Post by jannikki on Nov 12, 2005 10:17:45 GMT -4
Are Bermuda based Investment Firms used to Manipulate US Stocks – November 4, 2004
Dave Patch
A November 3, 2004 article published by a Bermuda based newsletter, Inside Bermuda, may have shown the fault lines between the Offshore Investment firms, US Member firms, and stock manipulation. The article states “Clients of Investment firm Lines Overseas Management stood to profit from the alleged manipulation of a penny stock now under investigation by the US Securities and Exchange Commission, according to a court filing”.
Lines Overseas Management (LOM) is an offshore Investment firm currently under SEC investigation and managed by CEO Scott Lines and President Brian Lines. LOM also had the pleasure over the years of acquiring the services of recently convicted felon Paul Lemmon arrested during the joint FBI/RCMP sting operation “Bermuda Shorts”. Lemmon further associated himself with convicted securities fraud felon Mark Valentine of the now Bankrupt Canadian firm Thompson Kernighan. Valentine was also arrested as part of the “Bermuda Shorts” sting operation. To their credit, both Lemmon and Valentine have received relative non-sentences for their part in the securities fraud and manipulation of our stocks for reportedly ratting out others. Investors lost billions and the feds cut a deal.
The fact that LOM is under investigation for stock manipulation is far from the true concerns with this issue however. This offshore firm needed accomplice’s to manipulate our US Markets and it is these accomplices that the SEC should be concerned with.
For example, according to the Inside Bermuda article, the SEC’s Washington DC branch chief Michael Unger claims that LOM executed substantial volumes of trades with the US operations of vFinance Investments Inc., Schwab Capital Markets LLC, Sterne, Agee Capital Markets and CIBC Mellon Securities Trust Company of NY. Instead of reviewing these US Member firms, Mr. Unger is using the association of LOM to US Members as rationalization to subpoena this non-US firm’s books.
Unger is quoted as saying, “The volume of LOM’s US trading, whether on behalf of its customers or its own accounts, is staggering. For example, in LOM’s accounts at Schwab, during a two-week period in 2003 – the same year in which SHEP and Sedona transactions in question occurred – LOM bought or sold, on over 4,000 different occasions a total of 151 Million shares of US Securities traded over various US securities markets.” This was in two weeks! Average this out to 400 trades a day of 377,500 shares per trade.
For the non-Industry professionals lets put some of this in perspective.
The Bermuda Insider quotes a trader for Florida based vFinance as saying “LOM’s trading over US markets was more than the trading of most US Regional banks” and that he “either accumulated or liquidated millions of shares a day for them.” How did this offshore firm acquire such a client base and share ownership in US securities?
Did Schwab, vFinance, Sterne, Agee, or CIBC Mellon hear of the Patriot Act and US anti-money laundering laws? A non-US firm is trading volumes far greater than trades of regional banks, in each of their firms and not a red flag to be seen. How and why were they executing these trades and, did these firms validate ownership and delivery rights to the trades before executing the trades on behalf of LOM? Naked shorting is about stock manipulation where trades are executed without delivery. The goal is to conduct a “Bear raid” on the stock by creating a massive supply side imbalance in the markets. Was LOM a player in this arena using these and other US firms as the conduit?
The SEC, at the present time, is under war with investors and issuers in a controversy over fraud related naked shorting. The controversy is tagged “Stockgate”. The fraud is about the lack of settlement taking place in US markets where many believe the trades originate offshore through a multitude of investment firms like LOM. Trades like the volumes accumulated by LOM in short order. The process is linked to criminal elements using this venue for money laundering and stock manipulation.
The players are clearly marked in this fraud and, unlike the SEC, our eyes are open enough to pick them out. These overseas operations cannot operate effectively without the compliance of the US Members and Regulators. Members willing to accept their trading volumes for the pure revenues of commissions and Regulators willing to ignore the abuses based on the pedigree of the Companies most easily abused. It is no clearer than the defendant’s claims in the Anthony Elgindy trial underway.
Anthony Elgindy is in presently on trial in a NY Federal Court accused of short selling stock manipulations. Manipulation he orchestrated through the help and assistance of US FBI Agents. Now, evidence of additional fraud and manipulation of similar nature is brought to light with Offshore Companies orchestrating the efforts. In all cases, it takes an industry wide behavioral problem to accept this fraud and, to date; the SEC has never taken action regarding the Members participation. To many the SEC is part of the problem. Elgindy’s lawyer has claimed in court that Elgindy was only doing the regulators a favor by weeding out scam stocks. He was playing judge, jury, and executioner to these smaller companies because the SEC wasn’t paying attention.
Who decides the scams from the innocent and who is responsible when the innocent are affected? Do the regulators and Wall Street have the right to create the collateral damage of innocent investors in their negligence and abuse? Is it acceptable for the SEC to insure the financial gains of Wall Street because they are biased to the market of lesser developed companies? How much more will the SEC allow before the conduits to the fraud are closed? The US Market members that allow continuous trades to take place without settlement are the conduit these operations need to launder their money and steal away the US Economy.
