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Pastimes : MANIPULATION IS RAMPANT --- Can We Stop It? -- Ignore unavailable to you. Want to Upgrade?

To: LPS5 who wrote (359)	6/16/2002 3:39:42 AM
From: Dave Gore	Read Replies (1) \| Respond to of 589

Myerson and Head Trader Found "Guilty" of Manipulation by NASD nasdr.com NASD Regulation Settles Stock Manipulation Case with M. H. Meyerson & Co., Inc. and Four Execs; NASD Regulation Files Complaint Against Two Employees of a Second Firm in Related Activity Washington, D.C. — NASD Regulation, Inc., announced today that it found that M.H. Meyerson, & Co., Inc. and its Head Trader, Salvatore Dacunto, manipulated the stock of Concap, Inc., (CNCG) a thinly traded OTCBB security in a scheme to artificially inflate its price in return for 100,000 restricted shares under a veiled investment banking arrangement. The firm and three of its officers - CEO Martin H. Meyerson, former President and COO Michael Silvestri and Compliance Officer Joseph G. Messina - were found to have failed to adequately supervise Dacunto's trading activities, and failed to establish and maintain adequate supervisory procedures. All parties consented to NASD Regulation's findings without admitting or denying the allegations and were fined a total of $240,000. NASD Regulation found that as part of the manipulative scheme, Dacunto acting on behalf of M. H. Meyerson & Co. of Jersey City, NJ, up-ticked Meyerson's bid for the security on a daily basis over a two-week period in 1998, causing the inside bid for CNCG to increase 400 percent. Dacunto fraudulently up-ticked the bid despite the lack of any favorable news reports, very little retail interest in the security, and no competing bids. In fact, Concap had no reported operating revenues for the previous three years and had recently received a going concern opinion from its auditors. In settling with NASD Regulation: The firm was censured, fined $75,000 and consented to the hiring of an independent consultant to review and revise the firm's "Chinese Wall" procedures between the firm's trading and investment banking departments. Dacunto was fined $75,000, suspended from associating with any NASD member firm for three months and suspended for an additional two months from acting in a supervisory or trading capacity. He is also required to re-qualify as a trader through examination, before again serving in that capacity. The firm, along with Martin H. Meyerson, Silvestri and Messina were sanctioned for failing to adequately supervise Dacunto's trading activities and for failing to have adequate supervisory procedures in place to detect his conduct. Specifically, Mr. Meyerson failed to make an effective delegation of supervision of Dacunto's trading activities since he was aware that the firm had no system to monitor traders' quotations, and that Messina had not established adequate procedures to review Dacunto's market-making activities. Mr. Meyerson was fined $50,000, suspended from associating with an NASD member firm for 20 business days and suspended from serving as a supervisor for an additional 10 business days. Silvestri also was aware that Messina had failed to establish adequate procedures to monitor the trading department's market-making activities. He was fined $25,000 and suspended from associating with an NASD member firm for 20 business days. Messina, for failing to adequately supervise Dacunto, and failing to develop an adequate system to monitor the trading room's activities, was censured, fined $15,000 and required to re-qualify by examination as a General Securities Principal before again serving in that capacity. In a related matter, NASD Regulation filed a complaint against Michael Marcus, previously a trader with Morgan Grant Capital Corp., a former NASD member firm, and Louis Montaino, a former broker with Morgan Grant, for engaging in related fraudulent trading in CNCG while at Morgan Grant. As part of the scheme, Morgan Grant obtained 1 million shares of Concap for little or no consideration. This represented more than 40 percent of the float. The two are alleged to have "pumped and dumped" the CNCG stock on their unsuspecting customers allowing the firm to garner $1.9 million in illicit profits. These charges are pending. The complaint filed against Marcus and Montaino alleges that between July 30, 1998 and August 12, 1998, Marcus directed purchase limit orders for CNCG to Meyerson almost on a daily basis, at increasingly higher prices. At that time, Meyerson was the only active market maker in the security. According to the complaint, the orders provided a pretense for Dacunto to increase Meyerson's bid for CNCG and to make it appear as if there were interest and activity in the security. Marcus placed those orders for his firm's proprietary account despite the fact that Morgan Grant already held a substantial long position of CNCG and that Marcus had no retail orders at that time. The issuance of a disciplinary complaint against Marcus and Montaino represents the initiation of a formal proceeding by the NASD. Investors can obtain more information and the disciplinary record of any NASD-registered broker or brokerage firm by calling (800) 289-9999 or by sending an e-mail through NASD Regulation's Web Site at www.nasdr.com. The National Association of Securities Dealers, Inc. is the largest securities industry, self-regulatory organization in the United States. It is the parent organization of NASD Regulation, Inc.; the American Stock Exchange, LLC; and NASD Dispute Resolution, Inc. For more information about the NASD and its subsidiaries, please visit the following Web sites: www.nasd.com; www.nasdr.com; www.amex.com; www.nasdadr.com.

