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The Sound of Thunder: SEC Goldman Indictment Rips U.S. Economic Core

April 19, 2010 (By Bud Burrell)

– From “Front and Center”, by Bud Burrell –

On Friday, April 16, the SEC announced the civil indictment of Goldman Sachs for securities fraud in the structuring and sale of collateralized debt obligations in connection with a $1 Billion offering of securities it sold in cooperation with the hedge fund Paulson and Company. The charges, which are alleged at this point, appear to be the product of a disgruntled Paulson employee becoming a whistleblower to the SEC, rolling on a mid-level trader at Goldman alleged to have been also involved in the fraud.

The allegations, which may change with the passage of time, are that Goldman executives worked with Paulson persons to construct a portfolio of debt obligations totaling $1 Billion, which was intended to fail from before its sale, and which was purportedly shorted while being structured and sold to buyers. This comes on the heels of industry rumors of similar behavior by Goldman in its sale of Greek Sovereign Debt, also while they hedged with short transactions including the purchase of Credit Default Swaps on Greek credit. [entire post]

Tags: bear, dollar declines, erisa, glass steagal, goldman, lehman, loss of diversity, morals, opt in, regulatory misconduct, rips us core, sec, ship out, six banks, six brokers, values
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Pro Naked Short Selling Journalists Begin To Jump Ship!

March 14, 2010 (By Bud Burrell)

– From “Front and Center”, by C. Austin Burrell –

With the release of the CNBC CYA piece Friday on Anthony Elgindy, the convicted felon, the exodus of his journalist supporters and apologists stage left has not only continued, but expanded. For over 10 years, this coterie of killer clowns has relentlessly attacked victims of illegal short selling manipulation with every slander imaginable. Then, in a single one hour piece, their world came crashing down, along with their co-conspirators at the regulatory agencies who made hay by attacking criminals and the defenseless in the name of hanging the easiest low hanging scalps from their belt.

The CNBC segment of the “American Greed” series, titled “Mad Max on Wall Street” was laughable in its defense of many of Elgindy’s supporters. While it attacked Elgindy personally, it left out little bites like his prior conviction for felony insurance fraud in Dallas before he appeared in San Diego.

Elgindy was a former pump and dump broker for the notorious Blinder, Robinson (known in the trade by the not so affectionate name “Blind ‘em and Rob ‘em”) in Denver, before he moved on to another bucket shop where the commissions were greater in Dallas. When he saw both these firms go under to regulatory and criminal findings, he astutely morphed himself into a short seller, one who postured himself as being only concerned with outing criminal pump and dump stocks like he had previously lived off of. [entire post]

Tags: 2nd circuit courts, american greed, anthony@pacific, bankruptcy examiner, bear stearns, cnbc elgindy, eagletech communications, fairfax financial, guru tout serving shorters, incompetent economic studies, lehman, mad max comes to wall street, madoff bd, madoff sec whitewash, malfeasance, milberg weiss, nanopierce, national inflation association, overstock, patrick byrne, phony lehman sarbanes oxley certifications, sec, sedona corp, self justifying, silicon investor, tipping point reached
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Watch ‘American Greed’ March 10th

March 8, 2010 (By Bud Burrell)

2 Hours on Short Seller, Anthony Elgindy

– From “Front and Center”, by C. Austin Burrell –

I was informed this evening that the CNBC Series “American Greed” will air a 2 hour special on the notorious short seller and convicted felon Amir “Anthony” Elgindy. Elgindy was the operator of the most notorious criminal short selling syndicate of the last decade, known by several names, including “Anthony@Pacific”, etc. After being arrested in early 2002, and being released on bail, Elgindy was caught trying to fly from New York’s Islip Airport back to San Diego, in possession of $40,000 in cash, and more in precious jewelry, along with phony passports with different names on them from his own.

While Elgindy was operating, he attacked thousands of companies, 2200 plus, with impunity and aggressive arrogance. Working with lawyers specializing in suits for Directors and Officers liability insurance, paid bashers, pay for play journalists, NASD (now FINRA) boiler room broker-dealers, PIPES financiers, bloggers and hedge funds short sellers to destroy and preferably bankrupt his target companies. [entire post]

Tags: 2200 companies victimized, american greed, anthony@pacific, bail, bankruptcy, d&o insurance suits, deregistration, doj, elgindy, finra, mad max, milberg weiss, nasd, paid bashers, pipes financiers, prison, sec, short selling syndicate, silicon investor, web site
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Whistleblower On Madoff Rocks Mainstream Media

March 4, 2010 (By Bud Burrell)

Harry Markopolos’ Book: “No One Would Listen”

– From “Front and Center”, by C. Austin Burrell –

This week, Certified Fraud Examiner Harry Markopolos announced the release of his new book, “No One Would Listen”, about the complete stonewall he hit with US Government Regulators including the SEC and FINRA. He told his story in his typical low key and very professional manner, making his message all the more devastating.

