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   Strategies & Market TrendsAnthony @ Equity Investigations, Dear Anthony,


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To: anniebonny who wrote (103259)4/8/2008 2:49:34 PM
From: anniebonny
   of 122002
 
U.S. Securities and Exchange Commission
Litigation Release No. 18381 / September 30, 2003
Securities and Exchange Commission v. 2DoTrade, Inc., George Russell Taylor, Barry William Gewin aka Barry Peters, Eric T. Landis, Dominic Roelandt, Michael D. Karsch, L. Van Stillman, David A. Wood, Jr., Clinton Walker, Oxford and Hayes, Ltd., FG & P Consulting, Ltd., Hackney Holdings, Ltd., Weston Partners, Inc., Infiniti Corporate Services, Ltd., Argo Financial, Ltd., 21st Equity Partners, Inc., MCG Partners, Inc., and LMR, Ltd., Civil Action Number 3:03-CV-2246-N(Godbey) (N.D. Texas, Dallas Division)
Securities and Exchange Commission v. Craig J. Shaber, Stephen R. Wright, and Bonaventure Capital, Ltd., defendants, and Aspen International Marketing, Inc. and Wright & Geis, Inc., relief defendants. Civil Action No. 3:03-CV-2247-G(Fish) (N.D. Texas, Dallas Division).
SEC Files Lawsuit Against 2DoTrade, Inc., Its President, Several Stock Promoters, and Two Attorneys In Bogus Anti-Anthrax, Pump-and-Dump Scheme -- Also Files Related Lawsuit Against California Attorney and Accountant for $7.5 million "Shell-Factory" Scheme
On September 30, 2003, the Securities and Exchange Commission filed a lawsuit against 2DoTrade, Inc., its president, several recidivist stock promoters, and two attorneys in a "pump-and-dump" market-manipulation case. 2DoTrade is an SEC-reporting company whose stock was formerly quoted publicly on the OTC Bulletin Board. According to the SEC's complaint, from July to November 2001, the defendants engaged in a fraudulent scheme in which they artificially pumped 2DoTrade's stock with false press releases, spam e-mail, and a fraudulent website and then illegally dumped millions of shares into the inflated market. At one point in the scheme-amid recurring reports of fatal anthrax attacks in the United States-several of the defendants sought to profit from the nation's fear of terrorism with false press releases about 2DoTrade's purported imminent distribution of an anti-anthrax compound in the United States. In a separate civil lawsuit filed on the same day, the SEC alleged securities fraud and other violations against a California attorney and accountant who created and sold the public shell company used in the 2DoTrade scheme.

The 2DoTrade complaint alleges that, in June 2001, defendants Barry W. Gewin, 36, of Enon Valley, Pennsylvania, Eric T. Landis, 38, of Charlottesville, Virginia, and Dominic Roelandt, 26, of Dehderhoutem, Belgium, gained de facto control of 2DoTrade-a shell company with no assets or revenue-by acquiring control over virtually all of its "free-trading" stock. Then, in collusion with 2DoTrade's president, defendant George R. Taylor of Ayrshire, Scotland, they manipulated 2DoTrade's stock price in two fraudulent promotional campaigns. The first campaign, which took place in July and August 2001, touted 2DoTrade's ownership of certain import/export contracts supposedly worth $300 million. In reality, these contracts were worthless. The second campaign, which began in October 2001, claimed that 2DoTrade was testing an anti-anthrax compound called "ATHOQ" at a hospital and a university in the United Kingdom for imminent distribution in the United States. In reality, ATHOQ was a sham, and no anthrax testing or product distribution ever occurred.

