He told the SEC Chair that short sales under Regulation SHO are not settled in
the 13 days allowed because one broker passes off to another, and so on,"
inferring that this process can go on indefinitely.
(COMTEX) B: Of Stocks and Socks: Senator Bennett Bores In On SEC's Dismal
aked Short Sales Record ( financialwire.net )
B: Of Stocks and Socks: Senator Bennett Bores In On SEC's Dismal Naked Short Sal
s Record ( financialwire.net )
Mar 14, 2005 (financialwire.net via COMTEX) -- March 14, 2005 (FinancialWire)
When U.S. Senator Robert Bennett (R-Utah), Chief Deputy Whip for Senate
Republicans, questioned U.S. Securities and Exchange Commission Chair William
Donaldson this past week about a naked short selling article he read from
FinancialWire, he indicated he was setting the stage for a full scale inquiry
into the SEC's failure so far to halt the illegal activity.
Bennett read Donaldson the story about the man, Robert Simpson, who filed that
he bought all of the stock of Global Links (OTCBB: GLKCE) and figuratively
stored the stock in his sock drawer only to see millions of shares traded almost
daily thereafter. Complaints about similar trades have been lodged regarding
Overstock.com (NASDAQ: OSTK), Martha Stewart Living Omnimedia (NYSE: MSO) and
Krispy Kreme (NYSE: KKD), to name a few.
A video of the exchange between Bennett and Donaldson is at
banking.senate.gov at
the 1:19:30 mark, and also at Investrend Information at
investrendinformation.com
Bennett questioned Donaldson in his appearance before the US Senate Committee on
Banking, Housing, and Urban Affairs. The Senator chairs the committee's
Subcommittee on Financial Institutions, and serves on the Subcommittee on
Securities and Investment. He also serves on the Senate Small Business Committee
and is Vice Chair of the Joint Economic Committee.
"This article in a national publication shows that people are still selling
short," Bennett told Donaldson. "Regulation SHO is clearly not
working."
He told the SEC Chair that short sales under Regulation SHO are not settled in
the 13 days allowed because one broker passes off to another, and so on,"
inferring that this process can go on indefinitely.
Donaldson said that his staff would be glad to meet with Bennett's staff to
describe what the Commission is doing to resolve these matters under Regulation
SHO. The SEC Chief of Market Regulation, Annette Nazareth, in a recent interview
with Floyd Norris of the New York Times (NYSE: NYT), dismissed complaints about
naked short selling as "people who want their stock to go up."
Senator Bennett told Donaldson that he is raising the issue because of
complaints received from his constituents back in Utah. It is not clear if
Nazareth, if and when she meets with Bennett's staff, will use the same
dismissive statement regarding the Senator's constituents.
Meanwhile, Robert Simpson's sock drawer may soon have a lot of folks poking
around in it.
There are already disputes as to how many shares are really outstanding.
For up-to-the-minute news, features and links click on
financialwire.net
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