StockGate: Berlin Listings 'Abuse Rules,' Says Financial Times Headline
May 20, 2004 (financialwire.net via COMTEX) -- (FinancialWire) Media attention
from Financial Times and The Pipes Report are now focusing on the bizarre turn
of events at the Berlin Stock Exchange, which has come under fire from numerous
small public companies such as Environmental Solutions Worldwide (OTCBB: ESWW),
GoldSpring, Inc. (OTCBB: GSPG), Wizzard Software (OTCBB: WIZD), and Advanced ID
(NASDAQ: AIDO) for inexplicably listing their shares without authorization or in
most cases, notification.
The story, first broke by FinancialWire, has taken new twists, including
complaints to the NASD and the U.S. Securities and Exchange Commission regarding
manipulative trading that has coincided with the "listings" on the
exchange for dozens of the several hundred companies that were listed en masse
by what appears now to have been a rogue trader.
"The Berlin listings came just weeks before a new Securities and Exchange
Commission rule on so-called naked short selling. Under the new rules, those
seeking to sell shares short must be able to demonstrate that they are able to
gain access to the securities within two days," noted Norma Cohen, reporting
in Financial Times. "However, the rules contain a loophole for what are
deemed to be genuine arbitrage trades, defined as short sales in shares that are
listed on another stock exchange.
"According to a spokeswoman for the Berlin-Bremen Stock Exchange, a single
broker, Berliner Freiverkehr, asked that 850 US companies that are traded Over
The Counter (OTC) be added to the official list during a six-week period
beginning in mid-February," the Times stated.
The Pipes Report confirmed FinancialWire's story earlier this week that the
Berlin Stock Exchange, at berlinerboerse.com, has apparently put the
brakes on more than 200 U.S. public companies sponsored by the German brokerage
Berliner Freiverkehr (Aktien) AG, broker #1170. The companies are now under
"filing companies" but have the designation, "NA," under the
column for the "expected day of listing."
One hundred of the companies were "listed" by Berliner Freiverkehr,
mostly without the company's knowledge or authorization, on April 22. Another 43
were put up for listing on April 23 and another 80 on April 28.
The April 28 listings pending include:
Zone 4 Play Inc., Zap, WinWin Gaming, Whitney Info Net, Warrantech Corp, Viragen
International, Veramark Tech, Urban Television, Towne Bank, Total First Aid,
Time America Inc., Thomas Group Inc., Surequest System, Summit Financial,
Spectre Gaming, Sealife Corp., Scanner Technology, Roo Group Inc., Refocus Group
Inc., Provectus Pharma, Power2Ship Inc, Pipeline Data, Pan American Energy,
Ortec Intl. Inc, Ophthalmic Image, Northern Empire, Noble Romans Inc., New
Medium Enterprises, New Jersey Mining, Naturade Inc., Nathaniel Energy, Mymetics
Corp, Michelex Corp, Medicor Ltd, Market Central, Man Sang Holdings, Kolorfusion
Intl, J Net Enterprises, Intl Smart Sources, International Mo, International Ca,
IJJ Corp, I2 Telecom Internationa, Heritage Worldwide, Find/SVP Inc, E-The Movie
Network, Ergo Science, Eos International, Elbit Vision Israel, E Med Future Inc,
Dogs International, Desert Mining, Corvu Corp, Coolsavings Inc, Claxson Inter-A,
Cipher Holding, China Expert Technologies, Carroll Shelby, Burzynski Research,
BP International, Bns Co-Cl A, Barneys NY Inc, Ballistic Recov, Axesstel Inc,
Archon Corporation, AP Henderson Group, Anacomp Inc-A, Amer Intl. Industries,
Aethlon Medical, Advant-E Corp, ACR Group Inc, and Acceris Communication.
The April 23 listings pending include:
Systems Evolution, Startech Enviro, Specialized Health, Solutia Inc, Skyterra
Communication, Siricomm Inc., Sinofresh Health, Simtek Corp., Silverleaf
Resources, Serviceware Tech, Searchhelp Inc., Schick Tech Inc., Satellite
Enterprise, Safety Component,Robotic Vision, Roaming Messenge, Poseidis Inc.,
Polymer Group-A, Platinum Superya, Phone 1Globalwide,Pharsight Corp, Pharm
Formulation, PDC Innovative, Oxford Ventures, Yi Wan Group Inc, YDI Wireless
Inc, XRG Inc, Weirton Steel, Usurf America, United Energy/NV, UCI Medical Affi,
Touchstone Resources, Torvec Inc, Tissera Inc, Timco Aviation, Thermoenergy, and
Temecula Valley.
