Naked Shorting-Hedge Fund & Market Maker manipulation? Message Board

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Microcap & Penny Stocks : Naked Shorting-Hedge Fund & Market Maker manipulation?

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To: rrufff who wrote (1784)	9/21/2006 6:54:32 PM
From: ravenseye	Read Replies (2) of 5034

Connecticut Attorney General Looking Into Losses At Amaranth In Separate Action, Urges SEC Crackdown On Short Selling Abuses September 19, 2006 -- Connecticut Attorney General Richard said today he is collecting evidence and reviewing facts concerning large losses at the Greenwich-based Amaranth Advisors hedge fund and renewed his call for greater transparency and disclosure in the hedge fund industry. "We are collecting evidence and reviewing facts relevant to recent hedge fund losses," Blumenthal said. "Particularly problematic are alleged representations made to investors in recent weeks by the management of Amaranth that may be contrary to apparent facts. Such claims - if made - would contradict the spirit and letter of current law. The facts about mammoth losses by Amaranth offer additional powerful and compelling evidence about the need to reform disclosure and oversight requirements." In a separate action, Blumenthal today sent the Securities and Exchange Commission (SEC) a letter praising proposed changes to rein in so-called "naked short-selling" - the illegal short selling of nonexistent shares - and called for even tougher measures against the practice. Some hedge funds - among others - have been accused of using "naked short selling" as part of a scheme to make large profits by artificially driving down a company's stock price. "I strongly support the SEC's crackdown on this illegal practice by eliminating a rule that exempted smaller short sales from the requirement to quickly deliver stock," Blumenthal said. "The SEC should take even tougher steps to stop this dangerous and despicable practice. "The rule should be simple commonsense: when you sell a product, you must deliver it. The SEC should require all stock sold short be delivered to its buyer within a reasonable time period with no exceptions or loopholes. Naked short selling victimizes honest companies and investors." "Short selling" - a legal and common practice - is when investors bet that a stock's price will fall. They borrow shares of stock they believe will lose value and sell them. If the price falls, they buy back the shares - making a profit because they purchased new shares at a lower price - and return them to the original owner. In "Naked short selling" - which is illegal - investors short sell shares without borrowing them. The seller is therefore selling a share that does not exist. Problems arise when the stock "fails to deliver" - the buyer of the non-existent share never receives the actual shares of the stock he or she purchased. Source: Connecticut AG's Office -------------------------------------------------------------------------------- Get the news before it happens: Avant News allamericanpatriots.com

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