The Stock Market, Social Security and Naked Shorts

Anyone know anything about this???

Are you sure that the stock you just bought isn't just a "counterfeit"....very similar too all those treasury notes that are sitting the the social security trust fund??

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Who's Behind Naked Shorting?

"Rare or everywhere?
Unfortunately, nobody seems to know. The Depository Trust & Clearing Corporation (DTCC), a holding company that clears and guarantees almost all trades in the U.S., very recently posted an interesting Q&A on naked short selling, an article well worth reading if you're at all interested in the subject. "While naked short selling occurs," says DTCC First Deputy General Counsel Larry Thompson in the document, "the extent to which it occurs is in dispute." Ain't that the truth.

Nevertheless, the DTCC has a good reason to say something public about the issue. The subject of naked short selling has gained some momentum with the introduction of Reg SHO early this year and a rising tide of complaint from companies like Overstock.com (Nasdaq: OSTK) and others. But in addition to this general attention, 12 separate lawsuits have accused the DTCC itself of engineering naked short-selling schemes. Nine of these, according to Thompson, have been dismissed or withdrawn, while three are still pending.

The basic accusation is that the DTCC itself counterfeits shares through its stock borrow program. This program has been around for more than 20 years and helps guarantee transactions when one party fails to produce promised shares. While the DTCC itself doesn't own shares, a network of participating broker-dealers lists shares available for borrowing with the program, and these are called on to complete failed transactions.

Lawsuits have claimed that the DTCC loans out shares it never collects from participants. These, in turn, presumably show up as new "fails to settle" transactions, but from the point of view of the market, they appear to be new shares floating around -- in electronic form, that is, without stock certificates to back them up. These can then be relisted, the theory goes, as available for borrowing, and the process repeats itself, allowing the folks manipulating the system to essentially manufacture any number of phantom shares. "


www.fool.com...

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isn't this exactly what crashed the stock market before the depression? only worse, this time there really isn't stock backing any of it?

Could this be the reason why Bush is trying to infuse the industry with a few trillion dollars from the social security fund...just so they can quietly clean up their mess?




[edit on 29-5-2005 by dawnstar]

Ohhh....I like this one:

"Intrigue in the sock drawer
How bad is the problem? Listen to this story: On Feb. 3, a man named Robert Simpson filed a Schedule 13-D with the SEC describing his purchase of 1,158,209 shares of Global Links Corp. (OTCBB: GLKCE), "constituting 100 percent of the issued and outstanding common stock of the Issuer." As described in a story that ran on FinancialWire on March 4, Simpson stuck every single share of the company in his sock drawer -- and then watched as 60 million shares traded hands over the next two days.

In other words, every single outstanding share of the company somehow changed hands nearly 60 times in the course of two days, despite the fact that the company's entire float was located in Simpson's sock drawer. In fact, even as recently as last Friday, 930,872 shares of Global Links still traded hands. If Simpson's claim that he owns all shares is accurate, that is a staggering number of phantom shares being traded around by naked short sellers. "

www.fool.com...

can you imagine what would happen to a company's stock if tomorrow it was announce the there were
60 million shares of the stock being marketing on the market that there actually were?

``

your quite correct, but it's all Legal hanky-panky!!

i'm still in 'arbitration' about some 57 shares of a reknown chip-maker
i bought & held in a 'brokers Account' in 1980.

the stock split 8 different times (= over 1,800 shares) from the original investment.

the Brokerage House (now merged & acquired company)had/has the 'right' to trade shares, using my owned shares as 'collateral'...
they must have made tens of thousands on trades 'allowed' to them as holders of deposited (or i could say Hostage) stocks.
(from 1980- 1992 & then to present!)

and I had NO RECOURSE because, the Fed Govt allows that practice
&
these shares were in a recognized retirement account, & if i didn't
keep that account with the only few 'authorized' brokers....well, i wouldn't have any IRA
(according to the Govt 'approved' list of brokers, which may offer IRAs!!)

tell me the special privledged PoliticalActionCommitties(PACs) don't got
a strangle-hold on the US & US economy.

my, now 1,800+ shares are still being sought as they remain 'phantom stock shares'....probably moored to someones' private dock.

BTW, my original investment was $200.oo incl fees


[edit on 29-5-2005 by St Udio]

Anyone interested in naked short selling would do well to research the sordid tale of USXP, or Universal Express. They won a HUGE judgement against the SEC in Florida court, and are waiting to collect.

