Post by kranker on Dec 10, 2005 18:12:00 GMT -4
CardioTech Shares Have Been 'Naked Shorted'
Wednesday April 20, 12:06 pm ET
WILMINGTON, Mass., April 20 /PRNewswire-FirstCall/ -- CardioTech International, Inc. (Amex: CTE - News) today announced that a website entitled BUYINS.NET has listed CTE as one of the companies that has been on the "fails to deliver list" for at least 5 consecutive trading days. Once the investigators at BUYINS.NET "determine that a company is being shorted, they find out at what price the stock is being shorted, what amount of shares have been shorted, and with enough investigation, who is illegally shorting the stock."
According to BUYINS.NET: "For decades Wall Street has been an enabler to nefarious trading activity in US stocks. By allowing short sellers to attack US stocks and sell stock that they do not own, a counterfeit stock printing press has gone unchecked. Even though the NASD and SEC have regulations that govern the legal short selling of stocks, there are countless loopholes that onshore and offshore institutions use to relentlessly attack US companies. This illegal activity is called naked short selling."
The following is an excerpt of a book entitled: "Naked Short Selling: The Illegal Hacking of the US Financial System" by Alan Lomax: "Naked shorting is the illegal practice of short selling shares that may not even exist. Phantom stocks, ghost longs, and other forms of naked shorts flood the market with unaccounted-for-shares, causing a devaluation of the legitimate share price of many companies' shares. There is no more pressing issue than dealing with the failure of our securities system to provide authentic and accountable trading for investors. This scheme deprives companies of their ability to finance themselves and grow, it robs investors of millions of dollars in potential profits, and it costs the U.S. economy untold billions of dollars. The culprits range from unscrupulous traders, offshore hedge funds, or other nefarious groups willing to employ the practice to circumvent the stock clearing systems in place today and undermine your stock."
Mr. Lomax continues: "There may be loopholes in the clearing system that allow the unscrupulous to take advantage of a company by manipulating its stock through naked short selling. Within the Depository Trust and Clearing Corporation (DTCC), for instance, there is stock pool set aside to help members that come up short during the day. Such stock can be borrowed by market makers who promise to make good on the missing certificates -- eventually. There is an SEC rule (15c3-3) that allows for temporary lags in the possession of shares, provided that the broker or dealer takes timely steps in good faith to establish account control. This constitutes an area of ambiguity that is rather ominous and wide. The SEC has put out for public comment 'Rule SHO' which will attempt to rectify certain loopholes in the legality of the trading systems. The key point is that there is a loophole that exposes the system to manipulation and abuse -- much to the potential harm of companies that are targets of naked short selling."
Matthew Godstein, Senior Writer for TheStreet.com, stated in his February 2, 2005 article: "Securities regulators have been conducting a sweeping investigation into allegations of manipulative trading in the private investment in public equity (PIPE) market. Last spring, the SEC issued subpoenas and requests for documents to 20 brokerages that have arranged PIPE deals for cash-strapped companies. Regulators subsequently issued subpoenas to about 10 hedge funds. The SEC is working in tandem with a parallel inquiry by regulators at the NASD. The investigation into the $14 billion PIPEs market is focusing on allegations of stock manipulation by hedge funds, which tend to be the biggest investors in these shadowy stock sales, and allegations of wrongdoing by the Wall Street firms that arrange the deals. PIPEs are popular with hedge funds because, unlike with typical secondary or follow-on offerings priced at market rates, the buyers can get preferred stock or bonds that convert into shares at a discount to market prices."
Mr. Goldstein further stated: "Regulators are looking for evidence that a select group of investors took unfair advantage of the typical decline in a company's share price after announcement of a stock placement. The regulators are concerned that some hedge funds found out prematurely that a company was considering a pipe deal. With that inside information, a hedge fund could then set up a short position on stock, betting that a flood of discounted shares will drive down the price, then cover those shorts with the discounted shares in the PIPE."
Michael Szycher, Ph.D., Chairman and Chief Executive Officer of CardioTech commented: "We encourage our shareholders to go directly to the www.buyins.net, and search for the CTE symbol on the upper right hand corner of the window. In the past months, our share price has experienced a significant decline, in my opinion unrelated to the fundamentals of the company. Naked shorting may well be a factor in this decline."
CardioTech believes that this release contains forward-looking statements that are subject to risks and uncertainties. Such statements are based on management's current expectations and are subject to facts that could cause results to differ materially from the forward-looking statements. For further information you are encouraged to review CardioTech's filings with the Securities and Exchange Commission.
For more information please contact:
Michael Szycher, Ph.D.
