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Microcap & Penny Stocks : Naked Shorting-Hedge Fund & Market Maker manipulation? -- Ignore unavailable to you. Want to Upgrade?

To: Max Fletcher who wrote (527)	11/16/2005 10:39:31 AM
From: rrufff	Respond to of 5034

Interesting post from another board - gives some insight on MM's and relationship to dilution schemes, that may include advanced shorting. HSDN or TDCM is usually used for dilution. A little MM Info (A Must Read) Penny Stock Market Makers Who Are the Players in this Game By Bill Panetta Let Me Start off by saying this: Level 2 Does not have the same effect like it did 5 years ago except for OTCBB Stocks & Pink Sheet Stocks. What Do I mean By This? NASDAQ is all chart plays, level 2 has no meaning as it once did for NASDAQ Stocks , too many games can be played now on level 2. Simply put if you don't know how to read the charts you will get killed on NASDAQ Stocks. With all the changes on Level 2 Traders have been forced to learn TA, You could had a made a killing with level 2 before 2001 with out TA; I have witnesses that have proven this. And when I make this comment I am talking about regular trading hours, after hour's different story. Bottom Line Level 2 does not have the same effect on NASDAQ Stocks that it did 5 years ago because of the New Super Soes Trading System being implemented in 2001 and along with 1 cent spreads, it was the worst thing NASDAQ ever did for traders IMO. The Traders from 5 yrs ago know what I am talking about. Let's talk about the 2 exchanges where Level 2 has not changed and having level 2 is really important to your trading. I am talking about The OTCBB & PINKSHEET Markets. If you learn how to read into Level 2 on the OTCBB & PINK SHEETS it will really enhance your trading. Let's break down the Market Markets. There are 2 categories of Market Makers let's talking about the first one. Retail Market Makers: These are the market makers from very popular brokerage firms. They handle a lot of the order flow for small retail investors. NITE: SCHB: Schwab TDCM: TD Water House SBSH: Smith Barney MLCO: Merrill Lynch GRVC: ETRADE This is the list that you really have master because these are the MARKET MAKERS that handle promotions, insider transactions also S-8 and CD Transaction. CD: means Convertible Debentures they are loans the come due and get sold into the market by the loaning company. There are lot market makers in this category so I will break it down to who are the most important: These are some of the more active MARKET MARKET MAKERS on the street: FANC: major S- 8 player: if there is an S- 8 on a Stock most likely he will be there on the ask until it dries up HDSN: major CD Seller Handles a lot CD transactions. formerly was WIEN. VIEW DOMS GNLN: one of favorites: smart money more like a trader than market maker VERT CLYP: heavy seller if you see him on the bid it's unusual BMIC FLCR: been very active lately especially on LENF and UGHO SACM: heavy seller spends alot time on the ask, well known daily shorter, also HILL: very weak smoke screen for NITE VFIN AYME CRWN a pure trader STCS PUGS: new player this year, has been around and dormant until 04 PBLC VFIN PERT MRLN: one of my favorites more like trader BKST BNCH BAMM AGIS works very closely with SCHB, sometimes shorts ECN MARKET MAKERS GNET: owned by ARCA: very active used by traders market makers any one can use GNET you have to know what your are doing. If you have access to ACRA trading system you can use gnet TRAC: owned by mytrack if you trade with my track you can use this to place your trade as a liquidity outlet same 4 data DATA: owned by my track same concept as GNET & TRAC

To: Max Fletcher who wrote (527)	11/18/2005 9:02:05 PM
From: rrufff	Respond to of 5034

