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Strategies & Market Trends : Anthony@Pacific & TRUTHSEEKER Expose Crims & Scammers!!! -- Ignore unavailable to you. Want to Upgrade?

To: ravenseye who wrote (254)	2/15/2006 10:43:45 AM
From: StockDung	Respond to of 5673

=DJ IN THE MONEY:SEC Backs DTCC Over Short Selling Claims By Carol S. Remond A Dow Jones Newswires Column NEW YORK (Dow Jones)--Naked shorts and phantom shares aren't usually fodder for legal briefs, especially those filed by federal securities regulators. But that's exactly what's at the center of a legal brief filed by the Securities and Exchange Commission in Nevada state court. Moving to dispel the belief by a few vociferant companies that millions of fake shares are created daily through an SEC-approved global clearing and settlement process, the brief sounds like a regulator's version of "Enough already!" The brief was filed last week in an appellate case in the Supreme Court of the State of Nevada in support of the Depository Trust and Clearing Corporation in its legal wrangle with Nanopierce Technologies Inc. DTCC operates the global clearing and settlement system through which most securities transactions are processed in the U.S. Nanopierce is one of several small companies that have claimed in state courts that their stock prices have been unfairly depressed by DTCC's clearing and settlement services. A number of these lawsuits have been dismissed by state court judges on jurisdictional grounds since DTCC's operations are authorized by the federal government. Nanopierce had argued in court that DTCC's stock borrow program results in the creation of non-existent stock and contributes to the illegal - or naked - short selling of the company's shares. Short sellers typically borrow shares to sell them, hoping that they will be able to replace them with shares bought at a lower price later. Trading without a borrowing agreement is called naked short selling. It's illegal for most investors, but legal for firms that make markets in stocks by bringing liquidity to the market. While addressing complex issues relating to the daily settlement of billions of trades, the SEC brief is clear and concise in asserting two points: DTCC's stock borrow program doesn't create securities and claims against DTCC are pre-empted by federal laws. Lawsuit Nanopierce's "lawsuit threatens to disrupt or to impose substantial and unwarranted costs on this system by seeking damages against registered clearing agencies...pursuant to Commission-approved rules," the SEC said in the brief. Nanopierce sued DTCC in July 2004 in the Second Judicial District Court of the State of Nevada, Washoe county, claiming that its stock price was unfairly depressed by DTCC's clearing and settlement services, specifically its stock borrow program. The complaint was dismissed last May and Nanopierce is now appealing that ruling. Under its stock borrow program, DTCC facilitates the lending of shares from one brokerage firm to the other in the event a firm is unable to deliver stock to settle a transaction on time. Nanopierce has argued in court that the program results in the creation of non-existent stock and contributes to the illegal short selling of the company's shares. "The stock borrow program is designed to improve the efficiency of the continuous net settlement system by increasing the likelihood that purchasers will receive their securities on settlement date," the SEC said, noting that Nanopierce's description of those programs "are flawed in important respects." "The number of securities issued and outstanding is determined by the security issuer and is reflected in the issuer's records of registered ownership; nothing that happens in the course of clearing and settling trades...can change that number," the SEC said. The claim by some companies and stock operators that DTCC's stock borrow program results in an increase in the amount of shares outstanding seems due to confusion over what exactly is being measured. "While the number of securities outstanding does not change because of the clearance and settlement system, the aggregate number of positions reflected in customer accounts at broker-dealers may in fact be greater than the number of securities issued and outstanding," the SEC said. Under federal law, a broker-dealer can credit a customer's account with a security even though that stock has yet to be delivered to that broker-dealer's account. (This is somewhat akin to funds being present but not available in a bank account when a customer is waiting for a check to clear). Regulation SHO In its amicus brief, the SEC also moved to clarify that although claims against DTCC are pre-empted by federal laws, there are other avenues for companies alleging illegal short selling, including law enforcement or private actions against those responsible. "If the alleged problem is systemic rather than arising from isolated unlawful conduct, the appropriate remedy is to amend the regulatory regime," the SEC said. The SEC has said that it continues to monitor Wall Street firms' compliance with Reg SHO, a one-year old short selling rule that modernized existing rules and was designed to address failures to deliver stock on settlement date, three days after a transaction. The SEC recently told Dow Jones Newswires that it's pleased with the level of compliance so far and that 99% of all trades in dollar terms settle on time. Under Reg SHO, exchanges provide daily lists of securities with large amounts that have failed to deliver. These lists are known as threshold lists. Once a security gets on the list, it typically becomes harder and more expensive to short the stock (Carol S. Remond is an award-winning columnist and one of four who write the "In The Money" feature. Most recently, she won a 2005 Gerald Loeb Award for best news service content with "Exposing Small-Cap fraud," a series of articles that described how three small companies unscrupulously pumped up their stocks.) -By Carol S. Remond; Dow Jones Newswires; 201 938 2074; carol.remond@dowjones.com (END) Dow Jones Newswires February 09, 2006 15:12 ET (20:12 GMT) Copyright (c) 2006 Dow Jones & Company, Inc.

To: ravenseye who wrote (254)	2/15/2006 10:44:38 AM
From: StockDung	Respond to of 5673

In its amicus brief, the SEC also moved to clarify that although claims against DTCC are pre-empted by federal laws, there are other avenues for companies alleging illegal short selling, including law enforcement or private actions against those responsible. "If the alleged problem is systemic rather than arising from isolated unlawful conduct, the appropriate remedy is to amend the regulatory regime," the SEC said. The SEC has said that it continues to monitor Wall Street firms' compliance with Reg SHO, a one-year old short selling rule that modernized existing rules and was designed to address failures to deliver stock on settlement date, three days after a transaction. The SEC recently told Dow Jones Newswires that it's pleased with the level of compliance so far and that 99% of all trades in dollar terms settle on time. Under Reg SHO, exchanges provide daily lists of securities with large amounts that have failed to deliver. These lists are known as threshold lists. Once a security gets on the list, it typically becomes harder and more expensive to short the stock

To: ravenseye who wrote (254)	2/16/2006 8:17:31 PM
From: StockDung	Read Replies (2) \| Respond to of 5673

Re: 2/16/06 - [Elgindy] Newsflash: Real claims plummet by more than 90%. To: Man on the moon who wrote (92429) 2/16/2006 7:51:50 PM From: Anthony@Pacific of 93893 NEWSFLASH!!! NEWSFLASH!!! NEWSFLASH!!! Title above and text below in Anthony's own words SI Bob IT'S OFFICIAL! As of this very second, the government has admitted that the former prosecutor's claims, gains of $12 million, were fictitious and bogus. Real claims plummet by more than 90%. Stay Tuned Folks! Anthony Message 22176166