Does everyone here forget all about naked short selling that has been so obviuos for months now that I can barely bring myself to mention it. What we have HERE is an MM having a grand old time making illicit profits here. The many promos and urgent 'tips' to "buy" from many 'sources' has not materialized into anything but losses...not for the crooks though, who are laughing at US suckers.

The MMs need someone to buy their CONTINUAL ISSUE of non existant shares. Their ultimate hope is to drive the co. into the dust...which will be impossible to do with SFMI do they must be going for broke here. They can out last main street investors any day...until the co. becomes a bonafide concern. Someitmes these NSS 'arrangements' are even tacitly connected to management...if the price is right. After all, they will never get caught.

I am sitting here today wondering how many millions of NSS there are now f'oating out there for SFMI. I suspect (being paranoid) that at least one poster imbedded here (and several 'over there' employed by the MM) have been hard at work for a long time. I'm not sure what the end game is but with the stock heading again down today ... and some having mumbled on Iflub about 2 cents and 3 cents, I can see what 'they' are hoping for. BUT, can they affford to cover on the way up? We'll see won't we...just how this stock reacts to the forth coming revenue news. It will be most obvious if there are no upticks...or a very brief one.

Anway, sorry for the rant but it never ceases to amaze me why so many knowledgeable posters here seem to let it slip their mind. Here some non-organized bit of info that I pasted together over the year that may help as a refresher of sorts on NSS. Some of itn came form some of you ...so thanks for that DCC being one. This is just the tip of the iceberg for all the info I have on this putird subject.

on Naked Shorting (slightly OT)

posted on Jun 30, 11 10:01AM

In regards to the TASER case I think you can see that the TASER plaintiffs not only got cash for the settlement and disposition of the case but also a certain amount of “hush” money. Wall Street and the hedge fund community had to prevent this case from serving as the template for possibly thousands of others. The risk is that the investors in thousands of development stage issuers through the years might learn that their investment never did have a chance to succeed. Part of the engine driving these crimes is the method in which hedge fund managers are compensated. These guys typically make “2 and 20”. This means 2% of funds under advisement and 20% of all profits. How are the 20% of profits measured? For “open positions” like naked short sales that haven’t been covered yet they are marked to market by current share prices. If the crooks attack a “XXX” at the $2 level and drive it to 2-cents then “on paper” they’re up about 99% on their investment. This is partly why they never cover unless forced to. “On paper” they’re making a fortune. They can solicit more wealthy investors by bragging about their “on paper” results. It’s easy to drive the share price of a company targeted for destruction down 99%. All you do is sell nonexistent securities all day long and refuse to deliver that which you sold. The mere act of covering and delivering what they sold, perish the thought, might turn a 99% profit into a 1,000% loss. As long as the hedge fund managers collectively keep spending about $11 billion per year on fees and commissions directed to the most corrupt of the MMs and clearing firms willing to aid and abet their sale of nonexistent securities they nothing will ever change UNLESS the corporations under attack can make internal breakthroughs that weren’t planned on by the crooks. Where the problems arise is not being able to finish off a company whose share price was manipulated downwards by 99% before the company proved to the world that it was far from the “scam” the crooks had it diagnosed as. Saying OOPS! doesn’t quite cut it as the attackers of TASER just learned.

a bit on naked shorting from Dr D (thanks to DCC)

posted on Jun 06, 11 01:13PM Use the IP Check tool [?]

Worldwide, everybody has absolutely had it with the thievery on Wall Street to the point where the pitchforks are being sharpened. It’s really that bad. Abusive naked short selling is the only form of securities fraud on Wall Street that is 100% Wall Street versus Main Street. There is money attached to every “buy” order that goes into the system and that becomes the target. If a crook sells nonexistent shares into that buy order he gets “first dibs” on portions of that money proportional to how much he can manipulate the share price downwards even if he never delivers anything. If he can “successfully” bankrupt the company then he gets to keep all of the money without needing to claim a capital gain.

