The SEC's Battle

I commend Fox news and Alexis Glick in particular for taking this hot issue by the horns. We investors, have been speaking out as loud as our voices could carry against the injustice and destructive nature of naked short selling for YEARS. With Hedge Funds getting bigger and bigger and more numerous all the time around the world, it seems what was once a controllable systemic imbalance, is now uncontrollable as the Hedge funds ram that crack almost everyone is now aware of, wide open, to make as much money for themselves as possible. Unfortunately for the U.S. economy, for the hedge funds to make money and take advantage of this systemic crack, it requires the harm and even demise of companies. Who would want that? This goes far beyond Wall Street. Alexis, you might want to follow very closely the lawsuit by NovaStar Share holders, against the prime brokers, that was initiated years ago in California, that is now in the discovery phase after surviving motions and challenges heard by federal courts and the CA Supreme court. We're th only ones on to them and Overstock has followed in our footsteps with an identical lawsuit. Should we succeed, I assume there will be a flood of copy cat lawsuits that will make naked short selling in every security most expensive and maybe bring down some of these prime brokers through legal liabilities - so far we have proven correct in what we've been saying and we've done what we said we would do. The entire problem starts with the basic - and incorrect - assumption, that is repeated over and over again, including by you Alexis, that short selling is beneficial to the market. I have to give you a lot of credit though, because you do qualify that by saying, "as far as volume is concerned..". Yes, short selling increases volume, so? How is that beneficial? Where are the studies that show that to increase the formation of capital, help investors, issuers, etc.... there is no such study concluding that as far as I know and I've been looking for one for years. Alexis, maybe you should highlight the fact that you mentioned in passing and get some guests on to discuss, just in what way is short selling beneficial to the markets? Not to speak of naked short selling? This is such a fundamental mind set finding it's way into all regulators, SEC rules and politicians..........let's examine this fundamental belief, for which no studies exist...... thanks again

No one has the right to take the things you have worked and paid for. I firmly believe that you have a constitutional right to use whatever force necessary to rid yourself of these threats.

When I learned about how my investments were stolen from me via naked short selling, I stopped buying stocks and started buying bullets. The DTCC may have to be forced to do their job correctly.

Naked shorting is responsible for millions, maybe billions of shares of common stock being counterfeited. It is not shorting in the normal sense, because generally there is no intention to deliver the stock that has been shorted. It is purposeful, and the purpose is to make money. The result is to drive the stock price of many small companies into penny range and eventually oblivion so that the shares will never have to be produced. Coupled with an aggressive media arm, rumors become facts, and risks that didn't exist are now known to everyone. Continue the shorting while mongering the rumor mill. Enter the respected analysts to say "independent research" shows that these risks may be real, and it is our opinion that the business model cannot withstand the strain--downgrade. Continue the shorting. Trumpet the negative opinions of the expert analysts. Continue the shorting. The fact is that the regulatory agencies do nothing to stop it until, well, it happens to a big player, Bear Stearns, uh-oh. Now Lehman Bros is "in trouble" according to the erstwhile press. Time to stop the merry-go-round. Fannie Mae? You gotta be kidding right? NO. So, time to introduce a new concept. Big players and Market Makers are no longer allowed to cheat. How are they supposed to make money then? The howl that has gone up should indicate that the free money offered up to the large institutions ( many of them on Mr. Cox's list of protected companies) has been a skimming operation extraordinaire vis- a-vis "naked shorting" or what should more properly be referred to as "Counterfeiting Shares".

Alexis, Great piece on naked shorts. You are one of the very few in "mainstream media" who are doing it justice. Good to have Robert Shapiro on. High credibility. This is a huge problem that threatens the infrastructure of our financial markets. It is like termites in your house. Sooner or later, the structure begins to crumble and may collapse. Fred

Ms. Glick thank you for the opportunity to see an Unbiased and honest reporter do awardwinning work on a topic that has been taboo in the New York Financial Press. If and when small investors ever get an inkling of what has happened to their hard earned retirement funds under the not so watchful or caring eyes of the SEC and with the assistance of the DTCC by the Prime Brokers, there will be a revolt to the likes that many will not want to see. Greed and criminal activities has saturated our Capital Market system and have been ably assisted by your competitors at CNBC and their shill reporters. This will end badly for all. If the can do what they did to Bear Stearns they can do it to anyone. Please get Patrick Byrne the CEO of Overstock. Com who has be called every name in the book,but he is being called accurate now, on your show for at least 30 minutes regarding this topic. I assure you your ratings will skyrocket. People are waking up to find their money is being stolen to pay Hedgfund Managers. IN ONE YEAR ONE HEDGE FUND MANAGER made $3.7 billion Where do you think that money came from? The Illegal NAKED SHORTING process and othe illegal market manipulations.No one doing anything legal can make that king of salary. The information is out there people just have to take time away from the distractions and watch and read. Thanks again for your outstanding interview with Robert Shapiro and Charles today.

