January 21, 2007
The Honorable Christopher Cox Chairman
Securities and Exchange Commission
100 F Street, NE
Washington, D.C. 20549
I hereby submit the following article that I find germane to the subject matter at hand.
Arizona Pushes Bill That Requires Brokers To Divulge FTDs To State Posted by:bobo 1/12/2007 8:48:00 PM
It seems that the Utah bill that required brokers to report their naked short positions has gained momentum, with AZ entering the mix with a bill of its own.
To view the SIA NYSE member firm spreadsheet showing $63 billion in delivery and receipt failures as of Q2, 2006, click here
Visit the new "SEC/Gary Aguirre Cover-Up" section of this site for a compilation of Mr. Aguirre's efforts to expose the SEC's alleged obstruction of justice and whitewashing of insider trading by some of the biggest names on Wall Street.
You know, it's kind of amusing, really.
Wall Street so believes that it can do whatever it wants, and as long as it buys the best politicians it can get on the Beltway, will be allowed to rape the rest of the country with impunity.
Arizona has submitted a bill to its legislature that is now the second state's effort to force the true state of the ugliness that is the failure to deliver crisis to be reported, rather than kept from the public. Given full and public disclosure, viewable by one and all.
You can read the landmark bill here,
What is noteworthy is that the tired, hackneyed arguments about federal preemption due to requiring the poor, besieged brokers to actually reveal the size of the FTD positions won't work on this bill. From my read, it is simply requiring the same reporting that the SEC and the SROs require - so bye bye to that argument. It isn't requiring any new reporting. It is requiring that the current reporting also go to the state.
Read it yourself.
Folks, the message here is that America has had an assfull of Wall Street running roughshod over the idea of the rule of law, and the quaint notion that someone paying real money should receive what they paid for.
A little bird tells me that there are more bills like this coming.
I wonder what the NY financial press is going to say when 5, 10, 15, 20% or more of the country is saying "enough" by initiating this sort of bill?
I wonder how long Congress can pretend that this hasn't become a systemic risk issue that needs the antiseptic of sunlight, versus the status quo heavy veil of secrecy?
2007 is going to be a very, very interesting year, with the NFI suit having been remanded to state court by the federal courts, effectively allowing discovery to proceed. There isn't much to hide behind there for the prime brokers accused of acting as a RICO-qualifying manipulative cartel. The options market makers can expect to be the next to be named in that suit, I would think, as their printing of millions and millions and millions of non-existent shares, and flooding the market with them - resulting in the easily documented current price depression of that company, coinciding with massive and numerous reverse conversions designed to manipulate the price down - is a piece of cake to show as being coordinated and manipulative.
The FFH, Biovail and OSTK suits are moving forward, and we can expect more fun there, I'd bet.
The hedge fund suit against the prime brokers, alleging precisely the coordinated delivery failure alleged in the NFI suit, is also proceeding apace.
And now Utah isn't the only state to be gunning for fair and full disclosure from Wall Street. Arizona is now in the house, and methinks that is the first rumble of a national wave of action.
Wall Street has forgotten the lesson of the Pecora hearings and 1934's legislation. It believes that the nation exists for it to prey upon, with impunity. The SEC has been helping it do so for a while, so one could understand why it behaves the way that it does.
2007 is where the worm turns.
Good job, Arizona. Anyone that is an Arizona resident should express their support for this sunshine bill.
Now wait for the cockroaches and weasels to howl in protest at having their uglies known by Joe Public.
Seems like the masses don't enjoy being screwed if it is easy for them to see how it is being done. And you can bet Wall Street is against any visibility on this topic.
Strap yourself in for the ride.