To: LPS5 who wrote (359)	6/16/2002 3:20:40 PM
From: Dan Duchardt	Read Replies (1) \| Respond to of 589

Want to take a stab at what the Constitution specifically identifies as federal crimes? Was it the purpose of the constitution to specifically identify federal crimes? While I am certainly not a constitutional scholar, my recollection of what I learned back in high school many years ago is that the constitution establishes a framework and philosophy of governance as a starting point for establishing and enforcing such laws as necessary to establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity. One of the very few (maybe the only one?) specific federal crimes mentioned in the constitution is treason, but in reference to impeachment it was certainly recognized that along with treason, Bribery, or other high Crimes and Misdemeanors were grounds for impeachment. While "common defense" is one of the few specific authorities given to the federal government, and without question there is much in the constitution that prohibits the federal government from usurping the authority of the states to govern themselves, there is at least acknowledgement that there may arise circumstances where no one state has jurisdiction, such as the specific power granted to Congress To define and punish Piracies and Felonies committed on the high Seas, and Offences against the Law of Nations With respect to the judiciary, there is a related recognition of the potential for crimes to extend beyond state boundaries and jurisdictions: The Trial of all Crimes, except in Cases of Impeachment, shall be by Jury; and such Trial shall be held in the State where the said Crimes shall have been committed; but when not committed within any State, the Trial shall be at such Place or Places as the Congress may by Law have directed. At the time of writing the constitution, the world was a very different place than it is now. Other than flight across state lines to avoid prosecution or punishment for a crime committed against one state, or its citizens, it would have been difficult to conceive of circumstances where federal jurisdiction would apply because crimes could be committed within several states simultaneously. We cannot know from the written words whether the constitution omitted any specific reference to such crimes or circumstances by design, or simply by omission, so the vague references to non-state-jurisdictional crimes are all there is it go by. Does the constitution prohibit the establishment of federal law to protect the citizens of all states from crimes that cannot be localized? If crimes involve the use of communication devices that carry information instantaneously across state lines, or federal mail, or are crimes against masses of people instead of directed at specific victims located in a specific state, are states prohibited from granting authority to the federal government to deal with such crimes? Far greater legal minds than mine have grappled with these issues and concluded that there are circumstances where crimes are too non-specific to attributed to one state, and should come under federal jurisdiction. The emergence of such laws, by consent of the states, define what is a federal crime, not the constitution itself, which merely left the door open by not prohibiting their establishment, and hinting at the possibly that some crimes may not fit neatly under the jurisdiction of an individual state. I happen to think, as I'm sure you do, that in many cases too much authority has been granted to the federal government. If I got to draw the line it would surround a different range of circumstances than it does now, and I dare say your boundary would be more restrictive than mine. But there are many others who would think that my boundaries are far too restrictive. Such is the nature of politics within government by consent, The evolution from state law to federal law may be in large measure be nothing more than a natural consequence of the blurring of state lines brought about by the huge increase in mobility of the population of the nation. A uniformity of laws among states, whether by commonality of state law, or by granting jurisdiction to federal authority, may be essential to insure domestic Tranquility and promote the general Welfare. I'd like to see federal jurisdiction limited to activities that cross state boundaries, but the fact of the matter is that except for mostly small, privately owned businesses there are few enterprises that operate in only one state. The vast majority of publicly held companies and the financial companies that deal in the business of raising and transferring capital for those public companies carry out their activities in many different states. Far better, IMHO, for those activities to be under a uniform set of standards and federal authority than to be subjected to a different set of rules in each state where they operate, as long as the individual states involved consent to that arrangement. Dan