Dave Patch
A November 3, 2004 article published by a Bermuda based newsletter, Inside Bermuda, may have shown the fault lines between the Offshore Investment firms, US Member firms, and stock manipulation. The article states “Clients of Investment firm Lines Overseas Management stood to profit from the alleged manipulation of a penny stock now under investigation by the US Securities and Exchange Commission, according to a court filing”.
Lines Overseas Management (LOM) is an offshore Investment firm currently under SEC investigation and managed by CEO Scott Lines and President Brian Lines. LOM also had the pleasure over the years of acquiring the services of recently convicted felon Paul Lemmon arrested during the joint FBI/RCMP sting operation “Bermuda Shorts”. Lemmon further associated himself with convicted securities fraud felon Mark Valentine of the now Bankrupt Canadian firm Thompson Kernighan. Valentine was also arrested as part of the “Bermuda Shorts” sting operation. To their credit, both Lemmon and Valentine have received relative non-sentences for their part in the securities fraud and manipulation of our stocks for reportedly ratting out others. Investors lost billions and the feds cut a deal.
The fact that LOM is under investigation for stock manipulation is far from the true concerns with this issue however. This offshore firm needed accomplice’s to manipulate our US Markets and it is these accomplices that the SEC should be concerned with.
For example, according to the Inside Bermuda article, the SEC’s Washington DC branch chief Michael Unger claims that LOM executed substantial volumes of trades with the US operations of vFinance Investments Inc., Schwab Capital Markets LLC, Sterne, Agee Capital Markets and CIBC Mellon Securities Trust Company of NY. Instead of reviewing these US Member firms, Mr. Unger is using the association of LOM to US Members as rationalization to subpoena this non-US firm’s books.
Unger is quoted as saying, “The volume of LOM’s US trading, whether on behalf of its customers or its own accounts, is staggering. For example, in LOM’s accounts at Schwab, during a two-week period in 2003 – the same year in which SHEP and Sedona transactions in question occurred – LOM bought or sold, on over 4,000 different occasions a total of 151 Million shares of US Securities traded over various US securities markets.” This was in two weeks! Average this out to 400 trades a day of 377,500 shares per trade.
For the non-Industry professionals lets put some of this in perspective.
The Bermuda Insider quotes a trader for Florida based vFinance as saying “LOM’s trading over US markets was more than the trading of most US Regional banks” and that he “either accumulated or liquidated millions of shares a day for them.” How did this offshore firm acquire such a client base and share ownership in US securities?
Did Schwab, vFinance, Sterne, Agee, or CIBC Mellon hear of the Patriot Act and US anti-money laundering laws? A non-US firm is trading volumes far greater than trades of regional banks, in each of their firms and not a red flag to be seen. How and why were they executing these trades and, did these firms validate ownership and delivery rights to the trades before executing the trades on behalf of LOM? Naked shorting is about stock manipulation where trades are executed without delivery. The goal is to conduct a “Bear raid” on the stock by creating a massive supply side imbalance in the markets. Was LOM a player in this arena using these and other US firms as the conduit?
The SEC, at the present time, is under war with investors and issuers in a controversy over fraud related naked shorting. The controversy is tagged “Stockgate”. The fraud is about the lack of settlement taking place in US markets where many believe the trades originate offshore through a multitude of investment firms like LOM. Trades like the volumes accumulated by LOM in short order. The process is linked to criminal elements using this venue for money laundering and stock manipulation.
The players are clearly marked in this fraud and, unlike the SEC, our eyes are open enough to pick them out. These overseas operations cannot operate effectively without the compliance of the US Members and Regulators. Members willing to accept their trading volumes for the pure revenues of commissions and Regulators willing to ignore the abuses based on the pedigree of the Companies most easily abused. It is no clearer than the defendant’s claims in the Anthony Elgindy trial underway.
Anthony Elgindy is in presently on trial in a NY Federal Court accused of short selling stock manipulations. Manipulation he orchestrated through the help and assistance of US FBI Agents. Now, evidence of additional fraud and manipulation of similar nature is brought to light with Offshore Companies orchestrating the efforts. In all cases, it takes an industry wide behavioral problem to accept this fraud and, to date; the SEC has never taken action regarding the Members participation. To many the SEC is part of the problem. Elgindy’s lawyer has claimed in court that Elgindy was only doing the regulators a favor by weeding out scam stocks. He was playing judge, jury, and executioner to these smaller companies because the SEC wasn’t paying attention.
Who decides the scams from the innocent and who is responsible when the innocent are affected? Do the regulators and Wall Street have the right to create the collateral damage of innocent investors in their negligence and abuse? Is it acceptable for the SEC to insure the financial gains of Wall Street because they are biased to the market of lesser developed companies? How much more will the SEC allow before the conduits to the fraud are closed? The US Market members that allow continuous trades to take place without settlement are the conduit these operations need to launder their money and steal away the US Economy.