Post by jcline on Feb 26, 2006 16:17:35 GMT -4
STOCKGATE TODAY
An online newspaper reporting the issues of Securities Fraud
SEC Subpoenas puts First Amendment Rights under Microscope – February 27, 2006
David Patch
From the mantra; any news is good news, we now have the financial press discussing illegal short selling.
According to recent reports, the Securities and Exchange Commission subpoenaed two columnists working for the Dow Jones publications to provide information about communications they had had with stock traders and analysts.
Herb Greenberg, who publishes articles for Marketwatch.com published an article on this issue late last week decrying that the SEC was violating his First Amendment right to free speech. Carol Remond, who publishes a column for the Dow Newswires remained silent on the subject.
Beyond the question of free speech is the issue of illegal short selling. Both Remond and Greenberg have been accused of aiding short sellers in stock manipulation through a series of well timed negative publications that were tailored to support the short selling community.
Since the news of the subpoenas, the New York Times, Wall Street Journal, and other publications have picked up the story and started to discuss it. While most of the stories have come out in favor of protecting their fellow journalists, the articles also delve into the issues involving two lawsuits that may pave the way to future stock market reforms and enforcement actions.
Published by the Associated Press, Greenberg has responded to the subpoenas by stating "if my unpublished communications aren't safe from government eyes, then the tools of every business reporter in this country become fair game for any company that doesn't like scrutiny and chooses to play the 'conspiracy' card."
Ironically many companies that have the evidence of reported abuse, listed daily on the Regulation SHO Threshold List, have seen similar SEC investigations taken against company without any resultant findings and yet Mr. Greenberg has never questioned who was behind those questionable SEC investigations. Greenberg is upset, however, because one company he frequently trashes is fighting back and turning the tides on the negative rumor mongers.
According to the transcripts of the US Prosecutors case against Anthony Elgindy, short sellers routinely seek out the SEC to investigate companies they have taken a short interest in. The Elgindy trial contained testimony from SEC Attorneys whom Elgindy contacted regarding investigations he thought was necessary. The interest by the short seller is to cast a negative light on the company, even if only temporary, in order to drive down the stock and create profits on the short positions. Elgindy was convicted of securities fraud and extortion and faces a possible life sentence. Mr. Greenberg has never written these sides of the story although several of the companies he has trashed over recent years have had this type “investigation” occur.
In an article published by Joe Nocera of the NY times Mr. Nocera states:
“In addition to his conspiracy-mongering, Mr. Byrne talked about Stinger missiles, Wayne and Garth, a mysterious Spanish phone message, stuttering and cocaine. ("I'm not a coke head," he said, unprompted.)
But I'm not laughing anymore. I've gone from viewing Mr. Byrne as an amusing diversion to a menace, at least for anyone who cares about the First Amendment. What has become increasingly clear in the months since the Sith Lord speech is that Mr. Byrne is using the courts, the Internet, his taunting e-mails — and even his conspiracy theory — as part of a thinly disguised effort to squelch any and all criticism of Overstock, a company with $804 million in sales last year.”
Nocera later identifies that he is a long time personal friend and associate of Herb Greenberg. That certainly puts this defamatory attack into perspective.
Like Greenberg, Nocera alludes to a conspiracy taking place. Is Herb and Joe not now becoming the “tin-foil hat” crowd of conspiracy theorists?
The Securities and Exchange Commission acted upon a complaint filed before them and initiated an investigation. The investigation led to a subpoena against Gradient Analytics which later, we surmise, led to subpoena’s against Carol Remond and Herb Greenberg. Is it now the intention of Greenberg, Nocera, and other journalists to infer that the SEC was acting solely on the accounts of Patrick Byrne? That the SEC was willing to violate a Constitutional right without supportive evidence to back up such a bold move? Talk about conspiracy-mongering!
Patrick Byrne, wealthy compared to most of us, still has a net worth that pales in comparison to the likes of SAC Capital’s Steven Cohen. If the SEC’s actions were solely based on complaints leveraged with wealth, Cohen holds the better hand. Greenberg and Nocera are aware of that fact and simply use their bias to leave it out of the discussions. The notion that Byrne concocted a story that led to these subpoenas is absurd.
What I find even more amusing about these financial journalists, reporters, or hacks if the shoe fits is that not once have they, short of a select few, even admitted to what is already proven fact. Naked shorting is reality and a focus of the regulators.
Nocera states in his column that Greenberg “is one of the straightest shooters I know.” Ironically, that is how many friends and associates described the CEO’s that were taken down by scandal over these past years. Is it a shock that the inner circle of friends is the last to admit the truth? OJ Simpson still has friends that vouch for his integrity. Need we go any further?
Emanual Friedman was a respected member of Wall Street. Emanuel Friedman has now resigned his post as co-CEO of Friedman, Billings, and Ramsey due to alleged naked shorting abuse. Nocera and Greenberg have dismissed this as fact and provided little space about how this could take down a respected CEO.
