TigerSoft Freedom News Service    7/18/2008      www.tigersoft.com 
                                    News You Won't Get from The Mainstream Corporate Media. 

                                                               IT OWNS THE SEC!

                 THE 2007-2008 BEAR MARKET

    Did The Securities and Exchange Commission Make The Recent Decline Much Worse

Who Polices Insider Trading Crime Done by The SEC?

    Why Should Anyone Trust Wall Street?  Use TigerSoft To Get Past The Smoke, Mirrors and Lies.

    SEC Chairman, Christopher Cox is a LIAR, who is more concerned about protecting Wall Street crooks
    than finding them.

                        1)      By lifting the ban on short sales on down ticks they gave the "green light"
                                 to "Bear Raiders", the bane of the early 1930s until legislation banned short selling
                                 on down-ticks.

                        2)      By not enforcing rules that require short sellers to borrow the stock they sell short,
                                they have given Bear Raiders access to all the stock they want.

                         3)      SEC Chairman Cox LIED on CNBC when he said naked short selling was not
                                 illegal.    He has now chosen to enforce it selectively.

                        4)      When 3 days ago, they banned naked short sales in key bank stocks, the reaction
                                was immediate.  Some bank stocks have risen more than 50% in the three days since,

                        5.)     Look at the high volume in finance stocks.  The word got out in advance of
                                 the SEC action to ban naked short sales in finance stocks. 

                       6.)      The SEC is only going through the motions of investigating traders who are claimed
                                 by the Bear Stearns to be the cause of his companies collapse.  The truth is the
                                 SEC made the bear raid on Bear Stearns much more easily accomplished.
The SEC's life is the Hobbesian ideal:  "Nasty, brutish and short"

                                                           by William Schmidt, Ph.D. -  Creator of Tiger Software.
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                     A bear raid is a type of stock market strategy, where a trader (or group of traders) attempts
                  to force down the price of a stock to cover a short position. This can be done by spreading negative
                 rumors about the target firm, which puts downward pressure on the share price. This may be a form of
                 securities fraud. Alternatively, traders could take on large short positions themselves, with the large
                 volume of selling causing the price to fall, making the strategy self perpetuating.

                                            SEC ALLOWS MUTUAL FUNDS AND HEDGE FUNDS
                                  TO SELL SHORT WITHOUT BORROWING ANY STOCK FIRST

                        "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
(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."  (
                           http://www.fool.com/investing/high-growth/2005/03/24/the-naked-truth-on-illegal-shorting.aspx )

                         Insiders are allowed by the present SEC policies to sell short a small company mercilessly.
                 Chairman Cox has Done away witht he need to borow any stock to go short.  All traders have to
                 do is to "locate" shares to borrow, not actually borrow them.  When a short sale is undertaken,
                 broker-dealers like Merrill Lynch are, under the law, supposed to take appropriate steps to settle
                 out the trade in three days.  This should mean buying back shares that were not really borrowed.
                 Instead the brokerages make only book entries now.  The result is that many a smaller company's stocks
                 has been sold short nakedly with dire effect on the company, its shareholders and employees. The
                 SEC does not care.  It is more concerned with protecting the borkerages.  Investor confidence will
                 take a long time to restore.   Particularly negligent is James Brigagliano.  He heads the SEC committee
                 that makes recommendations regarding short saling abuse. The SEC is headed entirely by Republicans who
                 are opposed to regulation, no matter the cost to shareholders..  (Source. See also.

                                  "When the trade fails settlement it is the Goldman Sachs, the Lehman’s, the
                             Merrill Lynch’s, the Morgan Stanley’s,  and all the other prime brokerage houses who
                             hold these fails on their books indefinitely.  Each colludes with each other to dismiss the
                             settlement responsibilities associated with the contract to settle they agreed upon.  The
                             3-day settlement periods are ignored for trade commissions, liquidity, and the rights
                             to future business from those who sold what did not exist".
The SEC enacted a new Regulation "SHO" in January 2005 regarding naked short selling. .[Source]
                         Regulation SHO also created the "Threshold Security List," which reported any stock where more than
                   0.5% of a company's total outstanding shares failed delivery for five consecutive days. A number of
                   companies have appeared on the list, including Krispy Kreme, Martha Stewart Omnimedia and
                   Delta Airlines. The Motley Fool, an investment website, observes that "when a stock appears on this
                   list, it is like a red flag waving, stating 'something is wrong here!'"[3]    On its Regulation SHO website ("Does
                   Naked Shorting Drive Prices Down?" section), the SEC cites the prevalence of false claims of naked short
                   selling in Pump and Dump fraud. The SEC downplays naked shorting as a factor in declining stock prices,
                   stating that stock values ideally should be determined by "the quality of the company itself," "supply and
                   demand" of the company's shares, and the company's ability to generate positive income.