This company has huge assets, sales growth, tight infrastructure and subsidiary holdings, and yet their stock never makes it past a penny...

It's either a huge conspiracy, or we live in an upside down world.

Check out their story..it will probably infuriate you...

I know it infuriates me..I'm a shareholder.

St Udio


THis wouldn't be a stock split though, would it? I thought that a stock split was when the value of the stock got too high, that well, the company TOOK ACTION and split the stock.....

I mean how can you have this:

"1,158,209 shares of Global Links Corp. (OTCBB: GLKCE), "constituting 100 percent of the issued and outstanding common stock of the Issuer." As described in a story that ran on FinancialWire on March 4, Simpson stuck every single share of the company in his sock drawer -- and then watched as 60 million shares traded hands over the next two days. "


unless someone...more than likely not the company....is just creating stock in the virtual wonderland of cyberspace...
if this company gives out a dividend, do you get one too, or are you out of luck there? and what if you decided to sell, ya know, let uncle sam take a big bite out of your investment and close out the account...do they sell the phantom stock to somene else, and you get the money or what....

do they tell you when you are buying this stock that it's just an iou for it, or do they just let you think you have the stock?

Originally posted by dawnstar

I mean how can you have this:

"1,158,209 shares of Global Links Corp. (OTCBB: GLKCE), "constituting 100 percent of the issued and outstanding common stock of the Issuer."
As described in a story that ran on FinancialWire on March 4, Simpson stuck every single share of the company in his sock drawer -- and then watched as 60 million shares traded hands over the next two days. "

THE KEY word here is 'issued & outstanding'
because, the company most likely reserved for itself & its treasury
probably about 90% of of the authorized shares created at the IPO (initial public offering)

those shares owned by mr Simpson, (1,158,209 shares)
were probably only the 'public float' of the company stock available for public trading.

the other 90% of shares (~11,582,090 that were in the company treasury)
just may have become tradeable securities, after the company treasury made the other 11.5 million shares available on the Exchange Trading floor.
i'm not saying for certain that is the actual sequence , but it is a possibility

~~because there just as well might have been 'blocks' of shares, which were in a legal condition where they were owned but could not trade on the market until a certain date (called a lock-up period)...i believe the recent Google lock-ups are presently expiring....

dawnstar, there's maybe two more scenarios which might explain the 'apparent' mysterious-phantom 'spontaneous generation?' of more shares...but this is not supposed to be a symposium or workshop.

just know there are many mechanisms to either create wealth or
siphon wealth from others.

unless someone...more than likely not the company....is just creating stock in the virtual wonderland of cyberspace...
if this company gives out a dividend, do you get one too, or are you out of luck there? and what if you decided to sell, ya know, let uncle sam take a big bite out of your investment and close out the account...do they sell the phantom stock to somene else, and you get the money or what....

do they tell you when you are buying this stock that it's just an iou for it, or do they just let you think you have the stock?

these are some questions being addressed with my 'Arbitration',
somehow my IRA account (which i couldn't do anything with until ~2023)
somehow got lost during the 1992 (last known statement) and yr 2000, when i recovered enough from a brain injury to recall & care about that
particular IRA.
The 'custodian' of these IRAs are allowed to trade the securities (that you actually own) and replace them,
all the while reaping any gains or losses for the BrokerageHouse "custodian" !!
...without putting up any of their own money to finance their endeavors!!.
.... IF, they have any losses which they have to replace- -
- well, they just charge YOU a maintenance or transaction or operation 'Fee' to maintain your IRA custodial Account!!

The whole system is whacky....but, that's the way it is....

Good Thread!!


As I have stated in the past, naked shorting is not a conspiracy. It is just a way for Market makers to make tons of money.

The illegal practice of short selling shares that have not been affirmatively determined to exist. Ordinarily, traders must borrow a stock, or determine that it can be borrowed, before they sell it short. However, some professional investors and hedge funds take advantage of loopholes in the rules to sell shares without making any attempt to borrow the stock.

Whereas, regular shorting means:

Selling short is the opposite of going long. That is, short sellers make money if the stock goes down in price.

A very risky trading technique. Most Market Makers ( or those with insider knowledge, or very savvy inverstors) would be the one's shorting stocks.

But, once again, this happens mostly with Pinks and OTCBB stocks.