October 7, 2018
More examples of SEC criminal obstruction of my claims to facilitate abusive naked shorting and money laundering by Knight/KCG/VIRT.
Tom Joyce joined Knight as CEO from Merrill Lynch/Broadcort
One of the first things Joyce did was take NITE self clear. Prior to going self clear, NITE cleared through Broadcort. Joyce was the perfect fit to run the criminal entity NITE. The timing of this decision to go self clear corresponds with the passage of Rule 204 of Reg Sho
In going self clear, a naked short fail by the NITE desk could now be booked as a receivable. An asset. Fails are not legitimate assets as there is no intention of ever delivering the security. Made possible by the SEC/DTCC creation of the non guaranteed Obligation Warehouse so that market participants like NITE could circumvent close out REQUIREMENTS of Rule 204. I have been telling the grossly corrupt SEC about this mis classification of "assets" since 2011. Accounting fraud: over stated assets/ under stated liabilities.
But, it doesn't end there. On the heels of the so called August 1, 2012 "trading glitch" NITE inadvertently sent 4000 worthless securities to J P Morgan as collateral for a bridge loan. This event was chronicled in the Wall Street Journal article: J P Morgan rankled by Risk.
These worthless were securities on the NITE balance sheet that represent a structural liability. Again, mis classified as an asset. When the SEC/FINRA approve massive reverse splits in OTC shells a new security is issued. A new CUSIP is issued WHEN 9not if) NITE has an open naked short fail in a shell executing an SEC/FINRA approved reverse split, that open fail/short can not be closed/covered. A structural liability sitting on the NITE balance sheet mis classified as an asset. In addition, both NITE and J P Morgan committed securities fraud in this incident. Pledging worthless collateral is an offer to sell according to the SCOTUS (Rubin).
The NITE balance sheet was complete fraud on August 1 2012.Anything BUT "highly liquid". AND, the SEC knew this because I told them. The "glitch" funding participants also knew this. The ultimate funding that transferred 74% of the company without a proxy was NOT collateral based. After the stock had been crushed to $3, the financing was a convert with a 50% discount OR $1.50/2hare. AND, NITE had to raise the entire "glitch" amount in the financing.
Fast forward to 2014. Detailed again by me to the grossly corrupt SEC. The grossly corrupt SEC was finalizing its market access complaint with Wedbush a privately held BD. This complaint alleged massive AML violations involving naked shorting OTC shells by foreign participants. Simultaneously, NITE announced it was selling its FCM business to Wedbush. This was the FCM business NITE bought from OTC Shell AML violator Penson 2 years earlier. As the SEC was negotiating a settlement with Wedbush, NITE "sold" its FCM business to Wedbush. NITE listed $688 million assets and a like amount liabilities held for sale in this transaction. No 8k was filed. No terms were disclosed. Certainly moving almost $1.4 billion in "leverage" off the NITE balance sheet was "material". No SEC inquiry. Further, the FCM "sale" closed on September 14 2014. The NITE CFO Bisgay resigned within days of this "sale" of the FCM business to Wedbush and just 2 weeks before the end of 3Q 2014. Bisgay did not certify NITE 3Q2014 financials. Another glaring red flag ignored by the SEC. The SEC had facilitated the movement of $1.4 billion in fails off the NITE balance sheet. Jay Clayton's colleague at Sull Crom Jared Fishman represented NITE in both the penny stock esque reverse merger with GETCO following the "glitch" as well as the "sale" of the NITE FCM business to Wedbush.
In 2Q 2017, the grossly corrupt SEC facilitated Cifu/Coleman moving more than $4 billion in fails off the KCG balance sheet on the eve of closing the VIRT acquisition of NITE. The SEC allowed Cifu not to publish KCG 2Q 2017 financials. Despite the fact Cifu had them and that KCG was an SEC reporting company through June 30 2017.
Not surprisingly, after moving these $4 billion+ fails off the KCG balance sheet in 2Q 2017, J P Morgan pledged $1.6 billion in financing to close the NITE/VIRT transaction. "Rankled no more".
Because the grossly corrupt SEC actively facilitates abusive naked shorting OTC shells to facilitate money laundering absolutely nothing has changed in October 2018. As a result, NITE/VIRT is AGAIN insolvent. Just last week, a rumor surfaced that NITE was pursuing the known criminal enterprise ITG. Truly a money laundering/securities fraud match made in heaven. No doubt, Cifu will use his insolvent stock as a currency in some form to pay for this acquisition. Massive fraud facilitated by the grossly corrupt SEC because they KNOW full well that NITE/VIRT is currently insolvent. ALL as a result of the information in my TCR's.
Finally, another layer of this massive fraud being perpetrated on Main Street investors.
SEC/FINRA approved reverse splits once a OTC shell gets to trip zeroes serves 1 purpose: perpetuating the activity. There is absolutely ZERO empirical evidence of "capital formation". In fact the opposite is true. This SEC/FINRA facilitation of the illegal activity constitutes capital destruction on a massive scale.
Also, the definition of a failed trade: a trade that hasn't settled yet. In approving these reverse splits, the SEC/FINRA issue new securities with a new CUSIP. The SEC/DTCC is issuing a new security WHEN trades in the old securities have not SETTLED AND where the securities were not authorized by the issuer (naked short). The OTC equity market serves no purpose other than a massive fraud on Main Street investors. Jay Clayton and his colleagues at the SEC know this. The SEC sides with criminal entities like NITE/VIRT over Main Street because they are bought and paid for by the criminals. Clayton must resign immediately. Any SEC employee obstructing full prosecution of the criminal entity NITE/VIRT must also resign as they are ALL guilty of gross negligence of their stated mandate to protect the investing public. Main Street.
Cheers
Christopher Diiorio