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Jul
7
Written by:
bobo
7/7/2008 4:51 PM
You read this right, folks. After a year of comment, wherein it was established without a doubt that the market maker exemption not only was unlawful, as it harmed investors, and allowed options market speculators cheaper options at a direct cost to equity investors - but was also likely the number one manipulative mechanism used by predatory short sellers to create artificial supply of shares...the SEC decided that MORE COMMENT WAS NEEDED!!!! Why? Because after looking at the data, it appears that indeed, the market maker exemption is in fact a huge source of fails. Just as everyone who has ever invested in a company that a group of shorts who use the exemption to their advantage has attacked, could attest to.
What a farce.
Yep. Seems that, as if allowing one sort of participant to print stock out of thin air, as often as they like, solely in order for the participant's customers to have inexpensive options pricing in dangerously overshorted issues, WASN'T ENOUGH REASON TO SHUT THE EXEMPTION DOWN IMMEDIATELY. No, a long study was necessary, while every day countless investors were harmed and companies destroyed. The result, that indeed the companies and investors were being hosed by the options market makers, now goes out for comment yet an umpteenth time.
Imagine. You are the cops. You have film of youths raping the local women repeatedly. Instead of stopping them, you first parse what the terms mean - "rape, forcible, harm, etc." Then you put that out for comment. When it becomes clear that everyone pretty much agrees that rape is bad (other than the rapists), you conduct a study as to exactly how many women are being raped exactly how often, and then put that out for comment, several times, just to make sure that the rapists have adequate time to keep raping, and to defend their actions. "She was askin' for it..."
And everyone just nods along. They stall, they lie, they cheat, they steal, their reckless disregard for everything but a quick buck has brought the entire US financial system to the brink of the largest crisis since the 1929 crash...and how does the watchdog organization created out of the ashes of the 1929 crash treat Wall Street?
By stalling it's ability to destroy companies and print stock out of the back room, virtually indefinitely.
I'm absolutely sickened, but not surprised.
The SEC has absolutely no excuse now, except to stall. That's what they are doing. Allowing options market makers to naked short every day they allow it to continue.
No wonder the world views the US market as a cautionary tale, and capital is bailing faster than at any other period in its history. The system is patently rigged in favor of the big banks and their interests. The same big banks who just naked shorted Bear Stearns into the ground, and bought all those puts the few days before the massive raid on the stock.
If I don't seem to write many blogs any more, it's largely because I am super busy, but also because I have come to the inevitable conclusion that the system is more bent than a ride at 6 Flags. This is predicted by that conclusion, as is the theory that mysteriously, nobody will ever know who made gazillions on options days before the "emergency" sale to JPM, nor will any of the other blatant manipulations that are now an everyday part of the US market. My theory, that it is all hopelessly out of control and rigged, and that the powers that be are preparing to crash the system so that their misdeeds will pale in comparison to the coming financial Armageddon created by that crash, seems as though it is unfortunately likely to come to pass. Two years ago, I publicly wrote that I thought the only way out for the bad guys was to create a stinky so big, that the naked short selling fraud pales. That's what I believe is in process.
And the SEC is part of it. No other way to explain the foot dragging on any legislation or rules that would protect investors.
No other explanation.
This doesn't end well. Trust me on that.
Copyright ©2008 Bob O'Brien
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13 comment(s) so far...
Re: If you had hope the SEC wasn't completely rigged by Wall Street, here is your official notice to abandon it...
The S.E.C. was never intended to stop manipulation or the destruction of the small investors and /or companys.
The reason the S.E.C. exists is to make people BELIEVE there is a regulatory body keeping the bad guys from robbing them blind.
The S.E.C. is only a make believe enforcement agency, the crooks knew the public was not going to put their money out there to be stolen again after the twentys crash so they dressed one of the robbers up as a cop called it the S.E.C. and said "Look the cops are here you wont get robbed now , come back out and invest again."
Pretty obvious now that the S.E.C. is just another member of the gang of cutthroats that has been preying on the public for generations.
They may as well shuck the cop suit.
By bbhindyou on
7/8/2008 7:00 AM
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Re: If you had hope the SEC wasn't completely rigged by Wall Street, here is your official notice to abandon it...
This is why we need the DOJ to step in immediately. Our financial markets are the very foundation of capitalism, and if the thieves are not removed, say goodbye to the US of A.
By SteveM on
7/8/2008 10:48 AM
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Re: If you had hope the SEC wasn't completely rigged by Wall Street, here is your official notice to abandon it...
