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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: Clase Azul who wrote (92969)	10/28/2005 10:40:46 AM
From: rrufff	Respond to of 122087

You may be right, you may be wrong. Someone like yourself who wants the "truth" should agree with me and be excited that the spotlight is on this issue. The REFCO scam and other scams by hedgies will probably do more to eliminate scamming in this area than Reg Sho as it brings "to the people" the fact that this an area that needs regulation and oversight in a very new and dynamic way. I don't profess to be an expert but I have read a lot about it and talked to people in the industry as well as politicians and regulators. It is a very confusing area, where understanding changes with market strategies and conditions. The bottom line to me is this - ASSUMING YOU ARE RIGHT - why object? Let this all be fully investigated, open the closing books, etc., and if it is as you say, then the market goes on in a better light, the public understanding that our markets are being run in as fair and equitable and efficient manner as possible. It's not just an issue of naked shorting and helping those poor misunderstood hediges in continuing to make their billions. The entire closing process and trading mechanism needs to be brought into the 21st century and modernized with technology. Whatever scams are revealed, if any, then great. As to the loophooles behind the Reg Sho list, I've read a lot and have seen many arguments both ways. For example, a clearing house participant could be passing the short off from one to another so that they don't get to the 13 day level. Some, but not all, possible "loopholes" besides the big one the grandfathered stocks scam (and why would anyone arguing for "truth" condone the hiding of scams behind a grandfather clause) are as follows: Rule 200(f) allows broker-dealers to aggregate their net positions in a security in each independent trading unit, rather than in the firm as a whole. Almost forgot about the "bona fide" market-making activity exclusion and the ways that MM's abuse this by claiming to make a market when they are really just lining their pockets. Specific commentary prohibits the use of this exception to avoid the mandatory locate rule but it clearly needs an investigation to see what is happening in actual trading. There is some question in my mind whether the limitations of covering in Rule 105 for shorting during the pre-pricing period prior to an underwriting has stopped the offshore hedgies from working stock or at least getting the circle of leaks and leakers to be a bit more imaginative in scamming. Exceptions exist for, among other situations, loans between broker-dealers, and instances where the broker-dealer's customer fails to deliver promised securities to the brokerdealer. The SEC even commented on sham transactions meant to evade this rule and indicated that their examples were not "exhaustive." You allude to the interplay between non-member firms and member firms. I agree that these are steps in the right direction. Can you guarantee that in real life there is no continued manipulation in this process, particularly where transactions of millions of shares are broken into world-hopping pieces? Have a nice day.