Great comments, Alexis. Many thanks. Keep after 'em. And by the way, you may wish to also interview David Patch (www.investigatethesec.com) who's been on this issue since the beginning of the decade and knows it better than anyone, or Dr. Patrick Byrne, the most visible leader in the battle to stop the overt thievery by Wall Street. Tom Vallarino, the head of the National Investor Protection Coalition, could equally help out (http://investorprotectioncoalition.org/index.html). Seems like the nation is suddenly discovering this fraud despite years of warnings by so many whose voices were ignored, ridiculed and fought.

A locate isn't good enough - we've already seen that too many times. It really is pretty simple. You want to sell something? Go get it, and then sell it. You want to sell stock? Super. Go borrow it, then when you have it, sell it. They won't let me buy if I simply "locate" money. Why should billionaire hedge fund managers be allowed to sell me something I have to pay my real money for, if all they did was "locate" it, and then that locate turns out to have also been located by 30 other guys, thus it fails to turn into a borrow? How is that rational? How does it make any kind of sense? The answer is that it doesn't. Perhaps as disturbing is that the SEC has been, along with Wall Street's privately owned clearing firm, the DTCC, saying for years that this isn't a problem. It is minor. Trivial. A non-issue brought up by malcontents and disgruntled CEOs. So why all of a sudden is it so large that an emergency measure needs to be taken, and one that only protects the worst offenders on Wall Street? I mean, I get the irony that the banks who made billions now are to be protected from the practice they made the billions from, even as they demand the right to continue doing it to everyone else. What kills me is that even as they pass this measure, the SEC continues to ignore that there are niggling little problems like the Federal securities laws being required to be applied EVENLY, favoring no particular interest or group. How does that sit with what you see? Answer: it doesn't. And an even better question is probably, why have all these other companies been allowed to be decimated by this practice, which is obviously NOT a small problem given the SEC's unprecedented action, and why do they continue to receive apartheid justice? Why is everyone but the financials to sit at the back of the bus while the fat cats on Wall Street are shielded from the behavior they pioneered and practice daily? Why isn't everyone protected under the law? Why is it one law for the rich crooks, and another for everyone else? It's an incredibly ugly picture, and the answers, no matter how you slice them, speak to anything but a free market or a game that is anything but hopelessly rigged. This is a sort of madness. That the media sat silent while sites like mine have been predicting this sort of ugliness for half a decade, and mocked brave CEOs like Patrick Byrne, who suffered every manner of character assassination and attack, is perhaps the worst thing of all. The last line of defense for the population against rich special interests, cartels of crooks, bent regulators, co-opted politicians....is supposed to be the media. And with a few rare exceptions, that delicate trust was abused, and the media sat silent, or even worse, aided and abetted those whose agenda was to pretend there was no there there. As in the S&L crisis, the media sang the song of those in power, which was also the song of the crooks, until it all blew up and the taxpayer took the hit. This is likely to make that episode seem like kids cheating at jacks. Imagine that ugly episode cubed. Not squared. Cubed. And you are likely still low. Anyone interested in discovering how a few groups and sites have been warning of the systemic risk created by naked short selling for YEARS, should google the term. DeepCapture.com is a great repository, as is TheSanityCheck.com - but you will rarely if ever hear them mentioned. It's as though this is all new, and a big secret that was just discovered by the mainstream. That is also a falsehood. The alarm bells have been clamoring for years. It's just that now, when the biggest banks in the country are days away from going under the bus, that it is "suddenly" news. The truth is that the retirement savings of a generation, and probably of the next two in terms of bailout requirements, have been methodically stolen by a cartel of organized criminals in pinstripes. And it isn't sudden, and many are now being protected from the financial equivalent of an eye for an eye. And that's not right.

Excellent reporting. A subject that needs more coverage. Ask, not only the financial institutions who are not being protected, but companies such as TASR and NFLX who have been battling short-sellers for most of their existence. And how about Solar companies like LDK and DSTI or bio tech stocks like DNDN. These companies all have been on and off the Reg SHO lists for years. Something has to be done.

I WANT TO KNOW WHY NONE OF MY E-MAILS TO FOX NEWS REGARDING NAKED SHORT SELLING HAVE EVER ONCE BEEN ANSWERED IN A YEAR AND A HALF SINCE I HAVE BEEN SENDING THEM. YOU FOLKS TOTALLY IGNORED THEM. WHY???????????? NOW THAT IT IS A BIG ISSUE YOU GUYS WANT TO ADDRESS IT. THANKS FOR NOTHING.

Remember back when the banks fought tooth and nail over check hold periods denying customers access to thier money? They were making a mint off of depositors by the free use of that money. It took major consumer activism to force the banks to give us what was due. Even today the holds are abused. I think what we are dealing with here is the same thing, that the fails are in fact loans that are not being backed. Loans where the customer is being charged the broker loan rate plus while the broker is not borrowing the stock. This is not an industry failure by accident, but an industry failure by design. Profits are being booked at the expense of breaking the rules and the SEC is looking the other way. Are we to believe that in this day and age the DTCC cannot figure this out and should we even rely on the industry watchdog FINRA to do something? Apparently this is going to take an act of Congress to be resolved at the behest of public pressure. Derb