Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: GVTucker who wrote (897)	3/19/2006 11:53:44 AM
From: rrufff	Read Replies (1) \| Respond to of 5034

Both of us, and it's typical with online "debate," generalize. I don't intend to say all hedge funds are scams. By highlighting hedge fund scams, that doesn't mean I believe that all hedge funds are scams. Those on the seeming other side of the debate highlight, e.g., penny stock scam, with the inference that all penny stocks are scams. My point all along is that there is plenty of scamming all around. I've seen many posts claiming that shorts rarely if ever are involved with manipulation, a generalization that I find totally absurd. What I'm advocating is a totally revamped system that makes sense, from registration to regulation, to access and use of information, to the basic ways that markets are made. This would eliminate and make moot most of our debate, as well as the finger pointing that basically says, "our scam ain't so bad, concentrate on all these other scams."

To: GVTucker who wrote (897)	3/19/2006 12:01:49 PM
From: rrufff	Respond to of 5034

I'm not sure that there are more long scammers or more short scammers, particularly if measured by the amount of trades with each particular tactic. I was just making the point that there are many more manipulators on the long side. I don't believe it's important for us to determine this. There is enough scamming to go around as I outlined in the prior posts. As to whether or not people believe one way or another, that's an assumption that you are making and it is an assumption that is made by many who seem to be defending naked short selling and the status quo. As I pointed out in my just previous post to you, posting about a topic, as being a scam, does not mean you believe it is the only scam. It's disingenuous to claim it. Most understand that there is plenty of opportunity in the system to scam, whether it be in big cap, supposedly "safe" environments, such as Enron, WCOM, etc., to P&D plays and, yes, to the NSScamming. I don't think it's particularly useful to say that one or the other is less harmful to the markets. Any who loses money knows that this type of loss is very difficult to bear. It's one thing to lose money in an investment. It's another thing to lose money in a "scam." After Enron et als., many left the market. After the euphoria of the internet scam and bursting of the bubble, many more left the market. IMO, if NSS and the current environment of abuses by MM's and some hedge funds and others is left alone, there will be the inevitable market crash, which will further deteriorate public confidence in the markets. The silver lining will be that, at that point, the calls for remvamp of the system will be loud and more pervasive than they are now.

To: GVTucker who wrote (897)	3/19/2006 12:06:43 PM
From: rrufff	Read Replies (1) \| Respond to of 5034

As indicated in my prior posts to you, I'm not saying that all hedge funds are scams. I'd advocate clear rules that provide more efficient regulation. Most recently we've seen hedge funds dance by changing their internal rules to avoid registration. Hedge funds have found ways to exploit loopholes. I'm not saying that is necessarily bad. There are many cases where market forces find profit in inefficiencies. However, the status quo is not something that needs to continue. I'm in favor, as I have posted to you, in finding an EFFICIENT system of registration, disclosure and regulation that won't destroy hedge funds, but will make the types of excesses and manipulation that we have seen less likely. I don't have all the answers but I'd like to see us start looking for them, rather than debating whether there should even be questions. 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.

To: GVTucker who wrote (897)	3/19/2006 12:10:17 PM
From: rrufff	Respond to of 5034

I find some merit in what you are saying. I think with uniform rules and clear requirements as to what is appropriate, much of the manipulation that takes place can be at least made more difficult. There should be some type of order throughout the financial industry. If a hedge fund is soliciting and its activities, scope and size are similar to a mutual fund's, then there should be similar regulation. It's not something we need to debate here. I'm not calling necessarily for MORE regulation, but rather for more efficient and effective regulation. We've seen plenty of manipulation which the SEC ignored for years in the mutual fund industry. Thank goodness for Eliott Spitzer. 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.

To: GVTucker who wrote (897)	3/19/2006 12:27:00 PM
From: rrufff	Read Replies (1) \| Respond to of 5034

If you read the posts of those that defend NSS or claim it is "no problem," most degenerate into a name-calling contest. There is incredible effort put out to attack ad hominem each of the individuals and even posters on message boards. So, I find your comment particularly "off." Instead of debating, I'd prefer you cut the personal attacks and I'd suggest that those on the other side, including myself, do the same. The reasons for Bob O'Brien's anonymity, and his right to be anonymous is something we should all defend, is IMO the desire by industry insiders to destroy an argument by attacking the speaker, rather than to discuss the issue. I don't agree with everything Bob O'Brien has said, but I do admire his message, his desire, his ability to bring this issue to the public. I also admire his ability to make his opponents look foolish. You followed, no doubt, the way he scammed those who spent significant resources, trying to track him down, eventually to a strip club. Masterful IMO. But let's do away with the personal issues. In any debate, each side makes points that are better than others. I'm not claiming that each and every argument is a winner. That's not reality. On the other hand, you may point to a particular weak argument and then conclude that nothing should be changed. I find that disingenuous. Let's agree that things have to change and start to go forward. You seem to agree that current rules should be enforced and that disclosure needs to mandatory within the current rules. Let's start with that. As I've pointed out in the past few posts, I'm not necessarily for more regulation. I'm for more effective and efficient regulation. I'm not a strong government fanatic, thinking that government can solve our problems. If anything, I'm on the other end, having dealt with many, many areas of government inefficiency throughout my life. However, that doesn't mean that the status quo should stay and it's foolish I believe to argue that it should. The system is broken and needs to be changed. As to the effect on our markets, changes always bring disruption. Industry always claims it's the worst thing in the world. No doubt, you remember the industry cry about decimalization and how it would put MM's, brokers, etc., out of business. Finally, your point about PIPE's and the attempt to categorize one scam vs. another. The theme in my own posts is to get rid of the scam, irrespective of who is scamming. With respect to PIPE's, I don't care if it's insiders selling, touts selling, the vulture funds selling, hedge funds selling, traders selling on leaked information, management selling, or some combination of all, I am for changing the environment so that all aspects of this scam is eliminated. It's just not fair for retail investors to be sitting out there with a big "S" for Sucker, while the industry, in many facets, does this scam. That's what I see in the articles about PIPE's. I see hedge funds. I see advance SHORTING into deals. It may not be the technical definition of Naked Short Scamming, but it's a scam and the result is the same. You seem to want to paint me and others into a "one-scam trick pony," and that's where you're wrong. As the previous paragraph clearly states, I'm not saying that others are not involved in this scam. Don't put the words into my mouth. The title of this board was as broad as I could manage. It's not just technical Naked Short Selling. It's advance selling into deals. It's the inherent toxic aspects of convertible. It's dumping that the public has to pay for. It's changing the MM system so that it really is "making markets" and not just "lining of pockets," at the public's expense. Let's change all of this. There is no need for anyone, not just hedge funds, to have an almost free ride on the back of public investors.