December 15, 2017
"What is really troubling though, is that the Committee on Foreign Investment in the United States apparently disregarded the concerns of the United States Congress when it blessed the transaction of the sale of the CHX to this group...."
"One of my real concerns here is that CFIUS simply ignored Congress. Congress had voiced their opinion and concern in this matter over a year ago and they simply ignored those elected officials with apparently no explanation as to logic or reasoning used in determining the recommended approval of the purchase of the CHX"
"What I find being highly coincidental is that had this transaction been allowed to close, it would have closed within the last few days of Barack Obama's Presidency."
James N. Hill
SEC Comments on SR-CHX-2016-20
March 6, 2017
These were some of my concerns expressed in my March 6, 2017 submission to the SEC concerning the sale of the Chicago Stock Exchange.
In a December 14, 2017 press release by the House Financial Services Committee entitled "Subcommittee Examines CFIUS", one of the key takeaways is stated:
While foreign investment can be a force for good, it must not be welcomed unthinkingly. Investment that might weaken the U.S. is not good or welcomed it must be guarded against.
As I sit to write this passage, I see one of the supposed greatest United States Agencies start to crack amongst the allegations out of heinous and treasonous acts by those charged with overseeing the safety of the Citizens of the United states. The Federal Bureau of Investigation is beginning to show the political influence that has slanted and tilted their supposed clear vision for the United States of America.
In today's release by the House Financial Service's Committee The Subcommittee on Monetary Policy and Trade expressed concern over the apparent lacking of the Committee on Foreign Investment in the United States. The Committee will seek to ensure that CFIUS has the tools and resources it needs to examine foreign investment. In other words, bring CFIUS up to a level of competency. I can think of no other reason for such a show by Congress over CFIUS other than to recognize flaws, deficiencies and partisanship of this powerful committee.
The current release by the HFSC regarding CFIUS certainly serves to me as a cloaked incitement as the to the partisanship as well as to the competency by those acting in lockstep in order to bring about this Chinese-esq purchase.
As we know, The CHX has a history of not following and enforcing trading rules. My cases in 2003 and again in 2013 against the CHX were where the CHX was fined for JUST NOT ENFORCING TRADING rules. This should be alarming to the investing public in general. WHY WILL THE EXCHANGE NOT ENFORCE TRADING RULES? How did The Bank of New York Mellon go some 8 years without being sanctioned, all while under the careful rule of Board Member and Chairman, Valery Jarrett, only to ultimately "turn themselves in"? And now a "once been cloaked" buyer should make the investing American public feel better? It was President Kerin that first planted the idea of Chinese State involvement. Why would he say that in the first place if there was nothing to the fact that the Chinese government was not involved? Kerin was just hedging his position when he said he could not deny that the Chinese State could be a stake holder. If the situation had been passed as originally put forward and bad things occurred, Kerin would have a fall back position to "see I warned you this might happen".
I have not seen ANY comment in this discussion about a court case concerning the dismissal of a former CHX surveillance employee being fired in the summer of 2016 when he complained to his superiors "about malfeasance, nonfeasance and misfeasance by his supervisor", and that his supervisor had "intentionally or negligently misled Board members as to whether a participant was award of actions that they needed to taken to avoid further sanctions by CHX Regulatory Operations and Enforcement." A reply by the supervisor was that whether any actions should be considered against a participant because that action could be detrimental to the Exchange's reputation with it participants and potentially to exchange business going forward, rather than considering the seriousness of the violation without regard to potential business implication.
And to think this situation has arisen since this sell to "once" cloaked buyers has all come about? I talked to this employee's attorney about the possible impact that this suit could queer the sale of this exchange. Some days later his legal representation withdrew from their representation.
I told Chairman Clayton's office of this occurrence and was told I should file a whistleblower claim.
There has been so much fodder about providing new jobs for those at the CHX if a new buyer came along. I believe most people outside of Chicago could not care any less about the potential jobs considering the fraud and manipulation exhibited by this exchange in the past. Why is it that the current owners of this exchange can't make this exchange profitable? It seems to me that if I had been involved with this exchange for such a long time, I would know how to tweak the operations to make the exchange profitable. They don't but evidently outsiders do.
The solution here is simple. SHUT DOWN THIS EXCHANGE. Remember, as has been stated so many times, the CHX represent less than 1% of the daily average volume of trades so the closing should serve as no big loss to the market as a whole.
