Post by jannikki on Nov 12, 2005 10:52:16 GMT -4
Senate Banking Committee Chairman Richard Shelby Aide claims – Settling Trades is “Oversimplified” - September 21, 2005 David Patch
Remember in grammar school when we were all taught how to take a test. The teacher would instruct us to not focus on looking for the difficult answers, as the question may be very straightforward. If we focus our energies on searching for the trick or to make a simple question difficult it would result in failure. Today, it is the leaders of our country that fail the test.
Earlier this month I received a memo from Ralph Lambiase, Director of Securities for the State of Connecticut. I was planning on keeping this memo private, with only limited viewership until just yesterday when I was informed that it was not an issue to take the memo public.
In the memo, Mr. Lambiase writes about the destruction of entrepreneurial businesses at the hands of illegal market activities and manipulation. He speaks on the impact this has to our local communities and the general economy of our nation.
‘It is these small businesses in our communities who take entrepreneurial risks to grow their companies through listings on the OTCBB and Pink Sheets. These small businesses not only provide employment for the residents of their communities, but also offer the general public the opportunity to invest in local businesses with promising products or services.
While it may be true that a number of small companies lack the financial depth to succeed, they are nonetheless entitled to succeed or fail by their own honest business decisions and not as a result of the corrupt acts of abusive short sellers.
Without transparency, we cannot, as yet, precisely identify each small business that failed as a direct result of abusive naked short selling nor quantify the exact number of jobs lost to our local economies when these companies are forced to close their doors. However, we can say to a certainty that the impact on many of our local communities has been injurious. As a result, we have observed an unmistakable loss of investor confidence by the arguably millions of investors who have lost their monies.’
To me they were pretty damaging words coming from a truly honorable gentleman. Mr. Lambiase has taken his responsibilities further and has now aided in the assembly of a multi-state task force to look into this issue in which the states “will continue to exert substantial effort to remedy the remaining abusive practices in naked short selling until we are confident at the state level that the companies in our communities and citizens that invest in them will no longer be the possible targets of abusive naked short sellers.”
But while States have limited authorities in our Securities Markets it is the Securities and Exchange Commission and Congress who can, at the Federal level, expedite change. According to Mr. Lambiase, “Without further substantive reform to REG SHO, many more small companies in our communities will succumb to failure - not through the mechanism of the marketplace but at the hands of manipulators.”
Yesterday we heard news of what Congress plans on doing and it is far from honorable. In fact, in my eyes it is more criminal that honorable.
In a report out by the Faulking Truth the Senate Banking Committee, and Senator Shelby in particular will not be supporting the State’s in getting to the bottom of this issue. The Faulking Truth reports that Senator Shelby has repeatedly postponed Senate Hearings leading to a recent cancellation of the last intended planned hearing in it’s entirety [February 2006]. If Mr. Lambiase is correct, Senator Shelby just sealed the fate of “more companies in our communities” which will “succumb to failure” due to manipulation.
According to a source who had been part of the planned hearings "The authority and the responsibility to take the necessary steps to deal with the issue of naked short selling lies squarely at the feet of Senator Shelby, and he has chosen not to allow the planned Senate Banking Subcommittee hearing to go forward." Further stating "Senator Shelby tends to grab things like this for his own purposes, and his own purposes don't always mesh with what's best for the public."
These are not words of recommendation for the Committee Chairman. If the Committee Chairman is using his authority for personal reasons, and sacrifices the people of this Country in doing so, he should be removed from this post and investigated.
I contacted Senator Shelby’s Office at the Banking Committee and spoke with aide Jonathan Grassio. My first question certainly being why would the Senator derail a hearing of this nature when the Senate Banking Committee has been receiving thousands of complaints pertaining to naked shorting for the past several years. Mr. Grassio responded by indicating the Senator did not derail any hearings and that the Banking Committee was “committed to this issue”. A commitment Mr. Grassio informed me as being focused on merely “monitoring Regulation SHO”. Asked how the committee was monitoring the regulation Mr. Grassio could not get into specifics.
As I ventured into areas such as Securities Laws requiring prompt settlement of trades, State Task Forces, Hedge Funds Lobbying the Committee, and a list with companies losing upwards of 85% of their market capitalization while suffering from being oversold I got my answer. Mr. Grassio informed me that I was “oversimplifying the issue”. It was complicated and somebody like me would not be qualified to understand what these respected members understand.
