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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 (4420)	5/10/2009 12:13:27 AM
From: gregor	2 Recommendations Read Replies (1) \| Respond to of 5034

rruff: I pulled this off the SEC site. Let's keep telling our story. Here is an annonymous poster @ telling the SEC about injustice, and economic terrorism ! Good reading.. Fraud: It is common practice for Mutual Funds and Pension Funds to loan shares of stock for shorting but perhaps this is not a legal practice--- Pension funds and Mutual fund companies/managers are defrauding consumers when they loan shares for short selling. The pensions and brokerage firms sponsoring the funds/managers have solicited consumers to be shareholders; to manage their money with the expectation of protecting shareholder investments and seeking positive returns. As a result of managing entities loaning fund shares to shorts sellers and receiving transaction fees or other benefits from such transactions there is a conflict of interest. Consumers/investors have been deceived by fund managers when shares are loaned to others who will short sell them. The managers are breaching their fiduciary responsibility to the share holders of the funds knowing the intent of short sellers (successful or not) is to return them at a lower value with the managing firm getting some benefits either way in the form of trading fees or other goodwill from the short sellers. While share holders may have protection on the up side when shares are loaned, share holders are fully exposed to total loss on the down side as those shares can not be sold by the fund until returned by the short seller. The managing firms of these funds justify the loaning of shares saying they have title for the shares in their name because they executed the transaction for the shareholders of the funds in their name. But in reality they are an agent and not legally at financial risk for those shares; that risk is with the shareholders of the fund, the shareholders whose money was used to buy those shares. The shareholders of the fund are the recipients of the gains and losses for the stock until sold, they are the owners. In the recent market freefall, shareholders in funds that loaned shares lost the majority of their equity as the loaned shares could not be sold by the fund until returned by short sellers. When returned many companies had been driven to insolvency with little or no value left for share holders. The managers, the brokerages and the short sellers won at the expense of the consumer who was deceived and lost most of their money. Many other shares are held by brokerages with title in the name of the broker as a convenience for individual clients of broker accounts or trust accounts. Again the brokerages are really agents for clients, the rightful owners are those at financial risk and not those in title. The brokerages should not be able to loan out these shares for any reason without written approval of the rightful owners. For the very reason we have copyright, patent and counterfeiting laws to protect those who have investments at risk from those who seek to reap where they did not sow, we need a new law banning short selling stocks. The law would be consistent with other laws we support to protect the property rights of company’s owners and to maintain an orderly market for stock. Further the law should make certain that these managers and brokerages can’t add new language to their prospectus allowing them to claim ownership of these shares unless they take all financial risk for any loss incurred. We may have been lucky this time but left in place shorting stocks risks the future of Capitalism and wealth of our Country. The current events clearly show short selling is now more intense, a danger to the marketplace and how shorts sellers in aggregate can quickly assemble large sums of money and put our money system at risk; creating a security threat to our Country. The greed of short sellers and the objectives of government are in conflict, world governments have invested trillions of dollars to stabilize financial institutions and other industries only to have short sellers short the very companies they are trying to stabilize. According to a Reuters story on short selling dated March 24, 2009, short interest on stocks in the NYSE increased by 10.8% since February 10, 2009, and almost One Billion shares of Citi Bank were shorted, a 392% increase bringing the stock price down as the Government invested tens of Billions of Dollars to prop it up. That’s a lot of shares and one should question whether that many investors with real financial risk would have loaned these shares to short sellers verses just selling them. Only institutional managers of mutual and pension funds could assemble these large quantities of shares in such a short time period by drawing them from managed funds. Again greed is in play as the institutions are not at financial risk for the shares loaned and are in conflict with their fiduciary duty to fund shareholders, for their own benefit. In summary, the residual effects of short selling stock are wrong, perhaps illegal and now are a threat to our Country. Short selling is counterfeiting a corporation’s currency, its stock. With the help of new technology, new methods to communicate, and day trading, the aggregate result of short selling in this economic down turn has been the transfer of enormous wealth “earned” over many generations to a group of “corporate raiders” likely from all over the world in a period of only a few months. For National Security short selling needs to be stopped immediately to protect capitalism from enemies who could orchestrate a plan to use this newly discovered model of financial terror to bring capitalism as we know it to an end. Back to the Basics….. The market system for trading ownership interests of companies should be returned to the productive use for which it originated; capital formation through investment, to create jobs that will provide necessary goods and services to people through the world; and a market place for the buying and selling of fractional interests in companies. A true marketplace provides access to enough ready willing and able buyers to provide liquidity for fractional shares of the company’s stock at any point in time at a price determined by the supply of and demand for the company’s stock. (Simple economics, where the demand curve crosses the supply curve). We have that without short sellers.