"Although the vast majority of short sales are legal, abusive short sale practices are illegal. For example, it is prohibited for any person to engage in a series of transactions in order to create actual or apparent active trading in a security or to depress the price of a security for the purpose of inducing the purchase or sale of the security by others. Thus, short sales effected to manipulate the price of a stock are prohibited."
Friday's action was obviously manipulation. Thus illegal.
If you have specific enforcement-related information, please see http://sec.gov/complaint/tipscomplaint.shtml for information on how to submit a complaint. You may also call 1-800-SEC-0330.
I've already reported Friday, June 26 as an example of how short sellers are manipulating ESI stock. The SEC will be able to easily figure who is selling and manipulating ESI. Once they have a lead, the SEC will nail them. It may take awhile but that's the way it goes. It took a long time to nail the professors in Florida but with leads from us, it'll go faster.
stb, the 10% rule just says that a stock can be shorted only at a price higher than the best bid. You are correct that you can still short, it's just a little harder.
The question is: Even though the alternative uptick rule has been triggered, will the market maker and brokerage firms abide by it?
We'll see on Monday.
"Washington D.C., Jan. 31, 2014 — The Securities and Exchange Commission today charged a pair of college professors in Tallahassee, Fla., with perpetrating a complex naked short selling scheme for more than $400,000 in illicit profits.
Abusive naked short selling occurs when shares are sold without having the shares to deliver, and then intentionally failing to deliver the securities within the standard three-day settlement period. An SEC investigation found that Gonul Colak and Milen Kostov repeatedly engaged in a series of sham transactions designed to perpetuate a naked short position as part of an elaborate options trading strategy. Colak and Kostov were required to deliver the securities underlying their short positions within the standard three days. Instead, their sham reset transactions created the illusion that they had delivered the underlying securities when in fact they had taken no steps to do so. They maintained the uncovered naked short positions and profited. Colak and Kostov agreed to settle the SEC’s charges by paying more than $670,000.
Colak and Kostov used multiple brokerage accounts to disguise the spurious nature of the sham transactions, moving a short position from one brokerage firm to another every few days in order to spread the failures to deliver across multiple firms in an effort to avoid detection. SEC investigators uncovered the complicated scheme while looking into unusual trading in one of the companies whose options were being traded by Colak and Kostov. An SEC examiner separately noted Kostov’s large volume options trading in a different company. By cross referencing their findings and crunching blue sheet data, it became clear that Colak and Kostov were likely trading with one another. SEC investigators pieced together the complex trading strategy by tracing one of the trading sequences from start to finish."
“Colak and Kostov engaged in trickery and deceit to
To me, it wouldn't make sense that the rule would apply only if the CLOSE was 10% lower from the previous day. If that were true, shorts could just drop a stock by 15%, take their profit, and reverse course and bid the stock back to less than 10% at the close, thus making a profit in both directions and not triggering the circuit breaker.
Then do it all over again the next day.
I believe you are correct. The Short Sale Price Test Circuit Breaker was tripped.
The key words are: "by experiencing a price decline of at least 10 percent in one day."
On Friday, ESI experienced at price decline of 10.08% because the low of the day was $4.28 at multiple times at the end of the day. The previous day's close was at $4.76
"Rule 201 – Short Sale Price Test Circuit Breaker. Rule 201 generally requires trading centers to establish, maintain, and enforce written policies and procedures that are reasonably designed to prevent the execution or display of a short sale at an impermissible price when a stock has triggered a circuit breaker by experiencing a price decline of at least 10 percent in one day. Once the circuit breaker in Rule 201 has been triggered, the price test restriction will apply to short sale orders in that security for the remainder of the day and the following day, unless an exception applies."
They also are authorized to buy back 7 million shares but may be restricted from doing so by Cerberus. Don't know.
Thanks, I'll watch it. You have to figure that with 11 million shares short, there must be powerful interests that are controlling ESI's stock price. It doesn't act rationally.