During the bogus-contract campaign, the defendants dumped millions of shares into the market, collectively realizing approximately $1.6 million in trading profits. As the defendant's sold their shares, the share price gradually declined by the end of August 2001. Beginning on October 31, 2001, however, the bogus anti-anthrax campaign drove up 2DoTrade's stock price again, this time by approximately 400%. During this period, certain defendants dumped over 700,000 shares into the market, for which they collectively received approximately $240,000. An SEC trading suspension on November 6, 2001, halted trading in 2DoTrade's stock and prevented some of the defendants from dumping millions of additional shares.

Other defendants named in the SEC's 2DoTrade complaint are:

Oxford and Hayes, Ltd., DBE Consulting, Ltd., and FG&P Consulting, Ltd., three Belize-registered companies controlled by Gewin. Gewin used offshore accounts in their names to sell approximately 869,000 shares of 2DoTrade stock during the fraudulent promotional campaigns, realizing approximately $318,288 in ill-gotten gains.

Infiniti Corporate Services, Ltd., a Bahamas corporation, and Argo Financial, Ltd., a Cayman Islands corporation, both controlled by Roelandt. Roelandt used offshore accounts in their names to sell approximately 1.85 million 2DoTrade shares during the fraudulent promotional campaigns, realizing approximately $474,005 in ill-gotten gains.

Hackney Holdings, Ltd., a Cayman Islands corporation, and Weston Partners, Inc., a Connecticut corporation, both controlled by Landis. Landis used domestic and offshore accounts in their names to sell 216,000 2DoTrade shares during the fraudulent promotional campaigns, realizing approximately $154,300 in ill-gotten gains.

MCG Partners, Inc., a Florida corporation, and Michael Karsch, 41, an attorney licensed in Florida, Texas, and New York. Karsch was a managing director of MCG Partners, which provided $450,000 to Gewin, Roelandt, and Landis for the purchase of an OTC Bulletin Board shell company, which ultimately became 2DoTrade. In exchange for the $450,000, Karsch and MCG Partners received 1.1 million 2DoTrade shares and a guarantee that other defendants would sustain 2DoTrade's stock price by touting the bogus contracts in a promotional campaign. Under this arrangement, MCG Partners sold 1.1 million shares for approximately $555,191, realizing a profit of approximately $105,191. Karsch received a share of these profits.

21st Equity Partners, Inc., a North Carolina corporation, its president David A. Wood, Jr., 50, of Charlotte, North Carolina, and its vice-president Clinton Walker, 33, also of Charlotte. On June 26, 2001, Wood and Walker orchestrated a manipulative matched trade with Gewin and Landis to artificially set the initial market price of 2DoTrade stock at $1.25. Wood offered and sold approximately 293,000 2DoTrade shares through a 21st Equity Partners account for approximately $154,670. Walker received at least 101,350 shares of 2DoTrade stock, which he sold for approximately $52,520.

L. Van Stillman, 54, an attorney licensed in Florida and Pennsylvania, and LMR, Ltd., an offshore company that he controlled. Stillman prepared false SEC filings on behalf of 2DoTrade, concealing Gewin, Landis, and Roelandt's beneficial ownership of 2DoTrade's stock. Stillman sold approximately 192,000 2DoTrade shares, mostly through an LMR, Ltd. brokerage account in Bermuda, realizing approximately $95,370 in ill-gotten trading profits.

Several of the 2DoTrade defendants have prior disciplinary histories. In 1992, Taylor was convicted in the United Kingdom of conspiracy to commit theft. Roelandt was enjoined in August 2000 by the United States District Court for the Northern District of Arizona for securities fraud in an action bought by the SEC, and in 2001, in another unrelated SEC action, he received an administrative penny-stock bar from the SEC. In 1999, the NASD suspended Landis' brokerage license for one year and fined him for market manipulation. And in 1998, Wood was the subject of an SEC cease-and-desist order for violations of the anti-touting provisions of the federal securities laws.