                             NASDAQ Regulation SHO Threshold List.

                                                   Selective Enforement for the Elite's Stocks

                           There is a list of companies that the SEC will now police naked short selling.  This is the WHOs
                   WHO list of the Wall Street elite.  Small wonder the SEC is considered merely an agent of these

                                                   BNP Paribas Securities Corp
                                                   Bank of America Corp  - of course.
                                                   Barclays PLC
                                                   Citigroup Inc
                                                   Credit Suisse Group
                                                   Daiwa Securities Group Inc
                                                   Deutsche Bank Group AG
                                                   Allianz SE
                                                  Goldman Sachs Group Inc  - naturally.
                                                   Royal Bank ADS
                                                   HSBC Holdings Plc ADS
                                                   JPMorgan Chase & Co
                                                   Lehman Brothers Holdings Inc
                                                   Merrill Lynch & Co Inc
                                                   Mizuho Financial Group Inc
                                                   Morgan Stanley
                                                   UBS AG
                                                   Freddie Mac
                                                   Fannie Mae

                                   "Who Is Missing? Where is Washington Mutual (WM)? Wachovia (WB)?
                      Were they tossed to the dogs? What about Corus Bank (CORS), Bank United (BKUNA),
                      National City Corporation (NCC)?    It is beyond all belief that naked short selling is affecting
                      Goldman Sachs (GS) more than Washington Mutual, Wachovia, Corus Bank, Bank United,
                      and National City Corporation.  One only needs consider all facts above to figure out what is
                      going on. " (Source: http://www.marketoracle.co.uk/Article5505.html )

                    The Uptick rule is a former financial regulations rule, relating to the trading of securities in the
                  United States. The rule was eliminated by the U.S. Securities and Exchange Commission (SEC),
                  effective July 6, 2007.

                  Within a year after the elimination of the uptick rule a large number of small and medium size companies experienced declines of even 95% in share value. Many small companies suffered unexplainable and unusually large declines. A 15% stock fall taking place in a matter of few minutes and in absence of news was something usual. Some companies were falling by double digits the same day they were releasing record earnings beyond all analyst expectations. The stock declines were so severe that Warren Buffet said was "not seen since 1929".

In the year following the elimination of the rule, for the ensemble of companies under 18B in market capitalization, 83% declined and 27% lost more than 50% of their market value . It can be argued that the consequences of the uptick rule's elimination are difficult to measure since shortly after the elimination of the rule the financial markets faced the sub-prime crisis. Some have blamed the worsening economy, the credit crisis and higher energy costs as a cause of the worsening stock markets. Others have blamed the elimination of the uptick rule.

Data seems to indicate that the lack of uptick rule could be the cause of the extreme stock price decline of small and medium size companies. A decline due to the credit or mortgage crises should have affected the financial sector more significantly. Nevertheless, the decline took effect very homogeneously across all economy sectors. Most important, the homogeneity was observed only for companies with small trading volumes (easier targets of orchestrated bear raids). In contrast, within the set of large companies over 18B in market capitalization (250 in total) only 10 companies lost more than 50% of their stock value and all were financial institutions. Same reasoning rules out the increase of oil price as an important factor in stock decline of small caps. Besides, the oil price increase affected all the economies worldwide but declines of 50% to 90% in stock prices were observed only in the United States.

On July 3, 2008 Wachtell, Lipton, Rosen & Katz, an adviser on mergers and acquisitions, said short-selling was at record levels and ask the SEC to take urgent action and reinstate the 70-year-old "uptick rule".[2]

On the March 20, 2008 episode of Mad Money, Jim Cramer launched his campaign to reinstate the Uptick Rule. Citing the wild swings of the market since its elimination, Cramer said that the SEC eliminated the rule during a bull market, when liquidity was not a problem. Cramer believes that, without the Uptick Rule in place, short sellers are devaluing perfectly solid stocks. As a former hedge fund manager, Cramer admitted to making millions short selling with the Uptick Rule in place. Without an impediment such as the Uptick Rule to slow down the pace of short sellers, Cramer believes it puts the market at risk for the very problems he believes led to the Great Depression.

