Quote from sprstpd:
This article doesn't seem to address naked shorting. Did I read it wrong? I don't see the connection yet - maybe it is there but I am not seeing it.
http://online.wsj.com/documents/Milbergindictment.pdf
Racketeering!!!!! huge!!!! Just huge!!! Trust me. Patrick Byrne is celebrating tonight. I believe this is a first for this affair.
This is allegedly how it works. It was documented in 60 minutes, except the part where SAC would get a "locate". That is hard for journalist to explain to the public..
Hedgefund manager A selects his pick. Remember, neg rebate is big, he has to make it happen quickly. He gets custom tailored research for his prey. They always looked for warts in the company or management. Then he gets his position in, and the research is released and followed up. If Byrne is right, then journalists, TV and Print pile on. Elgindy would have a web site were they would announce a journalist (sic) was going to bash a stock and when. Weiss would come in after the fact and finish off the company, so says the indictment. The naked shorting occurs at the Prime Broker. Read the Vodiagroup.com report I posted here. His analysis suggests that the pension funds, the true custodian of the securities, by being bypassed by the BD's , are deprived of some 205mm per year. THe Prime could borrow, but the securities run out, and then the vig goes to the custodian. Bypass that mess, you can lend out millions more than the hypothecated and not pay the vig. Go read the **10 K and see what stock loan brings in. And that's just one name. Huge Biz.
It has been suggested to me by former regulators that the hedgies are not all that happy about paying neg rebates for securities they know are not borrowed. But they pay.
Now, the hedgies are liable for the shorts that don't exist, and if they have to buy in, they are buying in many times what exists. That is why in OSTK the pressure is so intense. Ask yourself why so many journalists pile on these situations, knowing that there is no way that short postition could be that big.. That will be on e of the next shoes to drop. And I think the biggest.
Why grandfathering and the seemingly endless coverup? Where is the money going to come from? Let's say tomorrow OSTK is bought in. Where does 9mm take it with guaranteed delivery? How about 30mm? 60mm? What about TASR? All the OTCBB they've been raping forever? And the SHO list is the tip of the iceberg.
And thank you for the civil question.
Believe me, I got involved talking to a Specialst in a stock and hearing what one of the floor brokers was doing to me and him. An order he had one day was, sell all you can sell at "x". I asked how can you take the order. He said the guy was always good for it. The stock is now a nickel. I never would have dreamed all this in a million years. And I feel it just goes farther and farther. I mean, as a layman, reading the Weiss complaint, it is, in laypersons terms, extortion. Nothing more or less, and they are using the Justice System.
