In response to your last paragraph, It IS illegal for a group to research in private and then act in concert as a pool or syndicate to achieve advantage over the public.
As I have said before, read the history of the Equity Funding case. At the time, Dirks was a private contract special focus research analyst. He discovered a fraud in the financial statements of Equity Funding. In accordance with the contracts he had with his clients, he selectively disclosed this information to his exclusive clients.
They took advantage of their early access to the information to sell their shares before the public could. Three months or so later, Equity Funding was in Bankruptcy. The SEC screamed foul.
His clients did not share the information between one another, like the players on this board. They didn't short either, because rules then made it virtually impossible to traditionally short to any significant level, and back then not only could you not "Naked Short", you couldn't short without borrowing, and the DTCC didn't exist to "Re-Hypothecate".
The SEC objected to anyone having a leg up on the general investing public, and demanded that such information be distributed to the public before any individual investor took advantage of their early access to the facts. That is where Regulation Fair Disclosure, FD, came from 35 years later. That seems to be a typical SEC timeline on effective action.
Did this site and its members get access to information not broadly and contemporaneously shared with the public before they took advantage of it? There is only one honest answer, and the SEC should punish anyone for having gone against it. Why aren't they screaming "foul" here?
This group went further. It acted "In Concert" to destroy companies targeted, acting as a "Pool" or "Syndicate" to achieve their investment objectives. Maybe one company in a hundred could resist such pressure, more probably, less than one in a thousand. Someone here should have heard alarms going off. The failure of regulatory oversight is staggering.
Read the rules constructed as a result of the Bear Raids of 1929 and 1937. They made Pools and Syndicates illegal. Did some of the companies hit by this group deserve to be blasted? Absolutely. Did all of them? Absolutely not.
Did those with adverse information deserve the right to strip the market caps of those companies before the real victims, the people who actually bought something for consideration, could sell anything? According to the SEC, absolutely not, and certainly not by evading US Law by naked shorting offshore to avoid US rules.
I don't know "hedgefundman", but I bet from the balanced positions in his posts, he knows this history and these rules.
The rest of you have no plausible deniability. Some of you who continue to champion Elgindy do so as if you were in denial. Did some participate in this group's activities who were ignorant of the laws? Certainly. Are they in the majority? Certainly not. Is ignorance of the law a defense to prosecution? Also certainly not. Can ignorance ameliorate punishments? In some cases, at the discretion of the Judge.
Presuming the Elgindy trial ends before Christmas, some here are wished an "interesting" holiday period. That is a curse in Chinese.
Those who forget history are condemned to relive it. Nietsche said it best: The Past is Prologue.
Maybe one of the better lines is from Poker: "Read 'em and weep."
That's enough fun for this week.
Alienrecall. |
