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SEC to Webcast June 13 Meeting

Location: Blogs Bud Burrell - Front and Center
Posted by: bburrell	6/12/2007 10:39 AM
Comments after this is over, Please!

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Comments (38)

Re: SEC to Webcast June 13 Meeting	By ginger on 6/13/2007 7:56 AM
Webcast: Open Meeting Wed., 6/13 10 a.m. http://sec.gov/

Re: SEC to Webcast June 13 Meeting	By tml on 6/13/2007 7:56 AM
Exciting, from the sound of things - GF clause eliminated, 35 day closeout? Bud, do you think this will effect the share price of heavily NSS'd stocks, or will the shorters just continue to duck, cover, and break the law? Reply: The latter. Same crap, different day.

Re: SEC to Webcast June 13 Meeting

By Kevin on 7/20/2007 7:13 PM

Bud I am not sure where to post but did you hear the usxp webcast today July 20?
I would like to provide you this pdf which Mr. Altomare sent to everyone who listened and I would like to ask you has usxp already asked for the dtcc records?

I would also like to ask why isn't the media ever reporting that usxp has already won a naked short case in court, instead of reporting that Overstock is trying to get a naked short case to court? Why is usxp being ignored?
http://www.usxp.com/Position%20Paper.pdf

Reply: Kevin, Good Questions. I can't respond on some of the issues, but the press has chosen to ignore the judgments as a matter of prejudicial disclosure.

USXP is in a big spotlight now, and Altomare won't back down, you can bet on that.

Re: SEC to Webcast June 13 Meeting

By Kevin on 7/31/2007 8:51 AM

Bud, thanks for the previous reply. I agree, USXP is in the spotlight. I see them leapfrogging the likes of Overstock and Eagletech as far as being frontrunner on public attention, because if they get that jury trial, and I believe they will, it is scheduled for this November, as the other defendants have been given that date.

I would like to ask you, won't judge Lynch be forced to recuse himself if he grants USXP a jury trial, due to the fact he has already said some terrible things about USXP or Mr. Altomare, such as Mr. Altomare being "unfit" for running a public company? I cannot see how Lynch could possibly conduct the jury trial with that bias. Would you agree?

I also thought Universal would have filed additional lawsuits agasint some specific brokerages, just as Overstock has done. Why haven't they?

One final question please. Do you know of any previous cases where a company has cited Bankruptcy Court ruling as taking precedent over SEC regulations, as Universal has claimed?

Thank you.

Kevin

Reply: I would guess Lynch will have to recuse himself. I do know of a specific case where the Bankruptcy Court told the SEC lawyers to sit down and shut up or face disbarment. USXP has a legal strategy that doesn't stop with this current case.

Anything can happen in our legal system, mess that it is, and that is all I can say.

Re: SEC to Webcast June 13 Meeting

By Kevin on 8/2/2007 5:53 PM

Bud, in judge Lynch's ruling in Summary for SEC, he says Universal only had right to sell 1.25 million shares per bankruptcy plan, and it was reduced to 107,000 after a split. But although judge Lynch writes this in his ruling, a quote from the plan, "for any reason they can recapitalize" at the plan administrators discretion, and the number of shares can increase. For exact language, if you go to duediligencenet.com and click analysis, then Universal and scroll down to ruling, 172.0 page 5, you can see for yourself.

So why, and how can judge Lynch ignore that one phrase, that clearly allows Universal to increase that number of shares, thereby a non-violation I would think.

Appreciate any feedback.

Thank you.

Kevin

Reply: Judge Lynch is trying to dictate the S-8 authorization of the Bankruptcy Court. I am not a lawyer, but my bankruptcy authority says he has no such authority to re-state or change the original ruling of the BK court.

Time will tell.

Re: SEC to Webcast June 13 Meeting

By Kevin on 8/6/2007 1:20 PM

Bud, I see judge Lynch continues to deny usxp a jury trial, per his ruling of Friday August 3, 2007. This continues to appeal. I don't mind the other two items he ruled on so much, but it appears he is not giving any weight whatsoever to the FACT that the SEC lied to him in which they agreed with usxp, that usxp was not waiving it's right to a jury trial regardless of any summary judgment.

I try to be fair with this judge, but he seems like a bozo. I believe appeals will kick it right back in his face and usxp will get the jury trial.

My question for you is, with the other defendants scheduled for late November 2007 trial, won't usxp have to have a decision from the appeals court at least a couple months prior to that? Can you tell me how long an appeals court usually takes, dating from let's say this past Friday's ruling?

Thank you.

Kevin

Re: SEC to Webcast June 13 Meeting

By bburrell on 8/6/2007 1:23 PM

Re: Has the other shoe dropped on US CMO’s and CDO’s, per BIS?
By Valueinvestor on 8/6/2007 11:26 AM

Bud...Judge Lynch has rejected USXP's motions for a stay of his Feb. judgment and for a jury trial...basically, he has said unless the appeals court overturns his judgment, Richard and Gunderson are gulity as charged, should be disbarred and the company has to pay a hefty fine (that will most likely bankrupt it)...assuming the apeal will now be filed, how long does it usually take for an appeals court judge to rule on this ? Also, meanwhile, does the company have to come up with the 20+ million and keep this in escrow till the appeals court judge has ruled ? It appears Judge Lynch completely ignored the fact that the SEC lawyers did not reveal their prior assurances to Tifford about the SEC having no objections to a jury trial no matter how the summary judgment came out...I understand it was a period of great peersonal bereavement for Tifford, but did Tifford commit a monumental blunder when he agreed to that summary judgment procedure or is this still salvageable ? It appears the shareholders are losing big time, once again, in all of this, inspite of all the "hidden" and as yet untold "mysteries" underlying this company...where are the arabs when we need them the most ??? your thoughts at this critical juncture would be much appreciated...thanks in advance...

Re: SEC to Webcast June 13 Meeting

By Kevin on 8/7/2007 8:58 AM

Bud, I don't mean to be a bother, but would appreciate some clarification on the USXP situation. I know as of now we the case is to be presented before the 2nd Circuit Appellate Court. I am a bit confused on exactly what is the "fact" that Judge Lynch ruled upon that Universal claims he is not allowed to rule on "fact" but only a jury can do that.