I am sure that SEC, FINRA and other officials to whom he reported his findings on the scope of the Madoff fraud felt footfalls on their graves.

Starting with CNBC, and then going to Matt Lauer, CNN and FOX News, he recounted his story of his discovery of the Madoff fraud, which had been ongoing for many years, when he examined the claimed performance of Madoff’s split strike price conversion strategy, and his quick realization that he claimed performance that would have simply been impossible to produce. He recited the sequence of events that led him to conclude within 30 minutes that Madoff was a fraud. It is where it went from there that no one except people who had faced similar risks could imagine. [entire post]

Tags: book, conversions, finra, harry markopolos, lawyer misconduct, madoff, no one would listen, reverse conversions, sec, short selling, split strike price, threats
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Predator Pay-For-Play Journalists And Their Ilk: Who Pays And Who Benefits?

January 26, 2010 (By Bud Burrell)

– From “Front and Center”, by C. Austin Burrell –

I have watched the conduct of a figurative nest of journalists/bloggers/bashers/critics in a series of attacks on the targets of short raids many times over the past 15 years. The questions that never seem to be answered are the most basic? How do these parties pay their bills? Who is paid or not paid to the benefit of what organization, entity, or agency? If you think so many man hours could be devoted completely pro bono to analysis of mostly small companies balance sheets and management, I encourage you to look deeper.

I have watched the unrelenting attacks against companies who have dared to challenge these self-described vermin in the Courts. Without exception, the same attackers’ names appear repeatedly in such a consistent pattern that it cannot be a random occurrence. I have seen the work of internet sleuths tracking the patterns of relationships between these journalists and notorious market manipulators, including everyone from major hedge funds, to a community of professional journalists, unpaid web site and message board bloggers, compensated bashers, criminal rigged research organizations, and eventually to the federal agencies we depend on for oversight of our markets and the manipulators to regularly savage our assets.

The question “Quo Bene?” is older than our society. Thousands of years ago, corruption was cited that was tracked back to its sources by the simple method of looking first at who benefitted from the acts of corruption. This was true from Egypt, to Greece, to Rome, to modern times. The “contracts” between these parties track to not only involved cash considerations, but also to professional support, school access for related parties, legal partnerships, and more. Predation consumes assets as its cost of doing business, and those assets must come from some source.

Why haven’t those in charge asked these questions? Indeed, the SEC and FINRA have protected their related external supporting parties to this predation from any fair, open and balanced inquiry hundreds of times over the past decade. Why is this so? [entire post]

Tags: $14 trillion gdp, $15 trillion gnp, bashers, egypt, finra, greece, journalists, legal roles, liabilities $105 Trillion, lies, market manipulators, pay-for-play, perptrators, predators, research for pay, rico, rome, sec, selling shovels
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SEC, FINRA, Madoff, Stanford: Painful & Offensive Evid

October 15, 2009 (By Bud Burrell)

From “Front and Center”, by Bud Burrell

– This week, an 80 page internal report of the behavior of Dallas and New York FINRA staff members in actively protecting and shielding Sir Allen Stanford and his billion dollar Ponzi scheme was leaked by unidentified sources. This sickening report drove home the total absence of internal controls at FINRA related to discovering and acting on massive frauds for which they were given nearly untold numbers of signals that should have prompted their action against such parties. Near the end of the report, it was stated that the behavior of FINRA was essentially identical with regard to Bernie Madoff’s Registered Investment Advisor and his related broker-dealer.

Some years ago, I had the chance to see a brilliant and upcoming 18 year old comedian at “Catch a Rising Star”. He wrecked the audience with the description of his multi-ethnic background, saying his mother and father, who were from different ethnic groups, had met each other on the subway picking each others’ pockets.

After hearing the full stories of the way in which Madoff and Stanford each manipulated the SEC and FINRA to a point of abuse, I was reminded of this routine. The only difference was that in this case we had two RICO criminal enterprises manipulating two other Government and quasi-governmental institutional criminal enterprises, working together to pick the pockets of major investors, domestically and internationally. [entire post]

Tags: atm, cojones, einstein, finra, fraud, impeachment, madoff, petitions, picking pockets, recalls, sec, stanford, stupidity
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DOJ Issues Six Criminal Indictments In CMKM Diamonds Case

September 18, 2009 (By Mark Faulk)

From “The Faulking Truth Blog”, by Mark Faulk

– Seven years after the saga of CMKM Diamonds, Inc. (CMKX) officially began, over four years after the company was revoked by the SEC, and a year-and-a-half after the SEC filed civil charges against eleven individuals and three corporate entities, the Department of Justice unsealed criminal indictments against six individuals in the largest penny stock fraud in history.

