The president and CEO of Hedge Fund Lobbyist Managed Fund Associations is Richard Baker. Richard Baker is a former US Congressman and a Chairman of the House Financial Services Committee on Capital Markets. When it came to illegal short selling, Baker was a Committee chair serving a deaf ear as he denied his Louisiana constituents a right to protected markets.

Baker left Congress and joined MFA as president and CEO. MFA however was the brainchild of short selling fund manager James Chanos. The Mission statement for the MFA even reads “The objective of MFA is to enhance the image and understanding of the alternative investments industry through media relations initiatives.”

Alternative investment industry is a political way of saying short seller.

Well Jim Chanos and Richard Baker teamed up and drafted a joint memo to the Securities and Exchange Commission requesting the Commission provide no further extensions on the emergency short sale provisions outlined earlier this week. In fact, if you read the memo carefully you will understand that Chanos and Baker have requested that the Commission also continue to fail to enforce the settlement provisions of any short sales executed into the markets.

The emergency order drafted by the Commission created a mandate that all short sales were accompanied by a pre-borrow to insure that the short sale would settle and would not fall into the “naked short” category. That was all. Chanos and Baker claim such restrictions on short sales “distort the fundamentals that drive fair market prices and are, in the long run, counter-productive because they remove the liquidity and healthy skepticism from the marketplace.”

Chanos and Baker are from the short first and deal with settlement later camp despite the fact that settlement is a major component of fair market practices. In fact, intent of 3-day settlement of the trade is a pre-requisite of the trade execution as defined by SEC Rules 15c3-3 and 15c6-1.

“Under the Emergency Order, before undertaking a short selling strategy, a market participant must consider in advance the costs and risks of ensuring with 100% certainty that enough shares will be available to cover the maximum number of shares that may be sold short throughout the duration of the strategy.”

I am sorry, did the securities laws change whereby short sellers only had to make good on 40, 50, 60% of the short position traded?

Jim Chanos has publicly claimed that he does not even know how to naked short and yet, by this very admission, he counts on being able to sell short for an investment strategy without risk that shares may not be available for him to deliver. To Mr. Chanos and the MFA the investment strategy of the fund takes precedent over our national securities laws.

We have come to understand the greed that is wall Street and most notably the greed that has become hedge fund managers. We are beginning to see how captured our US Congress has become as a former Congressman responsible for maintaining the integrity of the US Capital Markets left his post mid-term in order to lobby for the greed and corruption that continues to suck the wind out of middel-class America..

The former Chair of the House Financial Services Committee just lobbied the SEC to forgive the responsibility of trade settlement when it pertains to a select group of investors. He lobbied the SEC for the ability to manipulate our markets through the sale of counterfeit securities because to sell such shares legally would carry too much financial burden to these wealthy funds and billionare fund managers..

Below is a copy of the memo drafted to the Commission. I suggest everyone read this memo and draft your own comment to the SEC and to your Congressman asking for an immediate investigation into the allegations presented within this document. This document contains an admission that the larger funds in the short selling camp willfully short for an investment strategy without the intent on meeting 3-day settlement for 100% of the trade. That is a violation of the laws and is the very premise behind the illegal short sale manipulation that has destroyed so many public companies over the decades.