I generally ask myself at this time of year what were the biggest stories of the past twelve months, in business/financial news.
By "stories," I don't mean themes, such as "Digital Revolution" or "EU unraveling." I mean stories, such as one might have seen in a particular newspaper on some specific day. Of course, I choose the ones I do largely because they illustrate an important theme, and in the list below (an innovation this year) I'll spell out and italicize the theme. Yet the theme itself isn't the story.
Further, I don't rank them, as in a top ten list. I assign one top story to each of the twelve months.
All that said, here is this year's list.
January: Isolating Iran. After the Central Bank of India, under pressure, withdraws from the Asian Clearing Union (which had been a crucial conduit for payments to Iran for petroleum), Indian companies that import oil from Iran scramble to find another way to send their payments and keep the flow going. Their substitute arrangement involved payments through the Hamburg, Germany based EIH Bank. The isolation of Iran would become a bigger theme for many industrialized nations later in the year, but we may as well use this as the kick-off.
February: food versus fuel. The US Department of Agriculture announces deregulation of one strain of genetically modified corn -- a strain designed for use as ethanol, the gasoline substitute. This announcement feeds into several ongoing stories -- one of them is the widening perception of the failure of ethanol (at least the traditional "first generation" sort) as an instrument of policy.
March: Banking for the poor. The central bank in Bengaldesh dials up the conflict over microfinance, ordering that the Grameen Bank cut its ties with its founder, Yunus. Arguments in that country's high court Monday, March 7.
April: Nuclear power. Continuing crisis at Japan's Fukushima I nuclear power plant forces advocates of nuclear power generation world-wide onto the defensive. On April 11, Japan's Nuclear and Industrial Safety Agency rated the disaster as a "major accident" or a level 7 event on an internationally recognized scale.
May: Exchange consolidation. Nymex OMX Group and the Intercontinental Exchange (ICE) withdraw their hostile bid for NYSE Euronext, apparently leaving a clear path for NYSE's friendly merger with Deutsche Boerse.
June: Political scandal. Oops. Time reporter Michael Grunwald writes this month, "reports of Solyndra's death have been greatly exaggerated." But they weren't. The company, an Obama administrration favorite, would file for bankruptcy two months later.
July: Digital revolution. Bankruptcy of famed bookstore chain Borders turns into a liquidation proceeding as re-org plans fall apart. Bricks-and-mortars retailing takes another in a series of hits.
August. Fiscal policy. US Congress and President seek to resolve long-running debt-ceiling soap opera. S&P downgrade of US Treasury debt. End up just perpetuating the soap opera.
September: Banking. UBS Rogue trader Kweku Adoboli arrested, September 15, 3:30 AM London time.
October: Allegations of naked-shorting conspiracy and pushback. Ali Nazerali brings a libel suit in Canada against Deep Capture and affiliated entities.
November. Retailing turmoil. Releases by Amazon and Barnes & Noble unleash the dogs of war, against each other and Apple, in the retail market for tablet computers.
December. Fiscal policy. France and Germany develop an ambitious joint plan to turn the eurozone -- or perhaps the whole of the EU -- into a fiscal union. Cameron, for the Brits, keeps his distance.
Yes, there is a hometown bias to this compilation. Seven of the twelve top stories are North American in character, six of those are US based. The five that one might attribute to the rest of the world are divided among western Asia (two), eastern Asia (one), and Europe (two).
I have no proposals as to what you might make of that.
Happy new year, everyone.
Showing posts with label naked short selling. Show all posts
Showing posts with label naked short selling. Show all posts
31 December 2011
19 September 2010
The Last of the Eight Days
As I'm sure my readers are aware, because one would have to have spent the past few days in a cave not to be aware of it -- this month marks the two-year anniversary of the most dramatic financial crisis in a couple of generations.
Last year at this time The New Yorker ran a tick-tock piece by James Stewart, called simply "Eight Days," with reference to the period from September 12 to and including September 19th of 2008. So we are now at the two year anniversary of the final of those days.
As my own way, then, of commemorating the insanity of another September, allow me simply to repost something I wrote at the time.
--------------
19 September 2008
Insanity
The relevant regulators in the US and the UK have both now indulged themselves in the ultimate in knee-jerk reactions.