The Commission's complaint alleges that defendant 2DoTrade violated the securities-registration, anti-fraud, and issuer-reporting provisions of the federal securities laws, specifically, sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 ("Securities Act") and sections 10(b) and 13(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 12b-20, 13a-1, 13a-11, and 13a-13 thereunder. It alleges that defendant Taylor violated the anti-fraud provisions and aided and abetted 2DoTrade's violations of the issuer reporting provisions. It alleges that defendants Gewin, Roelandt, and Landis, and the defendant companies they controlled, violated the securities-registration and anti-fraud provisions and also the beneficial-ownership and principal-shareholder reporting provisions of the federal securities laws, specifically, sections 13(d) and 16(a) of the Exchange Act and Rules 13d-1, 16a-2, and 16a-3 thereunder. And it alleges that defendants, Karsch, Stillman, Wood, and Walker, and the defendant companies under their control, violated the securities-registration and anti-fraud provisions and that Stillman also aided and abetted 2DoTrade's violations of the issuer reporting provisions of the federal securities laws.

The SEC seeks, among other relief, permanent injunctions, disgorgement of ill-gotten gains with pre-judgment interest, and civil money penalties against all the defendants; officer-and-director bars against Taylor, Gewin, Roelandt, and Wood; penny-stock bars against Taylor, Gewin, Roelandt, Wood, Walker, and Karsch; and an order enjoining Roelandt from violating section 15(b)(6)(B) of the Exchange Act, which prohibits participation in a penny-stock offering in contravention of an SEC order.

The Fraudulent "Shell Factory"

Also on September 30, 2003, the SEC filed a related lawsuit in the United States District Court for the Northern District of Texas against Craig J. Shaber, 45, a California-licensed attorney and Stephen R. Wright, 57, an accountant, both from the San Diego, California area. According to the complaint, from 1998 to 2002, Shaber and Wright engaged in an elaborate scheme to manufacture and sell 18 public shell companies, from which they derived at least $7.5 million in ill-gotten gains. To carry out the "shell factory" scheme, Shaber and Wright installed nominee officers and directors in dormant corporations that they controlled and caused these companies to submit false registration statements and reports to the SEC and the NASD, Inc. These false documents gave the bogus companies the appearance of legitimacy and permitted their securities to be eligible for quotation on the OTC Bulletin Board.

Among other things, the false registration statements and reports contained phony business plans, misrepresented the identity of the companies' true officers and directors, and contained false shareholder lists. In reality, Shaber and Wright owned virtually all of the companies' stock, and the individual shareholders listed in the documents were merely nominees for Shaber and Wright. In addition, Shaber and Wright served as the de facto officers and directors of the companies and intended not to pursue the stated business plans, but rather, to sell their controlling blocks of shares-and thus control of the shell companies-to stock promoters and other buyers for substantial profits. Shaber and Wright sold one of these fraudulently manufactured companies, Moranzo, Inc., for approximately $600,000 to certain 2DoTrade defendants, who then used it to create 2DoTrade and carry out that scheme.

The other defendant and relief defendants in the Shaber and Wright case are:

Bonaventure Capital, Ltd., defendant, a private Nevada corporation controlled by Shaber and Wright. Through Bonaventure Capital, Shaber and Wright maintained a bank account into which they deposited the funds from the sale of the stock in the public shell companies and maintained a brokerage account through which they sold securities in the public shell entities. Shaber and Wright, and entities they individually controlled, shared in the ill-gotten proceeds from the Bonaventure Capital accounts.

Wright & Geis, Inc., relief defendant, is a California corporation solely owned by Wright. It received at least $100,000 from a Bonaventure Capital bank account as proceeds from the scheme.

Aspen International Marketing, Inc., relief defendant, is a Nevada corporation owned by Shaber. It received at least $1 million in proceeds from the fraudulent scheme.