Specifically, can you please tell me the "fact" Lynch ruled on?

I do know the judge has ignored any talk of naked shorting, and any precedent the bankruptcy code holding. I disagree with him on each of these, and I hope the Appellate Court sees it Universal's way.

I also see Lynch being irresponsible for passing this onto the Appellate, because if he had the guts, he would have slapped down the SEC and saved us all time.

Recently I read a very lengthy article concerining the Bankruptcy Courts in the United States, and how sometimes they are not viewed as courts at all. This was well beyond my scope of things, but it talked about how sometimes things from Bankruptcy courts get recognized and sometimes how they get ignored, even up to the Supreme Court. Doesn't sound like this is something we should have in the U.S. where the BK Court itself is brought into question sometimes.

And if you could Bud, so many USXP shareholders really trying hard to stick this out. Is there anything you can say publicly that can add to our hope?

Also, I know Mr. Tifford is part of the Eagletech team, although distant I think. Don't you think he should be receiving information from Mr. Quinn who is handling that case as the lead attorney I believe, and learning from those documents what may apply to USXP?

Appreciate your answers. Thank you.

Kevin

Reply: I have suggested the Company put out a clarifying press release on these matters. Only they can do that.

Re: SEC to Webcast June 13 Meeting

By Kevin on 8/14/2007 7:38 PM

Bud, the GF ruling is now on the books, and they got it into the register in 61 days, rather than taking up to 90 from the date they voted on it. So if I understand correctly, ruling takes affect 60 days from today's August 14, 2007 which makes it October 15, 2007. Then another 35 days I guess to get everything covered.

Bud, is it true USXP is probably the most highly naked shorted stock in the markets? If they are or anywhere close to that, and if the naked shorts feel they must suddenly cover, don't you think they would start covering almost immediately rather than waiting......and letting marketmakers run the stock up first, making it costlier for them to cover?

** Reply: The precise size of the USXP short is yet to be determined, but it will be by responsible third parties. My opinion will be supported or not by that.

I'm thinking if they don't get active quickly, then they likely many not get active at all. Which I guess leaves us at a dead end, and nothing changes, which then comes down to SEC enforcement, and nobody knows if they would enforce, or what a penalty would be.

** Reply: The market will determine the penalty, not the SEC. Their hands are so dirty here, they would pollute the Atlantic Ocean. They could prove otherwise, by simply opening their books, something they won't do except under duress, which isn't off the table.

I guess I am asking is USXP possibly the best stock to watch and guage this GF ruling effectiveness?

I noticed today usxp traded around half a billion shares, and in the two weeks prior to this I was told Mr. Altomare had stopped selling stock, which caused the volume to decline to about 50 million or less per day. That the volume spiked so much on this first day of the ruling is of interest to me, but the stock also dropped 25%, which surely is not the result of covering nss.

Do you know if Mr. Altomare indeed has stopped selling shares? I thought he said a couple weeks ago he stopped because his transfer agent was uneasy with the SEC matters.

Thank you.

Kevin

** My work is in connection with litigation support, and I can't comment on other matters. I would like to know the name of the SEC lawyer/employee (?) in Denver who reportedly committed suicide over a year ago, and what caused it. Anyone helping on this will be owed one by me.

Re: SEC to Webcast June 13 Meeting

By Kevin on 8/16/2007 8:03 AM

Hi Bud, well I'm back for more insight. I can't ever get enough especially where usxp is concerned. I have searched google for months trying to find out the name of the SEC guy who apparently committed suicide over either this naked short thing in general, or is it in the usxp case in particular? I haven't had any luck. But I assume this is a guy from Denver, so that is where I have focused my attention. Shouldn't Universal already know who this guy is? I know they have had investigators trying to find the judgment money and collect on it working for them for years, and I would think they would be able to track down a suicide in a case involving them. I'll keep trying to dig.

One thing in general, it looks to me like Bloomberg's has backed off on the naked shorting reporting. They had a great piece there a couple months ago, but I haven't seen any follow up, and they went quiet right in the midst of the GF clause being revoked, that seems strange timing to go quiet. Do you hear anything about Bloomberg's or any other major media getting more active on nss reporting?

And as for the usxp bankruptcy matter taking precedent over the SEC, I have searched google too for at least 8 months, no luck in finding a case, but I'm going to defer to your experts on this, that the BK takes precedent, so I feel pretty good about usxp ultimately getting heard in court.

Do you know much about the Appellate Court Bud? Is it a 3 or 5 judge panel? To me it looks like Lynch knows he made a blunder, but he was going to make usxp sweat it out, make them work to get their day in court, and he really isn't going to mind being overturned.

That's it. I appreciate your assistance to usxp shareholders and investors in general. Wish we could put the SEC leadership in jail.

Thanks

Kevin

Reply: You are on the right track. We will find out more. The appeal would normally be heard by 3 judges, but the Company can ask for a en banc full court ruling.

Lynch has made enough mistakes here. The SEC lawyers should be facing sanctions, but I am not in control.

Best, Bud.

Re: SEC to Webcast June 13 Meeting

By Kevin on 8/27/2007 9:36 AM

Bud, regarding usxp and their bankruptcy ruling which you have said your expert tells you supersedes any SEC authority, and Richard Altomare says the same thing, I understand, and correct me if I am wrong, that you know of a company that was successful on along this same line of defense, and they were a California company.

Is there any reason you cannot tell me, a shareholder of usxp, the name of that company so I can do some research on my own? I know a couple more usxp shareholders and we work very hard trying to find things, but I have yet to come up with this, and if you know the name, I think I could evaluate the usxp defense claim more thoroughly, and so could my friends. If this is a public case, I dont' see why it would be of any harm to disclose it to us, help us out a bit.