I don't really see it as a big negative at all. The comment period is for only 30 days and it comes with new data that is devastating to the proponents of the options market maker exemption.
The release includes this text:
In response to the Proposal, commenters urged the Commission to obtain empirical data to demonstrate the relationship between fails to deliver and the options market maker exception before it determines whether additional rulemaking is necessary. In particular, commenters urged the Commission to obtain data relating to the impact of the elimination of the grandfather provision and connecting fails to deliver to the options market maker exception.4 The Commission has obtained additional data on fails to deliver since the Proposal was published. Accordingly, in response to commenters and because the Commission believes the additional data will aid the public in commenting on the Proposal, the Commission is re-opening the comment period to share with the public data obtained by the Commission regarding fails to deliver and the options market maker exception, and to provide the public with an opportunity to comment on the data.
To ascertain whether fails to deliver are not being closed out due to the options market maker exception to the close-out requirement since the elimination of the “grandfather” provision, Commission staff obtained data on securities with extended fails to deliver from a National Securities Clearing Corporation (“NSCC”) participant which settles and clears for a large segment of the options market for January and February 2008. A review of this data reveals that a high number of fails to deliver were not closed out as a result of the options market maker exception.5 Specifically, the data indicated that as of January 31, 2008, the options market maker exception was claimed in 16 threshold securities for a total of 6,365,158 fails to deliver. As of February 29, 2008, the data indicated that the options market maker exception was claimed in 20 threshold securities for a total of 6,963,949 fails to deliver.
In addition, the Commission is releasing the results of a recent analysis by the
Commissions’ Office of Economic Analysis (“OEA”) of fails to deliver before and after
the elimination of Regulation SHO’s “grandfather” provision.6 As set forth below, these results show that extended fails to deliver in non-optionable threshold securities declined significantly after the elimination of the “grandfather” provision while extended fails to deliver in optionable threshold securities increased significantly. Specifically, changes for optionable threshold securities include:
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The average daily number of optionable threshold list securities increased by 25.0%.
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The average daily number of new fail to deliver positions in optionable threshold securities increased by 45.3%.
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For fails aged more than 17 days in optionable threshold securities, the average daily dollar value of fails to deliver increased by 73.4%.
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For fails aged more than 17 days in optionable threshold securities, the average daily number of fail to deliver positions increased by 30.7%.
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The average daily number of optionable threshold list securities with fails aged more than 17 days increased by 40.9%.
Further, changes for non-optionable threshold securities include:
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The average daily number of non-optionable threshold list securities decreased by 3.5%.
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The average daily number of new fail to deliver positions in non-optionable threshold securities increased by 7.4%.
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For fails aged more than 17 days in non-optionable threshold securities, the average daily dollar value of fails to deliver decreased by 34.5%.
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For fails aged more than 17 days in non-optionable threshold securities, the average daily number of fail to deliver positions decreased by 38.8%.
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The average daily number of non-optionable threshold list securities with fails aged more than 17 days decreased by 32.6%.7
To ascertain the extent to which fails to deliver were not being closed out due to the options market maker exception to the close-out requirement prior to the elimination of the “grandfather” provision, Commission staff obtained data from certain self-regulatory organizations for 2006 and 2007 regarding use of the options market maker exception. This data is explained in more detail below. In 2007, as part of its regular Regulation SHO surveillance, the Financial Industry Regulatory Authority (“FINRA”) conducted a review of securities with extended fails to deliver at the NSCC to ascertain the continuing cause of fails to deliver, and to also assess compliance with NYSE Rule 440/SEA8 and Regulation SHO. As set forth below, according to data provided by one NSCC participant that settles and clears for a large segment of the options market, a number of fails to deliver at that participant were not closed out due to claims that the fails were excepted from the close-out requirement as a result of the options market maker exception. A review of the FINRA data for 2007 shows the following:
etc..........
By tommytoyz on
7/9/2008 7:07 AM
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Re: If you had hope the SEC wasn't completely rigged by Wall Street, here is your official notice to abandon it...
Tommy. Bet you a dollar that the comment period doesn't even start for a while, as it needs to be published in the Federal Register first. Then, after the comments are closed, they have to "deliberate" on those comments. That can take many months. My read is that this is good for another half a year or more of stall, devastating data or not. To a crook destroying companies, or to the poor shmucks invested in those companies, that is a lifetime. We have to agree to disagree on this one.
By bobo on
7/9/2008 7:09 AM
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Re: If you had hope the SEC wasn't completely rigged by Wall Street, here is your official notice to abandon it...