Paid Bashing by Shorting Hedge Funds? SEC investigates Gradient report in Overstock suit By Bob Mims The Salt Lake Tribune Article Last Updated: 11/18/2005 09:42 AM Federal securities officials are investigating Gradient Analytics Inc. over allegations it conspired with a well-known Wall Street hedge fund to drive down the share prices of online retailer Overstock.com. Documents obtained by The Salt Lake Tribune Thursday show inquiries have been under way since at least Oct. 6, when three former employees of the financial research firm were questioned by San Francisco SEC officers. In letters dated Oct. 11, Mark Fickes, an attorney with the SEC's Division of Enforcement, acknowledges the cooperation of ex-Gradient employees Daryl Smith, Demetrios Anifantis and Robert Ballash and provides a case number for the probe. Included is a document advising them of their rights as witnesses in possible enforcement proceedings. Messages left for Fickes were referred to Marc Fagel, head of enforcement for the SEC in San Francisco. Fagel said policy prohibited him from discussing or confirming any pending investigations. Smith, Anifantis and Ballash earlier discussed in affidavits their former employer's relationship with Rocker Partners, a New Jersey-based hedge fund. Those documents were included in Overstock's August lawsuit charging Gradient and Rocker with unfair business practices and corporate libel. Both Gradient and Rocker have denied all allegations. On Tuesday, Gradient counterpunched, seeking dismissal of Overstock's suit on grounds the Utah company was seeking to suppress its critical reviews. In a statement Thursday, Gradient insisted it has "no direct knowledge of any SEC inquiry that may be under way. . . . "Should the SEC choose to contact the company, Gradient looks forward to . . . getting to the bottom of the false accusations that have been circulated by Overstock.com." Brent Baker, a Salt Lake City attorney representing Smith, Anifantis and Ballash, said it was standard procedure that the target not immediately know it is being investigated. "They always work from the outside in," he said. "I worked for the SEC for almost 14 years," Baker added. "There is, absolutely, an investigation by the SEC in the matter of Gradient Analytics." In his affidavit, Anifantis swore he heard telephone conversations in which Rocker executives asked Gradient to emphasize negatives and downplay positives when writing about Overstock.com. Ballash and Smith similarly swore to instances where other Gradient clients were purportedly able to sway stock research. Reached at his home in Scottsdale, Ariz., Ballash said SEC questioners seemed particularly interested in details during his hourlong recorded interview under oath, including identities of alleged participants in key conversations and decisions involving Gradient reports. "They asked background questions about various relationships [at Gradient], who was there at meetings, how all that kind of worked," Ballash said. "It seemed like they were fact finding; they already had a good feeling for the case in general." Added Smith, questioned for nearly 90 minutes: "They sure sounded like they would pursue it further." Ballash, Smith and Anifantis -- the latter could not be reached Thursday -- contend they were fired after questioning Gradient's relationship with Rocker. According to published reports, Gradient claims that the trio was fired for reasons that range from violating policy on taking documents off-site to poor performance. In its complaint, filed with the Superior Court of California for Marin County, Overstock contends that Rocker specializes in short selling -- an investment strategy where stock is borrowed and sold, with sellers betting they can buy back the stock and bank the difference when share prices fall. Beginning in June 2003, Gradient purportedly published -- at Rocker's behest, Overstock contends -- nearly 60 negative reviews of the Utah company. During that period, short selling of Overstock shares accelerated. Eventually share prices tumbled from a high of $77.18 in January 2005. Overstock contends its stock never fully recovered. Even with an 11 percent boost Thursday, the company's shares closed at $37.09. bmims@sltrib.com sltrib.com

To: Max Fletcher who wrote (527)	12/1/2005 2:39:53 PM
From: rrufff	Read Replies (2) \| Respond to of 5034