And the April 22 listings pending include:
Otish Mountain, Optio Software, Northland Cran-A, Nothern American, Newtech
Brake Corp, Network Installa, Net 1 Ueps Tech, Nannaco Inc, Mr3 Systems Inc.,
Millstream Acqui, Mile Marker Inc, Micromem Tech, Metalline Mining, Mems Inc,
Medical Makeover, Manhattan Pharma, Majesco Holdings, M2003 PLC,
Loral Space & Communication, Locateplus Holdings, Life Science Resources,
Liberty Star Gold, Komodo Inc, Knot Inc., Jurak Corp, Jag Media Holding-, Invisa
Inc, Intl. Paper-Pfd, Integrat Security Systems, Impsat Fiber Net, Houston
American, Havana Group Inc, Guardian Tech, Graphco Holdings, GFY Food Inc,
Gelstat Corp., Gaming & Entertainment, Fortune Divers, First Avenue Net,
Findex.com Inc, Femone Inc., Female Health, Fact Corporation, Exten Industries,
Exide Technologies, Epixtar Corp., Endeavor Intl, Eline Entertainment,
Ecoloclean Industries, Duravest Inc, Dtomi Inc, Dreams Inc, Directview Inc,
Cytomedix Inc, CPC of America, Conectisys Corp, Comdisco Holdings, Civitas
Bankgroup, Cinemaelectric, China World Trade, China Granite Co, China
Enterprise, Chaus (Bernard), Chaparral Resources, Cadence Resources, Buyers
United Inc., Bio-Amer Capital, Axcess Inc, Autoinfo Inc, Austral Pcific, Asia
Premium Tel, Asia Pac Wire, Ascendant Solution, Aptimus Inc., Applied DNA
Science, American Oil & Gas, Amer Tech Group,
Amcast Industrial, Ambase Corp, Alpine Group Inc, Allegiance Telecommunicaion,
Air-Q Wi-Fi orp, Aerotelesis Inc, Aegis Assessment, Accupoll Holdings, Aames
Financial Corp, and Armstrong Holdings
Other listings pending by the same broker include:
Samaritan Pharm, Sagent Tech Inc, Spacedev Inc, IVP Technology, Tech Labs Inc,
Synthetic Turf C, Swiss Medica Inc, Summus Inc., Stockgroup Info, Spectrum
Organic, Spear&Jackson, Sonoran Energy I, ADV Viral Research, Allergy Research
Group, and TVI Corp..
The Pipes Report, followed the Dow Jones in confirming the lawsuit by Nanopierce
Technologies (OTCBB: NCPT) against the Depository Trust and Clearing Corp., and
said that the chief spokesperson for the DTCC continues to deny that it has been
sued even though the papers were served on the entity's attorneys more than two
weeks ago.
How entrenched is the Depository Trust and Clearing Corp.? It's two preferred
shareholders are the New York Stock Exchange and the NASD, a regulatory agency
that also owns the NASDAQ (OTCBB: NDAQ) and the embattled American Stock
Exchange! Regulators, regulate thyself?
In an era when corporate governance is the primary interest for the SEC and
state regulators, the DTCC is hardly a role model. Its 21 directors represent a
virtual litany of conflict:
They include Bradley Abelow, Managing Director, Goldman Sachs (NYSE: GS);
Jonathan E. Beyman, Chief Information Officer, Lehman Brothers (NYSE: LEH);
Frank J. Bisignano, Chief Administrative Officer and Senior Executive Vice
President, Citigroup / Solomon Smith Barney's Corporate Investment Bank (NYSE:
C); Michael C. Bodson, Managing Director, Morgan Stanley (NYSE: MWD); Gary
Bullock, Global Head of Logistics, Infrastructure, UBS Investment Bank (NYSE:
UBS); Stephen P. Casper, Managing Director and Chief Operating Officer, Fischer
Francis Trees & Watts, Inc.; Jill M. Considine,Chairman, President & Chief
Executive Officer, The Depository Trust & Clearing Corporation (DTCC);
Also, Paul F. Costello, President, Business Services Group, Wachovia Securities
(NYSE: WB); John W. Cummings, Senior Vice President & Head of Global Technology
& Services, Merrill Lynch & Co. (NYSE: MER); Donald F. Donahue, Chief Operating
Officer, The Depository Trust & Clearing Corporation (DTCC); Norman Eaker,
General Partner, Edward Jones; George Hrabovsky, President, Alliance Global
Investors Service; Catherine R. Kinney, President and Co-Chief Operating
Officer, New York Stock Exchange; Thomas J. McCrossan, Executive Vice President,
State Street Corporation (NYSE: STT); Eileen K. Murray, Managing Director,
Credit Suisse First Boston (NYSE: CSR); James P. Palermo, Vice Chairman, Mellon
Financial Corporation (NYSE: MEL); Thomas J. Perna, Senior Executive Vice
President, Financial Companies Services Sector of The Bank of New York (NYSE:
BNY); Ronald Purpora, Chief Executive Officer, Garban LLC; Douglas Shulman,
President, Regulatory Services and Operations, NASD; and Thompson M. Swayne,
Executive Vice President, JPMorgan Chase (NYSE: JPM).
