications for bloggers around the country.

Crystal L. Cox, a blogger from Eureka, Mont., was sued for defamation by attorney Kevin Padrick when she posted online that he was a thug and a thief during the handling of bankruptcy proceedings by him and Obsidian Finance Group LLC.

U.S. District Judge Marco Hernandez found last week that as a blogger, Cox was not a journalist and cannot claim the protections afforded to mainstream reporters and news outlets.

Although media experts said Wednesday that the ruling would have little effect on the definition of journalism, it casts a shadow on those who work in nontraditional media since it highlights the lack of case law that could protect them and the fact that current state shield laws for journalists are not covering recent developments in online media.

"My advice to bloggers operating in the state of Oregon is lobby to get your shield law improved so bloggers are covered," said Lucy Dalglish, executive director of The Reporters Committee for Freedom of the Press. "But do not expect the shield law to provide you a defense in a libel case where you want to rely on an anonymous source for that information."

The judge ruled that Cox was not protected by Oregon's shield law from having to produce sources, saying even though Cox defines herself as media, she was not affiliated with any mainstream outlet. He added that the shield law does not apply to civil actions for defamation.

Hernandez said Cox was not a journalist because she offered no professional qualifications as a journalist or legitimate news outlet. She had no journalism education, credentials or affiliation with a recognized news outlet, proof of adhering to journalistic standards such as editing or checking her facts, evidence she produced an independent product or evidence she ever tried to get both sides of the story.

Cox said she considered herself a journalist, producing more than 400 blogs over the past five years, with a proprietary technique to get her postings on the top of search engines where they get the most notice.

"What could be more mainstream than the Internet and the top of the search engine?" she said.

Padrick, of Bend, Ore., was a trustee in a bankruptcy case involving Summit Accommodators, a company that helped property owners conduct real estate transactions in a way to limit taxes. Three executives face federal fraud and money laundering indictments.

The lawyer sued Cox for defamation, a legal fight that is typically difficult for plaintiffs to win. Public figures, for example, must prove the defendant knew the statement in question was false, and the statement must be matters of public interest.

The judge found that Padrick was not a public figure, and that the bankruptcy case was not in the public interest. The ruling opened the way for a jury to award $2.5 million to Padrick and Obsidian.

Cox said she didn't have the money to pay the judgment, and that she intended to keep posting about the Summit bankruptcy case.

"My intensions are the highest and best," she said. "I know I am sometimes over the top or a little bit vulgar. But I encourage people not to listen to me or him but to look at the documents and make their own decision based on that."

Padrick said the case showed how vulnerable anyone was to someone with a computer. He said he has lost business from potential clients who search his name and firm through Google and find Cox's postings at the top of the list, adding that he has no way to remove them.

"If anyone can self-proclaim themselves to be media, the concept of media is rendered worthless," Padrick said. "When everyone is media, the concept of media is gone."


The judge ruled that Padrick and his company did not have to seek a retraction, as required by Oregon law, before claiming damages, because a blogger is not on the list of recognized media, which include newspapers, magazines, television and radio news, and motion pictures.

Padrick said he did not expect to collect much of the $2.5 million jury award, or to see his business fully rebound. He said his only consolation was that all eight jurors who heard the case believed he had been significantly harmed.

Ellyn Angelotti, who teaches about digital trends and social media at The Poynter Institute, said the ruling was significant because so little case law has built up on online media. But she believed it would have little impact on bloggers in general until the U.S. Supreme Court takes up a case, or more federal courts rule.

Kyu Ho Youm, a First Amendment expert and journalism professor at the University of Oregon, called the judge's strict definition of a journalist "outdated" since so-called citizen journalists currently outnumber traditional journalists.

"When we talk about the shield law, we should pay more attention to the function people are doing than whether people are connected to traditional and established news media," he said.





Read more: rapidcityjournal.com

Share Recommend | Keep | Reply | Mark as Last Read | Read Replies (1)


From: Hawkmoon4/17/2012 7:52:56 AM
4 Recommendations   of 4998
 

OptionXpress charged by SEC for NSS.

sec.gov

Share Recommend | Keep | Reply | Mark as Last Read | Read Replies (1)


To: Hawkmoon who wrote (4910)4/17/2012 9:55:33 AM
From: robert b furman
2 Recommendations   of 4998
 
Typical SEC take on a firm already sold - go tiger go !!!

