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

To: makeuwonder who wrote (2513)	6/10/2007 10:03:18 AM
From: rrufff	Respond to of 5034

It's really impossible to generalize but at least some of what you say is true. I've also found many CEO's to be incredibly naive. Many years ago I wrote about a CEO of a stock selling at about $10. I read about a toxic financing that they PR'd would bring their business to the next level. The PR created a lot of buying interest and the stock went to a new high. When I read the actual filing, I was appalled. I called the CEO and expressed my concerns with the toxic nature of the financing. He told me he "trusted" the financiers who would be in the trenches with them for the long run and had assured him, he said, that they would not hurt the stock by converting at the extremely toxic discount. I quickly sold, it was an easy decision, had a large profit. From there, the stock had the typical ski slope downtrend to subpenny level. It had a great business plan and its technology is now accepted and successfully used by large enterprises. Yet, it fell prey to a complicated scam, sold by toxic financiers, off shore money, etc. So, the lesson was that even if the CEO is honest, he can be incredibly naive. CEO's of small companies are bombarded daily by promoters and financiers who claim to be able to make them rich with "trust me" financing and dilution promotion. This is not to say that NSS does NOT exist in speculative companies as often the promoters and financiers are, in essence, NSS (eg dumping restricted shares or "waiting" for receipt of shares) and others jump on board. With technical exceptions, the defenders of this scam rely on semantics to say it's not NSS to wrongfully sell a restricted share or to sell a share against toxic funding. I suggest that any sale without borrowing actually for that trade is NSS, irrespective of whether there is an "excuse" such as part of an option MM exception, MM exception, hedge fund arrangement or someone pretending that the dog ate his certificate. Rather than NSS, I'd use the term "manipulative shorting" and this is prohibited by current law and regulations, including Reg. Sec. 10(b)-5. Regulation, registration and enforcement should not distinguish or excuse insiders, promoters, MM's, options MM's, or hedge funds. However, the scammers rely on semantics, grandfather clauses, and "excuses" to keep their scam going. In today's world, there is no reason for these type of excuses other than to help the moneyed interests take money from retail investors and naive managements. Note - to the defenders of this scam, I have repeatedly posted that many, if not most penny CEO's hide their own scamming dilution dumping by claiming NSS. However, as I also repeatedly post, "there is plenty of scamming to go around," and anyone who claims that there is no scamming on the short side or that manipulative shorting (whether technically NSS or not) is likely making money on the scam in my opinion.