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

To: rrufff who wrote (895)	3/19/2006 9:57:01 AM
From: GVTucker	Read Replies (5) \| Respond to of 5034

rrufff, RE: This is the goofy argument that I often get. That is, that I'm detracting from scams on the long side, by focusing on Naked Short Scamming. I never said you were detracting from scams on the long side, I was just making the point that there are many more manipulators on the long side. Many people in this discussion don't realize that. Because of secrecy in the hedge fund industry, we really don't know the extent that small hedge funds participate in the Elgindy type transactions. In fact, I've just cited a co-defendant who pled guilty who was a hedgie. His website was populated by hedge funds. Read the transcript. A hedge fund is a partnership that invests. Nothing more. To associate all hedge funds with someone like Anthony Elgindy is absurd. It would be like associating you with Ivan Boesky. Just because Boesky stole doesn't mean you do. This "secrecy" everyone refers to is just a right to privacy. A hedge fund shouldn't have to disclose all of its positions any more than you should. If a fund's positions get over the 5% threshold, the rules of 13D filings already apply. As far as the worry that increased regulation will hurt the market, that is also bogus. I'm suggesting that we open up the books. Let's see the disease before we make the diagnosis, before we prepare the remedy. The industry, including hedge funds, is fighting tooth and nail, to prevent changes. I suggest that we have full disclosure, too. I don't see why hedge funds should have to open its books, though. It is nobody's business but their's, just as you shouldn't have to tell everyone all the stocks you hold, either. All industries will fight change. The securities industry is fighting this particular change, too, because it gets to an advantage they have, namely information. I agree with you that this is wrong. The current trend has been to have more and more disclosure in the securities industry in spite of this resistance. For example, the specialists' books are all open on the NYSE. This gets to the next point that you make. As far as the vocal supporters of regulation, including Bob O'Brien and others hurting anything, your comment is quite frankly, ridiculous. Without him and others bringing this issue to light, nothing would have happened in this area. Hedge funds would continue to get their hugely inflated returns. MM's continue to enjoy the current abusive system. That is not ridiculous at all. If Bob O'Brien was making a rational, well thought out argument, that would be fine. But "he" isn't. Instead, there are numerous errors and completely absurd statements. When I have tried to point out the blatantly false statements that he makes, I only get empty conspiracy blather in return. He discredits his entire 'cause' and associates the issue with the lunatic fringe. The trend toward open disclosure is being fought particularly in this area because O'Brien is completely discrediting his own cause. Look what happened the last time I got into a discussion on this board. The discussion quickly turned to statements against me that thought that short selling in general is bad for the markets and that funds that lend their securities out harm their beneficiaries. Those are absurd arguments that any educated observer of the markets wouldn't make. Those are the people that O'Brien is convincing. On the "hugely inflated returns" of hedge funds, it is important to note that these returns are being made on the long side, not the short side. If you look at Rocker Partners, the main focus of the naked short sale brigade, the returns aren't huge at all. The only reason they have any investors at all is that they make a little bit of money on the short side, and this provides valuable counter-market exposure. Rocker Partners' returns aren't huge at all. You seem to be worried that hedge funds will go out of business. I don't care about this at all. I am worried about the capital markets. Excessive government regulation will hurt the long term return of the capital markets. There is no excuse for the grandfathering of this scam. Eliminate this. There are companies on the Reg.Sho list for a year. There is no excuse for this. You're right. And I've said all along that if a company is on the Reg Sho list for that long, we should have gradual, forced buy-ins. However, government inefficiency is no reason to allow scams to go unchecked. As we are seeing a move to make Reg Sho more efficient and less CYA paper shuffling, the same could be done with a total revamp in the way the markets function. Let's have markets that really are auction based, up to date, taking advantage of the technology of the 21st century. That is fine with me. First, just make you have your scams straight. For example, look at the latest bit of information posted here--the PIPE issue. This isn't a problem with naked short selling, it is problem with insider information. PIPEs are a subindustry that is rife with a lot of these problems, and there are a whole lot of questionable hedge funds that operate with PIPEs. I'm not sure exactly how to eliminate this area of abuse, but it has nothing to do with naked short selling. Whatever regulating in naked short selling that people are contemplating won't stop the abuse connected with PIPEs.