Bob

Share Recommend | Keep | Reply | Mark as Last Read


From: dvdw©4/19/2012 12:24:31 PM
3 Recommendations   of 4998
 
Anyone interested in this?
benzinga.com

Share Recommend | Keep | Reply | Mark as Last Read | Read Replies (1)


To: dvdw© who wrote (4912)4/23/2012 10:11:50 AM
From: Brasco One
   of 4998
 
100% long and strong heading into summer?????

Share Recommend | Keep | Reply | Mark as Last Read


To: rrufff who wrote (4909)5/4/2012 11:12:27 AM
From: Savant
3 Recommendations   of 4998
 
deepcapture.com

Up & revised, after a respite...court ordered.

Share Recommend | Keep | Reply | Mark as Last Read


From: basserdan5/16/2012 2:40:41 PM
6 Recommendations   of 4998
 
Taibbi: Accidentally Released - and Incredibly Embarrassing - Documents Show How Goldman et al Engaged in 'Naked Short Selling'





By Matt Taibbi
May 15, 5:39 PM ET

It doesn’t happen often, but sometimes God smiles on us. Last week, he smiled on investigative reporters everywhere, when the lawyers for Goldman, Sachs slipped on one whopper of a legal banana peel, inadvertently delivering some of the bank’s darker secrets into the hands of the public.

The lawyers for Goldman and Bank of America/Merrill Lynch have been involved in a legal battle for some time – primarily with the retail giant Overstock.com, but also with Rolling Stone, the Economist, Bloomberg, and the New York Times. The banks have been fighting us to keep sealed certain documents that surfaced in the discovery process of an ultimately unsuccessful lawsuit filed by Overstock against the banks.

Last week, in response to an Overstock.com motion to unseal certain documents, the banks’ lawyers, apparently accidentally, filed an unredacted version of Overstock’s motion as an exhibit in their declaration of opposition to that motion. In doing so, they inadvertently entered into the public record a sort of greatest-hits selection of the very material they’ve been fighting for years to keep sealed.

I contacted Morgan Lewis, the firm that represents Goldman in this matter, earlier today, but they haven’t commented as of yet. I wonder if the poor lawyer who FUBARred this thing has already had his organs harvested; his panic is almost palpable in the air. It is both terrible and hilarious to contemplate. The bank has spent a fortune in legal fees trying to keep this material out of the public eye, and here one of their own lawyers goes and dumps it out on the street.

The lawsuit between Overstock and the banks concerned a phenomenon called naked short-selling, a kind of high-finance counterfeiting that, especially prior to the introduction of new regulations in 2008, short-sellers could use to artificially depress the value of the stocks they’ve bet against. The subject of naked short-selling is a) highly technical, and b) very controversial on Wall Street, with many pundits in the financial press for years treating the phenomenon as the stuff of myths ( http://tiny.cc/wpueew ) and conspiracy theories.

Now, however, through the magic of this unredacted document, the public will be able to see for itself what the banks’ attitudes are not just toward the “mythical” practice of naked short selling (hint: they volubly confess to the activity, in writing), but toward regulations and laws in general.

“Fuck the compliance area – procedures, schmecedures,” chirps Peter Melz, former president of Merrill Lynch Professional Clearing Corp. (a.k.a. Merrill Pro), when a subordinate worries about the company failing to comply with the rules governing short sales.

We also find out here how Wall Street professionals manipulated public opinion by buying off and/or intimidating experts in their respective fields. In one email made public in this document, a lobbyist for SIFMA, the Securities Industry and Financial Markets Association, tells a Goldman executive how to engage an expert who otherwise would go work for “our more powerful enemies,” i.e. would work with Overstock on the company’s lawsuit.

“He should be someone we can work with, especially if he sees that cooperation results in resources, both data and funding,” the lobbyist writes, “while resistance results in isolation.”

There are even more troubling passages, some of which should raise a few eyebrows, in light of former Goldman executive Greg Smith's recent public resignation ( http://tiny.cc/jzueew ), in which he complained that the firm routinely screwed its own clients and denigrated them (by calling them "Muppets," among other things).

Here, the plaintiff’s motion refers to an “exhibit 96,” which refers to “an email from [Goldman executive] John Masterson that sends nonpublic data concerning customer short positions in Overstock and four other hard-to-borrow stocks to Maverick Capital, a large hedge fund that sells stocks short.”