In their comments to the SEC regarding Regulation SHO in January, the 50 state
regulators, through their association, the North American Association of
Securities Administrators (NASAA) issued what many consider to be a strong
warning that if the DTC is not dealt with in the final regulations, state
regulators such as New York State Attorney General Eliot Spitzer may step to the
plate.
In what many considered to have been explosive comments, Ralph Lambiase, NASAA
president and Director of the Connecticut Division of Securities, warned "NASAA
urges the Commission to reconsider its stance regarding the role of the
Depository Trust and Clearing Corporation (the DTC). As a threshold matter,
NASAA believes that the Commission should explicitly prohibit the DTC from
lending more shares of a security than it actually holds. The ability of the
overall proposed rule would be severely impared unless the Commission undertakes
to implement such a prohibition."
As the Nanopierce lawsuit reveals, those were indeed strong words, meddling as
it did, in a substantial revenues base for the DTCC.
Recently, leading market makers and brokers named in various lawsuits and other
actions, including FleetBoston (NYSE: FBF), Goldman, Sachs & Co. (NYSE: GS), H.
Myerson & Co., Inc. (NASDAQ: MHMY), Olde / H&R Block (NYSE: HRB), Charles Schwab
(NYSE: SCH), Toronto-Dominion's (NYSE: TD), TD Waterhouse Group and vFinance,
Inc. (OTCBB: VFIN). A.G. Edwards, Inc. (NYSE: AGE),
Ameritrade Holding Corp (NASDAQ: AMTD), Deutsche Bank AG (NYSE: DB), and ETrade Group, Inc (NYSE: ET),
were forced to comply with new short-selling market regulations imposed by the
NASD after the SEC had "sat on" the NASD request to plug material
loopholes for almost 2-1/2 years.
"The new rules expand the scope of the affirmative determination
requirements to include orders received from broker/dealers that are not members
of NASD ("non-member broker/dealers").
The new rule is on the web at nasdr.com
The rule itself, while welcomed by small companies and their shareholders in the
U.S., nevertheless raised an outcry because the NASD's request to put it into
effect had set on a shelf at the SEC since 2001.
The scandal has embroiled hundreds of companies and dozens of brokers and
marketmakers, in a web of internaitional intrigue, manipulative short-selling
and cross-border acctions and denials.
Comments on Regulation SHO ended January 5, and may be viewed at
sec.gov
Some 122 companies, including 13 brokers, such as FleetBoston (NYSE: FBF),
Goldman, Sachs & Co. (NYSE: GS), H. Myerson & Co., Inc. (NASDAQ: MHMY), Olde /
H&R Block (NYSE: HRB), Charles Schwab (NYSE: SCH), Toronto-Dominion's (NYSE:
TD), TD Waterhouse Group and vFinance, Inc. (OTCBB: VFIN). A.G. Edwards, Inc (NYSE: AGE),
Ameritrade Holding Corp. (NASDAQ: AMTD), Deutsche Bank AG (NYSE:
DB), and ETrade Group, Inc. (NYSE: ET), have been embroiled for over a year in a
raging controversy
The remaining 109 companies among the 122 named to date have issued press
releases or been named in the media as having been victimized, or as taking
various actions, either alone or in concert with other companies, to oppose
manipulative trading in the form of illegal naked short selling. The actions
have ranged from lawsuits to withdrawals and threatened withdrawals from the
electronic trading system managed by the Depository Trust & Clearing Corp., to
withdrawals from toxic financings, to the issuance of dividends or name changes
designed to squeeze manipulators, to joining associations or networks or to
contacting regulatory authorities to provide documentation of abuses or
otherwise complain.
The complete list of those 108 companies include Advanced Viral Research Corp.
(OTCBB: ADVR), AdZone Research, Inc (OTCBB: ADZR), Amazon Natural Treasures
(OTC: ANTD), America's Senior Financial Services (OTCBB: AMSE), American
Ammunition, Inc. (OTCBB: AAMI), AngelCiti Entertainment (OTCBB: AGLC), ATSI
Communications, Inc.
