March 27, 2007
Location: Blogs Dave Patch's Blog
Posted by: dpatch 3/15/2007 4:22 AM
Straight from DC and the US Chamber Summit on Capital Markets is the story the mainstream financial media will not be writing about.
In the QA session with Chairman Cox one in the audience had the opportunity to hit Cox Squarely where he stands. Transcripts below:
AUDIENCE MEMBER: Chairman Cox, Jonathan Johnson, Overstock.com. You have mentioned in the past that abusive naked short selling is being used to manipulate stock prices down to the detriment of investors. Last month, the Chamber sent a letter requesting that Congress hold hearings on the issue and last night Bloomberg TV ran a piece, a special report, on this issue. What is the commission doing to stop this form of manipulation and when can we expect some action?
CHAIRMAN COX: Abusive naked short selling is of great concern to the entire Commission, to all of our members and the professional staff at the SEC. The regulation that was first adopted to get after this and related problems, Reg SHO, has proven insufficient to stop the problem. One of the reasons is the Grandfather provision in the rule as it was originally adopted, so we are now setting out, as you know, to eliminate that grandfather provision. And we will do more. Just as Congress may well have hearings on this issue and seek to get more information, so too are we looking at this. As you know, there's a technological side to this. This is very closely connected to our system of clearing and settlement in a very very big market, and we want to make sure that we use technology as our friend in relating, potentially and at all times, ownership and particular shares rather than waiting until the end of an arbitrary period of time to match those things up. It's those sorts of things that I think will eventually help us, I think, put an end to this kind of abuse. And I know that people victimized by it have a great deal of right on their side to complain about it.
CHAIRMAN DONAHUE: You have a lot of support from here in getting that done. Just let us know how we can get some muscle behind it. It is a serious challenge.
Im sorry, did the Chairman say that Regulation SHO has not worked? Doesnt that imply that FRAUD exists and is not being corrected? Was this paltry $2 Million parking ticked to Goldman Sachs supposed to be the catch all deterrent?
For a decade the SEC has dismissed the allegations of unsophisticated investors and of small business issuers that they were being manipulated. We were all loonies that simply did not understand the markets and this issue we speak of is not real.
Wall Street and the media lobbied hard dismissing this issue. In fact the same individuals that claim those that complain about short selling are simply those deflecting the real issues are now they are the ones complaining that settlement issues, lawsuits, and those that report on it are all barking up the wrong tree. It almost sounds like short sellers who go after CEOs for what they call distractions are creating their ownDistractions.
And for the Chairman to say And I know that people victimized by it have a great deal of right on their side to complain about it. That is not what Annette Nazareth had to say to Floyd Norris in 2005. In fact Ms. Nazareth claimed we were simply whiners mad because our stocks did not go up. I guess Nazareth doesnt believe victims have a right to whine.
I guess after all is said and done we, this small universe of individuals, proved that we were smarter than all of Wall Street and Wall Street regulators.
We identified 10 years ago that a problem existed that the regulators, members of Wall Street, and regulators all denied existed.
We, the unintelligent investors identified in June 2004, when the SEC voted approval of the present Regulation SHO law, that the law was inadequate to resolve the problem. Wall Street was happy with the law, the crooks were happy with the law, SIFMA was happy to get another boatload of Wall Street funding for a job well done, and the regulators were too stupid to know otherwise but we knew. We came to conclusions the experts could not come to. We did so because we had the open minds, the capacity to see reality.
As for the Greenbergs, Weiss, Boyds, Noceras, McLeans etcwhile the data speaks for itself. These members of the financial media have the integrity of armed robber going into an old age community. They fail to reposnd to the needs of the people because they fear their careers will be destroyed when their crooked sources dry up.
Clearly there are members of the media in attendance at the Summit as they are constantly reporting the speaks positions being argued. Funny how 100% of them overlooked this comment.