Former CMKX CEO Urban Casavant and alleged mastermind John Edwards, along with cohort James Kinney, transfer agent Helen Bagley, attorney Brian Dvorak, and Urban’s secretary Ginger Gutierrez were charged with five counts of securities fraud in the massive and complex scam, which involved the selling of over 700 billion shares of CMKX stock to unsuspecting shareholders for an estimated $250 million.

The 40-page indictment, unsealed today in Las Vegas, included allegations of selling unregistered shares of company stock “by use of the mails, over-the-counter mediums of exchange (e.g, the Pink Sheets), and other means” in violation of federal laws. [entire post]

Tags: allegation(s), brian dvorak, cmkm diamonds, cmkx, criminal justice, department of justice, diana lee edwards, doj, extradition, fbi, fegeral laws, forfeiture, fraud, ginger gutierrez, helen bagley, indictment(s), irs, james kinney, john edwards, sec, tax evasion, timothy vasquez, unregistered shares, urban casavant, violation
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What The Markopolos Testimony Teaches Researchers About Methodology

September 16, 2009 (By Bud Burrell)

From “Front and Center”, by Bud Burrell

– Harry Markopolos made his second major appearance before Congress two days ago, this time in front of the Senate Banking Committee along with two SEC lawyers, who clearly were not up to his professional and intellectual standards. Harry talked about his aborted attempts over a ten year period to get the SEC to listen to the fact that it had taken him about five (5) minutes to figure out Bernie Madoff was a stone fraud. He then described his impressions of the lack of professional attributes of SEC staffers to recognize fraud at even an elementary level, much less a career examiner’s level.

He pulled no punches, saying at one point that the SEC “couldn’t find ice cream in a Dairy Queen”, to they “couldn’t find a steak in an Outback (Steakhouse)”. Since his interview will be available electronically soon, there is no need to recite his many statements challenging the conduct and skills of the SEC staff. Suffice it to say that he told the Senate Banking Committee that they should start by firing half the staff, and replace excess lawyers with smart trading and accounting people who should be paid bonuses for finding and busting crooks and frauds.

What many can’t begin to understand is the skill set required for someone to be a really outstanding forensic fraud examiner. This is not just the math and language skills, but the capacity for rigorous pattern recognition, and a detailed knowledge of the path that truly objective research has to take to be both valid and reliable. [entire post]

Tags: bury SEC, conflicts, markopolos, methodology, reliable, research, sec, valid
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Financial Armageddon In Retrospect, Part Two

August 21, 2009 (By Mark Faulk)

From “The Faulking Truth Blog“, by Mark Faulk

“A small group of thoughtful people could change the world. Indeed, it’s the only thing that ever has.” ~Margaret Mead

Years before SEC chairman Christopher Cox invoked a one-month ban in July of 2008 against naked short selling in 19 battered financial stocks, including Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), Citigroup (NYSE: C), Lehman Brothers (OTC: LEHMQ.PK), Credit Suisse (NYSE: CS), Merrill Lynch (DOA, as in dead on arrival), Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Fannie Mae (NYSE: FNM), and Freddie Mac (NYSE: FRE), an eclectic “small group of thoughtful people” sounded the alarm about a financial system gone horribly wrong. Activist Dave Patch started InvestigatetheSEC.com in late 2003, and in early 2004 I began reporting on financial fraud on my website The Faulking Truth. At around the same time, the late Gayle Essary began to utilize his own forums, Investrend and Financial Wire, to bring greater exposure and an air of credibility to the cause. Others, including Bud Burrell, Bob O’Brien, Rod Young, DeWayne Reeves, Darren Saunders, Mary Helburn, and economists Suzanne Trimbath and Robert Shapiro, worked tirelessly to warn the country about the potential train wreck years before it happened. Efforts to reform our financial markets were further galvanized when Overstock (NASDAQ: OSTK) CEO Patrick Byrne, along with fellow crusaders Judd Bagley, Brent Baker, and Mark Mitchell, joined the rapidly escalating war. Forbes writer Elizabeth Moyer and Euromoney magazine’s Helen Avery covered the scandal for the financial media, but the Wall Street controlled corporate media for the most part either ignored the issue or attempted to discredit those who exposed the corruption.