Had I been the teacher and Grassio the student he would have received an F. The Senate Banking committee was looking at naked shorting as a complicated issue that requires some complex algorithm to resolve. In fact, it is not. It is simple. When a buyer buys a stock a seller delivers a stock; not an extended IOU. Sellers must deliver stocks under the guidelines set forth in a Securities Exchange Act of 1934 created by Congressional members focused on protecting all investors of all race, religion, and financial stature. That is the law and until somebody changes the law it must be upheld. We as investors invest based on the laws we see and the laws we expect regulated.
Today the SEC and Senate Banking Committee have no idea how big an issue naked shorting is and thus they avoid it. They give it time hoping it will miraculously disappear. Maybe Wall Street will “do the right thing” on their own.
The last time the SEC gave fraud time the State AG out of NY created his own investigation and we now have mutual fund reforms and billions in fines against Wall Street Institutions. Each time the States take such an approach the SEC complains about being left out and the Senate re-evaluates the States authority. Without the States we would still have research analysts conflicts of interest, mutual funds late trading for preferred clients [Hedge Funds] and investors being defrauded out of their retirement savings.
Maybe it is time the SEC and Senate Banking Committee are evaluated. Evaluated for their participation in aiding those who committed securities fraud in the past and who continue to abuse the innocent and underprivileged due to their inability to enforce the laws.
Do state regulators, who have set up their own task force, think this issue is oversimplified? Not a chance. These honorable people take on these tasks because it is the right thing to do. Something some members of the Senate Banking Committee should have learned by now after getting burnt as the market watchdog these past few years.
According to the Republican Party, ‘President Bush recognizes that supporting America’s small businesses is critical to ensuring continued job creation. Small businesses create two-thirds of new private sector jobs in America, employ more than half of all workers, and account for more than half of the output of our economy. Because small businesses are vital to our prosperity, the President has taken important steps to assist small businesses and the hard working people they employ by reducing taxes, encouraging investment, and removing obstacles to growth.’
Senator Shelby, as Chairman of the Senate Banking Committee would rather sacrifice a few small businesses despite their value to our country in order to insure Wall Street and ultra-wealthy Hedge Funds remain satisfied lobbyists in Washington. Underprivileged be damned!
For more on this issue please visit the Host site at www.investigatethesec.com .
Copyright 2005
Remember in grammar school when we were all taught how to take a test. The teacher would instruct us to not focus on looking for the difficult answers, as the question may be very straightforward. If we focus our energies on searching for the trick or to make a simple question difficult it would result in failure. Today, it is the leaders of our country that fail the test.
Earlier this month I received a memo from Ralph Lambiase, Director of Securities for the State of Connecticut. I was planning on keeping this memo private, with only limited viewership until just yesterday when I was informed that it was not an issue to take the memo public.
In the memo, Mr. Lambiase writes about the destruction of entrepreneurial businesses at the hands of illegal market activities and manipulation. He speaks on the impact this has to our local communities and the general economy of our nation.
‘It is these small businesses in our communities who take entrepreneurial risks to grow their companies through listings on the OTCBB and Pink Sheets. These small businesses not only provide employment for the residents of their communities, but also offer the general public the opportunity to invest in local businesses with promising products or services.
While it may be true that a number of small companies lack the financial depth to succeed, they are nonetheless entitled to succeed or fail by their own honest business decisions and not as a result of the corrupt acts of abusive short sellers.
Without transparency, we cannot, as yet, precisely identify each small business that failed as a direct result of abusive naked short selling nor quantify the exact number of jobs lost to our local economies when these companies are forced to close their doors. However, we can say to a certainty that the impact on many of our local communities has been injurious. As a result, we have observed an unmistakable loss of investor confidence by the arguably millions of investors who have lost their monies.’
To me they were pretty damaging words coming from a truly honorable gentleman. Mr. Lambiase has taken his responsibilities further and has now aided in the assembly of a multi-state task force to look into this issue in which the states “will continue to exert substantial effort to remedy the remaining abusive practices in naked short selling until we are confident at the state level that the companies in our communities and citizens that invest in them will no longer be the possible targets of abusive naked short sellers.”
But while States have limited authorities in our Securities Markets it is the Securities and Exchange Commission and Congress who can, at the Federal level, expedite change. According to Mr. Lambiase, “Without further substantive reform to REG SHO, many more small companies in our communities will succumb to failure - not through the mechanism of the marketplace but at the hands of manipulators.”
