Post by liquidator on Feb 16, 2006 17:13:00 GMT -5
Feb 15, 2006 (financialwire.net via COMTEX) --
February 15, 2006 (FinancialWire) FinancialWire has learned from a highly-placed informed source that the Depository Trust and Clearing Corp. appears to be a target of an enforcement action by the multi-state task force formed by the North American Securities Administrators Association.
If so, this would explain a recent flurry of posts and press releases by the DTCC denying any complicity in the exploding national illegal manipulative trading scandal known as StockGate, embroiling Netflix (NASDAQ: NFLX), Overstock (NASDAQ: OSTK), Krispy Kreme Donuts (NYSE: KKD) and Martha Stewart OmniLiving (NYSE: MSO), as well as provide a measure of validation to rampant rumors that the clearing house, jointly owned by the NASD and the New York Stock Exchange has received subpoenas.
Similar rumors that individuals throughout the U.S. Securities and Exchange Commission have received subpoenas as part of the same or a different action has not been confirmed.
The scandal appears now to be moving at a fast pace. Harris Interactive has confirmed that the public is now informed and that 76% of investors believe those who naked short stock should suffer penalties as severe or more severe than those imposed for fraud and counterfeiting.
Its survey was conducted among 1,243 investors nationwide, and was commissioned by Working Americans for an Open Economy.
Investors' support for cracking down on naked shorting could play a role in upcoming congressional elections with 38% of investors saying they would be more inclined to vote for a congressional candidate who addresses the issue of naked shorting. Among investors aged 55 or older, fully one-half (50%) say they would be more inclined to vote for such a candidate.
"This study leaves little doubt as to how seriously investors view the illegal practice of naked shorting," said Mark Wirthlin, senior vice president of the Harris-Wirthlin Brand and Strategy Consulting Practice at Harris Interactive. "If this issue moves front and center, it clearly has the potential to influence both legislation and congressional elections."
The study was designed to understand investor attitudes toward the practice of naked shorting. "Naked shorting has become the game on Wall Street in the past 10 years and its pervasiveness creates serious risks to our system," said Steve Wark, spokesperson for Working Americans for an Open Economy. "These results show that the public is ready for the government to take real and meaningful action against hedge funds, brokerages and individuals breaking the law."
When it comes to specific actions that could be taken against those found guilty of naked shorting, vast majorities of investors are behind every alternative tested:
Requiring the federal government to publish the identity of brokerages and individuals found guilty of naked shorting (79%)
Allowing individuals, investors, pension funds, and small companies financially damaged by naked shorting to sue to recover their financial losses (75%)
Revoking the securities licenses of those found guilty of committing naked shorting (75%)
Meanwhile, the SEC is seeking comments on adding OTC and OTCBB companies to its tracking of short interest.
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