They've banned short selling in a wide range of stocks. Just to be clear: they haven't banned "naked" short selling, or "abusive" short selling, or closed any loopholes on the existing regulations that govern the practive.
They've banned short selling. Full stop. This is the logical equivalent of prohibiting pessimism.
Here's the SEC's press release.
And here's the counterpart from the other side of the Pond.
I have long believed that the history of the United States breaks down into a series of distinct equilibria. Leaving the colonial and revolutionary eras out of account, there have been three republics.
The first began in 1787 and lasted a little more than 70 years, then collapsed into a period of turmoil and civil war.
The second began in 1868, with the enactment of sweeping new amendments that made in effect for a new Constitution. This second republic lasted about 60 years. It, too, collapsed dramatically.
The third republic was up and running as of 1937, when Roosevelt's court-packing plan induced the Justices to acknowledge sweeping new interpretations for the Constitution. It is this third republic that is now crashing in upon us, and the ban on short selling is a sign of that.
You WILL BE CHEERFUL about stock prices. Washington (and London) command it!
The next logical step is a ban on any trade whatsoever at a price lower than the preceding trade on that asset. Unless, maybe, the asset in question is made out of hydrocarbons, in which case that might be reversed.
A hypothetical television commercial comes to mind.
"Crazy country. We'll sell you appliances. We'll make up prices. We'll order ourselves about like we're in a Three Stooges short. Crazy country. Our rules are ... INSAAAAANE!"
Last year at this time The New Yorker ran a tick-tock piece by James Stewart, called simply "Eight Days," with reference to the period from September 12 to and including September 19th of 2008. So we are now at the two year anniversary of the final of those days.
As my own way, then, of commemorating the insanity of another September, allow me simply to repost something I wrote at the time.
--------------
19 September 2008
Insanity
The relevant regulators in the US and the UK have both now indulged themselves in the ultimate in knee-jerk reactions.
They've banned short selling in a wide range of stocks. Just to be clear: they haven't banned "naked" short selling, or "abusive" short selling, or closed any loopholes on the existing regulations that govern the practive.
They've banned short selling. Full stop. This is the logical equivalent of prohibiting pessimism.
Here's the SEC's press release.
And here's the counterpart from the other side of the Pond.
I have long believed that the history of the United States breaks down into a series of distinct equilibria. Leaving the colonial and revolutionary eras out of account, there have been three republics.
The first began in 1787 and lasted a little more than 70 years, then collapsed into a period of turmoil and civil war.
The second began in 1868, with the enactment of sweeping new amendments that made in effect for a new Constitution. This second republic lasted about 60 years. It, too, collapsed dramatically.
The third republic was up and running as of 1937, when Roosevelt's court-packing plan induced the Justices to acknowledge sweeping new interpretations for the Constitution. It is this third republic that is now crashing in upon us, and the ban on short selling is a sign of that.
You WILL BE CHEERFUL about stock prices. Washington (and London) command it!
The next logical step is a ban on any trade whatsoever at a price lower than the preceding trade on that asset. Unless, maybe, the asset in question is made out of hydrocarbons, in which case that might be reversed.
A hypothetical television commercial comes to mind.
"Crazy country. We'll sell you appliances. We'll make up prices. We'll order ourselves about like we're in a Three Stooges short. Crazy country. Our rules are ... INSAAAAANE!"
16 September 2010
Believe it
I think you should believe every word this guy writes.
Oh, boy. I've hit a new low in clumsy self-marketing. Still, go there: read about Fuld and the nasty short sellers.
Thanks.
Oh, boy. I've hit a new low in clumsy self-marketing. Still, go there: read about Fuld and the nasty short sellers.
Thanks.
15 January 2010
Getting even with New Jersey
In the middle of his new piece in The Observer, Max Abelson throws in a quote from Patrick Byrne about the Sith Lord.
For those who don't know what I'm talking about, the Sith Lord is a figure in the trio of Star Wars prequels. He is also a figure in Byrne's imagination -- an important fact chiefly because Byrne is the CEO of Overstock.com. If you still don't know what I'm talking about and don't care, you are of course free to hit that little "x" on the top of your browser now. If you don't know what I'm talking about and do care, here is some background.
Anyway, Abelson has a profile in The New York Observer about Judd Bagley, who is working as Byrne's lieutenant on a cause dear to them both, the crusade against naked short selling -- well explained in the following 2006 column by a writer for the grey lady. Abelson seems to think that the crusaders have a point in a general sort of way, but are off-base in some important particulars.
