Here is Mork's response to your questions....................
Date: 1-9-98
To: DADDY BIGS
From: Dempsey Mork
Regarding: answers to your questions
The short position.
1a. How did you come into your short position?
Answer: Mike Zapara, who was a friend of mine from polo, asked me to sell OVIS
shares in my account so that Olympus would not know Zapara was the seller. Zapara
agreed to deliver however many shares I was able to sell to my broker. Based on my
belief that Zapara would deliver the OVIS shares, I sold 100,000 shares of OVIS "long
for late delivery".
1b. If you sold these shares for Zapara through your account, isn't that illegal (free
riding). It is my understanding you cannot trade shares for someone else in your
account.
Answer: Free riding is when a market maker executes a trade for his own account while
holding back a customer trade that guarantees the market maker a profit. Free Riding is
illegal. If I was selling Zapara's shared in my account I wouldn't had had a problem with
delivery. I don't know if its illegal to trade shares for someone else in your account. I
have never done that. I know its legal for brokers, fund managers, trustees, and
investment advisors. I don't know if it's legal without a license.
1c. Was the stock at a price for it to be legally shorted?
Answer: Investors can't short Bulletin Board stocks no matter what the price. I did not
short the stock. I sold "long for late delivery" which is not uncommon. When you sell
stock that is in your desk drawer, not in your brokerage account, you are not selling
short, you are selling long for later delivery. If for any reason you were unable to make
delivery to your broker you would be short, regardless of your original intent.
1d. What was the price of the stock when you sold it for Zapara?
Answer: The average price was $0.20 per share.
1e. Have you shorted any OVIS-RMIL through Canada?
Answer: No, I only sold OVIS-RMIL long for late delivery. Zapara opened an account
with the same broker so he could transfer the shares to my account without a market
trade. When Zapara broke his promise and failed to deliver, I ended up short.
----snip-----
Where did your info come from Riley? |