The complaint alleges that Shaber, Wright, and Bonaventure Capital violated the securities-registration, anti-fraud, beneficial-ownership, and principal-shareholder reporting provisions of the federal securities laws, specifically, sections 5(a), 5(c), and 17(a) of the Securities Act and sections 10(b), 13(d), and 16(a) of the Exchange Act and Rules 10b-5, 13d-1, 16a-2, and 16a-3 thereunder. It further alleges that they aided and abetted violations of the issuer-reporting provisions, specifically, sections 13(a) of Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder. The SEC seeks disgorgement with prejudgment interest from each defendant and relief defendant and further seeks permanent injunctions, an accounting, and officer-and-director bars against defendants Shaber and Wright.

The Commission acknowledges the assistance of the Cayman Islands Monetary Authority, the British Columbia Securities Commission, the Police Department of Tayside, Scotland, the London Metropolitan Police Department, the Hampshire Constabulary in England, the FBI's Dallas Field Office, and the United States Department of Justice in the investigation of this matter.

SEC Complaint in this matter

Second SEC Complaint in this matter



sec.gov

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From: StockDung4/8/2008 3:06:29 PM
   of 122002
 
New Zealand convicts 18-year-old "King of the Botnets"
----
18-year-old New Zealander, Owen Thor Walker, pleaded guilty earlier this week to six charges of using computers for illegal purposes. Walker, has been accused of playing a key role in a gang that infected 1.3 million computers around the world, installing revenue-generating adware and stealing information worth US $20 million. At the time of his arrest he was dubbed the "botnet king" by media around the world. Learn more about Owen and his arrest by following the link below.
sophos.com

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From: StockDung4/8/2008 3:20:30 PM
   of 122002
 
=DJ IN THE MONEY: Utah Co In Middle Of German Probe Of Stk Deals

Monday, April 07, 2008 3:38 PM

By Carol S. Remond
A Dow Jones Newswires Column

A Utah company has inadvertently gotten itself involved in a probe by German securities regulators into how a bank in that country got stuck with millions of shares of stock it didn't want in several companies after a client reneged on an agreement to pay for the stock bought on its behalf.

Norddeutsche Landesbank Girozentrale, or NordLB, earlier this year said it set aside 82.5 million euros to cover potential losses resulting from an unnamed client refusing to take delivery of stock.

As reported by Dow Jones Newswires, German fund Vatas Holding GmbH has stuck NordLB with 13% of Curanum AG, 15% of Balda AG, 20% of Euromicron AG and 23% of RemoteMDX Inc. (RMDX), a Utah-based maker of ankle "bracelet" monitoring equipment used by law enforcement.

NordLB spokesman Jan-Peter Hinrichs told Dow Jones Newswires that the German Federal Financial Supervisory Authority, or BaFin, began its investigation Monday. Hinrichs said BaFin is looking into the circumstances surrounding the trades and trying to determined how it happened. Hinrichs said the bank would cooperate with the investigation.

A spokesman for BaFin declined to comment.

Following the affair, four individuals have left NordLB. A trader and his supervisor were let go by the bank last month. More recently, a general vice president in charge of capital markets as well as Juergen Koesters, a member of the bank's management board and head of securities trading operations, have also stepped down.

Hinrichs declined to comment on reports that the bank is looking to sue Credit Suisse Group (CS) over its role in the failed stock deals. Hinrichs also declined to comment on German news reports that NordLB has taken steps to freeze some of Vatas' other stock holdings, slapping a lien on the fund's 18.5% stake in Air Berlin PLC in an attempt to recoup losses from the incomplete stock deals.

A spokesman for Credit Suisse declined to comment.

Vatas also declined to comment through an email.

The fund is a large strategic investor in RemoteMDX and, in December, suggested in a regulatory filing it was considering taking control of the company.

NordLB said last month in filings with the Securities and Exchange Commission that it holds 31 million shares of RemoteMDX, which it purchased on behalf of a client that refused to settle the order. NordLB said it isn't looking to hold the stock and plans to sell it.

According to a Dec. 28 filing with the SEC, Vatas held almost 17 million shares, including common stock and securities issuable upon exercise of warrants, or about 13% of RemoteMDX.