I still haven't been able to track down the SEC suicide, if there was one. If anyone else is reading this and has the capabilities, I would suggest searching the coroners offices records for rulings of suicide in 2005 and 2006 in the Denver area. It is by county I believe, so I think if we search about a 3 county area, that would pretty much cover it. Then check those names, likely a male, and then search the obituaries, and see who was an SEC employee.

Sure would like to check out that California BK company Bud. Appreciate any help.

Kevin

Reply: The information came to me under privilege, involving a Florida, not CA, Company.

If you want precedents, look to the hundreds of cases involving tax shelters and related companies post the 1986 Tax Reform Act. In every one of these cases, the SEC got its figurative ass handed to it by the BK Courts.

Re: SEC to Webcast June 13 Meeting

By Valueinvestor on 8/29/2007 12:18 PM

Bud..a while back you mentioned "I would like to know the name of the SEC lawyer/employee (?) in Denver who reportedly committed suicide over a year ago, and what caused it. Anyone helping on this will be owed one by me."...the fact that an SEC guy had taken his own life, likely in connection with this case, was communicated to me by Richard Altomare himself in a private conversation over a year back...I don't think Denver was mentioned...have you checked with Richard to find out more on this ? Not sure if he knew that for a fact or whether he was also told that second hand...

w.r.t. USXP, why the delay in appealing to the 2nd circuit ? Does the preparation for this venue have to be purposefully different than the one for the district court ? or is the company thinking of a new line of attack towards convincing the appeals court judges that the BK judge's ruling should make the SEC's authority on share issuance moot ? or is this appeal going to focus a bit more on why naked shorting has a central role in this entire case ?

Reply: One of the SEC officials from Denver was deposed, bringing out the fact that he was not a lawyer. I think I know who this was, but without first hand information, I don't want to use the name. I am making queries through other sources to determine the suicide's identity.

Re: SEC to Webcast June 13 Meeting

By Kevin on 9/5/2007 7:40 AM

Bud, I see the judge in the USXP now wants to hold Mr. Altomare in contempt. I read the article in the South Florida Journal, which always has been dead set against USXP, but the quote from the former SEC guys talks about receivership and how the receiver can come in and withdraw Universal's appeal. To me that sounds like a tremendous abuse of judicial power. My gosh Bud, what the bleep is wrong with Judge Lynch???? He is rubber stamping the SEC case, and he is ignoring that the SEC is the one who has allowed the crimes of naked short selling, and now he is going to rubber stamp one of the receivers they want, and you can be darn sure that receiver will withdraw Universal's appeal, and then the case is done!

I am super ticked off Bud, and part of it I have to direct at Universal for not being more forceful in their defense. They never gave judge Lynch enough to rule in their favor, and even today although they attack the SEC, they don't take off the kid gloves and really provide any damning evidence. And shareholders like me, we are getting raked over the coals.

And if Mr. Tifford hadn't screwed up long ago when he apparently got duped by the SEC, we wouldn't be in this mess.

I tell you Bud, I sure would like to know what you guys working on the usxp legal team are doing, because from a shareholder perspective, it looks like you guys aren't doing nearly enough. It's time to take off the kid gloves and by gosh come out with something dynamic that smacks judge lynch and the SEC in the face!

Sincerely mad as hell,

Kevin

Reply: The gaming here is vicious. Don't underestimate the capacity for duplicity of the enemy here. There is more happening than you can realize. It will eventually come out. The SEC wants this Company dead, period.

Re: SEC to Webcast June 13 Meeting

By Kevin on 9/7/2007 2:15 PM

It's Friday afternoon, Sep. 7, 2007, and I heard Richard Altomare on a radio show this morning, which was taped yesterday, and he said he would be meeting with the RECEIVER today, and that all he could do now was listen to his legal advice. I see the stock has traded almost 900 million shares today, which is many times the 35 million or so it had traded per day the past month, since Richard stopped selling shares. So I guess this is the last of the shareholders bailing out, except me, I have held.

I guess before this day is over, Richard will be out as ceo. And I have no trust or faith in this court appointed SEC RECEIVER. It's like the fox managing the hen house now. Incredible injustice if you ask me. And I guess with Richard out, this RECEIVER will drop pursuit of SEC case, shut the company down before any appeal, and we all are screwed.

As for Richard, he sounded in the dumps on the radio show. I guess for a shareholder like me, I can only hope the truth comes out, as I do not know for a certainty Richard is a good or bad guy, I hope a good guy, and I still intend to give him that chance to prove it.

Anything you can tell me Bud? Anything at all is appreciated. I had email contact with Richard for about a year, but if he is out as ceo, that will obviously end. I must say I do wonder if he could end up in jail, if indeed the SEC were correct about him. Could this whole thing have been a stock scam? What is your opinion of that? I mean $100 million in losses by a company that just ships luggage???? That sounds like an awful lot of money lost, more in line with an experimental drug company that small luggage company.

I sure hope Richard has been in the clear and can whip the SEC, but short term it sure looks to me like this company is about to be killed. I held my shares, because I figure in for a penny in for a pound, and I am long several years, way down on my investment of course. I think those who sold out may make a big mistake if Richard can prove his innocence. And you can only show damage I would think if you remain a shareholder.

I guess Richard will have no access to anything anymore. Boy.....it sure makes a shareholder feel sick.

Can you provide any uplifting, ......or hints of things going on Bud?

As always, thanks for you input and patience,

Kevin

Reply: The Receiver shut down the Company today, throwing out all the employees, and changing the locks on the doors.

Now we see where things go.

Best, Bud.

Re: SEC to Webcast June 13 Meeting	By Stephen the Strong on 6/13/2007 11:41 AM
Bus, you seem disappointed? Please correct me if I'm wrong, but isn't this a what we wanted? The GF is eliminated and nss will be forced to cover, is this not correct ?When does it go into effect?.....please explain, the riddles become confusing, thanks

Re: SEC to Webcast June 13 Meeting

By captdale on 6/13/2007 11:42 AM

I'm now an expert by any stretch of the immagination but my first take is. Cox said it plain and simple right out loud so the "conspiracy theory" is no longer a valid argue position. There were closeout laws on the books to start with that were never enforced so why should I believe they will be enforced now with a T+35 ? WTF. I was pleased that the GF was eliminated but would like to go over the complete final ruleing when it is posted to see what if any "escape routes" they have left in place. I did record the whole thing in MP-3 and will go over it a number of times and perhaps like Bud's broadcasts will have it transcribed so I can highlight it etc. Can't wait to hear Bud's take on it.

