Investing 101 - Jul 13, 2005 - Printable Version
- Forget SEC "Regulations".... This is Good Old-Fashioned Fraud
by Mark Faulk It's been over a year since the SEC approved Regulation SHO, designed to supposedly alleviate the illegal prectice of naked short selling, in which billions of shares of counterfeit stock are sold short, or borrowed, but never delivered to their rightful owners.
As this fraud has grown exponentially, millions of stockholders who have bought stock in companies have discovered that the stock that they purchased has never been delivered to their accounts. Time after time, investors have requested their stock certificates, only to be told by their brokers that they can't deliver them.....because they never bought them in the first place. The excuses for failure to deliver what stockholders have bought and paid for are varied and numerous, but in the end, they are no more valid than "the dog ate my homework", or in this case, "the DTCC trade settlement system ate your stock certificates".
The band-aid that the SEC applied to the problem in the form of Reg SHO has done absolutely nothing to stem the flow of counterfeit shares being dumped onto the stock market, and in fact, has just served to point out just how rampant this scandal is, as numerous companies, both large and and small, have been on the "trade settlement failure" list since day one.....over 140 days and counting. That's 140 days (and who knows how long before the list was published) that stocks have been bought and sold to investors by brokers who NEVER DELIVERED THEM. (Remember that phrase: NEVER DELIVERED)
While the NASD has done nothing but make lame excuses and deny responsibility (even thought their own loopholes have helped to create this financial nightmare in our stock market system), thousands of hedge funds and their ultra-rich clientele have reaped the benefits of stock counterfeiting, by short selling billions of shares of counterfeit stock with absolutely no intention of ever delivering those shares, and the SEC has in effect pardoned all past transgressions by "grandfathering" in all past trade settlement failures, and by constantly changing their interpretations of their own regulations to fit the crimes.
If this betrayal of the very investors who they are pledged to protect weren't enough, the SEC, in concert with the DTCC, has initiated a covert crusade to convince the states to eliminate paper stock certificates altogether, leaving investors with absolutely no way to of knowing if the stock that they've bought and paid for has been delivered to them, or if brokers are buying and selling them imaginary stock created out of thin air, stock THAT THEY NEVER DELIVER.
And Congress, who could step in at any time and put a halt to this massive fraud, this financial terrorism, this systematic dismantling of our economy and financial institutions, has, up to now, been all talk and absolutely no action. Oh sure, there have been some public displays of indignation, as far back as March of this year, and a few brave souls on Capitol Hill have spoken out, but so far, that's all that we've heard.....talk. In the meantime, billions and billions of dollars continues to pour out of America into offshore hedge funds and foreign entities, and there is compelling evidence that much of it is finding its way into organized crime syndicates and known terrorist groups. As I said earlier, this is financial terrorism, nothing less. (Note to our elected representatives: Actions speak louder than words.....especially your words.)
Investors and the companies involved have, in the meantime, been left with nothing......no shares, no money, and little recourse other than costly class action lawsuits. If the SEC is allowing the perpetrators to sidestep existing rules, and constantly reinterpreting their own rules to cover their own culpability in the fraud, what can be done to stop it, short of waiting for the inevitable collapse of the stock market system itself?
It's simple.....forget about the SEC regulations, forget about the self-regulating NASD, and forget about the DTCC's flawed trade settlement system. This is nothing more than good old-fashioned fraud, no different than any other type of fraud.
The news is filled with the stories of con artists convicted of internet fraud, mail fraud, or wire fraud:
A man in Salt Lake City pleads guilty to defrauding Internet customers of more than $200,000 by selling car parts that he didn't own, and THAT HE NEVER DELIVERED....he faces up to 20 years in prison.
A man in California is indicted for defrauding eBay users of more than $93,000 in auctions for sprorts tickets and rolex watches.....THAT HE NEVER DELIVERED.
In Maine, a man is convicted of accepting personal checks, bank checks, money orders, wire transfer payments and PayPal payments on eBay for merchandise THAT HE NEVER DELIVERED, and for failing to provide refunds. He was sentenced to six years in prison and forced to pay back his victims. (Is anyone else seeing a pattern here? On eBay, the buyer pays for their merchandise, and if the seller doesn't deliver it, they're arrested and they go to prison. It sounds simple enough, doesn't it?)