CEO
978 657 0075
--------------------------------------------------------------------------------
Source: CardioTech International, Inc.
biz.yahoo.com/prnews/050420/new043.html?.v=2
Wednesday April 20, 12:06 pm ET
WILMINGTON, Mass., April 20 /PRNewswire-FirstCall/ -- CardioTech International, Inc. (Amex: CTE - News) today announced that a website entitled BUYINS.NET has listed CTE as one of the companies that has been on the "fails to deliver list" for at least 5 consecutive trading days. Once the investigators at BUYINS.NET "determine that a company is being shorted, they find out at what price the stock is being shorted, what amount of shares have been shorted, and with enough investigation, who is illegally shorting the stock."
According to BUYINS.NET: "For decades Wall Street has been an enabler to nefarious trading activity in US stocks. By allowing short sellers to attack US stocks and sell stock that they do not own, a counterfeit stock printing press has gone unchecked. Even though the NASD and SEC have regulations that govern the legal short selling of stocks, there are countless loopholes that onshore and offshore institutions use to relentlessly attack US companies. This illegal activity is called naked short selling."
The following is an excerpt of a book entitled: "Naked Short Selling: The Illegal Hacking of the US Financial System" by Alan Lomax: "Naked shorting is the illegal practice of short selling shares that may not even exist. Phantom stocks, ghost longs, and other forms of naked shorts flood the market with unaccounted-for-shares, causing a devaluation of the legitimate share price of many companies' shares. There is no more pressing issue than dealing with the failure of our securities system to provide authentic and accountable trading for investors. This scheme deprives companies of their ability to finance themselves and grow, it robs investors of millions of dollars in potential profits, and it costs the U.S. economy untold billions of dollars. The culprits range from unscrupulous traders, offshore hedge funds, or other nefarious groups willing to employ the practice to circumvent the stock clearing systems in place today and undermine your stock."
Mr. Lomax continues: "There may be loopholes in the clearing system that allow the unscrupulous to take advantage of a company by manipulating its stock through naked short selling. Within the Depository Trust and Clearing Corporation (DTCC), for instance, there is stock pool set aside to help members that come up short during the day. Such stock can be borrowed by market makers who promise to make good on the missing certificates -- eventually. There is an SEC rule (15c3-3) that allows for temporary lags in the possession of shares, provided that the broker or dealer takes timely steps in good faith to establish account control. This constitutes an area of ambiguity that is rather ominous and wide. The SEC has put out for public comment 'Rule SHO' which will attempt to rectify certain loopholes in the legality of the trading systems. The key point is that there is a loophole that exposes the system to manipulation and abuse -- much to the potential harm of companies that are targets of naked short selling."
Matthew Godstein, Senior Writer for TheStreet.com, stated in his February 2, 2005 article: "Securities regulators have been conducting a sweeping investigation into allegations of manipulative trading in the private investment in public equity (PIPE) market. Last spring, the SEC issued subpoenas and requests for documents to 20 brokerages that have arranged PIPE deals for cash-strapped companies. Regulators subsequently issued subpoenas to about 10 hedge funds. The SEC is working in tandem with a parallel inquiry by regulators at the NASD. The investigation into the $14 billion PIPEs market is focusing on allegations of stock manipulation by hedge funds, which tend to be the biggest investors in these shadowy stock sales, and allegations of wrongdoing by the Wall Street firms that arrange the deals. PIPEs are popular with hedge funds because, unlike with typical secondary or follow-on offerings priced at market rates, the buyers can get preferred stock or bonds that convert into shares at a discount to market prices."
Mr. Goldstein further stated: "Regulators are looking for evidence that a select group of investors took unfair advantage of the typical decline in a company's share price after announcement of a stock placement. The regulators are concerned that some hedge funds found out prematurely that a company was considering a pipe deal. With that inside information, a hedge fund could then set up a short position on stock, betting that a flood of discounted shares will drive down the price, then cover those shorts with the discounted shares in the PIPE."
Michael Szycher, Ph.D., Chairman and Chief Executive Officer of CardioTech commented: "We encourage our shareholders to go directly to the www.buyins.net, and search for the CTE symbol on the upper right hand corner of the window. In the past months, our share price has experienced a significant decline, in my opinion unrelated to the fundamentals of the company. Naked shorting may well be a factor in this decline."
CardioTech believes that this release contains forward-looking statements that are subject to risks and uncertainties. Such statements are based on management's current expectations and are subject to facts that could cause results to differ materially from the forward-looking statements. For further information you are encouraged to review CardioTech's filings with the Securities and Exchange Commission.
For more information please contact:
Michael Szycher, Ph.D.
CEO
978 657 0075
--------------------------------------------------------------------------------
Source: CardioTech International, Inc.
biz.yahoo.com/prnews/050420/new043.html?.v=2