Re: SEC to Webcast June 13 Meeting

By captdale on 6/13/2007 11:43 AM

Dear Chairman Cox - I am a retired retail investor. Thank you for a straightforward description of the issue of Naked Short Sales and how the SEC is attempting to address those issues by amendments to the present rules. These statements by you have helped in a small way to renew my confidence in our financial system. Mr. Cox in my limited understanding I would like to say that I believe that adequate rules were in place prior to any amendments. The problem is that the rules were never enforced. Re - T+13 requirement to close out open positions. Nothing was mentioned in the meeting as to how the apparently new close out requirement of T+35 will be enforced. Is it just going to be business as usual or is there a plan to enforce this rule. Thank you again for a informative presentation.

Respectfully
Capt. XXXXXXXX

Re: SEC to Webcast June 13 Meeting

By captdale on 6/13/2007 12:22 PM

bud - in the meeting they said a number of times basically "in order to preclude any short squeeze". Why do they give so much value to that and not to the other way around. It would seem they want the shorters to make money or at least not to lose it but not the longs. If I am correct, why would they want to do that ?

Reply: The SEC has used the shorts as their designated "unregulated policemen", and in turn, feel a need to shelter them. These unregulated policemen are specifically inclusive of the broker-dealers, hedge funds, both domestic and international, and arbitrageurs. The financial power of these parties is simply enormous, almost beyond imagining.

Re: SEC to Webcast June 13 Meeting	By Paul on 6/13/2007 12:24 PM
Did this do anything to the Options Market Maker Exclusion??? Reply: Supposedly it is eliminated, but we will see. It is too early to tell.

Re: SEC to Webcast June 13 Meeting

By tmg on 6/13/2007 12:26 PM

A couple of subtle points:

I thought Commissioner Atkins' comment about following the APA by re-proprosing was rather snide, especially in the context of how they are using it now when it is to the advantage of the looters and ignored it when it it suited them.

Also Commissioner Nazereth's question about how they will publish the NSCC's aggregate CNS fail data was rather self serving. They can't keep a cap on it any longer under FOIA and these requests are straining the system, so isn't it nice of them to release the data after it is 2-5 months stale?

Reply: On target observations. Parties who have seen this data aggregation are my sources on the real expansion of short positions since SHO.

Re: SEC to Webcast June 13 Meeting - Forbes

By ginger on 6/13/2007 1:28 PM

Associated Press
SEC OKs Changes to Short-Selling Rules
Associated Press 06.13.07, 2:16 PM ET

The Securities and Exchange Commission voted Wednesday to abolish long-standing rules that restrict short sales in declining markets and approved another change to tighten rules intended to curb manipulative short sales, including so-called "naked" short sales.

The first change ends decades-long restrictions by the SEC and U.S. markets on selling short as prices are falling. An experiment in lifting the rules for select stocks showed there was little justification for retaining restrictions such as the New York Stock Exchange's "tick" test, SEC Chairman Christopher Cox said.

Elimination of SEC's short-sale price restrictions, and rules barring markets from using a "tick" or "bid" test to control short sales will take effect immediately after the rule change is published in the Federal Register, SEC staffers said.

A second change approved by the SEC modifies Regulation SHO, which the agency adopted in 2004 to curb abusive short sales. The change eliminates a controversial exception to the 2004 rule that shielded existing short positions from requirements to deliver hard-to-borrow shares within 13 days of settlement. Once the change takes effect, short positions previously protected by the grandfather clause must be closed out within 35 days.

Short selling involves sales of borrowed securities, producing profits when prices decline. The practice is legal, but the SEC's Regulation SHO sought to prevent "naked" short sales, in which short sellers don't borrow securities they sell.

SEC officials said delivery failures have declined about 35 percent overall since Regulation SHO took effect and have fallen about 53 percent for hard-to-borrow stocks defined as "threshold" securities.

Long-standing, persistent delivery failures seem to be due to the grandfather protections and a shield for short positions held by option market makers, Cox said. He said delivery failures hurt investors and companies, and may be a sign of naked short selling.

"It continues to be a problem, particularly in the microcap space," Cox told reporters after the SEC meeting.

Copyright 2007 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

http://www.forbes.com/feeds/ap/2007/06/13/ap3818234.html

Re: SEC to Webcast June 13 Meeting

By particleswaves on 6/13/2007 8:19 PM

A welcome partial move however the option market makers get to keep their hands in the cookie jar pending another horseshit comment period. Patrick Byrne sums it up nicely at the end of the following Liz Moyer (Forbes) article re todays SEC gathering.

Regulation
Trading Rule Reprieve
Liz Moyer, 06.13.07, 4:56 PM ET

Wall Street got a reprieve from more restrictive trading rules Wednesday as the Securities and Exchange Commission voted to put off any decision on whether to take away certain exemptions for options market makers.

But the SEC did eliminate a controversial "grandfather" rule that many critics have said allowed rogue traders to manipulate certain stocks through naked short sales. It also eliminated the prohibition on selling short on a downward tick in price.

At a hearing Wednesday on proposed amendments to a 2004 regulation on short sales, SEC Chairman Christopher Cox said the tightened rules "are aimed squarely at abusive short selling and market manipulation and promoting fair, efficient and orderly markets."

The SEC has been considering amendments to its 2004 Regulation SHO to close loopholes that encourage manipulation, but the proposed amendments have not been without controversy.

More than 900 letters poured into the agency since July from a wide assortment of commentators, including broker/dealers, hedge fund managers, ordinary investors and state securities regulators. One vocal critic of the rules is Overstock.com (nasdaq: OSTK - news - people ) Chief Executive Patrick Byrne, who has been waging a self-described "crusade" to stamp out abuses on Wall Street.

