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To: ChrisBBo who wrote (215178)	10/27/2006 10:10:02 AM
From: Magrathea	Read Replies (3) \| Respond to of 275872

RE: FTD, Proxies, "Are you Sure?" I am sure of very little. I am "waiting for fullness." What we can be sure of is that 1. FTDs happen. 2. FTD happen more often on large transactions than small ones. 3. Market Makers are allowed to sell naked shorts. 4. Some naked shorts result in FTDs. 5. Some retail investors are not told about FTD of stock they "bought" (see below). thestreet.com Why Does Failure to Deliver Go Unpunished? By Arne Alsin, RealMoney.com Contributor, 4/17/2006 My mutual fund purchased five blocks of stock in Overstock (OSTK...) during the first quarter. There was a failure to deliver shares in four out of the five purchases, with delays for delivery lasting as long as three weeks. Nobody can tell me why shares were not delivered within the requisite three-day settlement period -- the so-called T+3 requirement. For some sellers of stock, it appears that property can be delivered at a time of their choosing. It's not T+3. It's T plus when they get around to it. In one of my purchases of Overstock, it was T+21. The vast majority of investors do not have the luxury of delivering stock that they sell at a time of their choosing. A market is unfair when some market participants can ignore rules that others have to follow. Now in Alsin's case, he knew about the FTD. So maybe your broker does flag that some "shares in your account" are FTDs, i.e. "not really in your account." This would resolve the counterfeiting problem. -- No counterfeiting. Just a customer who was robbed. p.3:Investors are generally not informed by their broker when there are delivery problems. The bank that has custody of my mutual fund's assets readily provides me with the information when there are delivery problems. But not my brokers. I bought Overstock shares simultaneously for my mutual fund and for privately managed brokerage accounts. So far, I can't get delivery information from the brokers. [Before going any farther with this, let me address this OSTK matter. Maybe OSTK was a poorly run company; maybe average. Maybe it was a company who's stock was way overvalued and a smart short. Failure-To-Deliver has nothing to do with how well a company was run. FTD's are a problem about the stock market, and the stock sellers, not the company.] thesanitycheck.com (UPDATE: Dr. Byrne issued an alert regarding proxy abuse in OSTK, and the likelihood that it is taking place due to broker concerns about revealing the actual size of the fraudulently created securities entitlements in investor accounts - essentially, that they aren't sending proxies out to the FTDs because they are afraid (legitimately) of creating a massive smoking gun. If you have any OSTK, demand your proxy, and vote it directly with the company - and don't take no for an answer.) So, if there are FTD's in your account, the broker may not send you a proxie statement and hopes you won't notice. !! look what I found !! reidpriest.com SEC Proposes Amendments to Regulation SHO By Edward Gartenberg On July 12, 2006, the Securities and Exchange Commission proposed amendments to Regulation SHO governing short sales. The comment period extends until September 19, 2006. The proposing release (34-54154) explains that the "proposed amendments are intended to further reduce the number of persistent fails to deliver in certain equity securities, by eliminating the grandfather provision, and narrowing the options market maker exception."..... We are safe, now. The government is on the job..... Related links: thesanitycheck.com bobosrevenge.blogspot.com sec.gov Re: Reg SHO ------------- No, I'm not sure. But I think I'm getting warm. -Magrathea globusz.com [slightly edited...] SB: "Well you see, five million years ago the Galactic economy collapsed, and seeing that custom-made planets are something of a luxury commodity you see ... You know we built planets do you? " "Fascinating trade... so anyway, the recession came and we decided it would save us a lot of bother if we just slept through it. So we programmed the computers to revive us when it was all over. The computers were index linked to the Galactic stock market prices you see, so that we'd all be revived when everybody else had rebuilt the economy enough to afford our rather expensive services." Arthur, a regular Guardian reader, was deeply shocked at this. "That's a pretty unpleasant way to behave isn't it?" "Is it?" asked the old man mildly. "I'm sorry, I'm a bit out of touch."