Other cases like Scott Ryan running illegal shorts through his market making firm for several Hedge Funds, Hedge Fund manager Hilary Shane running her illegal shorts through First New York, Manager Guillaume Pollet running illegal shorts through SG Cowen, Hedge Fund Manager John Mangan running illegal shorts through HLM Securities, and TradeStation running illegal short sales through Bear Stearns have all been recent regulatory cases. Greenberg and Nocera rarely if ever discuss this growing trend of enforcement agenda’s but instead they take out space in their publications condemning Patrick Byrne for bringing awareness to an issue the financial press are too conflicted to address.
The financial press has a role to play to this nation and it is a role that should be taken with the utmost integrity. Those that consider using the First Amendment right of free speech to aid illegal activities have no standing to the constitutional rights of free speech.
The flurry of reports regarding the SEC’s activities in issuing subpoenas to Greenberg and Remond is expected. What is not expected, and to be considered unprofessional, are the articles that have been published by the likes of Joe Nocera.
Nocera’s personal attack on Patrick Byrne, insinuating Byrne had anything to do with a Federal agency risking First Amendment rights in investigating securities fraud, is deplorable. It was without merit and was carried no supportive material to back up the claims. Nocera’s limited investigation into the facts as presented make his actions nothing short of a defaming public attack and the NY Times should take the appropriate actions against such publications. If Nocera is concerned about the First Amendment rights, he should be equally concerned that those rights are not abused for illicit activities if that were in fact taking place.
The readers of Greenberg, Nocera, and other financial press are receiving a disservice as these conflicted reporters are unwilling to alert the investing public of a potential crime against their financial futures. It just may be that the SEC has uncovered, in the course of their investigations, that there is a more sinister reason behind their silence.
That is the story that should be openly discussed in the media publications.
Naked Shorting is real and it will continue to bring upon us news of how damaging the practice is to our markets. The actions recently taken by the SEC enlighten us to the depth of the issue and the lengths they are willing to go to address it. The subpoenas were no small step and certainly were not a step to be taken under such a microscope on a “non-issue.”
The people have a Fifth Amendment right to property and that is being stolen through Wall Street fraud. Nocera, Greenberg, and other financial press appear willing to give up that right of yours while standing on a pulpit preaching their personal right to free speech whether that speech was done for legal or illegal reasons.
For more on this issue please visit the Host site at www.investigatethesec.com .
Copyright 2006
An online newspaper reporting the issues of Securities Fraud
SEC Subpoenas puts First Amendment Rights under Microscope – February 27, 2006
David Patch
From the mantra; any news is good news, we now have the financial press discussing illegal short selling.
According to recent reports, the Securities and Exchange Commission subpoenaed two columnists working for the Dow Jones publications to provide information about communications they had had with stock traders and analysts.
Herb Greenberg, who publishes articles for Marketwatch.com published an article on this issue late last week decrying that the SEC was violating his First Amendment right to free speech. Carol Remond, who publishes a column for the Dow Newswires remained silent on the subject.
Beyond the question of free speech is the issue of illegal short selling. Both Remond and Greenberg have been accused of aiding short sellers in stock manipulation through a series of well timed negative publications that were tailored to support the short selling community.
Since the news of the subpoenas, the New York Times, Wall Street Journal, and other publications have picked up the story and started to discuss it. While most of the stories have come out in favor of protecting their fellow journalists, the articles also delve into the issues involving two lawsuits that may pave the way to future stock market reforms and enforcement actions.
Published by the Associated Press, Greenberg has responded to the subpoenas by stating "if my unpublished communications aren't safe from government eyes, then the tools of every business reporter in this country become fair game for any company that doesn't like scrutiny and chooses to play the 'conspiracy' card."
Ironically many companies that have the evidence of reported abuse, listed daily on the Regulation SHO Threshold List, have seen similar SEC investigations taken against company without any resultant findings and yet Mr. Greenberg has never questioned who was behind those questionable SEC investigations. Greenberg is upset, however, because one company he frequently trashes is fighting back and turning the tides on the negative rumor mongers.
According to the transcripts of the US Prosecutors case against Anthony Elgindy, short sellers routinely seek out the SEC to investigate companies they have taken a short interest in. The Elgindy trial contained testimony from SEC Attorneys whom Elgindy contacted regarding investigations he thought was necessary. The interest by the short seller is to cast a negative light on the company, even if only temporary, in order to drive down the stock and create profits on the short positions. Elgindy was convicted of securities fraud and extortion and faces a possible life sentence. Mr. Greenberg has never written these sides of the story although several of the companies he has trashed over recent years have had this type “investigation” occur.
In an article published by Joe Nocera of the NY times Mr. Nocera states:
“In addition to his conspiracy-mongering, Mr. Byrne talked about Stinger missiles, Wayne and Garth, a mysterious Spanish phone message, stuttering and cocaine. ("I'm not a coke head," he said, unprompted.)