FINALLY - CORNELL - MAY BE TRAPPED - URGENT - URGE ALL TO STAY ON TOP OF THIS INVESTIGATION!!! Another Hedge Fund Discloses PIPEs Probe By Matthew Goldstein Senior Writer 12/1/2005 7:12 AM EST URL: thestreet.com Cornell Capital Partners, a hedge fund that specializes in finance for ailing penny-stock companies, is being investigated by securities regulators for its trading activity in shares of nine companies. The Jersey City, N.J.-based hedge fund, which has more than $200 million in assets, disclosed the investigation in its most recent audited financial statement, a copy of which was obtained by TheStreet.com. Copies of the hedge fund's 2004 financial statement were mailed to Cornell investors in late August. The Securities and Exchange Commission investigation of Cornell stems from a broad-based regulatory inquiry into allegations of manipulative trading in the $17 billion-a-year market for PIPEs, the Wall Street acronym for private investment in public equity. For the past two years, securities regulators have been looking into the activities of hedge funds that invest in PIPEs and the brokerages that help arrange these private stock sales for companies in desperate need of cash. TheStreet.com previously reported that at least three other hedge funds -- HBK Investments, Gryphon Partners and Alexandra Investment Management -- are being investigated by regulators. PIPEs are a popular financing route for tiny, cash-strapped companies, which raise money by selling discounted shares to investors in a privately negotiated transaction. But the ability of a big trader to purchase thousands of shares of discounted stock also makes the PIPEs market ripe for abuse by unethical short-sellers -- traders who bet a stock will decline in price. Mark Angelo, the founder and president of Cornell, says regulators haven't told him they've found any wrongdoing involving the hedge fund. Angelo says Cornell is probably being investigated because it's a major PIPEs player and is involved in so many deals each year. "I think they're looking at all people in the PIPEs space,"' says Angelo. "Most of our investors view it as non-issue." Since its inception in 2001, Cornell has provided financing to more than 120 speculative, mostly money-losing companies, many of which trade shares on the over-the-counter Bulletin Board. In the third quarter of this year, Cornell was the ninth most active PIPEs investor, sinking $38 million into 10 different deals, according to PlacementTracker, a private placement research firm. The PIPEs market has been a profitable niche for Cornell. In 2004, it realized a $20 million net gain on investments, according to the financial statement. It took in another $3.4 million in investment income. The investigation of Cornell began in July 2004 with the SEC requesting information about its "funding of and trading" in shares of Bio-One, a defunct nutritional supplement company that had operated out of Winter Springs, Fla. Cornell had been the primary investor in two PIPEs deals that raised $25 million for Bio-One and enabled the company to make two small acquisitions. By this summer, the SEC investigation had expanded to include eight other companies Cornell had invested in. The audit doesn't disclose the names of the other companies. However, the 13-page report notes that Cornell received a subpoena from the SEC on July 18, 2005, seeking documents "related to the funding of and trading in the common stock of Bio-One and eight other portfolio companies in which the partnership is invested." Two months ago, the SEC reached a settlement with Bio-One over allegations that its financial statements failed to disclose an August 2004 default on a $15 million promissory note to a company it had acquired earlier that year. Angelo says the SEC began investigating Cornell because it had provided financing to Bio-One. But he says Bio-One company kept the default on the promissory note hidden from Cornell, too. "We have no idea why we were named in this, other than that we are an investor," says Angelo. "I have no idea why we were named." Angelo declined to discuss the eight other companies the SEC has asked for information about. An SEC spokesman declined to comment. One of the allegations regulators are looking at in the PIPEs probe is that some hedge funds routinely shorted a stock once they learned a PIPEs deal was in the works. Regulators contend that such premature short trades are illegal, because knowledge of such deals is confidential, nonpublic information. It's not uncommon for stocks of companies doing PIPEs deals to drop in price after it becomes public that the company has sold thousands of shares at a discount. Hedge funds, however, aren't the only target of the investigation, which is being coordinated with the National Association of Securities Dealers and in some instances, the Department of Justice. Investigators also have targeted brokerage firms that serve as placement agents for PIPEs deals by lining up investors. To date, the broad-based inquiry has led to the criminal conviction of a former SG Cowen managing director on insider trading charges, and a $1.45 million civil settlement with a former First New York Securities hedge fund manager. Emanuel Friedman, former co-CEO of Friedman Billings Ramsey (FBR:NYSE) , also faces potential civil charges, as does the investment firm he co-founded. Other Wall Street firms that face potential regulatory action arising from the probe include Knight Trading (NITE:Nasdaq) and Refco (RFXCQ:Other OTC) , the scandal-tarred commodity and derivatives brokerage. --------------------------------------------------------------------------------