(OTC: ATSC), Federal Agricultural Mortgage / Farmer Mac
(NYSE: AGM) Allied Capital (NYSE: ALD), American Motorcycle (OTC: AMCYV),
American International Industries (OTCBB: AMIN), Ameri-Dream (OTC: AMDR),
Adirondack Pure Springs Mt. Water Co. (OTCBB: APSW),
ATSI Communications,Inc (OTC: ATSC) Bluebook International (OTCBB: BBIC), Blue Industries (OTCBB:
BLIIV), Bentley Communications (OTCBB: BTLY), BIFS Technologies Corporation
(OTCBB: BIFT), Biocurex (OTCBB: BOCX). Broadleaf Capital Partners, Inc (OTCBB:
BDLF), Chattem, Inc. (NASDAQ: CHTT), Critical Home Care (OTCBB: CCLH), Composite
Holdings (OTC: COHIA), CyberDigital, Inc. (OTCBB: CYBD) Diamond International
Group (OTCBB: DMND), Dobson Communications Corp (NASDAQ: DCEL), Eagle Tech
Communications (OTC: EATC), Edgetech Services (OTCBB: EDGH);
Also, Endovasc Ltd. (OTCBB: EVSC), Enviro-Energy Corporation (OTCBB: ENGY),
Environmental Products & Technologies (OTC: EPTC), Environmental Solutions
Worldwide, Inc. (OTCBB: ESWW), EPIXTAR Corp (OTCBB: EPXR),
eResearchTechnologies, Inc. (NASDAQ: ERES), Flight Safety Technologies (OTCBB:
FLST), Freddie Mac (NYSE: FRE), FreeStar Technologies (OTCBB: FSRCE), Front
Porch Digital,
Inc. (OTCBB: FPDI), Geotec Thermal Generators, Inc (OTCBB: GETC), Genesis
Intermedia (OTC: GENI), GeneMax Corp. (OTCBB: GMXX), Global Explorations Inc
(OTC: GXXL), Global Path (OTCBB: GBPI), GloTech Industries, Inc (OTCBB: GTHI),
Green Dolphin Systems (OTCBB: GLDS), Group Management (OTCBB: GPMT), Hop-On
(OTC: HPON), H-Quotient, Inc., (OTCBB: HQNT), Hyperdynamics Corp (OTCBB: HYPD),
International Biochem (OTCBB: IBCL), Intergold Corp (OTCBB: IGCO),
International Broadcasting Corporation (OTCBB: IBCS), InternetStudios, Inc (OTCBB: ISTO), ITIS Holdings (OTCBB: ITHH), Investco Corp (OTCBB: IVCO), Lair
Holdings (OTC: LAIR), Lifeline BioTechnologies Inc. (OTC: LBTT), Life Energy &
Technology (OTCBB: LETH), MBIA (NYSE: MBI);
Also, MegaMania Interactive (OTC: MNIA), MetaSource Group, Inc. (OTCBB:
MTSR),Midastrade.com (OTC: MIDS), Make Your Move (OTCBB: MKMV), Medinah Minerals
(OTC: MDMN), MSM Jewelry Corp. (OTC: MSMC), Nanopierce Technologies, Inc.
(OTCBB: NPCT), Nutra Pharmaceutical (OTCBB: NPHC), Nutek (OTCBB: NUTK),
Navigator Ventures (OTC: NVGV), Orbit E-Commerce, Inc. (OTCBB: OECI), Pitts &
Spitts (OTC: PSPP), Sales OnLine Direct (OTCBB: PAID), Pacel Corp (OTCBB:
PACC), PayStar Corporation (OTC: PYST),Petrogen Corp. (OTCBB: PTGC), Pinnacle
Business Management (OTC: PCBM), Premier Development & Investment, Inc. (OTCBB:
PDVN), PrimeHoldings.com, Inc. (OTC: PRIM), Phlo Corporation (OTCBB: PHLC),
Resourcing Solutions (OTC: RESG), Reed Holdings (OTC: RDHC), Rocky Mountain
Energy Corp. (OTCBB: RMECE), RTIN Holdings (OTCBB: RTNHE), Saflink Corp (NASDAQ: SFLK), Safe Travel Care (OTCBB: SFTVV), Sedona Corp (OTCBB: SDNA);
Also, Sionix Corp. (OTCBB: SINX), Sonoran Energy (OTCBB: SNRN), Starmax
Technologies (OTC: SMXIF), Storage Suites America (OTC: SSUA), Suncomm
Technologies (OTC: STEH), Sports Resorts International (NASDAQ: SPRI),
Technology Logistics (OTC: TLOS), Swiss Medica, Inc. (OTCBB: SWME), Ten Stix,
Inc. (OTCBB: TNTI), Tidelands Oil (OTCBB: TIDE), Titan Construction (OTC: TTCS),
Trezac Corp. (OTCBB: TRZAV), Universal Express, Inc (OTCBB: USXP), Valesc
Holdings, Inc. (OTCBB: VLSHV), Vega Atlantic (OTCBB: VGAC), Viragen (AMEX: VRA),
Viragen International (OTCBB: VGNI), Vista Continental Corporation, (OTCBB:
VICC), Viva International (OTCBB: VIVI), Vtex Energy (OTCBB: VXENE) and Wizzard
Software (OTCBB: WIZD), WorldTradeShow.com (OTC: WTSW) and Y3K Secure Enterprise
Software, Inc. (OTCBB: YTHK)
Earlier in 2003, the SEC fined Rhino Advisors, Inc., $1 million for its
representation of Amro International in the financing and manipulation of Sedona
Corp. Amro, also known as AMRO, was registered in Panama, a secretive offshore
haven, but was not named in the SEC settlement. Another 60 public companies may
have been manipulated by the fined Rhino Advisors and its indicted principals,
or its funding apparatus, Amro.
