Post by kranker on Dec 10, 2005 16:53:50 GMT -4
July 4, 2005
Cynthia A. Glassman
U.S. Securities and Exchange Commission
Dear Ms. Glassman:
Read with interest the transcript of your June 15, 2005 speech to the SEC gathering and have to say I liked what you said and the way you said it. It seemed you were genuinely interested in conveying your honest assessment of where the SEC is positioned during this pivotal moment.
You graciously extended your invitation for questions at the end of your remarks, however not having been there, I am taking the liberty of now raising my hand in hopes of getting your attention for at least a moment (assuming your late permission, of course).
First, I’m wondering if you could comment on what some are calling “Stockgate”, the emerging story of the convoluted market phenomenon termed “Naked Shorting” (also termed “Failures to Deliver”). Both terms are now thought to be doublespeak for electronic counterfeiting of market securities. As you are no doubt aware, Chairman Donaldson appeared before Utah’s Senator Bennett and the Senate Banking Committee earlier this year and demonstrated a cavalier and frankly embarrassing lack of understanding on the issue. Not amused or at all satisfied, Bennett ordered Donaldson to regroup and come back with some answers. Will you (or perhaps Annette Nazareth) be appearing in his stead or will the Committee likely wait for Congressman Cox?
Second, I have read statements by Regulatory Chief, Annette Nazareth, approving of this dark phenomenon in the interests of “market liquidity”. Please correct me if I’m wrong but isn’t it true that the SEC’s Regulation SHO was recently enacted to ostensibly cure a problem certain SEC Regulators (including Nazareth) steadfastly refuse to acknowledge? Particularly troubling to many is the “Grandfather” clause of the Regulation that in a swoop unilaterally legitimized all past failures to deliver without so much as a fine, a slap on the wrist or the naming of anyone involved. Might you say a few words on the reasons behind the blanket pardon of all past illegal activity?
Third, please comment on the SEC’s relationship with the DTC. As I understand it, the DTC is largely self-regulating and subject only to your oversight. Moreover, isn't it true that the SEC & DTC are the only keepers of salient information on exactly who’s short what? During a recent Administrative Hearing (re CMKX) SEC attorneys devoted extraordinary efforts to keeping the lid on the naked short issue offered in evidence by an attorney representing an astounding number (5,600) of concerned shareholders holding an astounding number (315 Billion) of documented shares. Why the desperate secrecy about who is short what? “Transparency” seems to be the Washington buzzword of the month but is hardly in evidence in action. Please also comment on why the DTC adamantly refuses to open their books and why the SEC blithely allows them that refusal; this seems the antithesis of “transparency” and smells (to some of us) like a particularly fetid cover-up.
I know you are extremely busy these days (congratulations on your interim appointment) but a few words of on-point explanation to a small fish investor concerned about the (apparent) lack of a level playing field would be greatly appreciated. If the rationalization for ignoring counterfeit shares centers on “friendly fire” or “collateral damage” (as argued by Nazareth) thousands of small investors are as a result systematically cheated of their investment and retirement money for “the greater good” of the market. At the end of the day (small fish or not), I would like to think I’m an investor the SEC is mandated to look after and protect. In all honesty, right now I don’t feel protected at all from what I view as duplicitous and well-connected shark-sized piranhas on an out-of-control feeding frenzy. Small fish investors throughout our country are being eaten alive.
Thanks in advance for your reply. I would really like to regain my confidence in the financial markets. If I am off base please correct me; if I’m on base (or even partly on) please suggest a solution.
As interim Chairman, you are uniquely positioned at this moment…will you help?
Yours truly,
XXXXXXXX
XXXXXXXX
Cynthia A. Glassman
U.S. Securities and Exchange Commission
Dear Ms. Glassman:
Read with interest the transcript of your June 15, 2005 speech to the SEC gathering and have to say I liked what you said and the way you said it. It seemed you were genuinely interested in conveying your honest assessment of where the SEC is positioned during this pivotal moment.
You graciously extended your invitation for questions at the end of your remarks, however not having been there, I am taking the liberty of now raising my hand in hopes of getting your attention for at least a moment (assuming your late permission, of course).
First, I’m wondering if you could comment on what some are calling “Stockgate”, the emerging story of the convoluted market phenomenon termed “Naked Shorting” (also termed “Failures to Deliver”). Both terms are now thought to be doublespeak for electronic counterfeiting of market securities. As you are no doubt aware, Chairman Donaldson appeared before Utah’s Senator Bennett and the Senate Banking Committee earlier this year and demonstrated a cavalier and frankly embarrassing lack of understanding on the issue. Not amused or at all satisfied, Bennett ordered Donaldson to regroup and come back with some answers. Will you (or perhaps Annette Nazareth) be appearing in his stead or will the Committee likely wait for Congressman Cox?
Second, I have read statements by Regulatory Chief, Annette Nazareth, approving of this dark phenomenon in the interests of “market liquidity”. Please correct me if I’m wrong but isn’t it true that the SEC’s Regulation SHO was recently enacted to ostensibly cure a problem certain SEC Regulators (including Nazareth) steadfastly refuse to acknowledge? Particularly troubling to many is the “Grandfather” clause of the Regulation that in a swoop unilaterally legitimized all past failures to deliver without so much as a fine, a slap on the wrist or the naming of anyone involved. Might you say a few words on the reasons behind the blanket pardon of all past illegal activity?
Third, please comment on the SEC’s relationship with the DTC. As I understand it, the DTC is largely self-regulating and subject only to your oversight. Moreover, isn't it true that the SEC & DTC are the only keepers of salient information on exactly who’s short what? During a recent Administrative Hearing (re CMKX) SEC attorneys devoted extraordinary efforts to keeping the lid on the naked short issue offered in evidence by an attorney representing an astounding number (5,600) of concerned shareholders holding an astounding number (315 Billion) of documented shares. Why the desperate secrecy about who is short what? “Transparency” seems to be the Washington buzzword of the month but is hardly in evidence in action. Please also comment on why the DTC adamantly refuses to open their books and why the SEC blithely allows them that refusal; this seems the antithesis of “transparency” and smells (to some of us) like a particularly fetid cover-up.
I know you are extremely busy these days (congratulations on your interim appointment) but a few words of on-point explanation to a small fish investor concerned about the (apparent) lack of a level playing field would be greatly appreciated. If the rationalization for ignoring counterfeit shares centers on “friendly fire” or “collateral damage” (as argued by Nazareth) thousands of small investors are as a result systematically cheated of their investment and retirement money for “the greater good” of the market. At the end of the day (small fish or not), I would like to think I’m an investor the SEC is mandated to look after and protect. In all honesty, right now I don’t feel protected at all from what I view as duplicitous and well-connected shark-sized piranhas on an out-of-control feeding frenzy. Small fish investors throughout our country are being eaten alive.
Thanks in advance for your reply. I would really like to regain my confidence in the financial markets. If I am off base please correct me; if I’m on base (or even partly on) please suggest a solution.
As interim Chairman, you are uniquely positioned at this moment…will you help?
Yours truly,
XXXXXXXX
XXXXXXXX