Here's the bit, though, that caught my attention, and that seems to represent some score settling involving the state of New Jersey and its judicial system. Actually, I owe a tug of the forelock here to uberblogger Felix Salmon for noticing this passage before I did: But the juiciest part of the lore is that there’s a “Sith Lord,” like in Star Wars, at the center of the evil. The Sith Lord turns out to be Sith Lords. “It’s Steven Cohen and Mike Milken, though I’ve never said that to a reporter,” says Patrick Byrne, Overstock’s CEO.
Milken was an easy pick. Cohen is the unexpected name here. The speculation for 4 years now has been that Byrne meant Milken, hence the use of expressions like 'The Miscreant's Ball'. In the grand old days of HedgeWorld, my colleague Chris Clair wrote a column soon after Byrne's news conference discussing the speculation about who the Sith Lord was supposed to be, and Clair focused on Milken. Besides, the Milken/Byrne thing is an old family quarrel.
But why now make the Sith Lord a two-headed beast? And why Cohen? My first guess was that Cohen was just thrown in there to make this seem less anti-climactic than it would have been. Cohen's life is certainly not without ongoing drama.
But after thinking it over for a couple of days I developed a new hunch. I think Cohen became part of the Sithness because his corporate alter ego, SAC, in Byrne's eyes, beat the rap. And the New Jersey court system is the forum wherein SAC beat said rap.
In August 2009 the New Jersey Superior Court threw out claims that S.A.C. Capital Advisors (SAC) conspired with other firms, including the independent research firm Gradient Analytics, Inc. (formerly known as Camelback Research Alliance, Inc.) (Gradient) to drive down the stock price of Canada’s largest publicly-traded pharmaceutical company, Biovail Corporation (Biovail). The court dismissed the suit after it determined that Biovail failed to prove it was entitled to damages and that, in any event, the court lacked jurisdiction over all but one of the defendants. Most notably, the court stated that it did not evaluate the merits of Biovail’s claims against SAC or Gradient.
The Gradient case had significance beyond its particularity. Sixty Minutes, in a broadcast segment in March 2006, elevated Biovail into the single highest-profile case of the theory that short sellers conspire with Beg Media (like CBS News, for example?) and with allegedly independent researchers to bring down otherwise impeccable companies. That program didn't focus on the "nakedness" of the shorting involved, but the anti-nakedness crusaders seemed to be very happy about Leslie Stahl's work.
The New Jersey decision effectively debunked that story. The beneficiary of the New Jersey decision -- SAC, the hedge fund run by Steve Cohen. Who now turns out to be half of the Sith Lord. Take THAT, Garden State!
For those who don't know what I'm talking about, the Sith Lord is a figure in the trio of Star Wars prequels. He is also a figure in Byrne's imagination -- an important fact chiefly because Byrne is the CEO of Overstock.com. If you still don't know what I'm talking about and don't care, you are of course free to hit that little "x" on the top of your browser now. If you don't know what I'm talking about and do care, here is some background.
Anyway, Abelson has a profile in The New York Observer about Judd Bagley, who is working as Byrne's lieutenant on a cause dear to them both, the crusade against naked short selling -- well explained in the following 2006 column by a writer for the grey lady. Abelson seems to think that the crusaders have a point in a general sort of way, but are off-base in some important particulars.
Here's the bit, though, that caught my attention, and that seems to represent some score settling involving the state of New Jersey and its judicial system. Actually, I owe a tug of the forelock here to uberblogger Felix Salmon for noticing this passage before I did: But the juiciest part of the lore is that there’s a “Sith Lord,” like in Star Wars, at the center of the evil. The Sith Lord turns out to be Sith Lords. “It’s Steven Cohen and Mike Milken, though I’ve never said that to a reporter,” says Patrick Byrne, Overstock’s CEO.
Milken was an easy pick. Cohen is the unexpected name here. The speculation for 4 years now has been that Byrne meant Milken, hence the use of expressions like 'The Miscreant's Ball'. In the grand old days of HedgeWorld, my colleague Chris Clair wrote a column soon after Byrne's news conference discussing the speculation about who the Sith Lord was supposed to be, and Clair focused on Milken. Besides, the Milken/Byrne thing is an old family quarrel.