I've noticed the same thing with ESI (especially after big jumps in the stock price) and have tried to figure it out on my own but couldn't come up with exactly how they do it. Maybe that's why ESI is mysteriously at $4+ when it should be higher and why rallies always fail. Thanks for posting that link Jimmy.
Here's how that idiot Mohit protects students (or so he says). COCO goes bankrupt and then the dummies at the CFPB levy a $30 million fine on COCO. So now, the students trying to get restitution from COCO have to fight with the CFPB over the $30 million. Frickin' geniuses at the CFPB!
There are a lot of Democrats who also oppose the GER. It should pass, then Obama might veto it. Then we see if the Congress can override the veto.
By the way, Dahn, if you want to portray yourself as an expert on the Gainful Employment Rule, I would suggest you read the complete Gainful Employment Rule document published by the DOE. It's 940 pages so if you want to be finished by Christmas, you'd better start now.
Dahn, the earliest any for-profit would be hit by loss of funds would be 2 years from now. You're aware of that, aren't you? There have been multiple discussions on this board and an excellent analysis by tdr showing that all of the ESI programs would not be affected. That said, I'm 100% sure that ITT, if necessary would just adjust tuition or make sure that students get the low interest loans from the government and not private lenders. If you read Modany's response to that idiot Mohit, you'd know that almost NO ESI students have gotten loans from private lenders in the last 5 years. That said, if ESI gets hit hard by this news, I'm a big buyer. In fact, I'd be ecstatic if ESI dropped to $1. Please!! Let it be so!! Also, if you had done your homework, you'd know that the GER is not in the clear. See below:
"While Bates’ ruling is a victory for the upcoming gainful employment rules, the regulations continue to face opposition from not only the for-profit industry but legislators. Just last week, the House Appropriations Committee released a spending bill that would prohibit the Dept. of Education from enforcing the rules.
According to the bill, the Dept. of Education would not be allowed to use its funding to “implement, administer, or enforce the final regulations” related to gainful employment. That includes preventing the Department from moving forward with establishing a college ratings system, placing new requirements on teacher preparation, defining “credit hour,” and dictating how states must license institutions of higher education. While gainful employment rules will still go into effect as planed on July 1, if the proposed provisions gain approval and are signed into law, the new protections would be repealed in October."
The game goes on (and on).
Oops, forgot the most important reason Modany needs to go and ITT gets a new CEO
14) I would like to make a large profit in a very short time.
Yep, that's the lesson the SEC broadcasts to the financial community. Never be honest with the SEC. They'll stab you in the back. The banks knew that already and hid as much as they could from the SEC in 2008. That bozo Hurd from Lehman Brothers still claims that Lehman wasn't bankrupt when it was sold to JP Morgan. Lie, lie, lie. The smart guys at the banks knew the SEC would never figure it out on their own.
1) Almost any suitable replacement for Modany would mean a higher stock price.
2) An excellent replacement for Modany would shoot ESI near $10
3) Modany has a high squeaky voice that does not exude strength (sorry but that's the way I see it)
4) A new CEO with a commanding voice would instill confidence
5) Modany is too weak to allow live questions from analysts. This creates fear among potential investors.
6) Modany and Fitzpatrick are lightning rods for the SEC. They both hid important material PEAKS and CUSO info from shareholders.
7) Modany is "hiding out" and feels protected from the SEC while he is still CEO.
8) The SEC is not out to punish ITT, only Modany and Fitzpatrick.
9) The new CEO could acknowledge prior improprieties (recruiters, etc.) and pledge "a new start" with new rules for recruiters and graduation rates, etc.
10) The new CEO would not have adversarial relationships that Modany has (for example Durbin)
11) The CFPB might levy a smaller fine if it saw a change in leadership.
12) The DOE might be inclined to reduce its pressure on ITT. Maybe it would consider releasing the LOC sooner.
13) ESI would feel "new". Older issues would persist but investors would sense big changes mean a much higher stock price a year from now.
Anybody have other reasons why a Modany-less ITT would be a better investment?