"This is an encouraging development and the SEC is to be commended for taking this step," Byrne said in an e-mail Wednesday.

The grandfather exemption, repealed by a unanimous vote Wednesday though the date for implementation has yet to be set, made an exception to the 2004 Regulation SHO that hard-to-borrow securities sold short had to be delivered within 13 days of the settlement date. Reg SHO exempted trade failures that existed before the rule was implemented in January 2005, and it exempted failures that occured in a five-day window before a stock is added to threshold lists kept by the major stock exchanges.

Those exemptions are now eliminated though the close-out requirement was reset to 35 days from 13, giving short sellers more time to find shares to cover their open positions.

Cox has said Reg SHO helped reduce trade delivery failures, but hasn't been as effective as hoped, as evidenced by stocks that have languished on the threshold lists for months and years. (Overstock.com, for example, has been on Nasdaq's threshold list for over 500 days.)

These longstanding delivery failures are linked to the grandfather exemption for trades and by the options market maker exemption, which allows an options market maker to maintain an open short position to hedge his options position. High and persistent trade delivery failures can be a sign of deliberate naked short selling, "and that can be used as a tool to drive down a company's share price," Cox said.

The grandfather exemption was put in the 2004 regulation out of concerns that forcing the close out in hard-to-borrow stocks would lead to a short squeeze--a trading term to describe what happens to short sellers when a stock rises instead of the hoped-for decline, and the short seller has to cover by buying more expensive shares.

But the SEC commissioners acknowledged Wednesday that concerns about extra volatility and short-squeezes were overblown and that the benefits of eliminating the grandfather exemption outweighed the downside.

Also part of the changes proposed Wednesday was a plan to publish two-month delayed trade delivery failure data on individual stocks that appear on the threshold lists. That data comes from the Depositary Trust Co. The SEC is also going to increase the frequency of short-interest reporting to twice a month from once a month. That change is slated to go into effect by September.

But the matter of the exemption for options market makers is left open for now, something that is bound to cause consternation for those who wanted all the loopholes shut. The SEC will open a new comment period on amendments to market maker rules.

"We look forward to a comparable reform closing the market maker exemption loophole, which is currently an avenue of great abuse," said Overstock's Byrne. "There is a bank being robbed in two ways: some crooks snatch a teller's cash drawer and sprint out the front, some saunter in the back door and loot the vault. What the SEC did today was put bars up in the tellers' windows. I applaud that. But tomorrow there will be twice as many crooks going around back."

Reply: These actions fail to address Ex-Clearing, which is where all these trades will go, with no footprints at DTCC.

The so-called "studies" done by the SEC specifically EXCLUDE the period of the 2000 Crash, say March, 2000 to August 2003. Why haven't these articles been exposed to peer review, or any review for that matter.

These studies were cited as sources for claiming reductions in Fails alledged to have resulted from Reg SHO, when in fact, the fails were just moved over to Ex-Clearing.

Anyone taking anything positive out of this is playing piano short four fingers and a two thumbs.

The SEC remains the best regulator money can buy. Cases coming forward will make this painfully clear.

Re: SEC to Webcast June 13 Meeting

By rtway on 6/13/2007 8:27 PM

What I have not heard from anyone tet is how are they going to enforce these alledged new enforcements. Are they going to issue parking tickets like they did in the past while the bank was being robbed. Are ther going to issue fines that they can't verify have been collected? They shoul be doing this in partnership with the DOJ. I still don't trust Cox as far as I can throw this computer. I'll believe it when I see it.

Reply: From the French, there is a phrase: "Mais il n'y a pas de quoi."

Today was another short step in a long process. I have no idea how the SEC will exercise authority over Ex-Clearing, particularly when they have no one on staff that even knows what the hell it is.

We are three to five years away from this being resolved finally, or melting down the entire system, Japan style. Either result will produce serious casualties.

Those responsible should be thrown in a SuperMax Prison barefoot, naked and penniless, with personal Tats saying "I hate Everyone, and anyone in Prison is a piece of gutless scum, particularly Aryan's, Blacks, Hispanics and Asians." They would be some one's hood ornament within hours.

Re: SEC to Webcast June 13 Meeting

By captdale on 6/13/2007 8:32 PM

Bud - you said "These unregulated policemen are specifically inclusive of the broker-dealers, hedge funds, both domestic and international, and arbitrageurs. The financial power of these parties is simply enormous, almost beyond imagining. "
-----------
For you to say that it is for you "almost beyond imagining" when I would venture that you have extensive experience with money well into the multiple millions if not billions of dollars, I get some idea of the concentrated financial power you refer to. If this is truly the case I would suspect that with the exposure being placed on retail invester fraud the big boys will move away from direct fraud against the retail invester and start concentrating on the bigger pie. I would think that with all that financial power you refer to that there is no way they will let the stock market implode. Would not cost that much to correct it. I could see that if they start messing with the really big money too much it could cause a universal systemic meltdown however. Any thoughts on that ?

Reply: If we have a meltdown here, the World goes ballistic. One of the legendary gang of three economists of the 1980's once said, if the US consumer gets a head cold, the World gets pneumonia. Despite globalization, this is still true.

A meltdown here would make the collapse in Japan look like a walk in the park. The Central Bank of Japan is an undeclared bankruptcy, and it is their analog to our Federal Reserve.

I haven't sero-converted to cynic yet, but I would say that the percentages favor a meltdown. Things just feel too good, like "frothy". That is a great signal of a top.

I pray every night I am wrong.

Re: SEC to Webcast June 13 Meeting	By pjstevenson on 6/13/2007 8:34 PM
http://sec.gov/news/press/2007/2007-114.htm

from hedgeworld

By musketrifle on 6/14/2007 8:23 AM

The elimination of the grandfathering provision allows a 35-day phasing-in period to close out positions that were previously protected by the grandfather clause, and afterward allows 13 days for closing out failures to deliver, which Mr. Sirri said "in the settlement world is a long time."

