LFWK - getting some free publicity
StockGate: Has Canada Admitted It Has Been Aiding And Abetting Short Sales; New Events Tonight’ / FinancialWire®
March 13, 2006 (FinancialWire) ‘With 10 percent of all issues currently on the naked short-sales Regulation SHO list, market watchers have been trying to track the various end-arounds that market manipulators employ to circumvent their legal responsibilities in the U.S., including the secretive and nefarious Stock Borrow Program at the Depository Trust and Clearing Corp.,
March 13, 2006 (FinancialWire) With 10 percent of all issues currently on the naked short-sales Regulation SHO list, market watchers have been trying to track the various end-arounds that market manipulators employ to circumvent their legal responsibilities in the U.S., including the secretive and nefarious Stock Borrow Program at the Depository Trust and Clearing Corp., equally secretive ex-clearing arrangements between brokerages, and deep-pocketed offshore hedge fund accounts, now comes Canada saying it has not, so far, been adhering to U.S. short-selling rules.
At least four securities have spent a record 294 days on the scandal-plagued list. These include Krispy Kreme (NYSE: KKD), Martha Stewart Omniliving (NYSE: MSO), Global Crossing (NASDAQ: GLBC) and Netflix (NASDAQ: NFLX).
The Ontario Securities Commission has published proposed amendments to the rules of the Canadian Depository for Securities Ltd. (CDS) concerning adherence to U.S. short-selling rules.
On January 26, CDS’ board of directors approved amendments to the CDS rules which will facilitate adherence to Regulation SHO by CDS Participants utilizing Cross-Border Services offered by CDS. Regulation SHO imposes requirements on broker-dealers engaged in trading activity on markets regulated by the U.S. Securities and Exchange Commission with respect to short sales of equity securities.
Regulation SHO requires short sellers to locate securities to borrow before selling short, and imposes additional requirements when trading in securities in which a substantial number of failures to deliver have occurred (threshold securities).
The proposed amendments include: an explicit requirement that participants utilizing Cross-Border Services comply with Regulation SHO; a provision allowing CDS to release information to any self-regulatory organization of which the participant is a member or the primary Canadian regulatory body relating to that participant's compliance with Regulation SHO; a provision authorizing CDS to restrict a participant's access to Cross-Border Services where there is non-compliance with Regulation SHO; and, a provision mandating that CDS take the necessary steps to close out a participant's fail to deliver position in a threshold security.
In addition to the proposed amendments to its rules, CDS is proposing to implement changes to procedures to facilitate adherence to Regulation SHO by its participants. CDS is proposing to generate reports identifying threshold securities and outstanding positions in relation to these threshold securities both on an aggregate basis, for all CDS participants, and by individual participant.
To comply with the proposed amendments CDS participants will be expected to adopt internal procedures or policies when utilizing Cross-Border Services to ensure compliance with Regulation SHO.
Meanwhile, while the headlines have more recently been dominated by the War Between the Worlds of James Cramer, the half-subpoeaed founder of TheStreet.com (NASDAQ: TSCM) and the mostly indignant CEO of Overstock.com (NASDAQ: OSTK), another poster child has emerged, and its name is Loftwerks, Inc. (OTC: LFWK).
Loftwerks CEO Dennis Ammerman said that between treasury shares and restricted shares, insiders had purchased enough additional shares to exceed the 500 million share float.
Ammerman said the full details will be posted on the company’s website at loftwerks.com by tomorrow.
The fact that 20 million shares were traded when no legitimate shares were available raises the question as to where those shares came from. Critics of the Depository Trust and Clearing Corp., which is part of an investigation by state regulators, have said the ‘stock borrow’ program results in the ‘counterfeiting’ of shares for hundreds of public companies.
The most prominent battler against manipulative trading, Patrick Byrne, CEO of Overstock.com has told FinancialWire to expect important new developments tonight, but did not say what he expects to occur.
Some have expected the subpoenas to ‘journalists’ issued by the SEC to be reactivated, with the full support of SEC Commission Chair Christopher Cox, and some have speculated that General Electric (NYSE: GE), may suspend CNBC’s ‘Mad Money’ due to Cramer’s public display of disrespect for legal authority in the face of the SEC subpoenas, capped by his writing ‘BULL’ on the face of his and cavalierly tossing it to the floor while on-air, possibly leaving him the latest reincarnation of ‘Lonesome’ Rhodes, a character in ‘A Face in the Crowd.’
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