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Pastimes : The Naked Truth - Big Kahuna a Myth
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To: accountclosed who wrote (48880)6/23/1999 9:49:00 AM
From: wlheatmoon  Read Replies (1) of 86076
 
check this out.
Mary Baker (227 )
From: ahhaha
Wednesday, Jun 23 1999 1:15AM ET
Reply # of 247

I knew what you were doing and it is a violation of the '33 Securities Act. You are putting
no money down in order to buy stock. The '33 Act was created because Congress
believed a major contributor to the stock market crash of '29 was purchasing stock on
10% or less margins. Congress also created a wall between banks and securities houses
so that a pyramid of credit wasn't possible. In recent years the lines of separation have
been blurred between all these financial entities such that brokers act like bankers and
banks act like brokers. The net effect is to enable the public to escape the intent of the
law.

Etrade is in direct violation for failure to comply, negligence, and are subject to SEC fine
and censure, possible loss of securities license as a broker/dealer and possible expulsion
from the NASD. The credit card securing bank is also negligent and in violation of
banking laws about extending credit to buy stock on margin under the '33 Act and are
subject to censure and fine. The credit card company is negligent and in violation of
misrepresentation of promotional financial instruments. The check issuing bank will have
to cease this activity immediately.

You had better contact a lawyer and find out how to protect yourself from all these
financial entities which will try to prove that you intended to defraud them. I don't believe
that you're guilty. They are guilty of a form of inadvertent entrapment. They want you to
use these checks to spend on non-securities purchases. They did not say that you were
not to buy securities with them. At least I would guess they didn't. Etrade will argue that
they can't distinguish between a check on a debit balance and one on a demand deposit
balance so they can't be held responsible. The credit card company will sit on the securing
bank and the bank will claim they have made caveats in the fine print.

This activity is similar to check kiting and if intent to defraud can be shown, it is a felony.
Since I'm not a lawyer, I strongly suggest you contact one knowledgeable about securities
law.
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