SEC Passes Reg SHO Amendments

By Jacob Bunge, Financial Correspondent | Wednesday, June 13, 2007

Email this story | News Tracker | Reprints | Printable Version

WASHINGTON (HedgeWorld.com)—The Securities and Exchange Commission today [June 13] approved several amendments to Regulation SHO, intended to reduce the number of persistent failures to deliver on securities sold short, with the commissioners voting unanimously to adopt the amendments.
Up for consideration were amendments to Reg SHO that would eliminate the grandfather provision and narrow the market-maker exception to the close-out requirement for failures to deliver.

The amendments are part of the SEC's campaign to curb abusive short-selling, in particular "naked shorting," or the practice of short-selling a security without actually borrowing it beforehand. Naked short selling has gotten much press in recent years, with several companies, most notably Overstock.com, blaming the practice for torpedoing their share prices.

SEC Chairman Christopher Cox said that while Reg SHO has had a significant impact on persistent failures to deliver short-sold securities, problems remain, and may be attributable to the grandfather provision, which applies to failures to deliver that occurred before SHO's effective date. Another possible culprit is the exception for options market-makers, who are allowed to practice naked short selling because it gives them more flexibility to perform their functions in the market and limits volatility.

Both exemptions have raised objections from market participants, and the SEC introduced amendments to Reg SHO for comment in July 2006. Since then more than 900 comments have been lodged with the regulator, with supporters saying the amendments would restore investor confidence and detractors warning of increased volatility, decreased liquidity and short squeezes.

Earlier this year, speculation arose that the elimination of the exemption for options market makers would give rise to a new trading strategy—buying up hard-to-borrow stocks to squeeze market makers, who now will have to cover any such securities they've sold short Previous HedgeWorld Story.

Erik R. Sirri, director of the SEC's Division of Market Regulation, told the commissioners that his department has found that a significant portion of persistent fails to deliver continue to be attributed to options market makers. He said that the current exception allows failures to deliver to persist, partly because options market makers hedge by portfolio and not position. He also expressed concern that the playing field was not level with other market makers who are required to close out failures to deliver.

The commissioners approved a plan to collect feedback and comments from the industry on narrowing the options market maker exception, and proposed two alternate exceptions: a "hard" 35-day period exception, or one that is either 35 days or 13 days from when all previous options hedges have expired, whichever is earlier. Mr. Sirri said he believes that elimination of the exception makes sense, but he expects a continued dialogue to see if there's another limited exception that could be implemented.

The Division of Market Regulation also received comments on the grandfathering provision, warning of increased volatility and short squeezes, but Mr. Sirri said that similar concerns were also aired around the time Reg SHO was adopted in 2004. Neither greater volatility nor increased short squeezes materialized. The elimination of the grandfathering provision allows a 35-day phasing-in period to close out positions that were previously protected by the grandfather clause, and afterward allows 13 days for closing out failures to deliver, which Mr. Sirri said "in the settlement world is a long time."

The commissioners praised the effect Reg SHO has had so far on reducing failures to deliver short-sold securities. According to the Division of Market Regulation, failures to deliver across all securities have declined by approximately 30% as of March 2007. Fails among securities on the hard-to-borrow list have fallen by 53%, and the overall number of hard-to-borrow securities has fallen by 39% since Reg SHO went into effect.

Officials from the Division of Market Regulation also mentioned future plans to post aggregate failure-to-deliver data from the Depository Trust Co. on the SEC's web site, as the SEC has had a number of Freedom of Information Act requests for such information. The plan, which is still in development, calls for posting failures to deliver by security on a quarterly basis, with two-month-old information so particular firms' positions would not be revealed.

At the Wednesday meeting, SEC commissioners also unanimously voted to eliminate price restrictions on short selling, as well as rules like the New York Stock Exchange's "tick test" which control short sales.

Mr. Sirri said that requests for exemptions from such rules had increased in recent years with the spread of automated trading systems, and most commenters requested the removal of all such restrictions. SEC studies examined whether there was any connection between manipulative trading and price desk restrictions and found none, and Mr. Sirri expressed concern that keeping such restrictions in place would make short selling unnecessarily complex. However, if there was in the future a need for such a test, market participants still will have the option to file for a price test.

JBunge@HedgeWorld.com

http://www.hedgeworld.com/news/read_news.cgi?section=legl&story=legl2063.html

Reply: Ex-Clearing is the defacto alternative to DTCC and NSCC, and is used in a very major way.

The 35 days doesn't begin until the rule changes are published in the Federal Register, which usually takes about 90 days. A lot can happen in four months.

This is a battle in a long term War, won by our side on balance, but only if you look at the surface only. This Ex-Clearing issue is the bottom of the Iceberg, and it is where the problems now reside once this mess is cleared up.

Best, Bud.

Re: SEC to Webcast June 13 Meeting

By InvestigateTheSEC on 6/14/2007 8:25 AM

Bud, with regard to your reply...

Reply: If we have a meltdown here, the World goes ballistic. One of the legendary gang of three economists of the 1980's once said, if the US consumer gets a head cold, the World gets pneumonia. Despite globalization, this is still true.

A meltdown here would make the collapse in Japan look like a walk in the park. The Central Bank of Japan is an undeclared bankruptcy, and it is their analog to our Federal Reserve.

I haven't sero-converted to cynic yet, but I would say that the percentages favor a meltdown. Things just feel too good, like "frothy". That is a great signal of a top.

I pray every night I am wrong.
------------------------------------------------------------------

Perhaps a financial meltdown is necessary. Only then will Joe sixpack understand this major fraud. From this, true reform can result. I am not in the market, knowing what I know. We need to stop feeding the Banks/Brokers/Hedgers with rewards for screwing us. If they go down, so be it. So I hope you are right. Bring on the meltdown, and fix it once and for all.

Re: SEC to Webcast June 13 Meeting

By Paul on 6/14/2007 8:34 AM

Bud

A little clarification please.

Grandfather provision - gone. That is a good thing
35 days to clear up existing FTD's. That's a good thing
DTCC reporting 2 months late. Thats a good thing - that way if a company has 30 million issued and outstdanding and WS has created 80,000,000 psuedo shares we at least get to know about it.

