Post by kranker on Dec 10, 2005 17:38:16 GMT -4
The Real Deal
No agenda, no talking points, just facts.
By Thomas Catino
Chief Architect, Columnist
March 2005
Market Tragedy: The Failure of Market Regulation Amid the Naked Short Selling Scandal
The Securities and Exchange Commission has finally adopted Regulation SHO. The SEC has stated that its goal in adopting this new regulation would “among other things, require short sellers in all equity securities to locate securities to borrow before selling, and would also impose strict delivery requirements on securities where many sellers have failed to deliver the securities.” This has apparently not been effective as thousands of investors have yet to see any impact on individual corporations that have been plagued by this massive problem.
After the implementation of Regulation SHO, many in the investment world would believe that the naked shorting problem would be history. However blatant manipulation and naked shorting have overcome one particular company. Could someone buy the entire publicly available shares of a corporation, and not have any impact on the price per share? If you answer no, think again. On February 3, 2005, a person acquired 1,158,209 shares, constituting 100 percent of the issued and outstanding common stock of Global Links Corp. (OTCBB: GLKCE) through the open market. Since then, millions of shares have traded with little price appreciation, suggesting that fake shares of the company are being circulated. Where is the Securities and Exchange Commission when you need them?
The prime example of the ongoing battle against naked shorting is the case of Global Links Corporation. In a letter to shareholders, Frank J. Dobrucki, President and CEO of Global Links Corp. said that, "I cannot tell you how may shares have been sold or how many stockholders have demanded delivery of their shares. I believe that this number is much higher than the stock we have available. I strongly encourage our stockholders to demand delivery of their shares." He also believes that it is "very clear that we had no control of the volume or price of our stock in anyway. Outside forces were now manipulating our stock." With the pulling of certificates, the naked shorting issue can now clearly come to light. Justice may finally be served.
Another instance where naked shorting has come into the spotlight has been in Congress. In a hearing in the US Senate Committee, Senator Robert Bennett spoke about the issue of naked shorting with Chairman William Donaldson of the SEC. In his beginning remarks, Senator Bennet said that the SEC “…put out a new rule in January to deal with naked short selling, and as nearly as I can tell from my constituents, who feel victimized by this, it's not working." Senator Bennet then discussed an article about a little unknown company called Global Links Corp. and believes how it is representative of the practice of people “still selling short shares that they don't have and clearly are never gonna acquire."
In response, Chairman Donaldson tried to discuss the recently instituted Regulation SHO that helps to eliminate the naked shorting problem. To conclude, Senator Bennet stated that his main message was to help bring out evidence to show that the new regulations are not working.
Therefore, there still is a wait to see if investors and publicly traded corporations can finally invest in a market where there is a fair level playing field. The horrible damage naked shorting continues to impose can be avoided if the SEC takes forceful action that will change these terrible practices. Will the SEC act vigorously to prevent naked shorting through strict enforcement of Regulation SHO? Time will tell.
www.antandsons.com/therealdeal/
No agenda, no talking points, just facts.
By Thomas Catino
Chief Architect, Columnist
March 2005
Market Tragedy: The Failure of Market Regulation Amid the Naked Short Selling Scandal
The Securities and Exchange Commission has finally adopted Regulation SHO. The SEC has stated that its goal in adopting this new regulation would “among other things, require short sellers in all equity securities to locate securities to borrow before selling, and would also impose strict delivery requirements on securities where many sellers have failed to deliver the securities.” This has apparently not been effective as thousands of investors have yet to see any impact on individual corporations that have been plagued by this massive problem.
After the implementation of Regulation SHO, many in the investment world would believe that the naked shorting problem would be history. However blatant manipulation and naked shorting have overcome one particular company. Could someone buy the entire publicly available shares of a corporation, and not have any impact on the price per share? If you answer no, think again. On February 3, 2005, a person acquired 1,158,209 shares, constituting 100 percent of the issued and outstanding common stock of Global Links Corp. (OTCBB: GLKCE) through the open market. Since then, millions of shares have traded with little price appreciation, suggesting that fake shares of the company are being circulated. Where is the Securities and Exchange Commission when you need them?
The prime example of the ongoing battle against naked shorting is the case of Global Links Corporation. In a letter to shareholders, Frank J. Dobrucki, President and CEO of Global Links Corp. said that, "I cannot tell you how may shares have been sold or how many stockholders have demanded delivery of their shares. I believe that this number is much higher than the stock we have available. I strongly encourage our stockholders to demand delivery of their shares." He also believes that it is "very clear that we had no control of the volume or price of our stock in anyway. Outside forces were now manipulating our stock." With the pulling of certificates, the naked shorting issue can now clearly come to light. Justice may finally be served.
Another instance where naked shorting has come into the spotlight has been in Congress. In a hearing in the US Senate Committee, Senator Robert Bennett spoke about the issue of naked shorting with Chairman William Donaldson of the SEC. In his beginning remarks, Senator Bennet said that the SEC “…put out a new rule in January to deal with naked short selling, and as nearly as I can tell from my constituents, who feel victimized by this, it's not working." Senator Bennet then discussed an article about a little unknown company called Global Links Corp. and believes how it is representative of the practice of people “still selling short shares that they don't have and clearly are never gonna acquire."
In response, Chairman Donaldson tried to discuss the recently instituted Regulation SHO that helps to eliminate the naked shorting problem. To conclude, Senator Bennet stated that his main message was to help bring out evidence to show that the new regulations are not working.
Therefore, there still is a wait to see if investors and publicly traded corporations can finally invest in a market where there is a fair level playing field. The horrible damage naked shorting continues to impose can be avoided if the SEC takes forceful action that will change these terrible practices. Will the SEC act vigorously to prevent naked shorting through strict enforcement of Regulation SHO? Time will tell.
www.antandsons.com/therealdeal/