Main Street people cannot participate in this particular fraud. In the attacks on easy to kill penny stocks you need to gain access to a corrupt MM willing to ILLEGALLY share his bona fide MM exemption from making pre-borrows before short sales. In order to gain access you don’t bribe them with cash but you bribe them with “order flow” which is the same as cash to a MM. Main Street investors don’t have the wherewithal to direct enough order flow to a MM to illegally rent space under their umbrella of immunity from making pre-borrows before short sales. Corrupt hedge funds, however, certainly do. It is the larger MMs that have a superior visibility of buy orders and therefore access to the money attached to the buy order that are going to enjoy the lion’s share of this illicit order flow. THAT’S HOW THEY GOT TO BE THE BIGGEST MMs.

There is a dilemma for these criminals. The easy to kill development stage NONMARGINABLE penny stocks are the hardest to LEGALLY short sell. There are very few if any legally borrowable shares held in margin accounts or held by institutions willing to loan out shares to short sellers in order to make a little extra income. You have to attack the weakest prey ILLEGALLY usually through a co-conspiring MM pretending to be acting in the capacity of a bona fide MM willing to “inject liquidity”. Truly bona fide MMs must cover preexisting naked short positions on the next downtick after the naked short sale was made. They can’t legally establish enormous naked short positions.

Re: a bit on naked shorting from Dr D

in response to a bit on naked shorting from Dr D by dcbass

posted on Jun 06, 11 05:18PM Use the IP Check tool [?]

People have a tough time with the concept of abusive naked short sellers never, never, never having to cover unless a breakthrough by the preyed upon corporation forces it. In our corrupt clearance and settlement system you need not deliver that which you sold in order to gain access to an investor’s money. This insanity forms one of the many pillars supporting this fraud. Most countries with the notable exceptions of the U.S. and Canada have a “withhold the mark” policy with “the mark” being the investor’s money. If you don’t deliver what you sold you don’t get access to the buyer’s money just like at the grocery store.

When you NSS into a buy order with the cash of the buyer metaphorically “stapled” to it, the target of this crime, you get “first dibs” on a portion of that cash if a downtick should occur even if you never deliver that which you sold. If that isn’t insane enough, the buyer of the never to be delivered shares gets a readily sellable “security entitlement”/IOU credited to his brokerage a/c. This is over and above the number of shares already outstanding. This adds to the “supply” of that which is readily sellable which automatically depresses the share price. Refusing to honor your contract to deliver that which you sold by T+3 therefore not only established a naked short position and thereby giving the crook access to “the mark” it also depresses the share price which gets this cash flowing into the wallet of the criminal all in one fell swoop. This money of the investor becomes “free money” to any party willing to break their contract and refuse to deliver that which they sold.

The question arises, why would you EVER cover this naked short position if you not only have already been given access to the targeted cash of the original investor but the very act of covering would drive the share price up which would then force you to aim a portion of the stolen cash to your clearing firm in order to meet your “marked to market” collateralization requirements. Would you not instead be highly financially incentivized to continue to naked short sell into yet more buy orders to induce yet more share price depression to induce yet more flow of the cash of the investors being defrauded both well in the past and more recently in the past? The question becomes do you want more “free money” or do you want to be forced to give up some of the money you stole in the past. IN FACT, A CRIMINAL WOULD BE CRAZY TO EVER COVER UNDER THESE CIRCUMSTANCES.

