February 4, 2020
The SEC/FINRA ACTIVELY facilitate fraud in the OTCM.
The OTCM exists for 1 reason: abusive naked shorting publicly traded shells to facilitate money laundering. WHY has the SEC outsourced virtually the entire OTCM to the BD SRO FINRA?
Including: approval of ISSUER corporate actions:Reverse splits?
OTCM CEO Cromwell Coulson has stated repeatedly that FINRA short interest reporting is accurate. HOW can he make this preposterous claim when there is STILL no CAT?
No CAT, BUT there is an Obligation Warehouse. The SEC authorized the DTCC to create a non guaranteed, shadow clearing mechanism so that criminal BD's like NITE,CDEL, etc can circumvent close out REQUIREMENTS of Reg SHO Rule 204. The OW is illegal. It is clearly contrary to the 1934 Act "prompt and accurate settlement of securities transactions". WHEN not IF a BD like NITE has an open naked fail in a OTM shell when the SEC/FINRA approve a reverse split, there is a new cusip issued. The old cusip ceases to trade. This creates a structural liability. In the case of NITE: repeatedly/constantly insolvent (tangible book). Because NITE is self clearing, a naked short fail can be booked as a receivable. An "asset". Complete fraud as there is no intention of ever delivering. A "trading glitch" was born. The "glitch" proved Knight (NITE) was grossly insolvent as I had/have repeatedly told the SEC. NOT the "highly liquid balance sheet Knight(NITE) had claimed as they had to raise the entire amount of the "glitch" "losses". On the heels of the "glitch" NITE inadvertently sent 4000 worthless securities to JPM as collateral for a bridge loan. JPM rejected the collateral. Per SCOTUS (Rubin) NITE engaged in securities fraud in pledging worthless securities. JPM as usual looked the other way. ALL of the "glitch" funding participants KNEW the NITE balance sheet was complete fraud. (Blackstone,Goldman,JPM,Stifel,Gen Atlantic, Jefferies et al). The ultimate transaction was NOT collateral based. But a P discounted pref after the stock was crushed to $3 or $1.50/sh.
Fast forward to 2017. The Tangible book value used to calculate the VIRT/NITE transaction was also complete fraud.
VIRT grossly over paid for NITE. NITE was and still is grossly insolvent (tangible book) as a direct result of ongoing illegal activity: abusive naked shorting and accounting fraud actively facilitated by the corrupt SEC. The VIRT/NITE transaction didn't close until 7/31/2017. KCG (NITE) was an SEC reporting company until VIRT CEO Cifu de registered KCG. Cifu has but won't "publish" KCG 2Q2017 financials. The SEC allowed this. Information CERTAINLY material to investors to analyze the transaction. Interestingly, more than $4 BILLION in "leverage" disappeared from the combined company balance sheet in 3Q2017 IF you were to simply do a 2+2 analysis. In the case of the VIRT/NITE balance sheet in 3Q2017, 2+2+1.5.
Amazingly, the same players facilitating the "glitch" also facilitated the NITE/VIRT transaction. After the disappearance of $4 billion in "leverage" JPM committed $1.6 billion to finance the transaction. Goldman along with Jay Clayton's Sull Crom colleague Jared Fishman advised KCG. AGAIN.
The transaction was complete fraud. ALL participants know this. The "assets" used to calculate the tangible book value to justify the transaction were written down because they were not real "assets" to begin with.
Also, in the months leading up to the transaction closing on July 31 2017, KCG (NITE) reported trading more volume than the overall market. Naked shorting. VIRT/Cifu,JPM,Goldman et al knew and have always known what the core business at NITE is.
Knight/KCG/VIRT is a criminal enterprise. It was literally "made by the mob" Spitzer mob bust: Ashton Technologies: "Worthless paper". Became VIE Financial. Then Optimark. Then Knight/Trimark.
Fast forward to December 2019. The top traded OTCM shell was a company called Elite Group out of Frisco TX. ELTZ
.0001. The CEO of ELTZ is Terrence Tecco. The SEC knows him from their Strata Coal/WesPac complaint.
The OTCM ELTZ page is "Skull and Cross Bones". DANGER. WARNING.
The Transfer Agent is Island Transfer. The SEC knows them well also from their Feb 20, 2019 "Shell Factory" complaint.
Did ANY of this stop NITE/VIRT from being the #1 trader in ELTZ in December 2019? NITE/VIRT traded BILLIONS of shares. WHY? Any SAR's? WHEN? Before or after trading billions of shares? Pull a market? Not with an open naked short position. Sitting on the bid as a "vital source of liquidity"as ELTZ went to .0001? Not a chance. The PL will show: Abusive naked shorting: MANIPULATION.
So, this rule proposal does absolutely NOTHING to address the massive fraud on the public being actively facilitated by the SEC. The balance sheet at NITE VIRT is AGAIN exploding in 2019 heading into 2020. The SEC has allowed Cifu/NITE/VIRT to stop disclosing their OTCM share volumes in any SEC filings despite the AML risk they pose. The Sell side omits these share volumes from their models. What happens to NITE/VIRT trading profits IF their OTCM share volumes went to zero? Most definitely a material disclosure.
The Clayton SEC once again shows they don't give a "Rats ASS" about Main Street as they claim to.
The SEC is a criminal enterprise facilitating criminal activity at the expense of "Main Street" on a daily basis.