Here is a more blunt opinion of the ruling, it pulls no punches in characterizing what has been happening. We've been monitoring Broker dealer profits for some time, they go up while trading goes down, and supply shrinks. This is not a function of business efficiency, but of the wholesale use of investor inventory, loaned to ohers for fees, by those whose whose desire is to suppress stock values facilitating the transfer of those same shares; to them that Needs em. What a game.
Prime Brokers Kicked in Throat By California Court, Now All Shall Be Known
Location: Blogs Bob O'Brien's Sanity Check Blog
Posted by: bobo 7/18/2007 3:46 AM
My summer hiatus has been briefly punctuated due to a freak accident involving a Chinese acrobatic troop, a midget named Gomez, a pirated copy of "March of the Penguins", and a case of 50 weight motor oil. I won't bore you with the details, however trust me when I say that it looks worse than it feels. All things being equal, however, I'm laid low for a few days, so decided to turn on the 'puter and see what's up.
And lo, it was as though, with the strength of 20 CEOs, that Dr. Patrick Byrne did smite the infidels and bring unto them the wrath of the heavens.
Or more specifically, the prime brokers lost their shuck and jive attempts to block discovery in the OSTK case, which accuses them of propagating a counterfeiting scheme in the company's stock. So now as I understand it, the prime brokers will have the opportunity to demonstrate that all the ugly rumors accusing them of acting as a racketeering cartel are hogwash, and that they are as innocent as newborn lambs, and that Patrick is a certifiable loon with a bad attitude and a case of the howling fantods.
Unless, of course, his allegations are true, in which case a complete collapse of confidence in the system, and our regulators, would not be unwarranted.
Because if true, the prime brokers have bastardized the system, and converted it from an auction market for goods (equity securities) to a confidence scheme wherein they take your money and simply lie to you about delivering anything. A con game. A lie.
That they do so in order to help their hedge fund choagie co-racketeers is immaterial. That it destroys the price of targeted victim companies is not the show stopper. What is significant is that if true, the entire conceit of prices being a function of supply and demand is a sham. Which means anyone "investing" is also being robbed, by lying liars and the lies they tell, as there is no linkage between your cash, and really, anything.
There oughtta be a law. Oh, that's right, there is, it's just that the regulators are suck ups who long ago sold the investor down the river so that the big banks who run wall street can rob the country blind.
That about covers it. Now all should be known, and I'm quite sure that the prime brokers will be shown to be newborns, innocent of any wrongdoing, driven snow, as 'twere.
Or maybe, like Rocker, they will hire a specialist in criminal defense for their counsel, you know...just because.
My typing finger is strained, and I've been advised to rest, so must sign off, however this has got to be the single most fascinating example yet of an entire system of thievery, exposed by a single persistent American hero.
With a little help from the easter bunny. Who has also been called a loon and a nut by the same group of innocents. Funny, that.
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