PATCHIE, PATRICK BYRNE CALLING YOU A LIAR. YOU POSTED THAT THERE WHERE NO NAKED SHORTS IN GLOBAL LINKS Message 22768798 YET PATRICK SAYS THERE ARE.
THE GLOBAL LINKS FRAUD CONTINUES!!
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Global Links, a Nevada real estate holding company, claims it was a victim of short-selling but decided to fight back. Last month Forbes reported that the SEC found that trade settlement fails for Global Links were 27 times higher in February 2005 than the total number of shares Global Links had issued. Among other things, Global Links issued a new symbol, making it impossible for brokers to trade under the old symbol.
Byrne said his company did not need such drastic measures. "I wouldn't do anything special to Overstock to get at them," Byrne said. "I think we can burst them by results. I am walking pretty close to the line. If I purposely go out and try to hurt short sellers, it would be illegal."
The Overstock CEO thinks Global Links had to take the law into their own hands. "I don't know if there is a line (between legal and illegal methods to fight short sellers) anymore. The SEC is like some corrupt southern sheriff doing duty for the drug dealer," he said.
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Friday, September 08, 2006
CEO blasts SEC over controversial trading
By VALERIE MILLER
Overstock.com CEO Patrick Byrne says so-called "naked short selling" has to stop or it will hurt small- and medium-sized companies. The executive was in Las Vegas Friday as part of his campaign to press for stronger regulatory action to stop what he says is an "illegal" practice.
"The SEC is in bed with Wall Street and they need to face up to it," Byrne asserted. He is campaigning against "naked" short selling. In typical short selling, an investor sells stock believing its price will fall and can be bought back at a lower price. In the more controversial form of short selling, Byrne and other critics of the practice claim brokers loan stock to investors and that such borrowing creates "phantom" shares of stock.
The practice has led to a crisis, Byrne claimed. "There may be more stock I.O.U.s in the system than there is stock. We could be looking at the Enron of stock." To make his point, he cited a study done by the New York Stock Exchange looking at the number of companies that came in with more shareholder votes than there were shares. In that count, 341 out of 341 firms came in with an over-vote. Small- to medium-cap companies are more vulnerable to manipulation because larger companies are much more liquid and not as vulnerable to rumors, Byrne contended.
Global Links, a Nevada real estate holding company, claims it was a victim of short-selling but decided to fight back. Last month Forbes reported that the SEC found that trade settlement fails for Global Links were 27 times higher in February 2005 than the total number of shares Global Links had issued. Among other things, Global Links issued a new symbol, making it impossible for brokers to trade under the old symbol.
Byrne said his company did not need such drastic measures. "I wouldn't do anything special to Overstock to get at them," Byrne said. "I think we can burst them by results. I am walking pretty close to the line. If I purposely go out and try to hurt short sellers, it would be illegal."
The Overstock CEO thinks Global Links had to take the law into their own hands. "I don't know if there is a line (between legal and illegal methods to fight short sellers) anymore. The SEC is like some corrupt southern sheriff doing duty for the drug dealer," he said.
Byrne insists that millions of extra Overstock shares that never actually existed may have been sold over the last 30 months. He will not, however, discuss whether that affected his company's stock price and maintains that Overstock is not the issue.
The Depositary Trust & Clearing Corporation settles trades and manages such "borrowing" of stock. In an interview on its Web site, the corporation's First Deputy General Counsel Larry Thompson says there is no such thing as "phantom" stock. "The assertion that the same shares are lent over and over again with each new recipient acquiring ownership of the same shares is either an intentional misrepresentation of the SEC-approved system, or a profoundly ignorant characterization of this component of the process of clearing and settling transactions," he said.
Byrne is unperturbed. "Two years ago, strangers around America got in touch with me and convinced me to get involved in this issue," he recalled. "They said, 'There are folks coming after you.'"
The same people warned Byrne that Overstock would see his company on "obscure foreign exchanges." Overstock would would show up on markets in Bavaria, Berlin, Hamburg and Australia, among others, he was told. That landed his company on the "Reg Sho" list for 18 months. Regulation Sho (for short selling) was a rule that took effect in January 2005. Under the rule, Nasdaq, NYSE and American Stock Exchange and other markets get daily reports from Depository Trust & Clearing about failed deliveries.
If an exchange discovers that a company has unsettled trades equal to at least 10,000 shares and 0.5 percent for five or more days, there are stricter requirements placed on it for future sales.
Byrne claimed there is more that needs to be done. "(The SEC) needs to close the loopholes and stop giving hall passes to criminals."
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