Post by jcline on Jul 13, 2006 19:21:27 GMT -4
STOCKGATE TODAY
An online newspaper reporting the issues of Securities Fraud
David Patch
Honorable Members of Congress,
It was nearly 2 years ago that the web site www.investigatethesec.com was created. The site originated off a belief that if enough of the people spoke as one Congress would listen. It was created because tens of thousands of investors, and hundreds of public companies perceived that they were being violated by members of the financial industry as the Securities and Exchange Commission looked on. Ultimately, we started the petition because we were losing our financial security and because we felt that the federal agency empowered to protect out financial investments was aiding those who were actually stealing it.
Over the years our web site has been receiving hits from various members of Congress as well as other federal agencies including the Department of Homeland Security, Department of Justice, the US Federal Courts, the US Treasury, the Securities and Exchange Commission, and many others. With companies and investors signing this petition requesting a formal investigation into the activities of the SEC and SEC management, our concerns and requests were overlooked despite being monitored on a regular basis. We have been handedly dismissed as misinformed or simply “whacko’s.”
Honorable Members of Congress, respectfully I ask you to stop overlooking the concerns of the people and of the small public companies abused and begin to act on our requests for a formal criminal investigation into the SEC staff and operations.
This past Friday the NY Times broke what could be the most compelling story of the year and even the decade. At the surface the NY Times article was about an SEC investigation that was halted because of the political connections of the accused. The story concluded with a story of the termination of the SEC Attorney, Gary Aguirre, who was abruptly told to back off on the investigation just prior to being terminated. If that were all there was to the story it would be simple.
For those who look deeper than the surface level subject matter, the supporting documents behind the NY Times story tells a tale of a co-opted federal agency involved in aiding in the financial terrorism against our nation’s people and our nation’s economy. It is a story of a federal agency, trusted by the people to protect our financial well being, abusing that trust by ignoring the fraudulent activities of those who are politically connected.
Effectively the SEC has violated our Constitutions rights to equal and fair protection under the law. The agency did so freely and with total disregard to the Constitution the generations before us put their lives on the line to create and uphold.
For these past years, investors have voiced growing concern with how hedge funds have been manipulating our markets and effectively destroying small business enterprises in the process. These complaints were formally and informally served up to the SEC with supportive evidence in many cases. The investors solicited the support of state regulators who have also raised concerns to the SEC. The SEC’s responses have been to systematically ignore these concerns as they systematically ignored much of the reported fraud exposed over this past decade.
As middle class America and the overall US economy suffered due to the financial destruction of people and local economies, the hedge funds and the wealthy clients in these funds enriched their overflowing portfolios with illegal profits. Mr. Aguirre has now written to members of Congress and explained to them in detail that our concerns are not only factual in nature but that the SEC Chairman and Commission Staff are aware of the issue and are attempting to cover-up the fraud through the obstruction of enforcement activities relating to these concerns.
This issue can stand silent and ignored no longer.
In the Aguirre memo to Congress the former SEC attorney states “Fixing the SEC so it can protect investors and capital markets from hedge fund abuse will not be an easy task. Powerful interests want the SEC to stay just the way it is or, better yet, to become even weaker.”
Honorable Members of Congress, Mr. Aguirre speaks here to you and about you.
The powerful interests spoken of are political interests that must be set aside for the safety of the future generations to come. In this growing nation of power hungry ego’s and class separation we are slowing eating our own alive. We, as a nation, are destroying the working class family and their ability to survive and we are doing so by stealing all financial and emotional stability the middle class family has. As goes the middle class, so goes our nation.
Again I refer to a comment from Mr. Aquirre in his memo to Congress. “Likewise, the value investor has no clue that an attractively priced small cap is on its way to bankruptcy via the naked shorting of an $8 Billion hedge fund.” This bankruptcy is not all about profits and losses but about jobs and personal financial stability.
When a small cap company enters into bankruptcy, the nation is forced to pick up the tab for portions of the debt held by the now bankrupt company. There become tax liabilities and trickle down impacts on suppliers that become absorbed and absorbed by the victims. The market cap of the stock, once part of investor portfolios [household financial stability] is driven to near zero in a manner that negatively impacts every household of every investor in that security while the profits to the particular hedge fund are typically a small overall percentage of the market cap losses. Finally, the local communities that house the employees of these small companies are now faced with a growing population of unemployed individuals.
All this personal and community destruction so some institution and some hedge fund can show a growing profit to feed the appetite of ego and greed.