Abusive naked short selling is similar to a drug binge. Once you get started even if you wanted to stop you sometimes can’t. The very act of stopping your daily “fix” of naked short sale orders would release the potential energy encased in the coiled spring you’ve been compressing while forcing the share price down day after day. If you fail to bankrupt the targeted corporation you can quickly get to a point at which you can’t cover without risking serious financial calamity. When you get to this point you typically recruit Wall Street fraternity brothers to help you polish off this feisty corporation that you theoretically have on their death bed. Once the “recruits” realize that they got sand-bagged then all kinds of things can happen. This includes covering by the recruits with lesser naked short positions and then going net long to take advantage of the blood in the water coming out of the “recruiter”. In summary, all buy orders by Main Street investors have money attached to them but all sell orders by Wall Streeters do not have meaningful delivery obligations attached to them. This asymmetry serves as another pillar supporting these crimes. Since these criminals never have to cover until forced to the aggregate size of naked short positions is accretive by nature. They get larger and larger month after month.

From Dr D:

Jim, I'm not certain that I understand what you are saying. How are the abusive naked short who have no intention of covering held accountable?

The single most effective way is to simply succeed in your business plan. This is so rare for companies under attack that you rarely see it. Above and beyond that there are a variety of strategies to implement at the proper time. Operating in a sector like the junior mineral exploration sector that has ultra-high risk and ultra-high reward built into it helps a lot. These people have more discipline as to mitigating losses than we investors do. The hedge fund managers will continue to make gazillions of dollars as long as they don't screw up on any one deal big time. The management teams and compliance officers of the publicly traded crooked clearing firms and crooked MMs will also do quite well as long as they don't blow it real bad on any one deal or allow their shareholders to learn what they do to shareholders for a living. This series of attacks started when XXX was trading at over $2 back pre-Lipangue when they deserved to be trading at lower levels. The problem with these attacks is once you start it's tough to find the brakes when you need them. These people are collectively short many thousands of companies. Part of the goal is to get covering our naked short position to the top of their "to do" list. "Qualified" cash dividend distributions and tenders for assets that lead to qualifying dividends are the be all and end all.

If you study the 30-day period before any generous qualified cash dividend distribution "record date" there will be a lot of buying by opportunists but very little selling by shareholders lest they not earn the dividend. When that wave of buying comes in the naked short sellers have 3 options. They can NSS into these buy orders and be forced to match an astronomical number of cash dividends. They can sit on their hands and do nothing and let the share price break out to the upside until the % of share price the dividend represents moderates out or they can cover at the same time no natural selling is occurring and waves of opportunistic buying is entering. The second they stop their daily "maintenance" NSS-ing they must constantly do to keep their collateralization requirements in check the share price will gap upwards by itself without all of these other factors. In essence, you take away the daily status quo and FORCE them to make a lose-lose decision.

The status quo is bad in that it basically involves we investors riding donkeys with our fists clenched yelling at them to deliver the shares they sold to us chasing them across the prairie while they drive off in their Ferraris and flip us off. What you need to do is to route them into a "qualified cash dividend" box canyon and force a shoot out

Naked Shorting: Majority of Investors Say Penalties

Should Be as or More Severe Than for Fraud and

Counterfeiting

Monday February 13, 2:06 pm ET

Issue Could Have an Impact at the Polls According to New Study by Harris

Interactive

ROCHESTER, N.Y., Feb. 13 /PRNewswire/ -- Three out of four U.S. investors(1) (76%) say someone

who naked shorts a stock should face civil (8%) or criminal penalties (9%) or both (59%). By the same

margin (76%), investors believe such penalties should be about as (65%) or more (11%) severe than

those for fraud and counterfeiting, according to a recent survey commissioned by Working Americans

for an Open Economy, conducted online by Harris Interactive® among 1,243 investors nationwide.

Investors' support for cracking down on naked shorting could play a role in upcoming congressional

elections with 38% of investors saying they would be more inclined to vote for a congressional

candidate who addresses the issue of naked shorting. Among investors aged 55 or older, fully one-half

(50%) say they would be more inclined to vote for such a candidate.

"This study leaves little doubt as to how seriously investors view the illegal practice of naked shorting,"

said Mark Wirthlin, senior vice president of the Harris-Wirthlin Brand and Strategy Consulting Practice

at Harris Interactive. "If this issue moves front and center, it clearly has the potential to influence both

legislation and congressional elections."