But why now make the Sith Lord a two-headed beast? And why Cohen? My first guess was that Cohen was just thrown in there to make this seem less anti-climactic than it would have been. Cohen's life is certainly not without ongoing drama.
But after thinking it over for a couple of days I developed a new hunch. I think Cohen became part of the Sithness because his corporate alter ego, SAC, in Byrne's eyes, beat the rap. And the New Jersey court system is the forum wherein SAC beat said rap.
In August 2009 the New Jersey Superior Court threw out claims that S.A.C. Capital Advisors (SAC) conspired with other firms, including the independent research firm Gradient Analytics, Inc. (formerly known as Camelback Research Alliance, Inc.) (Gradient) to drive down the stock price of Canada’s largest publicly-traded pharmaceutical company, Biovail Corporation (Biovail). The court dismissed the suit after it determined that Biovail failed to prove it was entitled to damages and that, in any event, the court lacked jurisdiction over all but one of the defendants. Most notably, the court stated that it did not evaluate the merits of Biovail’s claims against SAC or Gradient.
The Gradient case had significance beyond its particularity. Sixty Minutes, in a broadcast segment in March 2006, elevated Biovail into the single highest-profile case of the theory that short sellers conspire with Beg Media (like CBS News, for example?) and with allegedly independent researchers to bring down otherwise impeccable companies. That program didn't focus on the "nakedness" of the shorting involved, but the anti-nakedness crusaders seemed to be very happy about Leslie Stahl's work.
The New Jersey decision effectively debunked that story. The beneficiary of the New Jersey decision -- SAC, the hedge fund run by Steve Cohen. Who now turns out to be half of the Sith Lord. Take THAT, Garden State!
19 September 2009
The Last of the "Eight Days"
As I'm sure my readers are aware, because one would have to have spent the past few days in a cave not to be aware of it -- this month marks the one-year anniversary of the most dramatic financial crisis in a couple of generations.
The New Yorker has a tick-tock piece by James Stewart, called simply "Eight Days," with reference to the period from September 12 to and including September 19th of 2008. So we are now at the one year anniversary of the final of those days.
As my own way, then, of commemorating the insanity of last September, allow me simply to repost something I wrote a year ago today.
--------------
19 September 2008
Insanity
The relevant regulators in the US and the UK have both now indulged themselves in the ultimate in knee-jerk reactions.
They've banned short selling in a wide range of stocks. Just to be clear: they haven't banned "naked" short selling, or "abusive" short selling, or closed any loopholes on the existing regulations that govern the practive.
They've banned short selling. Full stop. This is the logical equivalent of prohibiting pessimism.
Here's the SEC's press release.
And here's the counterpart from the other side of the Pond.
I have long believed that the history of the United States breaks down into a series of distinct equilibria. Leaving the colonial and revolutionary eras out of account, there have been three republics.
The first began in 1787 and lasted a little more than 70 years, then collapsed into a period of turmoil and civil war.
The second began in 1868, with the enactment of sweeping new amendments that made in effect for a new Constitution. This second republic lasted about 60 years. It, too, collapsed dramatically.
The third republic was up and running as of 1937, when Roosevelt's court-packing plan induced the Justices to acknowledge sweeping new interpretations for the Constitution. It is this third republic that is now crashing in upon us, and the ban on short selling is a sign of that.
You WILL BE CHEERFUL about stock prices. Washington (and London) command it!
The next logical step is a ban on any trade whatsoever at a price lower than the preceding trade on that asset. Unless, maybe, the asset in question is made out of hydrocarbons, in which case that might be reversed.
A hypothetical television commercial comes to mind.
"Crazy country. We'll sell you appliances. We'll make up prices. We'll order ourselves about like we're in a Three Stooges short. Crazy country. Our rules are ... INSAAAAANE!"
The New Yorker has a tick-tock piece by James Stewart, called simply "Eight Days," with reference to the period from September 12 to and including September 19th of 2008. So we are now at the one year anniversary of the final of those days.
As my own way, then, of commemorating the insanity of last September, allow me simply to repost something I wrote a year ago today.
--------------
19 September 2008
Insanity
The relevant regulators in the US and the UK have both now indulged themselves in the ultimate in knee-jerk reactions.