Tommy and Bobo,
All they are doing is releasing some damning empirical evidence to support the fact that the OMM exemption is being used to illegally counterfeit stocks. That they don't act immediately to eliminate the exemption is evidence that they are not going to fix the loophole that they created.
The SEC is a corrupt organization.
By SteveM on
7/9/2008 1:30 PM
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Re: If you had hope the SEC wasn't completely rigged by Wall Street, here is your official notice to abandon it...
The American investor MUST speak to elected officials about this traitorous activity at the SEC. This is certainly TREASON. Spread the word------
ABOLISH THE SEC IMMEDIATELY
By virakiller on
7/9/2008 1:31 PM
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Re: If you had hope the SEC wasn't completely rigged by Wall Street, here is your official notice to abandon it...
William Donaldson founded Donaldson, Lufkin & Jenrette Securities. Their subsidiary, Pershing, was sold to BNY and has the largest declared failure to deliver of any clearing brokerage. When he headed the SEC, he stonewalled any attempts at settlement.
Many believe naked shorting is used to facilitate money laundering. Now, the Russian government is suing the bank of NY for just that.
I hate to get into conspiracy theories, but George Bush, John Kerry and William Donaldson are all members of skull and bones, a group that only adds a handful of members per year.
http://tinyurl.com/5w4h9f
You can't help but read the news stories in these links and wonder if the network that has captured the SEC and many of our politicians is also the beneficiary of this crime.
http://tinyurl.com/5w8kmr
http://tinyurl.com/5sgkev
http://tinyurl.com/5nbzm3
http://tinyurl.com/5f7g7x
http://tinyurl.com/5w4h9f
http://www.pershing.com/statementoffinancialcondition.pdf
Securities failed to deliver $730 million
Securities failed to receive $968 million
By Putting pieces together on
7/15/2008 9:49 AM
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Re: If you had hope the SEC wasn't completely rigged by Wall Street, here is your official notice to abandon it...
http://www.financialsense.com/Experts/2008/Burrell.html
By bud on
7/15/2008 9:49 AM
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Re: If you had hope the SEC wasn't completely rigged by Wall Street, here is your official notice to abandon it...
I appreciate all the folks who have contributed to this blog over the years but let`s face it. It`s over now. Even if they paid back every dime that was stolen (which they won`t) it would not matter because a dime now is not worth half what it was when it was stolen. They won. We lost. When it hits the front pages of newspapers it is over. Ask any kid attending a public grade school what the federal reserve does. Not 1 in 100 can answer that question. They didn`t teach us that stuff when I was a kid and they don`t teach it now. They teach the kids the same thing they taught us. You have to have the money they print to survive.
By oldfeller on
7/15/2008 9:50 AM
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Re: If you had hope the SEC wasn't completely rigged by Wall Street, here is your official notice to abandon it...
http://cryptogon.com/
At an investor presentation in May, Citigroup Inc. Chief Executive Officer Vikram Pandit said shrinking the bank’s $2.2 trillion balance sheet, the biggest in the U.S., was a cornerstone of his turnaround plan.
Nowhere mentioned in the accompanying 66-page handout were the additional $1.1 trillion of assets that New York-based Citigroup keeps off its books: trusts to sell mortgage-backed securities, financing vehicles to issue short-term debt and collateralized debt obligations, or CDOs, to repackage bonds.
Now, as Citigroup prepares to announce second-quarter results July 18, those off-balance-sheet assets, used by U.S. banks to expand lending without tying up capital, are casting a shadow over earnings. Since last September, at least $100 billion of assets have flooded back onto Citigroup’s balance sheet, accompanied by more than $7 billion of losses.
By kevin on
7/15/2008 9:51 AM
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Re: If you had hope the SEC wasn't completely rigged by Wall Street, here is your official notice to abandon it...
Manipulated bank stocks on taxpayer's backs.
http://www.conspiracyplanet.com/
By kevin on
7/15/2008 9:56 AM
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Re: If you had hope the SEC wasn't completely rigged by Wall Street, here is your official notice to abandon it...
How nice .... Currently airing on CNBC.
http://sec.gov/news/testimony/2008/ts071508cc.htm
By zinkley on
7/15/2008 9:57 AM
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Re: "SEC Gets Religion..."
Guess who "gets tough" now that Fannie and Freddie ( and Fed) are "in play" ?
http://www.marketwatch.com/news/story/sec-limit-naked-shorting-fannie/story.aspx?guid=%7B2E426D41%2D7D14%2D4A5D%2D9AB8%2D85C04FCAAA24%7D
By Willie Loman on
7/15/2008 10:29 AM
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