And just last month, a man right here in Oklahoma pleaded guilty to selling tickets to sporting events and concerts....THAT HE NEVER DELIVERED. Although he "only" defrauded his victims out of a total of $21,000, he faces up to 20 years in prison and a $250,000 fine.
The list goes on and on. In every case, the victims pay for their tickets, merchandise, or services, and in every case, the seller fails to deliver the items. There is absolutely no difference between the thousands of people convicted of these types of fraud and the brokers, hedge funds, and everyone else who is taking money from investors in exchange for shares of stock.....THAT THEY NEVER DELIVER.
When a stock transaction is conducted over the internet, and the stock is never delivered.....that's Internet fraud. The perpetrators should be arrested and sent to prison.
When a brokerage firm accepts money wired into accounts and buys stock with it that is never delivered.....that's wire fraud. They should be arrested, forced to pay restitution.....and sent to prison.
When an investor sends a check or money order to their stockbroker, and their broker uses the money from that check or money order to buy shares of stock that are never delivered to the investors' accounts.....that's mail fraud. They should be arrested, fined heavily.....AND SENT TO PRISON.
It's time we stop looking at stock market fraud as a practice that is immune to any law other than the SEC's own worthless regulations. It's time that every one of us demand delivery of the stock that is rightfully ours, while we still can. It's time we stopped allowing the brokers and hedge funds to play by their own rigged rules, and see this for what it really is....FRAUD, by any definition of the law.
And THAT'S the Faulking Truth.
(Editor's note: There is a demonstration planned in front of the Depository Trust and Clearing Corporation building at 55 WATER STREET, NEW YORK, NY 10041 on July 29th, 2005 at 10am. You can read more about it at http://www.faulkingtruth.com/Articles/LettersToEditor/1015.html )
The June 20th, 2005 "Mysteries of the Mind" radio show, where Faulking Truth Editor Mark Faulk discusses the Stockgate scandal with show host Alex Merklinger, is now available in their archives: Click here, and go to the Monday, June 20th show. The interview begins 30 minutes into the show.
Voice your opinion to your state's representatives at http://www.congress.org/congressorg/home/
To contact members of the US Senate Committee on Banking, Housing, and Urban Affairs, go here and click on the members' names:
http://banking.senate.gov/index.cfm?FuseAction=Information.Membership
To contact members of the Senate Finance Committee, go here and click on the members' names:
http://finance.senate.gov/sitepages/committee.htm
To contact those Congressmen who have already had the courage to speak out about the naked short selling scandal known as Stockgate:
Senator Robert Bennett (R-UT)
http://bennett.senate.gov/contact/dc.html
Rep. Joe Wilson, (R-SC)
http://joewilson.house.gov/Contact
Senator Richard Shelby (D-AL)
senator@shelby.senate.gov
Senator Richard Durbin (D-IL)
http://durbin.senate.gov/sitepages/contact.cfm
Senator Susan Collins (R-ME)
http://collins.senate.gov/high/contactemail.htm
Senator James M. Talent (R-MO)
http://talent.senate.gov/Contact/default.cfm
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Investing 101 Archives:
Financial Terrorism in America (Mark Faulk, Mar 19, 2004)
Pump and Dump or Short and Distort? (Mark Faulk, Apr 18, 2004)
Response From Berliner Freiverkehr and The Berlin-Bremen Stock Exchange (The Faulking Truth, Jun 3, 2004)
The Berlin Connection? SEC and NASD to Meet With German Brokerage Firm Tomorrow (Mark Faulk, Jun 3, 2004)
Is Dateline Losing Credibility Over StockGate Story Delays? (Mark Faulk, Jun 11, 2004)