They've banned short selling in a wide range of stocks. Just to be clear: they haven't banned "naked" short selling, or "abusive" short selling, or closed any loopholes on the existing regulations that govern the practive.
They've banned short selling. Full stop. This is the logical equivalent of prohibiting pessimism.
Here's the SEC's press release.
And here's the counterpart from the other side of the Pond.
I have long believed that the history of the United States breaks down into a series of distinct equilibria. Leaving the colonial and revolutionary eras out of account, there have been three republics.
The first began in 1787 and lasted a little more than 70 years, then collapsed into a period of turmoil and civil war.
The second began in 1868, with the enactment of sweeping new amendments that made in effect for a new Constitution. This second republic lasted about 60 years. It, too, collapsed dramatically.
The third republic was up and running as of 1937, when Roosevelt's court-packing plan induced the Justices to acknowledge sweeping new interpretations for the Constitution. It is this third republic that is now crashing in upon us, and the ban on short selling is a sign of that.
You WILL BE CHEERFUL about stock prices. Washington (and London) command it!
The next logical step is a ban on any trade whatsoever at a price lower than the preceding trade on that asset. Unless, maybe, the asset in question is made out of hydrocarbons, in which case that might be reversed.
A hypothetical television commercial comes to mind.
"Crazy country. We'll sell you appliances. We'll make up prices. We'll order ourselves about like we're in a Three Stooges short. Crazy country. Our rules are ... INSAAAAANE!"
13 June 2009
Who Were the Real Hit Men?
Liz Moyer, of Forbes, began an article about a certain wireless equipment manufacturer in October 2006 with these words, "There's a hit out on Pegasus Wireless."
The rest of the story consisted mostly of a re-hashing of the complaints of Pegasus' chief executive that a dramatic fall-off in the price of the company's stock that summer and fall was the result of a cabal of naked short sellers spreading vicious rumors rather than from any defect of management.
Buried deep into Moyer's story (paragraph fourteen) is the possibility that "Pegasus is just a poor investment" creating the appearance of growth through acquisitions rather than through sales, because the touted new products, Moyer acknowledged, "haven't hit the shelves yet."
Moyer was aptly admonished by Seth Jayson of Motley Fool at the time. His bottom line: "There are plenty of good reasons for Pegasus' huge fall, and unless Knabb can deliver something other than gimmicks and PR, Pegasus will be no phoenix."
Pegasus filed for chapter 11 protection in January 2008. That petition was dismissed in October. Pegasus then re-filed for bankruptcy protection in November, and the court againt dismissed the filing in April 2009. The court also barred any further chapter 11 filings for two years.
Late last month the SEC filed a lawsuit against Pegasus, Knapp, and an associate, Stephen Durland, the company CFO. Its complaint alleges in essence that the company was not the victim of incompetence. Nor was it the victim of (external) hit. The stock price plummeted as a result of fraud. As to hitmen, those were the silhouettes of Knapp and Durland in the Book Depository window.
Unbeknowst to investors, at the very time Moyer was writing sympathetically about the company, Knapp and Durland secretly controlled hundreds of millions of the company shares, falsely claiming they owned only minimal amounts. They dumped these shares into the market, making millions for themselves and of course driving down the price.
And Moyer gets to eat some crow. Hmmmm Yummy.
The rest of the story consisted mostly of a re-hashing of the complaints of Pegasus' chief executive that a dramatic fall-off in the price of the company's stock that summer and fall was the result of a cabal of naked short sellers spreading vicious rumors rather than from any defect of management.
Buried deep into Moyer's story (paragraph fourteen) is the possibility that "Pegasus is just a poor investment" creating the appearance of growth through acquisitions rather than through sales, because the touted new products, Moyer acknowledged, "haven't hit the shelves yet."
Moyer was aptly admonished by Seth Jayson of Motley Fool at the time. His bottom line: "There are plenty of good reasons for Pegasus' huge fall, and unless Knabb can deliver something other than gimmicks and PR, Pegasus will be no phoenix."
Pegasus filed for chapter 11 protection in January 2008. That petition was dismissed in October. Pegasus then re-filed for bankruptcy protection in November, and the court againt dismissed the filing in April 2009. The court also barred any further chapter 11 filings for two years.