But I'm not laughing anymore. I've gone from viewing Mr. Byrne as an amusing diversion to a menace, at least for anyone who cares about the First Amendment. What has become increasingly clear in the months since the Sith Lord speech is that Mr. Byrne is using the courts, the Internet, his taunting e-mails — and even his conspiracy theory — as part of a thinly disguised effort to squelch any and all criticism of Overstock, a company with $804 million in sales last year.”
Nocera later identifies that he is a long time personal friend and associate of Herb Greenberg. That certainly puts this defamatory attack into perspective.
Like Greenberg, Nocera alludes to a conspiracy taking place. Is Herb and Joe not now becoming the “tin-foil hat” crowd of conspiracy theorists?
The Securities and Exchange Commission acted upon a complaint filed before them and initiated an investigation. The investigation led to a subpoena against Gradient Analytics which later, we surmise, led to subpoena’s against Carol Remond and Herb Greenberg. Is it now the intention of Greenberg, Nocera, and other journalists to infer that the SEC was acting solely on the accounts of Patrick Byrne? That the SEC was willing to violate a Constitutional right without supportive evidence to back up such a bold move? Talk about conspiracy-mongering!
Patrick Byrne, wealthy compared to most of us, still has a net worth that pales in comparison to the likes of SAC Capital’s Steven Cohen. If the SEC’s actions were solely based on complaints leveraged with wealth, Cohen holds the better hand. Greenberg and Nocera are aware of that fact and simply use their bias to leave it out of the discussions. The notion that Byrne concocted a story that led to these subpoenas is absurd.
What I find even more amusing about these financial journalists, reporters, or hacks if the shoe fits is that not once have they, short of a select few, even admitted to what is already proven fact. Naked shorting is reality and a focus of the regulators.
Nocera states in his column that Greenberg “is one of the straightest shooters I know.” Ironically, that is how many friends and associates described the CEO’s that were taken down by scandal over these past years. Is it a shock that the inner circle of friends is the last to admit the truth? OJ Simpson still has friends that vouch for his integrity. Need we go any further?
Emanual Friedman was a respected member of Wall Street. Emanuel Friedman has now resigned his post as co-CEO of Friedman, Billings, and Ramsey due to alleged naked shorting abuse. Nocera and Greenberg have dismissed this as fact and provided little space about how this could take down a respected CEO.
Other cases like Scott Ryan running illegal shorts through his market making firm for several Hedge Funds, Hedge Fund manager Hilary Shane running her illegal shorts through First New York, Manager Guillaume Pollet running illegal shorts through SG Cowen, Hedge Fund Manager John Mangan running illegal shorts through HLM Securities, and TradeStation running illegal short sales through Bear Stearns have all been recent regulatory cases. Greenberg and Nocera rarely if ever discuss this growing trend of enforcement agenda’s but instead they take out space in their publications condemning Patrick Byrne for bringing awareness to an issue the financial press are too conflicted to address.
The financial press has a role to play to this nation and it is a role that should be taken with the utmost integrity. Those that consider using the First Amendment right of free speech to aid illegal activities have no standing to the constitutional rights of free speech.
The flurry of reports regarding the SEC’s activities in issuing subpoenas to Greenberg and Remond is expected. What is not expected, and to be considered unprofessional, are the articles that have been published by the likes of Joe Nocera.
Nocera’s personal attack on Patrick Byrne, insinuating Byrne had anything to do with a Federal agency risking First Amendment rights in investigating securities fraud, is deplorable. It was without merit and was carried no supportive material to back up the claims. Nocera’s limited investigation into the facts as presented make his actions nothing short of a defaming public attack and the NY Times should take the appropriate actions against such publications. If Nocera is concerned about the First Amendment rights, he should be equally concerned that those rights are not abused for illicit activities if that were in fact taking place.
The readers of Greenberg, Nocera, and other financial press are receiving a disservice as these conflicted reporters are unwilling to alert the investing public of a potential crime against their financial futures. It just may be that the SEC has uncovered, in the course of their investigations, that there is a more sinister reason behind their silence.
That is the story that should be openly discussed in the media publications.
Naked Shorting is real and it will continue to bring upon us news of how damaging the practice is to our markets. The actions recently taken by the SEC enlighten us to the depth of the issue and the lengths they are willing to go to address it. The subpoenas were no small step and certainly were not a step to be taken under such a microscope on a “non-issue.”
The people have a Fifth Amendment right to property and that is being stolen through Wall Street fraud. Nocera, Greenberg, and other financial press appear willing to give up that right of yours while standing on a pulpit preaching their personal right to free speech whether that speech was done for legal or illegal reasons.
For more on this issue please visit the Host site at www.investigatethesec.com .
Copyright 2006