Was Goldman really disclosing “nonpublic data concerning customer short positions” to its big hedge fund clients? That would be something its smaller, “Muppet” customers would probably want to hear about.

When I contacted Goldman and asked if it was true that Masterson had shared nonpublic customer information with a big hedge fund client, their spokesperson Michael Duvally offered this explanation:

Among other services it provides, Securities Lending at Goldman provides market color information to clients regarding various activity in the securities lending marketplace on a security specific or sector specific basis. In accordance with the group's guidelines concerning the provision of market color, Mr. Masterson provided a client with certain aggregate information regarding short balances in certain securities. The information did not contain reference to any particular clients' short positions.

You can draw your own conclusions from that answer, but it's safe to say we'd like to hear more about these practices.

Anyway, the document is full of other interesting disclosures. Among the more compelling is the specter of executives from numerous companies admitting openly to engaging in naked short selling, a practice that, again, was often dismissed as mythical or unimportant.

A quick primer on what naked short selling is. First of all, short selling, which is a completely legal and often beneficial activity, is when an investor bets that the value of a stock will decline. You do this by first borrowing and then selling the stock at its current price, then returning the stock to your original lender after the price has gone down. You then earn a profit on the difference between the original price and the new, lower price.

What matters here is the technical issue of how you borrow the stock. Typically, if you’re a hedge fund and you want to short a company, you go to some big-shot investment bank like Goldman or Morgan Stanley and place the order. They then go out into the world, find the shares of the stock you want to short, borrow them for you, then physically settle the trade later.

But sometimes it’s not easy to find those shares to borrow. Sometimes the shares are controlled by investors who might have no interest in lending them out. Sometimes there’s such scarcity of borrowable shares that banks/brokers like Goldman have to pay a fee just to borrow the stock.

These hard-to-borrow stocks, stocks that cost money to borrow, are called negative rebate stocks. In some cases, these negative rebate stocks cost so much just to borrow that a short-seller would need to see a real price drop of 35 percent in the stock just to break even. So how do you short a stock when you can’t find shares to borrow? Well, one solution is, you don’t even bother to borrow them. And then, when the trade is done, you don’t bother to deliver them. You just do the trade anyway without physically locating the stock.

Thus in this document we have another former Merrill Pro president, Thomas Tranfaglia, saying in a 2005 email: “We are NOT borrowing negatives… I have made that clear from the beginning. Why would we want to borrow them? We want to fail them.”

Trafaglia, in other words, didn’t want to bother paying the high cost of borrowing “negative rebate” stocks. Instead, he preferred to just sell stock he didn’t actually possess. That is what is meant by, “We want to fail them.” Trafaglia was talking about creating “fails” or “failed trades,” which is what happens when you don’t actually locate and borrow the stock within the time the law allows for trades to be settled.

If this sounds complicated, just focus on this: naked short selling, in essence, is selling stock you do not have. If you don’t have to actually locate and borrow stock before you short it, you’re creating an artificial supply of stock shares.

In this case, that resulted in absurdities like the following disclosure in this document, in which a Goldman executive admits in a 2006 email that just a little bit too much trading in Overstock was going on: “Two months ago 107% of the floating was short!”

In other words, 107% of all Overstock shares available for trade were short – a physical impossibility, unless someone was somehow creating artificial supply in the stock.

Goldman clearly knew there was a discrepancy between what it was telling regulators, and what it was actually doing. “We have to be careful not to link locates to fails [because] we have told the regulators we can’t,” one executive is quoted as saying, in the document.

One of the companies Goldman used to facilitate these trades was called SBA Trading, whose chief, Scott Arenstein, was fined $3.6 million in 2007 by the former American Stock Exchange for naked short selling.

The process of how banks circumvented federal clearing regulations is highly technical and incredibly difficult to follow. These companies were using obscure loopholes in regulations that allowed them to short companies by trading in shadows, or echoes, of real shares in their stock. They manipulated rules to avoid having to disclose these “failed” trades to regulators.

The import of this is that it made it cheaper and easier to bet down the value of a stock, while simultaneously devaluing the same stock by adding fake supply. This makes it easier to make money by destroying value, and is another example of how the over-financialization of the economy makes real, job-creating growth more difficult.

In any case, this document all by itself shows numerous executives from companies like Goldman Sachs Execution and Clearing (GSEC) and Merrill Pro talking about a conscious strategy of “failing” trades – in other words, not bothering to locate, borrow, and deliver stock within the time alotted for legal settlement. For instance, in one email, GSEC tells a client, Wolverine Trading, “We will let you fail.”