The study was designed to understand investor attitudes toward the practice of naked shorting.

"Naked shorting has become the game on Wall Street in the past 10 years and its pervasiveness

creates serious risks to our system," said Steve Wark, spokesperson for Working Americans for an

Open Economy. "These results show that the public is ready for the government to take real and

meaningful action against hedge funds, brokerages and individuals breaking the law."

When it comes to specific actions that could be taken against those found guilty of naked shorting, vast

majorities of investors are behind every alternative tested:

* Requiring the federal government to publish the identity of brokerages

and individuals found guilty of naked shorting (79%)

* Allowing individuals, investors, pension funds, and small companies

financially damaged by naked shorting to sue to recover their financial

losses (75%)

* Revoking the securities licenses of those found guilty of committing

naked shorting (75%)

Findings for the study were compiled from an online study of 2,486 U.S. adults conducted December

6-8, 2005. These questions were then asked of the 1,243 who currently own stocks, mutual funds or

401(k) funds. The sampling error for the investor results is +/- 4 percentage points at the 95%

confidence level.

QUESTION WORDING AND TOPLINE FINDINGS:

BASE: ALL RESPONDENTS

QA Thinking about something new ... Which of the following do you own?

48% OWN STOCKS, FUNDS OR MUTUAL FUNDS

29% Stocks

27% Mutual funds

29% 401(k)

43% None of these

9% Decline to answer

BASE: OWN STOCKS, MUTUAL FUNDS OR 401(K)

QB Please read the information below, then answer the questions that follow.

In stock trading, there is a stock purchase called "shorting" or "short selling" and one called "naked

shorting."

When someone shorts a stock, he/she borrows shares of that stock from his/her broker, typically for a

fee, and sells those borrowed shares on the open market. When the stock goes down, he/she buys

shares in the market and returns them to his/her broker who lent them to him/her. Short selling is legal

and the borrower pockets the money he/she makes from borrowing low and selling high.

Let's say you noticed the price of moose antlers was soaring -- which in turn would hurt the earnings of

Deer Antlers Incorporated. You decide to go short on Deer Antlers Incorporated, so you borrow 100

shares of Deer Antlers Incorporated from your broker and sell them at $30 per share. Two months

later, Deer Antlers Incorporated falls to $25 a share. You buy the shares back and pocket the $5

difference per share for a $500 profit. If you do this you are a "short-seller" or "selling-short" Deer

Antlers Incorporated.

In naked shorting a short-seller makes a stock trade without ever owning or borrowing the shares

he/she sells. Some professional investors and hedge funds take advantage of loopholes in the rules to

sell shares without making any attempt to borrow the stock. When a stock is naked shorted, there is no

limit on the downward pressure a short-seller can apply to that stock and some companies can be put

out of business by this practice. Naked short sellers sell and profit from something they don't own or

haven't borrowed. Naked shorting is illegal.

In your opinion, should someone who naked shorts a stock face civil and criminal penalties?

8% Yes, face civil penalties

9% Yes, face criminal penalties

59% Yes, face both civil and criminal penalties

5% No, face no penalties

18% Not sure

BASE: OWN STOCKS, MUTUAL FUNDS OR 401(K)

QC In your opinion, should penalties for someone guilty of naked short selling be more severe, less

severe or about the same as penalties from crimes such as fraud and counterfeiting money?

11% More severe

10% Less severe

65% About the same

14% Not sure

BASE: OWN STOCKS, MUTUAL FUNDS OR 401(K)

QD Would you be more inclined / less inclined to vote for a congressional candidate who will address

the issue of naked shorting?

38% More inclined to vote

4% Less inclined to vote

36% Makes no difference

21% Not sure

BASE: OWN STOCKS, MUTUAL FUNDS OR 401(K)

QE Do you believe that individuals, investors, pension funds, and small companies financially

damaged by naked shorting should be able to sue the guilty parties to recover their financial losses?

