January 24, 2007
Naked shorting is only the tip of the iceberg. I want the problem of fractional ownership of shares to be addressed. Shareholders who think they own a full share only own a fraction of one and they are none the wiser because the system lies to them.
I believe billions of dollars have been illegally transferred from people that work for a living to parasites that don't work based on a misrepresentation on how the stock market operates.
Investors have been told it is an auction market based on supply and demand. This is clearly not the case as the supply is not limited. The back office can borrow in a daisy chain, fail to deliver or hide obligations under repos. that effectively create more than one owner of the same share.
There seems to be such a disconnect between the SEC on the one hand and investors and companies on the other that understand the extent of the problem. I hate to think the worst.
I try to imagine you aren't making excuses and loopholes for the thieves and try to theorize how you could let this corruption to continue.
Is it possible you don't realize how big the problem is?
Has the SEC ever done an audit to compare the global claims on shares in public companies to the actual shares at custodians to back those claims?
It wouldn't surprise me if that ratio was many times to 1, including some of the largest companies.
If you don't have those statistics, is it reasonable for you to make rules in a vacuum?
Do you even have the legal authority to step in front of congress or law enforcement to allow participants to fraudulently represent claims on shares as if they are real shares? I think anyone with a "grandfather obligation" should be criminally investigated for fraud.
It seems to me that the officials at the SEC could be personally responsible when the public begins to understand how the system has been stealing from them.
As you debate this new rule, I request that you make the minutes of that meeting publicly available, so we can be sure there was no industry influence.
The middle class is watching and we fully expect you to introduce fairness into your investment casino.