LTV case was dismissed due to a technicality: Lawyer's conflict of interest...
NOT on the MERITS of the CASE. And, IMHO Aurible Goldfinger, as an Industry Insider and Broker, you SHOULD USE a DISCLAIMER in every POST....
sec.gov
SIGNIFICANT EXCERPTS:
The CHX found that the Applicants sold short shares of LTV
Corporation ("LTV") common stock ("Old LTV Stock"), manipulated
the price of Old LTV Stock, and employed deceptive devices, in
violation of the Securities Exchange Act of 1934 ("Exchange Act")
and The Chicago Stock Exchange Rules ("CHX Rules"). [1] The CHX
also found that the Applicants violated CHX Rules in that they
abused their positions as registered market makers. Further, the
CHX found that the Applicants, other than Bryant, excessively
traded Old LTV Stock, violated various books and recordkeeping
provisions of the Exchange Act and CHX Rules in connection with
Scattered's LTV trading and failed to provide information to the
CHX during its investigation. The CHX also found that the
Applicants, other than Nichols and Bryant, manipulated the stock
price of American Healthcare Management, Inc. ("AHI") common
stock, in violation of the Exchange Act and CHX Rules......
The CHX expelled Scattered from CHX membership and fined it
$3.5 million. It permanently barred Greenblatt from association
with any CHX member and fined him $1.3 million. The CHX
suspended Jahelka, Nichols and Bryant from association with any
CHX member for two years, one year, and one year, respectively,
and fined them individually $750,000, $580,000, and $350,000,
respectively. The CHX also fined Scattered, Greenblatt, Jahelka,
and Nichols, jointly and severally, $300,000; and separately
fined Greenblatt, Jahelka, and Nichols, jointly and severally,
$50,000. The CHX also ordered disgorgement of one-half of the
Applicants' trading profits. We base our findings on an
independent review of the record.....
This case arises out of the Applicants' massive short
selling of Old LTV Stock during LTV's bankruptcy reorganization
proceedings, which resulted in a plethora of litigation. In much
of this litigation, the Applicants and the CHX participated in a
variety of capacities. The CHX found itself playing multiple
roles in the litigation concerning the applicants, thereby
creating the possibility that the CHX's impartiality in
adjudicating the Applicants' case could be affected. This issue
became a focal point in the disciplinary proceeding.......
The Applicants
gambled, however, that most purchasers of Old LTV Stock would not
demand delivery of their shares, or "buy-in" if Scattered could
not deliver Old LTV Stock, because the price of Old LTV Stock
would continue to fall throughout the Trading Period. Had the
Applicants been required either to deliver shares or to make good
on "buy-ins," they would have had to make a capital outlay that
could have bankrupted the firm......
We find that the conflicts of interest that entangled those
providing the CHX with legal representation deprived the
Applicants of a fair proceeding before a fair tribunal. [41] We
find that the conflicts, and resultant potential for bias, so
infected the whole proceeding that all of the allegations,
including those relating to American Healthcare Management Inc.
(otherwise not implicated in the various conflicting litigation
involving the CHX and Applicants), must be dismissed.
Accordingly, we set aside the findings of violation and sanctions
imposed by the Chicago Stock Exchange concerning the Applicants. |