Late last month the SEC filed a lawsuit against Pegasus, Knapp, and an associate, Stephen Durland, the company CFO. Its complaint alleges in essence that the company was not the victim of incompetence. Nor was it the victim of (external) hit. The stock price plummeted as a result of fraud. As to hitmen, those were the silhouettes of Knapp and Durland in the Book Depository window.
Unbeknowst to investors, at the very time Moyer was writing sympathetically about the company, Knapp and Durland secretly controlled hundreds of millions of the company shares, falsely claiming they owned only minimal amounts. They dumped these shares into the market, making millions for themselves and of course driving down the price.
And Moyer gets to eat some crow. Hmmmm Yummy.
25 October 2008
I don't break the rules (I'm sneaky that way).
Another dispatch from the lipstick wars, WR battlefront.
I've written of wikipedia and its conflicts over "sock puppetry" here often enough. I'll try not to repeat myself unduly.
I don't think I've ever mentioned Wikipedia Review (WR), which is a website designed by and for those with a wikipedia-related grievance, something of a "shadow site," if you will.
I've only recently discovered that I've become a subject of some discussion at Wikipedia Review. This seems to have been set off by a piece I wrote in the HedgeWorld blog, back when HW was still a semi-autonomous newsgathering organization within the Reuters family and when they still employed the likes of me.
I wrote in that piece about certain wikipedia articles that had a direct or indirect connection with the "naked short selling" debate, and about the contention -- in that context especially hot -- about who was a sock puppet of whom.
I also was explicit in this piece that I have edited wikipedia myself. I gave the name I use in that context, Christofurio. So, just to be clear: the identity of Christopher Faille and Christofurio isn't something that anybody else had to do any detective work to discover. I have been very clear about it.
Another point: within wikipedia, I am always and only "Christofurio," -- so nobody ever has to wonder whether I am using two or more names strategically. There's only the one.
This is all simple enough, and unremarkable, one would think. Yet I find myself mentioned in the Wikipedia Review as if I were being especially sneaky.
Here's a direct quote from someone who writes there with the name Piperdown.
I think the reason Christofurio hasn't been publically curbed on editing Byrne/NSS/Weiss/etc is that he's been very careful to not actually do any editing that could be blatantly cited as breaking any WP rules.
Um ... right. The reason I haven't been disciplined for breaking any rules is that I haven't broken any rules.
Likewise, the reason I've never been imprisoned for burglary is that I've never burgled. Pretty crafty, eh?
I don't know what axe exactly Piperdown is grinding here (actually I think I do, but I'll let it pass) but it does seem that he is oddly perplexed by the spectacle of someone who joins a collective editing enterprise, uses one and only one name, edits as he thinks best, sticks to the spirit as well as the letter of the collective enterprise, gives his reasons for his edits in the Talk pages, and generally comports himself according to Hoyle.
If any of that makes me remarkable, I'll see if I can keep it up.
I've written of wikipedia and its conflicts over "sock puppetry" here often enough. I'll try not to repeat myself unduly.
I don't think I've ever mentioned Wikipedia Review (WR), which is a website designed by and for those with a wikipedia-related grievance, something of a "shadow site," if you will.
I've only recently discovered that I've become a subject of some discussion at Wikipedia Review. This seems to have been set off by a piece I wrote in the HedgeWorld blog, back when HW was still a semi-autonomous newsgathering organization within the Reuters family and when they still employed the likes of me.
I wrote in that piece about certain wikipedia articles that had a direct or indirect connection with the "naked short selling" debate, and about the contention -- in that context especially hot -- about who was a sock puppet of whom.
I also was explicit in this piece that I have edited wikipedia myself. I gave the name I use in that context, Christofurio. So, just to be clear: the identity of Christopher Faille and Christofurio isn't something that anybody else had to do any detective work to discover. I have been very clear about it.
Another point: within wikipedia, I am always and only "Christofurio," -- so nobody ever has to wonder whether I am using two or more names strategically. There's only the one.
This is all simple enough, and unremarkable, one would think. Yet I find myself mentioned in the Wikipedia Review as if I were being especially sneaky.
Here's a direct quote from someone who writes there with the name Piperdown.
I think the reason Christofurio hasn't been publically curbed on editing Byrne/NSS/Weiss/etc is that he's been very careful to not actually do any editing that could be blatantly cited as breaking any WP rules.
Um ... right. The reason I haven't been disciplined for breaking any rules is that I haven't broken any rules.