At first, the focus of stock market reform advocates was something called “naked short selling”, a predatory trading practice used to illegally manipulate stock prices. The fraud appears to have originally been fueled mostly by Canadian brokers and offshore lenders and hedge funds, who victimized small, struggling companies and their investors. They utilized naked short selling and a lending practice that became known as “death spiral financing” because targeted companies were often forced into bankruptcy. The con artists bet against the company and its shareholders by taking advantage of a trading system that allowed them to “sell” shares that they didn’t own, and in many cases, never even borrowed. They could literally destroy the company, and its shareholders, by creating so much negative pressure that the stock eventually collapsed under the weight of the massive selling. But the key to the scheme was the con artists’ ability to short sell the companies’ stock without having to ever acquire the shares to cover their positions. They could buy and sell stock that didn’t exist, shares that were never delivered, in effect creating an unlimited supply of counterfeit stock. [entire post]

Tags: accountablility, bank of america, bankruptcy, bob o'brien, brent baker, bud burrell, christopher cox, citigroup, collapse, congress, corruption, counterfeit stock, credit suisse, darren saunders, dave patch, death spiral financing, delta airlines, dewayne reeves, economy, elizabeth moyer, euromoney magazine, fannie mae, forbes, fraud, freddie mac, free enterprise, gayle essary, global crossing, goldman sachs, hedge fund(s), helen avery, investigatethesec.com, investrend financialwire, j.p. morgan chase, judd bagley, lehman broyjers, mark mitchell, market collapse, martha stewart, mary helburn, merrill lynch, morgan stanley, naked short selling, netflix, obama, overstock.com, patrick byrne, regulators, robert shapiro, rod young, sec, stock manipulation, susanne trimbath, taser, the faulking truth, wall street, washington, white house
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Financial Armageddon In Retrospect, Part One

August 15, 2009 (By Mark Faulk)

From “The Faulking Truth Blog“, by Mark Faulk

After years of spreading the word on The Faulking Truth (http://www.thefaulkingtruth.com) for the last five and half years, this is my introductory post for Investrend Weblogs for FinancialWire(tm). Thanks to Todd Essary, Investrend’s CEO, for the opportunity, and for taking up the cause of stock market reform that his father Gayle Essary championed so courageously for so many years.

“A small group of thoughtful people could change the world. Indeed, it’s the only thing that ever has.” ~Margaret Mead

It began when Bear Stearns began to fall apart at the seams in March of 2008, triggering the SEC’s first emergency weekend meeting in over 30 years. Over the next few months, all of America, in fact, the entire world, watched in trepidation as our financial markets unraveled like a slow motion train wreck, one that the vast majority of Americans had been oblivious to until it was too late. Over the next few months, the train wreck began to pick up speed, prompting SEC chairman Christopher Cox to invoke a one-month ban on July 15, 2008 against naked short selling in 19 battered financial stocks, including Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), Citigroup (NYSE: C), Lehman Brothers (OTC: LEHMQ.PK), Credit Suisse (NYSE: CS), Merrill Lynch (DOA, as in dead on arrival), Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Fannie Mae (NYSE: FNM), and Freddie Mac (NYSE: FRE). The emergency rule, designed to eliminate the illegal downward manipulation of those companies’ stock prices, stated that no one could short sell stock in those companies unless they had “borrowed or arranged to borrow the security” and that they settle the trade on the required settlement date. Of course, as usual, even that rule imposed absolutely no penalties for anyone who violated the rule.

It proved to be too little, and decidedly too late. On September 15, 2008, our economy officially imploded: Lehman Brothers filed for Chapter 11 bankruptcy (its stock now trades for less than a nickel a share), Bank of America took over troubled Merrill Lynch, and AIG (NYSE: AIG) sought $40 million from the federal government under the guise of being “too big to fail” (the following day they received $85 billion from the fed, setting off what would become the largest government bailout of private sector businesses in history). And Washington Mutual was teetering on the brink of collapse.

What a difference a day makes. On September 19, the SEC enacted another temporary ban, this one prohibiting short selling of 799 financial firms. Why short selling was considered a crisis in those particular firms but was deemed okay in other publicly-traded companies remains a mystery, but it didn’t matter. The markets continued to tank, with the Dow eventually losing over 60% of its value by March of this year. [entire post]

Tags: aig, bank of america, bear stearns, chapter 11, christopher cox, citigroup, collapse, corruption, credit suisse, fannie mae, faulkingtruth.com, financial crisis, freddie mac, gayle essary, goldman sachs, j.p. morgan chase, lehman brothers, manipulation, mark faulk, market reforem, merrill lynch, morgan stanley, naked short selling, sec, the fed, washington mutual
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