Aw, come on. How'bout an ATTA BOY. Please....... ?????
=DJ Lawsuit Filed Vs Brokers Over Naked Short-Selling Fees
By Chad Bray
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--An antitrust lawsuit was filed Wednesday against the
securities industry's largest brokerage firms over fees charged as a result of
"naked short selling."
The lawsuit filed in federal court in Manhattan by Electronic Trading Group
LLC alleges that the major broker-dealers charged unearned fees, commissions or
interest on short sales where those broker-dealers failed to borrow or deliver
the stock to back a short position.
Naked short selling exists when a stock is sold before an arrangement has been
put in place to borrow the shares. It's illegal for most investors, but legal
for firms that make markets in stocks and bring liquidity to the market.
"Defendants collusively condone and engage in these practices to their
individual and collective enrichment, routinely alternating among themselves in
the roles of prime broker who fails to deliver and third-party broker-dealer who
permits the (failure to deliver) to persist," the lawsuit says.
The complaint names the broker-dealer units of Bank of America Corp. (BAC),
Bear Stearns Cos. (BSC), Citigroup Inc. (C), Credit Suisse Group (CSR), Deutsche
Bank (DB), Goldman Sachs Group Inc. (GS), Lehman Brothers Inc. (LEH), Merrill
Lynch & Co. (MER), Morgan Stanley (MS) and UBS AG (UBS).
The lawsuit, which is seeking class-action status, claims the broker-dealers
charged Electronic Trading Group and other legitimate short sellers for
"covering" short positions that the broker-dealers actually didn't cover and
then concealing that fact. Electronic Trading Group said it was charged improper
fees, commissions and interest by the broker-dealers from April 2000 to present.
"In effect, plaintiff and other members of the class were charged and paid
costs and fees, but did not receive the bargained-for value in return," the
lawsuit says.
-Chad Bray, Dow Jones Newswires; 212-227-2017;
chad.bray@dowjones.com