NordLB said in an SEC filing that it spent $116.6 million to acquire the RemoteMDX stock at an average price of $3.76 a share. RemoteMDX stock was recently trading at $1.55 a share.

Trades listed in NordLB's filing show that it bought and sold a huge amount of RemoteMDX shares, purportedly on behalf of Vatas, between Nov. 1, 2007, and Feb. 25, 2008.

Part of the filing doesn't make a lot of sense. For example, the filing shows that the bank bought 14.75 million RemoteMDX shares at $3.736 on Feb. 25. But 3.2 million shares traded that day and the stock never came close to that price, closing at $1.62 a share.

RemoteMDX offers TrackerPal, an ankle bracelet combining cellular and global-positioning-system technologies that help law-enforcement personnel track those who were the product through the company's SecureAlert subsidiary.

(Carol S. Remond is an award-winning columnist who won a Gerald Loeb Award in 2005 for best news service content with "Exposing Small-Cap fraud," a series of articles that described how three small companies unscrupulously pumped up their stocks.)

-By Carol S. Remond, Dow Jones Newswires; 303-997-5783; carol.remond@dowjones.com

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From: StockDung4/8/2008 3:35:47 PM
   of 122002
 
=DJ SEC Files Charges Against CMKM Diamonds In $64M Scheme

Monday, April 07, 2008 4:02 PM

By Carol S. Remond
OF DOW JONES NEWSWIRES

Tiny mining company CMKM Diamonds Inc. (CMKX) and itsuse of billions of unregistered shares to finance various endeavors like a drag car racing team and corporate merger with other companies has long been a thorn in the side of securities regulators in the U.S. and Canada.

On Monday, the Securities and Exchange Commission finally caught up with the Pink Sheets company, charging CMKM, its chief executive Urban Casavant and several others with violating registrations provisions of federal securities laws by fraudulently issuing "hundreds of billions of shares," the SEC said.

The SEC alleged in its complaint filed in the U.S. District Court for the District of Nevada that the defendants "conspired to illegally issue and sell unregistered stock" and "lined their pockets with more than $64 million from 40,000 nationwide."

The complaint alleges that Casavant generated investors' interest in the company through false press releases, Internet chat boards and funny-car race events in events across the country without disclosing that he ran this purported gold and diamond company from his house in Las Vegas.

The SEC complaint charges CMKM, a broker dealer and transfer agent involved and 11 individuals including Casavant.

The commission identifies in its complaint John Edwards as the mastermind of the scheme. The SEC alleges that Edwards and others sold their unregistered stock into the public markets. The SEC alleges that Edwards profited by about $26.4 million from sales through a single brokerage firm and that Casavant received about $31.5 million.

The SEC alleges CMKM improperly issued up to 622 billion shares of purportedly unregistered stock between January 2003 and May 2005.

The complaint alleges that CMKM improperly issued up to 622 billion shares of purportedly unregistered stock between January 2003 and May 2005. The SEC claims that these stock issuances were based in large part on "inadequate, suspect and inconsistent" written authorization and opinion letters prepared by company lawyer Brian Dvorak.

CMKM transfer agent 1st Global Stock Transfer LLC and owner Helen Bagley are also charged with issuing stack of stock certificates without restrictive legends based on these faulty documents.

The SEC is seeking permanent injunctions against the defendants and disgorgement of profits. The Commission is also seeking penny stock bars against each named individual defendants and an order prohibiting Casavant from acting as an officer or director of any public company.

The SEC revoked the registration of CMKM in October 2005 after the company failed to file annual and quarterly financial reports since 2002.

