Naked Shortening & Pool Operations on the Short Side - Jim Sinclair
posted on
Jun 19, 2008 04:46PM
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Dear CIGAs, The following is a missive that is being emailed to a total of 60,000 by request readers. I respectfully request that you cut, paste and send this to every junior mineral company and every mineral investor you know. Let’s send this to 250,000 investors and 1000 mineral companies TODAY! I trust you are all enraged and will be active in your support.
Dear Friends, Today is proof that these people are running scared. Their target today is a message that their time has come to an end. Add to that the arrest of the Bear Stearns Hedge Fund managers for not correctly marking down their holdings and informing their investors. These events have to put these people that are committing bullying, illegal and unethical activities in the crosshairs of investors, management and the law. Soon there will be no place to hide, no place to run and the name Anonymous has done them no good at all. The name Anonymous may well be their eventual undoing as illegal activities using such a means confirms their devious undertakings. The major underestimation by these hedge fund operators is the nature of the old-line junior mineral management. When you push them hard they will push back harder and make it personal. They should study the history of past PDACs and how old timers can act when attacked. Where I am concerned, today they made this personal. There is a great deal of information available to the management of any company listed on an exchange. The first step in determining what is happening in the short term is broker identification. Every transaction shows a broker on it with one curious twist on the TSX which allows trades to be noted as broker “Anonymous.” That is not the stumbling block itself because you can see all the daily trades almost as they happen and the total volume of buys and sells on each trade for broker Anonymous, therein determining if this legal camouflage has been a seller on balance for that day. This information can be obtained from www.tsx.com for companies on the Toronto Stock Exchange. Other exchanges have similar setups. It will have to be obtained by your company on www.tsx.com as info/short interest data is password protected. When you are on the TSX homepage, click on “Market Activity” and select “Current Market.” There will be a 15-minute delay on information but you can see the broker’s activity and name including that famous broker, Anonymous. This type of information can be obtained for all exchanges and the NASDAQ. Looking historically will be more informative as you can be assured that as the heat is turned up, procedures will change. Knowing the broker who represents the greatest on balance selling daily or from period to period is quite easy as they will not use Anonymous often enough to camouflage that they are or have been the largest seller. The next three documents companies need to obtain are:
By the comparison of all the above you are able to determine if the selling is long selling, legal short selling or unreported short selling. It is an exercise that is common to forensic accounting, probably better done for many companies by their auditor rather than by non-accountant management such as geologists. The next step is to retain a reputable Internet investigator as it is all out there in one form or another. Anonymous is a nice cover name probably used by the naked short seller, but after the trade and into the statistics it loses its effective cover capacity. We will keep that proprietary for the time being. We live in an information world, complex of course, but not to those that specialize. As this practice continues, your dedication to stopping the rape of shareholders must increase. Complaining to exchanges, regulators and hiring attorneys at this point is a useless effort. Bringing the culprits out into the light is the most effective first step. Making their identity known is the goal. The effort is to out those who are both pool raiding and those naked short selling your issue. One is conspiracy and the other is simply a crime. Identification is the first step. They will be identified and then they will be dealt with. We will come at them at every angle from rewards for information to cyber investigators and forensic accounting. Click here to read more about our efforts. The incoming company interest in this is simply overwhelming. I would venture to say that the companies now interested in ousting these criminals represents at least 200,000 investors. They can hide as all cowards do, but out they will come as many in the mineral industry have now dedicated their existence to this effort. Remember, the threats you face you can overcome. The threats you run away from for any reason win. To the management of the juniors: Never run, no matter what the message they try to communicate to you via your market is. Stockholders will support you because aggressive, dedicated and well-financed action is the only way to remove this vermin permanently. The more they speak via your market, the more you act. This is the only strategy that will protect shareholders from their reprehensible and illegal activities permanently.
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