More damning is an email from a Goldman, Sachs hedge fund client, who remarked that when wanting to “short an impossible name and fully expecting not to receive it” he would then be “shocked to learn that [Goldman’s representative] could get it for us.”

Meaning: when an experienced hedge funder wanted to trade a very hard-to-find stock, he was continually surprised to find that Goldman, magically, could locate the stock. Obviously, it is not hard to locate a stock if you’re just saying you located it, without really doing it.

As a hilarious side-note: when I contacted Goldman about this story, they couldn't resist using their usual P.R. playbook. In this case, Goldman hastened to point out that Overstock lost this lawsuit (it was dismissed because of a jurisdictional issue), and then had this to say about Overstock:

Overstock pursued the lawsuit as part of its longstanding self-described "Jihad" designed to distract attention from its own failure to meet its projected growth and profitability goals and the resulting sharp drop in its stock price during the 2005-2006 period.

Good old Goldman -- they can't answer any criticism without describing their critics as losers, conspiracy theorists, or, most frequently, both. Incidentally, Overstock rebounded from the 2005-2006 short attack to become a profitable company again, during the same period when Goldman was needing hundreds of billions of dollars in emergency Fed lending and federal bailouts to stave off extinction.

Anyway, this galactic screwup by usually-slick banker lawyers gives us a rare peek into the internal mindset of these companies, and their attitude toward regulations, the markets, even their own clients. The fact that they wanted to keep all of this information sealed is not surprising, since it’s incredibly embarrassing stuff, if you understand the context.

More to come: until then, here’s the motion ( http://tiny.cc/zcveew ), and pay particular attention to pages 14-19.

UPDATE: Well, I guess I shouldn't feel too badly for the lawyer who stepped on this land mine. For Morgan Lewis counsel Joe Floren, karma, it seems, really is a bitch ( http://tiny.cc/idxeew ).

http://www.rollingstone.com/politics/blogs/taibblog/accidentally-released-and-incredibly-embarrassing-documents-show-how-goldman-et-al-engaged-in-naked-short-selling-20120515








Dan

Share Recommend | Keep | Reply | Mark as Last Read | Read Replies (2)


To: basserdan who wrote (4915)5/16/2012 7:38:13 PM
From: Savant
2 Recommendations   of 4998
 
"Incredibly Embarrassing"...HA!...History has shown that that type of psychopath/sociopath is never embarrassed...only po'd that they've been caught out.

To wit: .."P
sychopaths and sociopaths have a complete disregard for the feelings and rights of others. This often surfaces by age 15 and may be accompanied by cruelty to animals. These traits are distinct and repetitive, creating a pattern of misbehavior that goes beyond normal adolescent mischief. Both fail to feel remorse or guilt. They appear to lack a conscience and are completely self-serving. They routinely disregard rules, social mores and laws, unmindful of putting themselves or others at risk. "


Just sayin', if the foo s..ts, wear it.

Will it ever change...prolly not, just a rotation of the players.

However, one can hope, and protest.

Share Recommend | Keep | Reply | Mark as Last Read


To: basserdan who wrote (4915)5/16/2012 9:54:48 PM
From: Elroy
2 Recommendations   of 4998
 
In other words, 107% of all Overstock shares available for trade were short – a physical impossibility, unless someone was somehow creating artificial supply in the stock.


Not true. The writer doesn't realize that a share can be "borrowed" more than once.

Share Recommend | Keep | Reply | Mark as Last Read | Read Replies (1)


To: Elroy who wrote (4917)5/18/2012 3:50:06 PM
From: dvdw©
6 Recommendations   of 4998
 
At no time can the total outstanding exceed the amount of the total outstanding which was introduced into the market place by IPO, subsequent share offerings, splits, warrants conversions, and a host of other legal means,according to rules governing stock issuance..

if a stock is above 100 someone needs to be prosecuted....there is no legal way to have 107% without violating all previous documents filed. Artificial expansion of a stocks outstanding....is indicating there are illegal shares affecting the market.

there are many examples.......

Share Recommend | Keep | Reply | Mark as Last Read | Read Replies (1)
Previous 10 | Next 10 

Copyright © 1995-2014 Knight Sac Media. All rights reserved.Stock quotes are delayed at least 15 minutes - See Terms of Use.