-By Carol S. Remond, Dow Jones Newswires; 303-997-5783; carol.remond@dowjones.com

(END) Dow Jones Newswires

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To: StockDung who wrote (103262)4/8/2008 4:05:22 PM
From: anniebonny
   of 122002
 
Isn't ONYX Consulting Group involved with RemoteMDx??
I think I came across them when I posted something about USSU.
Can't remember the specifics offhand -
onyxconsultinggroup.com

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To: magicrecall who wrote (88243)4/8/2008 4:39:59 PM
From: StockDung
   of 122002
 
Way to go Bud Burrell!! Go get-them CMKX naked shortsellers!!

thesanitycheck.com

CMKX: 465 Billion Shares in with a 2500 fax Backlog in the Owner's Group Box.

Location: Blogs Bud Burrell - Front and Center
Posted by: bburrell 3/15/2006 7:17 PM

The number keeps building. There are just under 466 Billion shares in the box so far at the counsel to the owners group, with an estimated 28% of shareholders in. There are over 2500 faxes of additional shares yet to be processed in the current backlog. Conservatively, let's hear it for 1.5 Trillion shares in total on an outstanding issued number of 100 Billion!

Perhaps Madame LeFarge will handle the insatiable monster with one tooth if it can hopefully be brought back. Better yet, let's let the Red Mafiya handle the collections, backed up by the Mossad. We will get back more than was stolen if either unit handles the collections in their own inimitable fashion.

I was once questioned about the wisdom of getting familiar with the shareholders of CMKX. I was right and the questioners were wrong. One crime doesn't excuse another. There may have been really disreputable behavior by management, but that doesn't excuse the conduct of the criminal naked short sellers. If this short breaks the back of the entire situation, which it could by itself, then every person who has been victimized owes them a debt of gratitude.

The twit at the SEC who came up with the concept of using the shorts as "Unregulated Policemen" should go to the head of the future headless line. It is doubtful that person is still at the SEC. He/She sounds like a political appointment, not a career civil servant, most certainly an attorney. For the latter status, maybe we can figure out a way to execute them twice.

I hope the CMKX shareholders' Owner's Group holds a mass rally in DC when they get their settlement, right outside the Congress. Headings for the signs they should carry will be easy to come up with.



thesanitycheck.com

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To: magicrecall who wrote (88243)4/8/2008 4:47:02 PM
From: StockDung
   of 122002
 
How do you feel Bud being a naked shortselling patsy:

Re: CMKX: 465 Billion Shares in with a 2500 fax Backlog in the Owner's Group Box.
By bburrell on 6/25/2006 7:27 AM

Just because CMKM is claimed, possibly with legitimacy, doesn't excuse the absolutely enormous apparent naked short position. It is a poster child for both kinds of manipulations, and the SEC did nothing about either, for what reason I can't even guess.

There have been some major changes at CMKX with the dissolution of the Task Force, and with the resignations of Frizzell, Stocklein, and Maheu.

There is something rotten in Las Vegas and Washington. I don't think everyone is going to walk away on this one. The shareholders wil have their revenge, now or later.

thesanitycheck.com

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From: StockDung4/8/2008 6:23:43 PM
   of 122002
 
Susanne Trimbath DTCC fact checker:

-------------------------------------------------

"According to the Press Release, the DTCC contends that they were not invited to speak at the NASAA Public Forum held in November to discuss the issues of Naked Shorting. Mr. Lambiase, Director of Securities for the State of Connecticut and moderator of the forum, specifically identified to the audience attending the forum that the DTCC was invited to attend but had declined the invite. Panelist Dr. Susan Trimbath, former Operations Manager for the DTCC, also confirmed the DTCC invite during the forum discussions."

from DTCC Continues Public Campaign Stop blaming us; it s not Our Fault January 26, 2006
David Patch

===================================================================

5. INSIDE THE BLACK BOX

I worked not only at DTC in New York, but also with the Pacific Clearing Corporation in
San Francisco. I have the experience necessary to talk about what happens inside clearing
and settlement. Please don’t misquote me as saying I worked for DTCC because I
actually worked for their predecessor DTC, with only one C. Last February a reporter in
New Jersey put an extra “C” in my resume and DTCC had to issue a media statement
clarifying my employment record. Let’s not put them to that trouble again, OK?
Seriously, all the details of my background are in my bio.