Likewise, the reason I've never been imprisoned for burglary is that I've never burgled. Pretty crafty, eh?
I don't know what axe exactly Piperdown is grinding here (actually I think I do, but I'll let it pass) but it does seem that he is oddly perplexed by the spectacle of someone who joins a collective editing enterprise, uses one and only one name, edits as he thinks best, sticks to the spirit as well as the letter of the collective enterprise, gives his reasons for his edits in the Talk pages, and generally comports himself according to Hoyle.
If any of that makes me remarkable, I'll see if I can keep it up.
06 August 2007
Overstock: Pathetic
An amusing site called hedgefunnies ran a photo of a "naked short seller" recently.
http://hedgefunnies.com/2007/07/30/patrick-byrne-unveils-irrefutable-proof-of-naked-short-selling/
This is amusing, at any rate, to those of us who have followed the controversy over "naked short selling" and the central role of Overstock boss, Patrick Byrne, therein.
http://cfaille.blogspot.com/2007/06/overstock-what-about-losses.html
But Mr. Byrne and his fans, including one Judd Bagley, Overstock's Director of Communications, have been rather nasty about this. Either they don't have much of a sense of humor or they really have no business plan OTHER than to silence any critics. So they've gone after the proprietor of the hedgefunnies site in a big way.
He's a 19 year young man, so this means, say, critiquing his high school via wikipedia. Yes, High School. Does that sound petty? Yes, I think so too.
I'll save myself some typing. Here's more.
http://www.sequence-inc.com/fraudfiles/2007/08/05/more-on-overstockcom-stalking-teenage-blogger/
http://hedgefunnies.com/2007/07/30/patrick-byrne-unveils-irrefutable-proof-of-naked-short-selling/
This is amusing, at any rate, to those of us who have followed the controversy over "naked short selling" and the central role of Overstock boss, Patrick Byrne, therein.
http://cfaille.blogspot.com/2007/06/overstock-what-about-losses.html
But Mr. Byrne and his fans, including one Judd Bagley, Overstock's Director of Communications, have been rather nasty about this. Either they don't have much of a sense of humor or they really have no business plan OTHER than to silence any critics. So they've gone after the proprietor of the hedgefunnies site in a big way.
He's a 19 year young man, so this means, say, critiquing his high school via wikipedia. Yes, High School. Does that sound petty? Yes, I think so too.
I'll save myself some typing. Here's more.
http://www.sequence-inc.com/fraudfiles/2007/08/05/more-on-overstockcom-stalking-teenage-blogger/
30 June 2007
How to Deflect an Accurate Accusation
Universal Express is a company that describes itself as "visionary" on its website. It brings "diversity and creativity to the logistics and transportation industries."
It certainly brings some creativity to the business of deflecting accusations.
Between 2001 and 2004, Universal Express issued 500 millions shares of common stock without filing registration statements. Not unsurprisingly, this had a diluting effect. Its stock price lagged. Universal Express, though, in the person of its head honcho (and sole director) Richard Altomare, soon became very ardent in claiming that "naked short sellers" were the problem. Its own stock-distribution policy couldn't be at fault.
The SEC brought a lawsuit against Universal Express for its unregistered issuance, and in due time (February of this year) it won. Part of its complaint involved the noise Altomare had been making about naked short selling -- on the rationale that Altomare used that as part of a smoke screen to explain away the depressive effect on stock price that his own stock issuances were having. The NY federal district court ordered the company to pay $9 million in disgorgement and $9 million in penalties.
On June 21, Thursday, seeing that no effort at disgorgement had been forthcoming, and claiming that the company had become simply a vehicle for fraud whence the investing public required protection, the SEC asked the court to appoint a receiver.
The next day, the New York Times published an article by Floyd Norris, "Resilience of Fraud." His fifth graf read thus: "The case of Universal Express, a small company that loses money even faster than it issues news releases, is not very important on its own merits. But it shows how hard it can be for the SEC to halt what it views as a fraud. The agency filed suit against Universal in 2004, but the company is still funding itself by issuing billions of unregistered shares."
The Times later ran a Norris follow-up, "S.E.C. Seeks Receiver for Universal Express, Calling it a Fraud."