75% Should be able to sue

5% Should not be able to sue

21% Not sure

BASE: OWN STOCKS, MUTUAL FUNDS OR 401(K)

QF Do you believe that the federal government should be required to publicly publish the identity of

brokerages and individuals found guilty of naked shorting?

79% Should be required to publicly publish

4% Should not be required to publicly publish

17% Not sure

BASE: OWN STOCKS, MUTUAL FUNDS OR 401(K)

QG In your opinion, should individuals and firms licensed by U.S. federal and state governments to

buy and sell securities lose their licenses when found guilty of committing naked shorting?

75% Should lose their licenses

6% Should not lose their licenses

19% Not sure

Note: For questions QD and QE, percentages may not add up to 100% due to rounding.

Methodology

Harris Interactive® conducted the online survey on behalf of Working Americans for an Open

Economy between December 6-8, 2005 among 2,486 U.S. adults aged 18 and over, of whom 1,243

currently own stocks, mutual funds or 401(k) funds. Figures for age, sex, race/ethnicity, income,

education and region were weighted where necessary to bring them into line with their actual

proportions in the population. Propensity score weighting was also used to adjust for respondents'

propensity to be online.

In theory, with probability samples of this size, one could say with 95 percent certainty that the overall

results have a sampling error of plus or minus 3 percentage points of what they would be if the entire

U.S. adult population had been polled with complete accuracy. Sampling error for the sub-samples of

investors (1,243) and investors aged 55 and over (497) is higher and varies. This online sample is not

a probability sample.

About Working Americans for an Open Economy

Working Americans for an Open Economy is a non profit public interest group that advocates for

greater transparency and financial accountability in America's investment, securities, and financial

institutions.

About Harris Interactive®

Harris Interactive Inc. (www.harrisinteractive.com), based in Rochester, New York, is the 13th largest

and the fastest-growing market research firm in the world, most widely known for The Harris Poll® and

for its pioneering leadership in the online market research industry. Long recognized by its clients for

delivering insights that enable confident business decisions, the Company blends the science of

innovative research with the art of strategic consulting to deliver knowledge that leads to measurable

and enduring value. Harris Interactive serves clients worldwide through its United States, Europe

(www.harrisinteractive.com/europe) and Asia offices, its wholly-owned subsidiary Novatris in Paris,

France (www.novatris.com), and through an independent global network of affiliate market research

companies. EOE M/F/D/V

1. "U.S. investors" refers to U.S. adults aged 18 and over who currently

own stocks, mutual funds or 401(k) funds.

CONTACT: STEVE WARK 702-498-2820

Source: Harris Interactive

P.S.

posted on Mar 11, 11 05:04PM Use the IP Check tool [?]

I have railed against the corruptness and leack of oversight in the Canadia markets to no use. Finally someone with heft says it like it is...as per the last paragrahof the last post by Jesse:

"And if you are a junior, make it a priority to list on a major exchange in the States. The games being played on the Canadian exchanges are disgraceful, almost as bad as the US futures markets. And the US pink sheets are a snakepit, even by the current low standards of transparency and efficient in equity markets."

Loading...

A solution to the naked shorts?

posted on Mar 11, 11 05:00PM Use the IP Check tool [?]

Isn't it time for the management of the various JPMs, especially those like ECU, to implement a plan on behalf of their long suffering shareholders? I would have to think that some of the major shareolders would immediately address the management of their respective holdings ASAP.

How to attack the “Naked Shorts”

http://www.jessescrossroadscafe.blogspot.com/

A Modest Proposal for Some of the Unhedged Gold and Silver Producers

Going forward as your cash flows improve, one of the ways to combat the naked shorting of your stocks is to provide to your shareholders the option to receive small quarterly dividends in your own products, gold and silver.

Yes I know, those with cash flow will be on a merger and acquisition mania, scooping up the small producers and explorers. But this phase will pass and fall to a more sustainable level. I watched the same phenomenon unfold in the Canadian oil juniors markets last decade.