I believe this sale was all scripted until Donald Trump was surprisingly elected President. Who knew what Valerie Jarrett may have had in mind for her old Exchange where she had previously served as chairman before exiting to become THE ADVISER.
After seeing all of the corrupt actions involved in the FBI debacle, this CHX is a small thing..... oh but maybe it wasn't, maybe it was because the Obama SEC had been called out for improper disclosure for comment this time last year that prevented infiltration by foreigners. What would our financial markets have looked like right now if the CHX sale had been pulled off as scripted? Throwing this situation into the Trump Administration is probably one of the most proud things I have done in my 41+ year financial market career.
I will have to give my greatest regards to Chairman Clayton to have had the courage to stay this transaction back in August when it appeared all were pushing for this sale. I believe that President Trump was the impetuous behind this stay. I see that there has been a number of resignations at high level posts at the SEC in the past few months. It makes one wonder why these people resigned. Were the resignations tied to trying to push through this sale and it failed? We see high crimes and corruption surrounding Fusion GPS, the Dossier and the Uranium One debacles. How did CFIUS sign off on Uranium and this deal in the first place? It is funny that the Obama SEC asked for comments last December on this situation EVEN BEFORE THE GENERAL PUBLIC KNEW HOW CFIUS would recommend. There are only two words that make any sense of this situation's gyrations. Donald Trump.
I believe all events concerning this sale were going as scripted when the American voters said "enough". I believe that Chairman Clayton said he was somewhat put aback by the fact that SEC staff recommended approval of this sale back in August. I thank God that Chairman Clayton had the fortified and gumption to issue an immediate stay.
Lets remember that the former Administration's CFIUS approved a sale that appears that 20% of the US uranium fell under adversary control. I cannot figure the logic of that situation regardless of the number of supposed moving parts. I do see how a Jack Lew led CFIUS would WANT to approve a sale of an American Stock Exchange to "unknown buyers" on his way out the door if the full implications were known by only a select few. What would have been the ultimate financial reward? Time has revealed how ex-Presidents have gamed the system having money funneled to them in cloaked off balance sheet/shore transactions. I believe this CHX sale was one of those situation but simply was stopped before it was able to close. I read crying from previous commentators and my interpretation is that they simply got caught.
One of my most proudest accomplishments was making the Obama SEC restate the comment period about this sale occurring a year ago throwing the final decision of this sale into the Trump Administration. I have had absolutely NO financial gain in this situation, only the satisfaction that I believe I was able to protect those unknowing Americans and the potential tragic acts I envisioned to follow. One year later and the sale has not closed.
Was part of all this Russia-Russia-Russia chant's purpose to take the public and private eye off a potential relationship from a former Administration to a U.S adversary that was in the making? Things simply went awry when Donald Trump was elected President. The clock started on the CFIUS review the same week that Donald Trump was elected. That is just too coincidental the Obama SEC asked for comments before CFIUS disclosed it's recommendation? What would have happened if CFIUS had needed the additional days allowed for review? That just wasn't going to happen. That is why the former Obama SEC started it's short timed clock on the comment period. There is really no telling just how big of a story this would have grow into if Donald Trump had not been elected President.
There is a documentary film that will be released in the early spring about how the Chinese have taken U S shell Corporations and through reverse mergers, acquired the U S Corps that were listed but were basically defunct, produced fake non-verifiable financials purposefully to deceive the American investor into buying these sham corporations only to start the classic pump and dump. Do you take comfort in knowing that's the way that some Chinese have operated on our exchanges before? This is absolute in it's meaning of illegal immigration but in our financial markets. This documentary may serve as an eye opener for what just could have happened and has been prevented. These writers and producers of this film are needed a show of gratitude to have exposed this sham.
As far as the CFIUS article yesterday I think every single word contained in that release was very carefully sculptured as to not alarm the United States Citizenry as to how certain oversight bodies FAIL in their roles as protector. In this case I view CFIUS in the past administration as being a facilitator. Flavors of the latest FBI shenanigans are certainly spiced in this CFIUS approval. The exposure of a cabal of plotters.
I would like to thank certain Congressional Staff members that voiced opinions this time last year for having given me credit for being able to stop this rushed approval attempt.
James N. Hill