Honorable Members, I respectfully request that you take this opportunity to initiate the investigation we have petitioned you to initiate these past few years. The Securities and Exchange Commission continues to demonstrate the appearance of being co-opted resulting in the violation of our civil rights to equal protection under the law. Only a co-opted agency would initiate a grandfather clause into law to protect past securities violations. The SEC did just that in Regulation SHO despite concerns voiced by staff members from Congress. I believe the issue has grown to such levels that many employees of the SEC have elected to leave the agency rather than continue to work in such an unethical manner. When this happens, as it appears to be happening more and more, the safety of our financial markets is at its greatest risk.
For example, Paul Berger Assistant Director of Enforcement, resigned from the Commission just weeks prior to Mr. Aguirre’s memo to the members of Congress. It could be a coincidence but an interesting one if it is. The memo lists very few specific names but Paul Berger was one of them. In the memo Mr. Aguirre claims ““Assistant Director Paul Berger – who had very little knowledge of the facts – emphatically stated in my presence that no case would be filed against the suspected tipper, but gave no reason for his decision.” The suspected “tipper” is alleged to be none other than Morgan Stanley Chairman John Mack whose name is frequently raised in possible appointments by President Bush.
Now Mr. Berger is gone as well. Abruptly after 14 years of service and only two weeks before Mr. Aguirre drafted a document to Congress. This is same type of red flag the SEC uses daily to initiate investigations. Please take this as your opportunity to investigate and take all appropriate actions necessary.
In conclusion, Mr. Aguirre claims that cleaning up the SEC and Wall Street will be a difficult task. Here I disagree. The Honorable members of Congress can do it almost instantly.
Those that have violated the people’s trust must be brought to justice under criminal charges. The Constitution does not come with varying degrees of protection based on personal net worth or political connections. It comes only with the blood of those who fought to create it. Usually the blood of the lower and middle class we now look to systematically destroy.
Furthermore, Wall Street executives must begin to be held personally accountable for the illegal activities of the companies they are so highly compensated to manage. The federal government should be using the same legal ambitions we have seen taken when going up against the corporate executives of our publicly traded companies and direct that ambition at these Wall Street Executives who turns a blind eye to illegal activities within their firms. Wall Street fraud creates a thousand times more victims than any individual company and must therefore the executives of these firms must be held to equal or higher levels of personal accountability. Today the SEC has held each to lower standards than a corporate executive and we see the results of this complacency each day when we open our newspapers or turn on the news. Tens of Billions in fines for fraud yet not a single Wall Street Executive held accountable.
Please start the process. For those who are concerned, investigate the SEC staff and SEC operations.
Respectfully,
David Patch
(and the petitioners at http://www.investigatethesec.com)
An online newspaper reporting the issues of Securities Fraud
David Patch
Honorable Members of Congress,
It was nearly 2 years ago that the web site www.investigatethesec.com was created. The site originated off a belief that if enough of the people spoke as one Congress would listen. It was created because tens of thousands of investors, and hundreds of public companies perceived that they were being violated by members of the financial industry as the Securities and Exchange Commission looked on. Ultimately, we started the petition because we were losing our financial security and because we felt that the federal agency empowered to protect out financial investments was aiding those who were actually stealing it.
Over the years our web site has been receiving hits from various members of Congress as well as other federal agencies including the Department of Homeland Security, Department of Justice, the US Federal Courts, the US Treasury, the Securities and Exchange Commission, and many others. With companies and investors signing this petition requesting a formal investigation into the activities of the SEC and SEC management, our concerns and requests were overlooked despite being monitored on a regular basis. We have been handedly dismissed as misinformed or simply “whacko’s.”
Honorable Members of Congress, respectfully I ask you to stop overlooking the concerns of the people and of the small public companies abused and begin to act on our requests for a formal criminal investigation into the SEC staff and operations.
This past Friday the NY Times broke what could be the most compelling story of the year and even the decade. At the surface the NY Times article was about an SEC investigation that was halted because of the political connections of the accused. The story concluded with a story of the termination of the SEC Attorney, Gary Aguirre, who was abruptly told to back off on the investigation just prior to being terminated. If that were all there was to the story it would be simple.
For those who look deeper than the surface level subject matter, the supporting documents behind the NY Times story tells a tale of a co-opted federal agency involved in aiding in the financial terrorism against our nation’s people and our nation’s economy. It is a story of a federal agency, trusted by the people to protect our financial well being, abusing that trust by ignoring the fraudulent activities of those who are politically connected.
Effectively the SEC has violated our Constitutions rights to equal and fair protection under the law. The agency did so freely and with total disregard to the Constitution the generations before us put their lives on the line to create and uphold.
For these past years, investors have voiced growing concern with how hedge funds have been manipulating our markets and effectively destroying small business enterprises in the process. These complaints were formally and informally served up to the SEC with supportive evidence in many cases. The investors solicited the support of state regulators who have also raised concerns to the SEC. The SEC’s responses have been to systematically ignore these concerns as they systematically ignored much of the reported fraud exposed over this past decade.