These include:
All American Food Group Inc (OTC: AAFGQ), Amanda Co Inc (OTC: AMNA), Antra
Holdings (OTC: RECD), Aquis Communications Group Inc (OTCBB: AQUIS), Avanir
Pharmaceuticals (AMEX: AVN), Bionutrics Inc (OTC: BNRX), Brilliant Digital
Entertainment Inc (AMEX: BDE), Bravo! Foods International Corp (OTCBB: BRVOE),
Butler National Corp (NASDAQ: BUTL),Calypte Biomedical Corp (OTCBB: CYPT),
Chemtrak Inc/DE (OTC: CMTR), Clicknsettle Com Inc (OTCBB: CLIK), Corporate
Vision Inc (OTC: CVIA), Crown Laboratories Inc/DE (OTC: CLWB), Dental Medical
Diagnostic Systems Inc (OTC: DMDS), Detour Media Group Inc (OTC: DTRM),
Also, Digital Privacy Inc/DE (OTC: DGPV), Senior Services Inc (OTC: DISS),
International Inc (OTC: DYNX), Endovasc Ltd Inc (OTCBB: EVSC), Esynch Corp/CA
(OTCBB: ESYN), Focus Enhancements Inc (NASDAQ: FSCE), Frederick Brewing Co (OTC:
FRBW), Greystone Digital Technology Inc (OTC: GSTN), Havana Republic Inc/FL
(OTCBB: HVNR), Henley Healthcare Inc (OTC: HENL), Hollywood Media Corp (NASDAQ:
HOLL), Ibiz Technology Corp (OTCBB: IBZT), Diagnostic Systems Inc/FL (OTCBB:
IMDS), Imaging Technologies (OTCBB: IMTO), Integrated Surgical Systems Inc
(OTCBB: RDOC),
Also, Interferon Sciences Inc (OTC: IFSC), Interiors Inc (OTC: ITRNA), Laminaire
Corp (OTC: THMZ), Medisys Technologies Inc (OTC: SCEP), Milestone Scientific
Inc/NJ (AMEX: MS), Nevada Manhattan Group Inc (OTC: NVMH), Innovations Inc
(OTCBB: NTGE),Systems Group (OTC: OSYM), Pacific Systems Control Technology Inc
(OTCBB: PFSY), Professional Transportation Group Ltd Inc (OTC: TRUC), Rnethealth
Inc (OTC: RNTT),
Also, Sand Technology Inc (NASDAQ: SNDT), Sedona Corp (OTCBB: SDNA), Silverado
Foods Inc (OTC: SVFO), Stockgroup Information Systems (OTCBB: SWEB) Surgilight
Inc (OTC: SRGL), Tasty Fries Inc (OTCBB: TFRY), Tech Laboratories Inc (OTCBB:
TCHL), Teltran International Group Ltd (OTC: TLTG), Titan Motorcycle Co of
America Inc (OTC: TMOTQ), Trans Energy Inc (OTCBB: TSRG), Motorcycle Co (OTC:
UMCC), Universal Communication Systems Inc (OTCBB: UCSY), Medical Systems Inc
(OTC: UMSI), Vianet Technologies Inc (OTC: VNTK),Viragen Inc (AMEX: VRA),
Webcatalyst Inc (OTC: WBCL), Worldwide Wireless Networks Inc (OTCBB: WWWNQ), and
ZAP (OTCBB: ZAPZ)
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