Mr. Norris wrote, "If a receiver is appointed and no more shares are issued, the company might have trouble financing itself. In the first nine months of its fiscal year, through March 31, it reported $2.7 million in revenues and a net loss of $21 million. It took in $11 million by issuing new shares."
On Monday, June 25, Mr. Altomare put out a press release comparing him to Rosa Parks. You read that right. He's decided that the SEC really doesn't like him because he's made the case against "naked short selling," and the offenses it claims he committed are a trivial excuse for this punishment.
"I am sure that Rosa Parks, Susan B. Anthony and others, who questioned previously accepted 'legal' practices, were vilified, criticized and even demonized prior to the truth finally surfacing. When the cause is just, the enemy must be engaged. Naked short selling and the unchecked abuse of power of a governmental agency are such valuable causes worthy of the battle." And so forth in a megalomanaical rush.
At no point in that press release, or so far as I can tell anywhere else over the course of the litigation, does the company or its sole director dispute the crucial facts: the issuance of the unregistered stock. Nor is it entirely obvious why a law requiring registration is entirely on a par with, oh, a city ordinance prohibiting blacks from sitting in the front seats of a bus.
Not entirely, mind you....but if your only real product seems to be your company's own shares, you have business problems that you can't blame (well ... can't accurately blame) on exogenous forces. Your problems, Mr. Altomare, are self-generated. Rosa Parks didn't banish herself to the back seats and then seek to inspire a boycott of the Montgomery bus system.
It certainly brings some creativity to the business of deflecting accusations.
Between 2001 and 2004, Universal Express issued 500 millions shares of common stock without filing registration statements. Not unsurprisingly, this had a diluting effect. Its stock price lagged. Universal Express, though, in the person of its head honcho (and sole director) Richard Altomare, soon became very ardent in claiming that "naked short sellers" were the problem. Its own stock-distribution policy couldn't be at fault.
The SEC brought a lawsuit against Universal Express for its unregistered issuance, and in due time (February of this year) it won. Part of its complaint involved the noise Altomare had been making about naked short selling -- on the rationale that Altomare used that as part of a smoke screen to explain away the depressive effect on stock price that his own stock issuances were having. The NY federal district court ordered the company to pay $9 million in disgorgement and $9 million in penalties.
On June 21, Thursday, seeing that no effort at disgorgement had been forthcoming, and claiming that the company had become simply a vehicle for fraud whence the investing public required protection, the SEC asked the court to appoint a receiver.
The next day, the New York Times published an article by Floyd Norris, "Resilience of Fraud." His fifth graf read thus: "The case of Universal Express, a small company that loses money even faster than it issues news releases, is not very important on its own merits. But it shows how hard it can be for the SEC to halt what it views as a fraud. The agency filed suit against Universal in 2004, but the company is still funding itself by issuing billions of unregistered shares."
The Times later ran a Norris follow-up, "S.E.C. Seeks Receiver for Universal Express, Calling it a Fraud."
Mr. Norris wrote, "If a receiver is appointed and no more shares are issued, the company might have trouble financing itself. In the first nine months of its fiscal year, through March 31, it reported $2.7 million in revenues and a net loss of $21 million. It took in $11 million by issuing new shares."
On Monday, June 25, Mr. Altomare put out a press release comparing him to Rosa Parks. You read that right. He's decided that the SEC really doesn't like him because he's made the case against "naked short selling," and the offenses it claims he committed are a trivial excuse for this punishment.
"I am sure that Rosa Parks, Susan B. Anthony and others, who questioned previously accepted 'legal' practices, were vilified, criticized and even demonized prior to the truth finally surfacing. When the cause is just, the enemy must be engaged. Naked short selling and the unchecked abuse of power of a governmental agency are such valuable causes worthy of the battle." And so forth in a megalomanaical rush.
At no point in that press release, or so far as I can tell anywhere else over the course of the litigation, does the company or its sole director dispute the crucial facts: the issuance of the unregistered stock. Nor is it entirely obvious why a law requiring registration is entirely on a par with, oh, a city ordinance prohibiting blacks from sitting in the front seats of a bus.
Not entirely, mind you....but if your only real product seems to be your company's own shares, you have business problems that you can't blame (well ... can't accurately blame) on exogenous forces. Your problems, Mr. Altomare, are self-generated. Rosa Parks didn't banish herself to the back seats and then seek to inspire a boycott of the Montgomery bus system.
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