Funny to see you quoting thestreet.com, since you are always trashing anyone from there that posts a negative article about OSTK. And as far the investigation, nobody was holding a gun to anyone's head to short hard to borrow stock. If the cost is too high, then don't short the friggin' thing. These are all big boys, and not some mom and pop being taken advantage of. Laissez-Faire I say.
http://www.forbes.com/business/2006/09/14/bawag-refeco-arrest-biz_services_cx_lm_0914refco.html Look at the acton in SHO stocks. BUy ins have started.
Byrne on the Radio Tonight, September 17, 8-10pm Eastern time. It's a call in type show, so ask your questions. The stream is at KFYI.com. Here is the rest of the agenda. Program: The Terry Gilberg Show, KFYI-AM, Phoenix Date: Sunday, September 17 The show starts at 5:00 p.m. Local Time. The first hour will tentatively be about Taser The second hour (6pm) will be all Patrick Host: Terry Gilberg Format: Live talk radio show Topic: Naked short selling; Gradient lawsuit; Overstock; Taser Duration: 1 or 2 hours (depending on whether Patrick is on the first hour) Finishes up at 7pm
Ran across this today: CFA Institute came out in defense of negative research published on OSTK: CFA Institute Says Overstock.com Case Infringes Analyst Independence Unless Reversed, Lower Court Decision Will Have âChilling Effectâ on Analystsâ Ability to Provide Objective and Independent Research https://www.cfainstitute.org/aboutus/press/release/06releases/20060905_01.html A bit on the periphery of the OSTK saga, but interesting nonetheless.
Calif AG wrote an Amicus Brief IN FAVOR of OSTK. This boils down to the rule of law. Byrne has deliberately played down OSTK in favor of the whole problem, and it's a huge problem. The liability is just unbelievable. And I do believe the time is here for the end. It just depends what day Justice moves. It' s very difficult to make a Fed case, but the Bawag arrest last week was the beginning. Bawag/Refco destroyed hundreds of companies. One company who did the research told me they found 310, so it has to be more than that. they had to miss some. And that's just one entity. Estimates run to 2000. They'll be class action suits vs. Prime brokers for years, because many of the funds are in Eastern Europe, and they'll just melt away. They draw down credit every day, leaving time bombs behind. Oh well. Not my problem anymore. But I hope to make some money in the squeeze of the century.
This disproves the "they're all shit companies" defense........... Banking Fund's in 'Naked Shorting' Hot Water By Matthew Goldstein Wall Street Editor 9/25/2006 7:13 AM EDT URL: http://www.thestreet.com/newsanalysis/banking/10310715.html Securities regulators are investigating whether a big hedge fund tried to cash in on the havoc that Hurricane Katrina wrought late last summer. The unidentified hedge fund allegedly made improper short sales in shares of New Orleans-based Hibernia just as Katrina was laying waste to the bank's hometown, sources say. The hedge fund sought to profit from Wall Street speculation that the devastation caused by Katrina would force Capital One (COF) to cut the price of its planned acquisition of Hibernia. Shorting a stock, or betting on its decline, is legal -- even if it means benefiting from someone else's misery. But the Securities and Exchange Commission is investigating allegations that the hedge fund ran afoul of securities laws by shorting Hibernia shares without first borrowing them from a broker. In effect, the SEC is looking into the possibility that the hedge fund engaged in "naked shorting." In traditional short sale, a bearish trader must first borrow shares from a broker and then sell them. The trader then hopes to pay off the loan at a later date with stock purchased at a lower price, pocketing the difference as profit. But naked shorting lets traders defy the laws of supply and demand by shorting even when shares aren't available to borrow. Over the past year, allegations of naked shorting have become rampant on Wall Street. Some executives have tried to paint short-sellers as merchants of evil who will stop at nothing in their effort to drag down healthy businesses. But clouding these claims is the fact that many of the supposed corporate victims either aren't profitable or face other problems -- raising the question of whether chicanery is really driving the decline in their shares. Sources say the SEC began its inquiry into the alleged improper shorting several months ago. Regulators have since questioned people at the hedge fund, as well as the brokers who executed the short-sales for the fund. An SEC spokesman declined to comment. A Capital One spokeswoman didn't return a phone call seeking comment. The issue of just how widespread naked shorting is remains a matter of considerable dispute. Some contend the unsavory practice has all but disappeared since the NASD and SEC instituted new rules last year making it more difficult to engage in naked shorting. The new rules, commonly referred to as Regulation SHO, prohibit brokers from letting traders short a stock unless there are "reasonable grounds" for believing there are shares available to borrow. But the latest allegations, if true, are an indication that naked shorting may still be going on in some circumstances. More significant, the allegations arise from a merger involving two large banks, as opposed to some money-losing smaller company. It's easy to see why a hedge fund would have wanted to short shares of Hibernia in the wake of Katrina. The bank's deal with Capital One was scheduled to close on Sept. 1, 2005, just days after Katrina made landfall. There was a lot of speculation in the market that the closing would be delayed and that Capital One might seek to slash the purchase price. In fact, late in the day on Aug. 31, the banks did reschedule the planned closing. They first pushed it back to Sept. 7, citing "the devastation and disruption caused by Hurricane Katrina." That day the banks delayed the closing again, saying they had renegotiated the purchase price lower by $350 million, to $5 billion. The hedge fund that's under investigation allegedly pocketed a tidy profit from its shrewd bet, given the approximate $3 slide in the share price of Hibernia during the week the deal was in flux. Sources say the hedge fund could not find any shares of Hibernia to borrow. That's because so much of the stock had been taken out circulation in anticipation of the deal with Capital One closing as intended on Sept. 1. In mergers, shareholders of the company being acquired must "tender" their shares to their broker in order to collect on the payout. When the shares are tendered, they are taken out of circulation and can't be lent out by brokers. When Capital One and Hibernia delayed the closing of the deal, the shares tendered by Hibernia stockholders remained locked up and out of circulation. This made the stock hard to borrow -- and thus nearly impossible to short properly. Yet sources say the hedge fund under investigation went ahead and shorted Hibernia anyway. The fund allegedly told brokers at big Wall Street firm that it was borrowing shares from another brokerage. The brokers apparently believed the hedge fund and executed the trades. --------------------------------------------------------------------------------
This is PIPE related and naked shorting related. Notice, they get her on insider trading because she, well,...... she knew. It's serious because the magic words are "Federal Prosecuters". These guys are already bent outta shape because Elgindy got to two of their own, and I believe that they will be ruthless in ratting out these bastards. Hedge fund manager charged with insider trading NEW YORK (MarketWatch) -- Federal prosecutors on Monday said they charged former hedge fund manager Hilary Shane with five counts of securities fraud and insider trading in the stock of Compudyne Corp. Shane, 39, allegedly sold Compudyne shares short in 2001, based on the material, non-public information that Compudyne was engaged in a private investment in public equity (PIPE) offering. Prosecutors allege Shane, and the fund she managed, made $315,000 in profits from the short sales. Shane faces a maximum sentence on each count of 20 years in prison and a fine of $5 million or twice the gross gain or gross loss from the offense, according to the U.S. Attorney's Office for the Southern District of New York