12-13-2013, 05:35 AM
To begin with I have NEVER posted on any board. I have been managing my own money for 25 years. No fund or outside investors. I have owned IOC for 1 ½ years.
About a year ago I had a call with WA and, in that call I had lengthy discussions about Naked Shorting. He was very aware of it but had no intentions of doing anything about it. I gave him specific actions he could take but never did. I am close to the best attorneys in the country that have taken on these shorts and what’s worse they are in Wayne’s back yard (Houston). I offered to introduce them to him and he did nothing about it. These attorney’s have a long list of publicly traded clients they have represented. For instance Overstock.com.
Yes the SEC is fully aware of this crime and they do nothing about it. So wise companies ( Fairfax Financial)have taken directly aggressive action to fight these crooks.
Most people are not aware of how it works. DTC is the centralized clearing for all US equities. Rather than being one of the few agencies the government should regulate it is the one that is not. Therein lies the beginning of the problem. DTC is owned and operated by the 10 largest Prime Brokers in the country.
What does this mean? If for example purposes only, I own 1000 or 100,000 shares of IOC and it is deposited at GS thus DTC, If you are one of those 10 DTC members you can loan those same 1000 shares out, thus creating 10,000 shares short (9000 of which were never borrowed). That creates 9000 Naked short.
Also, hedge funds circumvent by using the following tactics if they are ever issued a fail to deliver notice. For example purposes only if someone like SAC wanted to short IOC and there was no borrow, they might tell GS ( example only) to sell 1000 IOC. Since SAC may be a large revenue driver for any Prime brokerage firm they (could) mark it as a long trade and just sell as much as they want. The Prime broker does have a responsibility to locate the shares but may choose not to (regardless of whether the really believe they own the shares) because some large customers have several brokerage accounts in several locations thus allowing the Prime Broker to claim hey they said they were long elsewhere and were going to deliver the stock. When the fail to deliver arrives the hedge fund simply sends the shares to another account. Some of these funds have 30 plus accounts and the shares get moved every 3 days to avoid having to deliver the stock they never had. If you were a Prime Broker and got fined 1-2 million every 2-3 years ( which some do)you would simply write it off against the 100 million / year you are making off the hedge fund in commissions, interest ….
How do I know this? I was an early round investor in Vonage Holdings. When it went public at 17 it was heavily shorted from day 1. It went on the fail to deliver list 3 days later when settlement began and stayed there for 100 straight days. You may ask how is that possible when you can’t even margin a stock in the first 30 days of trading? I asked the SEC the same question and they did nothing. I contacted these attorney’s. Having said that there is nothing we can do as share holders without the company taking aggressive action.
IOC must fight fire with fire. They need mean attorneys that know what to do. I offered that to Wayne 1 ½ years ago.
About a year ago I had a call with WA and, in that call I had lengthy discussions about Naked Shorting. He was very aware of it but had no intentions of doing anything about it. I gave him specific actions he could take but never did. I am close to the best attorneys in the country that have taken on these shorts and what’s worse they are in Wayne’s back yard (Houston). I offered to introduce them to him and he did nothing about it. These attorney’s have a long list of publicly traded clients they have represented. For instance Overstock.com.
Yes the SEC is fully aware of this crime and they do nothing about it. So wise companies ( Fairfax Financial)have taken directly aggressive action to fight these crooks.
Most people are not aware of how it works. DTC is the centralized clearing for all US equities. Rather than being one of the few agencies the government should regulate it is the one that is not. Therein lies the beginning of the problem. DTC is owned and operated by the 10 largest Prime Brokers in the country.
What does this mean? If for example purposes only, I own 1000 or 100,000 shares of IOC and it is deposited at GS thus DTC, If you are one of those 10 DTC members you can loan those same 1000 shares out, thus creating 10,000 shares short (9000 of which were never borrowed). That creates 9000 Naked short.
Also, hedge funds circumvent by using the following tactics if they are ever issued a fail to deliver notice. For example purposes only if someone like SAC wanted to short IOC and there was no borrow, they might tell GS ( example only) to sell 1000 IOC. Since SAC may be a large revenue driver for any Prime brokerage firm they (could) mark it as a long trade and just sell as much as they want. The Prime broker does have a responsibility to locate the shares but may choose not to (regardless of whether the really believe they own the shares) because some large customers have several brokerage accounts in several locations thus allowing the Prime Broker to claim hey they said they were long elsewhere and were going to deliver the stock. When the fail to deliver arrives the hedge fund simply sends the shares to another account. Some of these funds have 30 plus accounts and the shares get moved every 3 days to avoid having to deliver the stock they never had. If you were a Prime Broker and got fined 1-2 million every 2-3 years ( which some do)you would simply write it off against the 100 million / year you are making off the hedge fund in commissions, interest ….
How do I know this? I was an early round investor in Vonage Holdings. When it went public at 17 it was heavily shorted from day 1. It went on the fail to deliver list 3 days later when settlement began and stayed there for 100 straight days. You may ask how is that possible when you can’t even margin a stock in the first 30 days of trading? I asked the SEC the same question and they did nothing. I contacted these attorney’s. Having said that there is nothing we can do as share holders without the company taking aggressive action.
IOC must fight fire with fire. They need mean attorneys that know what to do. I offered that to Wayne 1 ½ years ago.