Susanne Trimbath

stpadvisors.com

====================================================

hedgeworld.com

DTCC Questions Facts in Naked Shorts Squabble

By Christopher Faille, Financial Correspondent | Thursday, March 16, 2006


NEW YORK (HedgeWorld.com)—In the increasingly heated public dispute over "naked" short sales of securities, the Depository Trust & Clearing Corp. fired an unexpected volley Tuesday [March 14], issuing a statement on the "purported work experience of a former employee" at one of its subsidiaries.
The former employee, Susanne Trimbath, was a manager of transfer agent services at the Depository Trust Company from 1987 to 1993. This work experience became relevant to the controversy over what is now DTC's corporate parent, DTCC, because on Feb. 23 Ms. Trimbath participated in a hearing of the New Jersey State Senate Judiciary Committee, and there criticized Bradley Abelow, the governor's nominee for state treasurer.

Mr. Abelow (who has since been confirmed as treasurer) was a director of the Depository Trust & Clearing Corp. from 2002 to 2005 Previous HedgeWorld Story, so certain individuals who believe that DTCC has enabled short sellers' failures to deliver (FTDs), thereby empowering shorts at the expense of targeted issuers, used the opportunity created by the confirmation hearing to put their case before the public.

At the hearing, Ms. Trimbath referred to herself as a "former employee of the Depository Trust and Clearing Corporation," and then said that for simplicity she would thereafter refer to DTCC and its subsidiaries as the "Depository." She didn't indicate that she had ever been an officer.

Her self-introduction appears to have been a misstatement in at least one respect. She wasn't an employee of DTCC, which didn't exist until 1999. She was an employee of DTC, which later became a subsidiary of DTCC. In a telephone conversation the evening of DTCC's press release, Ms. Trimbath said that she agrees with the facts of her employment history as that release sets them out. She was employed at DTC prior to the formation of DTCC as a holding company in 1999.

DTCC's statement expresses concern about misrepresentations not by Ms. Trimbath but by unnamed third parties. It states, "[I]naccurate information … has appeared in the press and … on Web sites and in public forums" portraying Ms. Trimbath as a former officer, and an "expert on clearance and settlement and the Stock Borrow program."

DTCC said that Ms. Trimbath was a "manager of transfer agent services, a corporate middle-management position below officer level." Nothing in her testimony was inconsistent with that characterization, nor did she quarrel with it Tuesday. She testified that she wanted the committee to consider "how you can have year-long failures to settle trades," and that the answer to that question was and is "lax management at the Depository and a willingness to look the other way when broker members neglect their fiduciary duty to small investors."

She said that she saw the hearing as "an opportunity to bring to light a failure of management [at the Depository] to address this issue" concerning failures-to-deliver "a decade ago when it was merely a thorn in somebody's side." She also said that before she went to work at DTC as a transfer agent, she had been an operations analyst for the Pacific Clearing Corp. She was surprised and flattered to find that she's important enough for DTCC to issue a release making the distinction between Depository officers and employees with special reference to her.

Challenge and Response

On the more substantive issues in dispute, a challenge to DTCC and its policies this week from a former Clinton administration economist, Rob Shapiro, has drawn a point-by-point reply from its target.

Mr. Shapiro's consultancy, Sonecon, issued the report Tuesday under the dramatic headline "500 Million Shares of Stock Are Missing." It contends that DTCC's settlement and clearing process "implicitly permits naked short sales by using bookkeeping entries and the holdings of members uninvolved in those sales to ‘clear and settle' short sales even when the short seller persists in failing to deliver the shares he has sold short." In quantitative terms, the report states that the consequences of FTDs are concentrated on a small number of issuers.

