The worm has turned and naked shorting may end up causing LOTS of jails to be built in the near future. Does CALM have an assortment of these NAKED thiefs that will be brought to justice?
The worm turns. And CALM just keeps accumulating price while naked shares are sold. I am glad I am not NAKED for the world to see.
Naked shorts will soon be regarded on the level of Bin Laden. The electronic records are all there. Waiting to be read and warrants issued.
"The U.S. Securities and Exchange Commission subpoenaed Wall Street's biggest firms and hedge-fund advisers in a widening effort to crack down on suspected manipulation of Lehman Brothers Holdings Inc. and Bear Stearns Cos. shares. The SEC's enforcement unit demanded information from investment banks including Goldman Sachs Group Inc., Deutsche Bank AG and Merrill Lynch & Co.
The subpoenas mark a new front in the broadest U.S. investigation of Wall Street trading since state and federal regulators targeted mutual-fund abuses in 2003. The SEC issued an emergency order yesterday curtailing short selling in financial stocks, including Lehman and mortgage-finance companies Fannie Mae and Freddie Mac.
"The SEC is trying to determine whether there was illegal manipulation of market prices, and that is far easier to do if you have a broad sweep," said Tamar Frankel. SEC Chairman Christopher Cox, 55, told the Senate Banking Committee yesterday the agency is investigating whether illegal trading contributed to the collapse of Bear Stearns in March this year. The probe focuses on traders who seek to profit by intentionally spreading false information.
Former Bear Stearns Chief Executive Officer Alan Schwartz and Richard Fuld, the head of Lehman, have contacted Goldman CEO Lloyd Blankfein, asking whether Goldman traders spread misleading information about the firms, the Wall Street Journal reported today.
More than 50 hedge fund firms including SAC Capital Advisors LLC and Citadel Investment Group LLC also received subpoenas from the SEC. The SEC won't limit its focus to individual investors, and will likely sift for communications that would suggest traders got together and coordinated efforts for a particular security.
Cox told officials at the Federal Reserve and U.S. Treasury over the weekend that the agency is stepping up efforts to curb market speculation. Cox yesterday told lawmakers the agency will require traders to obtain shares of brokerages, Freddie Mac and Fannie Mae before betting their shares will fall. The temporary order, to take effect July 21, will bar so-called naked short-selling, in which traders avoid the financial cost of borrowing stocks. It applies to shares in 19 companies, including Citigroup Inc., JPMorgan and UBS AG.
In traditional short selling, traders borrow stock through a broker and hope to profit by selling shares at a higher price and later buying them back at lower prices to repay the loan. Naked short sellers do the same thing, with one difference: They don't borrow any shares, which means they can drive down prices by flooding the market with orders to sell shares they don't have.
"Small public companies have been complaining for years about the abuses of naked and illegal short selling," said Roel Campos.
"The new attention by regulators has occurred when those naked-short chickens came home to roost with Bear Stearns and now Lehman." Historically, "it has been difficult to parse where rumors start and where they are being spread," Cox said. Now, technology is "permitting us to trace back through e-mails and instant messages to the very individuals who have manufactured intentionally false information," he said.
the new attention by regulators is because the SEC is has been forced by public outrage to do what it is they are supposed to do but dont do. The SEC is supposed to protect the investor. Instead it protects the high rollers and crooks. Just like the FDA protects meat packers, the FCC protects the Bells, the DOJ protects monopolists, etc.