Who's Looking Out For You? SEC Critics Seeking Investigation (Mark Faulk, Jun 27, 2004)
He Said, She Said: SEC, NASD At Odds Over Status of Proposal (Mark Faulk, Aug 5, 2004)
The Berlin Connection: 250 Companies Out (And Counting) (Mark Faulk, Aug 30, 2004)
Jag Media Case Dismissed by Judge, Citing Filing Deficiencies (Dave Patch, Sep 9, 2004)
A Twelve Step Program to Clean up the OTC Stock Market (Mark Faulk, Sep 14, 2004)
Is Time Running Short in StockGate Scandal? (Mark Faulk, Oct 5, 2004)
Dateline: The Waiting is the Hardest Part (Mark Faulk, Nov 16, 2004)
Death of an Investment Class (Dave Patch, Dec 30, 2004)
Elgindy Trial Illustrates Incompetence at the Federal Levels (Dave Patch, Jan 4, 2005)
The Year of the Investor (Mark Faulk, Jan 5, 2005)
Regulation SHO’s Threshold Lists Leave More Questions than Answers (Dave Patch, Jan 11, 2005)
Feeding the Stock Market Beast (Mark Faulk, Jan 11, 2005)
Economic Corruption US Style (Joel S. Hirschhorn, Feb 27, 2005)
Stockgate Goes to Congress (Mark Faulk, Mar 10, 2005)
The Old Shell Game (Bob O'Brien, Mar 25, 2005)
FINALLY! Dateline to Air Stockgate Segment April 10th (Mark Faulk, Mar 28, 2005)
Dateline Stockgate Update: POSTPONED YET AGAIN! (Mark Faulk, Apr 6, 2005)
Time to Boycott GE, Dateline, and NBC? (Mark Faulk, Apr 6, 2005)
Pink Sheets CEO Calls for Reform in OTC Stock Market (Mark Faulk, May 2, 2005)
National Counterfeit Conspiracy Days, June 6th and 7th! (Mark Faulk, May 15, 2005)
Ninety-Four Trade Days and Counting (Dave Patch, May 25, 2005)
Stockgate: Turning up the Heat (Mark Faulk, May 31, 2005)
Stockgate: Donaldson out......Cox in (Mark Faulk, Jun 2, 2005)
SEC's Donaldson out, Cox in: One Step Forward, Two Steps Back (Mark Faulk, Jun 13, 2005)
President Bush’s Social Security Agenda - Steal your Money the Easy Way (Dave Patch, Jun 17, 2005)
Global Links Corp: The Real Story (Mark Faulk, Jun 26, 2005)
Forget SEC "Regulations".... This is Good Old-Fashioned Fraud (Mark Faulk, Jul 13, 2005)
Common Cause Joins Fight to "Stop Corporate Takeover of the SEC" (Mark Faulk, Jul 22, 2005)
Dateline Stockgate: We're on, we're off, we're on, we're off.....WE'RE ON AGAIN: July 31st!!! (Mark Faulk, Jul 25, 2005)
Dateline to Air Stockgate Segment in 2-Hour Show, Sunday, July 31st (Mark Faulk, Jul 29, 2005)
From Dateline to Overstock....The Plot Thickens (Mark Faulk, Aug 16, 2005)
Congress Sells America Short (Mark Faulk, Sep 20, 2005)
Stockgate: The Big Picture (Mark Faulk, Oct 10, 2005)
Stockgate: Rallying the Troops (Mark Faulk, Oct 16, 2005)
The $10.5 Billion REFCO Smoking Gun? (Bob O'Brien, Oct 23, 2005)
We Definitely Aren't in Kansas Anymore - Fraud Wall Street Style (Bob O'Brien, Nov 3, 2005)
Start Spreading the News: Stockgate Goes Nationwide (Mark Faulk, Nov 8, 2005)
Stockgate: "Can We Talk?" (Mark Faulk, Nov 27, 2005)
It's Money That Matters (Mark Faulk, Dec 11, 2005)
Regulation SHO; Results Leave Questions More than Answers (Dave Patch, Dec 29, 2005)
Faulking Truth Editor to Write CMKX Story (The Faulking Truth, Jan 5, 2006)
It Takes an Army (Mark Faulk, Jan 11, 2006)
The Circle of Greed: The Only Bull in this Stock Market is a Cash Cow (Mark Faulk, Jan 17, 2006)
A Silent Lynch Mob - An Open Letter From Rod Young (Rodney Young, Feb 2, 2006)
The Circle of Greed: A Voice in the Wilderness (Mark Faulk, Feb 13, 2006)
The Circle of Greed: Who Wants to be a Congressman? (Mark Faulk, Feb 26, 2006)
Freedom of the Press? (Mark Faulk, Mar 12, 2006)
The Parallel Universe of the DTCC: “Bits and bytes in book-entry form.” (Mark Faulk, Mar 24, 2006)
Finally...the Truth About Patrick Byrne (An open letter to Colin Kelly, Jr.) (Mark Faulk, Apr 19, 2006)
Faulking Truth recommends abolishing the SEC (Mark Faulk, Apr 27, 2006)
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