Complaint letters have been submitted to the SEC for their decision of eliminating the uptick rule. Examples of complain letters that can be found at the SEC website are:

April 27, 2008

In 2007, the SEC eliminated the "Uptick Rule" stating that there is sufficient liquidity in the market place to make an "Orderly" market without the rule. I find it incredible that, at that very time, a huge "Liquidity" crisis was developing before the eyes of the SEC. Why was it important for the SEC to make the change at that particular time? Were there hordes of investors pleading with the SEC to eliminate the "Uptick Rule? I think not. On the other hand: Did the SEC buckle under to pressure from the hedge funds to eliminate the "Uptick Rule" so they could cover some of their losses in the impending liquidity crisis and down market which followed July 2007? I think, probably so. The elimination of the "Uptick Rule" has cost me many thousands of my retirement dollars. One only need look at the 33% short interest in SCRX, a strong, viable, profitable company to witness "FRAUD" in action.

July 9, 2008

It is well past time you dealt with infractions of the fails to deliver rules. This practice, in far too many cases, seriously dilutes stockholders to the advantage of short sellers seeking easy gain. I am disappointed in the SEC. It has done far too little to protect the integrity of our markets. Abolishing the "Uptick Rule" last July was a particularly damaging decision, one which has left the market and thus small and large investors alike at serious risk from fear and short sellers capitalizing on the panic trade. Please correct your mistakes. Reinstitute the "Uptick Rule". Punish serial naked shorters, and clean up the threshold securities list. There shouldn't be a single company on that list, and it is to your discredit that so many remain there for such long periods. Sincerely, Steven O'Hara

June 6, 2008

Dear Commissioners, Please reinstate the 'Uptick Rule' to make it more difficult to short stocks relentlessly. the small investor, retirees and many other buy and hold investors lose tremendous amounts of money due to the practice of greedy shorters attacking a particular stock. These professional shorters know all too well that a rapidly falling stock price creates panic which causes more selling which in turn makes them richer and the unsophisticated small investor poorer. Your commission is to prevent corruption in the marketplace and by reinstating the 'Uptick Rule' you will be doing just that. Respectfully, A disabled retiree.

April 6, 2008

What brilliant argument or whos influence, convinced law makers to repeal the uptick rule which has served to mitigate extreme volatility and protect us from market crashes since it was created after the lessons learned from the forensic reconstruction of the factors leading to the crash of 29. Since the uptick rule was repealed market volatility has increased drastically leading to both the fed and the treasury having to take extreme measures to stabilize the market. Let us learn from our mistakes and reinstate the uptick. rule. (except form Michael E Kushner, letter)

                      (   http://en.wikipedia.org/wiki/Bear_raid )

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        More to be added here about modern day "Bear Raiders" this weekend.       
                     See also - http://www.tigersoftware.com/TigerBlogs/July-16-2008/index.html  




SEC told to act on short-sellers

By Deborah Brewster in New York

Published: July 3 2008 03:00 | Last updated: July 3 2008 03:00

A leading US law firm has called on the Securities and Exchange Commission to take much stronger action against abusive short-selling, warning of an increase in rumor-mongering and bear raids amid a sharp increase in short-selling.

Wachtell, Lipton, Rosen & Katz, an adviser on mergers and acquisitions, said short-selling was at record levels and the SEC needed urgently to reinstate the 70-year-old "uptick rule" - which was lifted only last year - to dampen volatility and halt manipulative practices in what were "extraordinary" times.

The uptick rule was installed in 1938 and designed to constrain short-selling in a falling market by requiring that a security could only be sold short at a price above its last sale price.

In a memo to clients, Wachtell said the regulator had lifted the rule after a pilot program, which had been conducted in a period of rising stock markets and low volatility.

The limitations of that program had become "painfully clear" in recent months, the firm said.

"Today, many of the same conditions that led to the adoption of the rule in 1938 are reappearing . . . there are suggestions that false rumours about the demise of firms (e.g. Bear Stearns and Lehman) and bear raids are taking place," said the memo, which was signed by two partners, Edward Herlihy and Theodore Levine.

Wachtell's move is unusual because law firms seldom make direct policy recommendations. It comes as regulators worldwide are moving towards greater constraints on short-sellers, whose presence is felt more as markets decline.

Short-sellers recently have had financial services firms in their cross-hairs, giving regulators greater concern because such firms are more susceptible to confidence and the collapse of a bank or broker would have flow-on implications for the financial system.

Wachtell unfavourably contrasted the SEC's inaction with the moves by other regulators, citing the UK's Financial Services Authority, which introduced a rule requiring disclosure by short-sellers during a company's rights issue.

"By contrast, the SEC is merely relying on its surveillance and enforcement efforts to address these abusive activities. Those tools are not adequate in today's market. Manipulation and fraudulent intent are difficult to prove. Moreover, the SEC's enforcement efforts can address wrongdoing only after the fact - a delay that imperilled stocks cannot afford," Wachtell said.





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