April 28, 2007
I was and I am appalled the SEC grandfathered naked shorting a few years ago, which I see as counterfeiting shares of publicly companies.
To my mind, counterfeiting shares of publicly traded companies is a crime that needs to be prosecuted for what it is... a crime. The SEC through its grandfathering clause has told the public and most especially the criminals that it is OK to counterfeit shares of publicly traded companies before date "xyz".
And since I have not heard of the SEC prosecuting any hedge funds, or investment companies for naked shorting, I can only conclude that any penalties for naked shorting today are so inconsequential that the hedge funds and investment companies involved in this illegal counterfeiting activity have no motivation to stop such illegal activity.
In contrast to this SEC attitude toward naked shorting of "I see no crime", "I hear no crime," and "I prosecute no crime," is its recent decision to make backing dating of stock options illegal. The press has been full of reports about this, and has indicated that federal prosecutors were brought in along with the SEC. I still have NOT heard of any actions taken against naked shorting.
It appears there is only one reason the SEC and federal prosecutors have not taken action against the counterfeiting of stocks through naked shorting techniques... Those people involved in these illegal activities are wealthy and powerful. These wealthy and powerful individuals appear to influence the upper echelons of the SEC and the Federal Government itself. How else can it be explained that the SEC and federal prosecutors have the attitude of "I see no crime", "I hear no crime," and "I prosecute no crime" of naked shorting.
I think it is time for the SEC and federal prosecutors to remove the appearance thatit gives special treatment to the wealthy and the powerful... make the counterfeiting of publicly traded shares a crime and put teeth in the penalties. Put a STOP to counterfeiting.
Sincerely,
Stephen Burleigh