But returning dividends, not in cash, but in metal, is an extremely attractive proposition and certainly not a new thought. I have proposed it in the past. I was reminded of this while listening to an interesting audio interview that Jim Sinclair had with KWN. The problem is how one can manage the logistics. And so here is something to think about.

A producer or trust could do a direct distribution of physical but this would be awkward and costly. Distribution of things to shareholders is not their business, and requires a certain amount of expertise and infrastructure.

Rather, a producer could work with a group like Sprott to set up a physical gold and silver trust in the manner of a hard closed end fund like the Sprott Physical Trusts with redemption rights. Or they could work with some firm like Goldmoney, supplying them with bullion and then issue certificates to shareholders. Outsourcing the logistics might be the best solution.

This would require the naked shorts to start handing over physical gold and silver, which is much more difficult to do than to provide more paper.

Just a thought and not a complete plan, and the details are quite important. But there are several methods of rewarding shareholders while pulling in the reins on the naked shortsellers, and this is one of them.

Pleading with the regulators to do their jobs may not be fruitful, considering how the banks seem to have their way with them.

And if you are a junior, make it a priority to list on a major exchange in the States. The games being played on the Canadian exchanges are disgraceful, almost as bad as the US futures markets. And the US pink sheets are a snakepit, even by the current low standards of transparency and efficient in equity markets.

naked shorting info

posted on Mar 11, 11 06:59PM Use the IP Check tool [?]

If ECU is dealing with shorts, this is relevant info, and is the latest on the subject:

As you guys follow the Raj Rajaratnam insider trading trial play out don’t forget that abusive naked short selling is actually the ultimate form of “insider trading”. In these cases you typically have a tipper and a tippee. The tipper has access to something that the tippee wants. Usually it’s market moving nonpublic information about a publicly traded corporation.

In the case of abusive naked short selling the abusive MMs typically have several things that corrupt investors want. Firstly, they have a superior visibility of buy orders. Every buy order has money attached to it. If you want to steal somebody’s money you need to gain access to it. Secondly, abusive MMs have the ability to ILLEGALLY access the bona fide MM exemption from making pre-borrows or “locates” before making admittedly “naked” (no borrow involved) short sales. The easy to kill development stage corporations typically attacked often have shares that are nonmarginable and have little institutional ownership. These are the two main sources of legitimate borrows for legal short sales. Simply refusing to deliver that which you sell while pretending to be injecting liquidity as a bona fide MM circumvents expensive or unavailable borrows.

Abusive MMs also have access to market moving nonpublic information. Who needs to get a hot tip on quarterly earnings when you can see buy and sell orders queuing up right in front of you? Obviously the abusive MMs willing to prostitute all of these advantages and play the role of “tipper” now only needs “tippees” to sell this information to. This is where abusive hedge funds, abusive clearing firms, naked short selling cartel, etc. come in.

In the Raj Raj trial we see where Raj allegedly had one of his tippers set up an offshore a/c into which he allegedly deposited $500,000 per year of “service”. In abusive NSS-ing cash is not typically the currency used for the tippee to pay the tipper. Instead, order flow is the currency of choice. Abusive MMs then typically convert this into cash. After all, a corrupt hedge fund has the right to direct order flow to any “securities intermediary” he so chooses.

As this trial plays out, ask yourself what is more the heinous of an act, is it a corporate insider whispering to a buddy that earnings are going to be lousy so he would recommend shorting the stock or an abusive MM ILLEGALLY renting out his bona fide MM exemption so that a party willing to “bribe” him with order flow can take an ILLEGAL short position by refusing to deliver the securities he sold while circumventing an expensive or unavailable borrow. There are going to be some valuable educational opportunities available in following not only this case but also the developments in the Fairfax Holdings case (Fairfax v. SAC Capital) and the upcoming Overstock case.