Yesterday we heard news of what Congress plans on doing and it is far from honorable. In fact, in my eyes it is more criminal that honorable.
In a report out by the Faulking Truth the Senate Banking Committee, and Senator Shelby in particular will not be supporting the State’s in getting to the bottom of this issue. The Faulking Truth reports that Senator Shelby has repeatedly postponed Senate Hearings leading to a recent cancellation of the last intended planned hearing in it’s entirety [February 2006]. If Mr. Lambiase is correct, Senator Shelby just sealed the fate of “more companies in our communities” which will “succumb to failure” due to manipulation.
According to a source who had been part of the planned hearings "The authority and the responsibility to take the necessary steps to deal with the issue of naked short selling lies squarely at the feet of Senator Shelby, and he has chosen not to allow the planned Senate Banking Subcommittee hearing to go forward." Further stating "Senator Shelby tends to grab things like this for his own purposes, and his own purposes don't always mesh with what's best for the public."
These are not words of recommendation for the Committee Chairman. If the Committee Chairman is using his authority for personal reasons, and sacrifices the people of this Country in doing so, he should be removed from this post and investigated.
I contacted Senator Shelby’s Office at the Banking Committee and spoke with aide Jonathan Grassio. My first question certainly being why would the Senator derail a hearing of this nature when the Senate Banking Committee has been receiving thousands of complaints pertaining to naked shorting for the past several years. Mr. Grassio responded by indicating the Senator did not derail any hearings and that the Banking Committee was “committed to this issue”. A commitment Mr. Grassio informed me as being focused on merely “monitoring Regulation SHO”. Asked how the committee was monitoring the regulation Mr. Grassio could not get into specifics.
As I ventured into areas such as Securities Laws requiring prompt settlement of trades, State Task Forces, Hedge Funds Lobbying the Committee, and a list with companies losing upwards of 85% of their market capitalization while suffering from being oversold I got my answer. Mr. Grassio informed me that I was “oversimplifying the issue”. It was complicated and somebody like me would not be qualified to understand what these respected members understand.
Had I been the teacher and Grassio the student he would have received an F. The Senate Banking committee was looking at naked shorting as a complicated issue that requires some complex algorithm to resolve. In fact, it is not. It is simple. When a buyer buys a stock a seller delivers a stock; not an extended IOU. Sellers must deliver stocks under the guidelines set forth in a Securities Exchange Act of 1934 created by Congressional members focused on protecting all investors of all race, religion, and financial stature. That is the law and until somebody changes the law it must be upheld. We as investors invest based on the laws we see and the laws we expect regulated.
Today the SEC and Senate Banking Committee have no idea how big an issue naked shorting is and thus they avoid it. They give it time hoping it will miraculously disappear. Maybe Wall Street will “do the right thing” on their own.
The last time the SEC gave fraud time the State AG out of NY created his own investigation and we now have mutual fund reforms and billions in fines against Wall Street Institutions. Each time the States take such an approach the SEC complains about being left out and the Senate re-evaluates the States authority. Without the States we would still have research analysts conflicts of interest, mutual funds late trading for preferred clients [Hedge Funds] and investors being defrauded out of their retirement savings.
Maybe it is time the SEC and Senate Banking Committee are evaluated. Evaluated for their participation in aiding those who committed securities fraud in the past and who continue to abuse the innocent and underprivileged due to their inability to enforce the laws.
Do state regulators, who have set up their own task force, think this issue is oversimplified? Not a chance. These honorable people take on these tasks because it is the right thing to do. Something some members of the Senate Banking Committee should have learned by now after getting burnt as the market watchdog these past few years.
According to the Republican Party, ‘President Bush recognizes that supporting America’s small businesses is critical to ensuring continued job creation. Small businesses create two-thirds of new private sector jobs in America, employ more than half of all workers, and account for more than half of the output of our economy. Because small businesses are vital to our prosperity, the President has taken important steps to assist small businesses and the hard working people they employ by reducing taxes, encouraging investment, and removing obstacles to growth.’
Senator Shelby, as Chairman of the Senate Banking Committee would rather sacrifice a few small businesses despite their value to our country in order to insure Wall Street and ultra-wealthy Hedge Funds remain satisfied lobbyists in Washington. Underprivileged be damned!
For more on this issue please visit the Host site at www.investigatethesec.com .
Copyright 2005