Enforcement of the above???? Maybe not but at least a statement as to issuers rights and expectations has been made - step in the right direction

Options MM Exemption still in place - that is a bad thing - though at least to the extent that the Options trades go through the DTCC we should be able to determine just how badly we have been abused - Right???

Ex-Clearing??? WTF???? Is this a channel that the Options MM have available to them in the normal course of their business??? Is this just an entirely new class of crooks I haven't learned about yet?? Is this currently a great source of nakeds or is this just the next direction you think they will take?? Which type of crook currently uses ex-clearing??? I'm so confused??? Is this just like starting over with a whole new enemy or is this just the next battle in a foreseeable progression????

Paul

Reply: ADP is being pressured to stop providing NOBO lists to companies when they don't reconcile with the OBO numbers when totaled, versus the legally outstanding shares.

Nothing happens for four months, as I noted inmy reply above, so you won't see DTCC numbers until 6 months from now, unless they opt to start reporting the numbers they have.

Options and futures markets are the World's money laundery. I didn't expect them to lose their exemption. The questions about "Locate" vs "Borrow" remain unaddressed.

What about the other exemptions and rules, first exempting MM's, Hedgies, and Arb's from the locate rule on their shorts?

This is just another battle, but on balance, the rats are being pushed into a corner.

Ex-Clearing is used by the Major brokers and their customers. It is a murky place, as nothing about this arena is disclosed. It will be a future battleground.

Re: SEC to Webcast June 13 Meeting

By Robert on 6/14/2007 3:06 PM

Hi Bud,

Well, it is pretty hard to feel good about any of this. It would be nice to think that the SEC would take the bull by the horns and enact the tough rules that would clean up the mess, but they don't really want to. There is no percentage in it for them. I think the only reason they repealled the GF clause is because of all the noise (lawsuits) being made right now concerning the Naked Shorting issue. But what difference does it make? They pick and choose what rules they want to enforce. Not only that, but they clearly target "problematic" companies.

Even when they do go after the big boys, they only give them a slap on the wrist. Who am I kidding? It is barely a harsh look or a finger in the face, much less a slap on the wrist! Meanwhile, they hit a company like USXP with penalties that are almost twice their CAP. So, what is the point? When I listened to the webcast yesterday and heard them say that there were still "a few" persistent fails even with the Grandfather Clause, I was yelling at my computer asking the questions WHY?!?! HOW?!?! Why did the council members not ask the very simple question, "What is being done about these persistent fails and what will be done in the future to enforce the rules on FTD's?" What is the point in getting rid of the GF if new persistent fails are not being forced to cover? They were very clear to point out that they were only looking at those threshold securities that are reported. Ex-Clearing is not (and cannot be) monitored effectively which means that with or without the GF, they are still free to do what they want as long as it does not go through the DTCC. Am I missing something here? It is as if they are saying, "Let them think they have won a battle. Give them the repeal on the GF to shut them up. What difference does it make?"

I am sorry, but I have no faith in the current system. Let them enact or repeal whatever rules they want because the game is fixed anyway. The rules are just there for comic relief.

Reply: Ditto your position here.

NOBO/OBO

By tmg on 6/14/2007 3:14 PM

Bud,
There are issuers who don't know what these lists are. Would you explain what an issuer must to to obtain these lists? Do they include shareholders with certificates, or are those obtained from the transfer agent?
Thanks!

Reply: The OBO list is the list of shares held by beneficial owners objecting to disclosure of their identity to the company or public. It is obtained as requested, generally monthly, from the DTCC and show what shares are owned by broker at in whose name street shares are held.

The NOBO list is obtained by purchase from ADP, which maintains the list. It shows non-objecting beneficial owners' positions by beneficial owner's name.

In very simplistic terms, if the total of reflected shares from these two lists don't equal the number of shares known to be legally outstanding per the Company's stock register, you have a share imbalance. In layman's terms, this means there are more shares in the market than have been issued.

One company has seen fit to develop an algorithym for analysis of these numbers, and has filed patents on it, Shareholder Intelligence Services, of Rowayton, CT. They are used by a number of companies who have noticed suspicious activity in their stocks, particularly shorting pressure from parties who cannot be identified.

Re: SEC to Webcast June 13 Meeting	By captdale on 6/15/2007 6:38 PM
Hi Bud - Okay, you said ex-clearing will be a future battleground. I think we have a good map of this present one so lets start getting some detail on the future one. Where is a good place to start to learn about ex-clearing behind the curtain and "how it really works" ?

Re: SEC to Webcast June 13 Meeting

By AlexCosta on 6/15/2007 6:42 PM

Bud, Did Shareholder Intelligence Services find any unusual trading in your companies stock? I see that it is at 40 cents down from a high of $12.

Was PVTM a victim of naked short selling?

Private Trading Systems, Inc. Engages Shareholder Intelligence Services

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--April 12, 2005--Private Trading Systems, Inc. (Pink SheetsVTD) announces it has engaged the services of ShareIntel (Shareholder Intelligence Services LLC) to develop and maintain accurate and meaningful analytics protecting the interests of legitimate PVTD shareholders. Private Trading Systems anticipates the relationship with ShareIntel will allow the Company to thoroughly monitor and control parties who might consider trading PVTD shares in an inappropriate, improper, or illegal-trading manner.

Private Trading Systems states it has an explicit fiduciary obligation to its shareholders and will utilize Shareintel's services to fully protect the interests of its shareholders. Any form of malfeasant activities directed at the Company's shares, or any attempts to electronically counterfeit the Company's shares via the sale of unregistered securities or as a result of non-exempt naked short selling will be aggressively pursued and reported. ShareIntel will monitor the management, acquisition, analysis, surveillance, and compliance aspects of all trading and related trading records of PVTD shares.

"Private Trading Systems is one of a rapidly growing number of companies that recognizes a fiduciary obligation to protect its shareholders by utilizing our unique and proprietary suite of online services and analytics," states David Wenger, President & CEO of ShareIntel.