As middle class America and the overall US economy suffered due to the financial destruction of people and local economies, the hedge funds and the wealthy clients in these funds enriched their overflowing portfolios with illegal profits. Mr. Aguirre has now written to members of Congress and explained to them in detail that our concerns are not only factual in nature but that the SEC Chairman and Commission Staff are aware of the issue and are attempting to cover-up the fraud through the obstruction of enforcement activities relating to these concerns.
This issue can stand silent and ignored no longer.
In the Aguirre memo to Congress the former SEC attorney states “Fixing the SEC so it can protect investors and capital markets from hedge fund abuse will not be an easy task. Powerful interests want the SEC to stay just the way it is or, better yet, to become even weaker.”
Honorable Members of Congress, Mr. Aguirre speaks here to you and about you.
The powerful interests spoken of are political interests that must be set aside for the safety of the future generations to come. In this growing nation of power hungry ego’s and class separation we are slowing eating our own alive. We, as a nation, are destroying the working class family and their ability to survive and we are doing so by stealing all financial and emotional stability the middle class family has. As goes the middle class, so goes our nation.
Again I refer to a comment from Mr. Aquirre in his memo to Congress. “Likewise, the value investor has no clue that an attractively priced small cap is on its way to bankruptcy via the naked shorting of an $8 Billion hedge fund.” This bankruptcy is not all about profits and losses but about jobs and personal financial stability.
When a small cap company enters into bankruptcy, the nation is forced to pick up the tab for portions of the debt held by the now bankrupt company. There become tax liabilities and trickle down impacts on suppliers that become absorbed and absorbed by the victims. The market cap of the stock, once part of investor portfolios [household financial stability] is driven to near zero in a manner that negatively impacts every household of every investor in that security while the profits to the particular hedge fund are typically a small overall percentage of the market cap losses. Finally, the local communities that house the employees of these small companies are now faced with a growing population of unemployed individuals.
All this personal and community destruction so some institution and some hedge fund can show a growing profit to feed the appetite of ego and greed.
Honorable Members, I respectfully request that you take this opportunity to initiate the investigation we have petitioned you to initiate these past few years. The Securities and Exchange Commission continues to demonstrate the appearance of being co-opted resulting in the violation of our civil rights to equal protection under the law. Only a co-opted agency would initiate a grandfather clause into law to protect past securities violations. The SEC did just that in Regulation SHO despite concerns voiced by staff members from Congress. I believe the issue has grown to such levels that many employees of the SEC have elected to leave the agency rather than continue to work in such an unethical manner. When this happens, as it appears to be happening more and more, the safety of our financial markets is at its greatest risk.
For example, Paul Berger Assistant Director of Enforcement, resigned from the Commission just weeks prior to Mr. Aguirre’s memo to the members of Congress. It could be a coincidence but an interesting one if it is. The memo lists very few specific names but Paul Berger was one of them. In the memo Mr. Aguirre claims ““Assistant Director Paul Berger – who had very little knowledge of the facts – emphatically stated in my presence that no case would be filed against the suspected tipper, but gave no reason for his decision.” The suspected “tipper” is alleged to be none other than Morgan Stanley Chairman John Mack whose name is frequently raised in possible appointments by President Bush.
Now Mr. Berger is gone as well. Abruptly after 14 years of service and only two weeks before Mr. Aguirre drafted a document to Congress. This is same type of red flag the SEC uses daily to initiate investigations. Please take this as your opportunity to investigate and take all appropriate actions necessary.
In conclusion, Mr. Aguirre claims that cleaning up the SEC and Wall Street will be a difficult task. Here I disagree. The Honorable members of Congress can do it almost instantly.
Those that have violated the people’s trust must be brought to justice under criminal charges. The Constitution does not come with varying degrees of protection based on personal net worth or political connections. It comes only with the blood of those who fought to create it. Usually the blood of the lower and middle class we now look to systematically destroy.
Furthermore, Wall Street executives must begin to be held personally accountable for the illegal activities of the companies they are so highly compensated to manage. The federal government should be using the same legal ambitions we have seen taken when going up against the corporate executives of our publicly traded companies and direct that ambition at these Wall Street Executives who turns a blind eye to illegal activities within their firms. Wall Street fraud creates a thousand times more victims than any individual company and must therefore the executives of these firms must be held to equal or higher levels of personal accountability. Today the SEC has held each to lower standards than a corporate executive and we see the results of this complacency each day when we open our newspapers or turn on the news. Tens of Billions in fines for fraud yet not a single Wall Street Executive held accountable.
Please start the process. For those who are concerned, investigate the SEC staff and SEC operations.
Respectfully,
David Patch
(and the petitioners at http://www.investigatethesec.com)