HOME
Message Board
CURRENT COLUMNS
- Editor's Corner
- Blogfest 2005
- Commentary
- Commentary Too
- Down The Middle
- Faulking Around
- Global Warning
- This guy walks into a bar...
- Investing 101
- Faulking Opinions
- Off The Rail
- Words
ARCHIVES
LINKS
CONTACT US
 | |||
Commentary - Aug 14, 2004 - Printable Version
- To The NASD: PROVE ME WRONG!
by Dave Patch
It is difficult to put faith in a system that continuously supports the members over the investors. Rule 3370 was delayed in affirmative determination (After 2 years of Regulatory Neglect) to let the Firms get their computers up and running. SHO, simply a duplication of Rule 3370, is providing these same members yet another 6 months to do the same computer work. And now, the NASD is providing an additional 2 months to members in their short sale reporting of OTCBB stocks for – Computer enhancements. Funny thing is, these firms do not have separate computers to handle NASDAQ vs. OTCBB stocks and we know it. I would also think that with all these “Technological enhancements” the Industry has to put into place to handle OTCBB securities we should certainly question how they were handled in the past. Can we assume that the industry did not use computers to handle these trades and to keep track of our holdings but instead used pen and paper? This delay is yet another example of the regulators cowering to the members and then expecting us to trust them. This ‘technological enhancement” excuse is no better than “The Dog ate my homework”. Either that or the NASD and SEC have been in neglect over the handling of these securities for years. I told you before and I will say it again, YOU NEED TO EARN OUR TRUST AND RESPECT, and to date you have not.
The SEC’s Regulation SHO is in violation of section 17A of the Securities Act and will be exposed for that. When the NASD chooses to follow suit by restructuring their short sale settlement rulings to mimic the SEC’s their liabilities as a non-government agency will be greater than that of a Government Agency. The SEC has recently pulled registrations on over 30 publicly traded companies for reporting violations that are YEARS outstanding and yet the SEC has not addressed share ownership now in these PRIVATE companies. How many of these companies fall into the SEC’s 4% abused category for settlement failures? Funny how this is all transpiring before the SEC has addressed the unsettled trade issues and is now the new drive of the SEC. The Regulators ignored this reporting issue while they could, allow investors to get screwed, but now that a parallel issue needed to be addressed the SEC is mitigating Industry risk by abusing the Investors yet again. How does one holding unsettled shares in their account gain their rightful ownership in the now private company? What happens to the net capital the industry set aside to cover the trades? Do they simply GET IT BACK for selling counterfeit shares? These are issues you and your members WILL be forced to address.
The recent malicious attacks on small business investors will be one that you will regret soon enough. It is clear that the SEC and NASD are setting up the means to reduce their liabilities by attacking the abused. Hardly a means of earning respect! Respect comes from actions and not political gamesmanship.
For the record, if you disagree with my comments – PROVE ME WRONG. Address the settlement issues. Identify the Unsettled positions on the shells recently deregistered. Open the DTCC records on settlement failures of those companies seeking the answers. Stop hiding behind the Wall of secrecy and PROVE with evidence that the NASD is not covering up the issue. Don’t provide unsubstantiated rhetoric about your agency – PROVE ME WRONG. Remember, on my side of the table I have the last 3 years of securities scandals that demonstrate poor regulatory controls as Wall Street raped the Investor and kept the money. Bankrupt people financing the Wall Street elite who gained their wealth over ill-gotten gains and false revenue recognitions. Wall Street was claiming growth generated from FRAUD and the Regulators have not been astute enough to pick it up.
GO AHEAD, PROVE ME WRONG!
Editor's note: The preceding commentary is a copy of a letter sent by Dave Patch at www.investigatethesec.com to Marc Menchel at the NASD, addressing the failures of both the NASD and SEC to deal with the ongoing scandal that has plagued the stock market for years. In my opinion, it voices the concerns shared by a lot of investors who believe that they have been abandoned by the very regulatory agencies who are pledged to protect them.
Contact the NASD:
Marc Menchel: Marc.Menchel@NASD.com
Jeffrey S. Davis, Office of General Counsel, NASDAQ, at (202) 912-3035
Sign the petition at www.investigatethesec.com
http://www.nasdr.com/2610_2004.asp#04-54
NASD Notice to Members 04-54
Operative Date of Short Sale ACT Reporting Requirements for OTCBB and Other Non-
NASDAQ OTC Equity Securities Extended to September 24, 2004
Executive Summary
NASD is delaying the operative date of IM-6130 (Trade Reporting of Short Sales) for Over-the-Counter Bulletin Board (OTCBB) and other non-NASDAQ over-the-counter (OTC) equity securities until September 24, 2004. IM-6130 was filed for immediate effectiveness with the SEC in May 2004 with an operative date of July 26, 2004.1 New IM-6130 clarifies that, as currently required by Rule 6130 (Trade Report Input), a "short sale" or "short sale exempt" indicator, as applicable, is required in all short sale transactions reported to the Automated Confirmation Transaction Service (ACT), including (1) NASDAQ National Market (NNM) securities; (2) NASDAQ SmallCap Market (SmallCap) securities; (3) other OTC transactions in exchange-listed securities; (4) OTCBB securities; and (5) other non-NASDAQ OTC equity securities. NASD understands that some members and their vendors need to make significant technological changes to their systems for OTCBB and other non-NASDAQ OTC equity securities to comply with these requirements; therefore, in consultation with SEC staff, NASD is extending the operative date for OTCBB and other non-NASDAQ OTC equity securities to provide members with additional time to make such changes.
Questions/Further Information
Questions regarding this Notice to Members may be directed to Jeffrey S. Davis, Office of General Counsel, NASDAQ, at (202) 912-3035; the Legal Section, Market Regulation, NASD, at (240) 386-5126; or Office of General Counsel, Regulatory Policy and Oversight, NASD, at (202) 728-8071.
Add your name to our "Stockgate activist list" at info@faulkingtruth.com. We will email you only when we have new articles or information dealing with this issue. Please link the articles everywhere you can, post them on stock message boards, and send them to the appropriate public entites. To enact positive change requires positive action.
We are always looking for intelligent commentaries on all sides of the issues, so pick up a computer and voice your opinion at: info@faulkingtruth.com )
Voice your opinion on our message board (you don't have to sign up to post).