About ShareIntel (Shareholder Intelligence Services LLC)

ShareIntel tracks ownership, trading activity and physical and electronic custody of client company shares. Proprietary software and analytics enable identification out of balance relationships among the entities responsible for recording and reporting share trades, ownership, and physical and electronic custody of such shares.

ShareIntel creates timely, detailed shareholder intelligence reports for management, identifying by individual, institutional and brokerage firm, who is buying, who is selling, who is a new shareholder and who has divested. Corporate records of issued and outstanding shares are reconciled with share positions held at brokerages firms and private custody.

About Private Trading Systems, Inc.

Private Trading Systems, Inc. has been created by the merger of Mesa Gold, Inc. with certain assets of Private Treaty Markets Limited of London, England. Over the past three years, and in partnership with Societe Bancaire Privee of Geneva Switzerland, Private Treaty Markets Limited has developed a comprehensive proprietary turnkey exchange offering for utilization in the trading of any asset capable of being assigned a CINS/CUSIP number. Private Trading Systems is in the final stage of approvals to complete the full consolidation and acquisition of the PTML shares.

Private Trading System's exchange offering must be approved in its final form by the Swiss Federal Banking Authority. The Company anticipates concluding this process within the next six months subject to certain elements not fully under its control. Certain key proprietary aspects of the design and operation of the exchange model are intended for process patent protection and, as a result, the Company will not disclose these elements until its patent counsel has completed and filed the fully documented and approved intellectual property protection with the U.S. Patent Office and parallel filings under the Patent Cooperation Treaty. Private Trading Systems anticipates announcing the selection and retention of its Patent Counsel within the next ten days.

The intention of the Company is to offer an "exchange environment" access to unique situations where it can provide a quick, effective route to a secure and clean electronic market for any financial instrument not currently able to avail itself of such a venue. This exchange incorporates a completely unique and proprietary integration of functions currently not found in one product offering anywhere in the world. The system is also designed to specifically preclude specific forms of illegal manipulative trading of any security for which it provides exchange services.

Forward Looking Statements

This press release contains statements that are "forward looking" and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and federal securities laws. Generally, the words "expect", "intend", "estimate", "will" and similar expressions identify forward-looking statements. By their very nature, forward-looking statements are subject to known and unknown risks and uncertainties that may cause our actual results, performance or achievements, or that of our industry, to differ materially from those expressed or implied in any of our forward-looking statements. Statements in this press release regarding the Company's business or proposed business, which are not historical facts, are "forward-looking" statements that involve risks and uncertainties, such as estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made.

The Company cannot assure that it will finally consummate the proposed final form of its acquisition of the final elements of Private Treaty Markets or that we will profitably integrate all of its business elements when and if the acquisition is completed in its final approved form.

Reply: What they found is the subject of ongoing litigation, along with other illegal selling by an institutional holder who sold stock illegally under Rule 144, the subject of further litigation by shareholders against that institution, based on an invalid legal opinion.

This was part of why we have moved to the UK. The market here are a bad joke, a a miinimum.

Re: SEC to Webcast June 13 Meeting	By bbhindyou on 6/16/2007 9:37 AM
This whole sham of a sec 'meeting' is just more promises of jam every other day. It will never be the day covering must take place. We will never get to taste jam.

Re: SEC to Webcast June 13 Meeting

By captdale on 6/19/2007 1:28 PM

Did this do anything to the Options Market Maker Exclusion???

Reply: Supposedly it is eliminated
--------------------
Eliminated ? I can not find anywhere anything that would support that it is supposedly eliminated although I really would like to........

Reply: OPMM's no longer have an exclusion, and must liquidate their open grandfathered positions within 35 days of the ruling being published in the Federal Register (about 60 to 90 days from Now).

Re: SEC to Webcast June 13 Meeting

By Valueinvestor on 6/19/2007 8:48 PM

Bud: what is this I hear about close to 2 trillion $ being able to be hidden in some loophole that exists between brokerage houses ? I was told that inspite of the GF clause being revoked there is this place where these crooks can still hide a lot of the FTDs without them being revealed...is there any truth to this and can you please explain ? thanks...

Reply: The $2 trillion plus number shows up in loans to others (brokers), which are the IOU's that keep the ex-clearing system afloat. It shows up on the NYSE Quarterly Focus Report.

Re: SEC to Webcast June 13 Meeting	By captdale on 6/19/2007 8:47 PM
Bud - thanks. Your 100% correct. As if I didn't already know that. I listened to the mp-3 again and did find where they stated the OPMM exclusion was eliminated. It was during the vote period. Whew. Now thats good news. Reply: That is $2 TRILLION, not Billion. Going too fast, and typo'd.

Re: SEC to Webcast June 13 Meeting

By Valueinvestor on 6/21/2007 12:29 PM

So what you are saying is even if the GF clause is finally revoked (60 to 90 + 35 days) and the OPPM's no longer have an exclusion, the naked shorted shares can continue to rest in this gigantic IOU blackhole between brokers and the perpetrators would continue to be unaccountable for all this naked shorting ? And the SEC is aware of this ? How then do we get to the bottom of this ? Even Dr. Byrne stated that in addition to the GF clause being lifted (which amounts to robbers coming through the front door of a bank being stopped), the OPPMs robbing the bank by attacking the vaults via the back door needs to be stopped and then we have a fair system...

Reply: The ruling goes into effect 60 days after publication in the Federal Register, which takes generally about 90 days. They then have 35 days after that to clear out the GF positions. That is 6 months total for the amateurs. I will believe something is really happening when I see it.

Re: SEC to Webcast June 13 Meeting

By Valueinvestor on 6/22/2007 11:18 AM

Bud...what is your opinion on the motive for this article ? Is it a harmless reporter calling it as he sees it, or is there something more sinister at work here ?

http://www.iht.com/articles/2007/06/21/business/norris.php

Reply: Norris is in the pocket of the special interests who are furious with the GF ruling of the SEC. Apart from that, Floyd is a schumck personally, to put a fine point on his prejudices.

He is anything but harmless.