On any given day, it states, almost half of Nasdaq and NYSE threshold stocks—from 50 to 80—may account for as much as 95% of all fails in listed firms. The average fails for those 50 to 80 shares are between 1.5 million and 2 million shares each.

On any given day, also, about two thirds of over-the-counter threshold securities, 60 to 80 stocks, make for the vast majority of FTDs in OTC companies, with average fails at 4.3 million to 4.8 million each.

The report argues for the following conclusions:

• Designation as a "threshold security" doesn't necessarily reduce short sales, and has proven consistent with an increase in the number of fails-to-deliver in the case of many securities;

• DTCC's lack of transparency "undermines the efficiency of U.S. capital markets and could damage investor confidence;" and

• Data indicates that Reg SHO "has not created the market conditions or regulatory requirements needed to ensure that naked short sellers (and others) resolve any large, outstanding fails."

When asked for a response, DTCC prepared a statement Wednesday [March 15] listing what it saw as the flaws of the report, beginning with the bias of its author. Mr. Shapiro "has admitted to DTCC he is a paid consultant" for law firms that are pursuing claims against DTCC.

DTCC objects to the report's presumption that it possesses, but has failed to employ, buy-in authority—i.e., authority to purchase the necessary shares itself for delivery, while charging the account of the naked short seller's broker. DTCC said that the Securities and Exchange Commission has repeatedly said it doesn't have that authority.

DTCC said that Mr. Shapiro misleadingly speaks of naked short sales and FTDs as synonyms, which is a distortion. There are many reasons aside from short selling why a delivery may not occur on settlement date. "Many times the member will experience a problem that is either unanticipated or is out of its control, such as … delays in customer delivery of shares to the broker dealer," it said.

DTCC said that SHO has in fact reduced the number of outstanding fails. Within the first three months of the program, it produced a 10% reduction in aggregate fails, and a 32% reduction in fails regarding companies on the threshold list.

As to disclosure, DTCC said that it doesn't necessarily possess the data that Mr. Shapiro demands it disclose. "While we have data on the volume of fails, we have no information on the underlying causes of those fails. As noted above, there are many causes of fails," it stated.

There are good reasons, it also argued, for it to be less than transparent: Data on fails could be used for purposes of market manipulation.

CFaille@HedgeWorld.com

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From: StockDung4/9/2008 10:31:38 AM
   of 122002
 
Even though no one seems to be trying very hard to find him, Khashoggi is currently a fugitive from justice in the case.

At one time, Khashoggi's chief lieutenant and fellow Saudi swindler, Ramy El-Batrawi, former President of Jetbourne, a Miami CIA proprietary which flew Oliver North's TOW missiles to the Iranians during the Iran Contra Scandal, owned both DC9's later owned by SkyWay.

Small world.

madcowprod.com

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To: anniebonny who wrote (103264)4/9/2008 11:33:08 AM
From: StockDung
   of 122002
 
Geoffrey Eiten used to promote criminal Marc Harris's stock fraud Juniper Group. Mad Cow Morning News has a interesting story about Marc Harris. Also stock fraud GenisisIntermedia which Geoffrey Eiten also promoted

here is the link madcowprod.com

From SHAME ON THE SEC by Christopher Byron:

rgm.com

This outfit, bearing the name OTC Financial Network, is headed by a stock promoter named Geoffrey Eiten, who has been the promotional muscle behind a long list of shaky penny stocks.

At the time he was taking on the Premier Enterprises account, Eiten was simultaneously promoting a Great Neck, L.I., company called Juniper Group.

An SEC filing shows that the largest shareholder of Juniper at that time was a Panamanian company called Bluffdale Corp., which Miami-based KYC News Inc., a leading newsletter publisher, has identified as a mail drop for an international crook named Marc Harris. That man was convicted last May by a federal jury in Miami and sentenced to 17 years in prison for his role in a freon gas smuggling ring.

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