More Fuel for the Fire

The Link:

http://www.faulkingtruth.com/Articles/Investing101/1066.html

The Return of the Lying Liars
by Mark Faulk

One month ago, I wrote one of those articles where I go out on a limb and spout off something extreme for the sake of getting the masses up in arms…and then later I secretly hope I didn’t go too far in my comments. In the case of stock market fraud, and the underlying government incompetence that is the real root of the problem, every time I thought I was over the top in my opinions, something has happened to not just make me look downright prophetic, but to actually make me seem conservative in my statements.

Here is the latest hyperbole turned understatement: In the article titled “Once a Liar, Always a Liar,” I opened with “From now on, don’t believe a word of anything the SEC tells you. Chances are, they’re lying.” From there, I went on to tell the story of Global Links Corp., and how Dave Patch received, under the Freedom of Information Act, evidence of massive failed deliveries by brokers in the company’s stock. In other words, they sold millions of shares of Global Links stock to their customers…but never actually purchased it OR delivered it (and we wonder how the major brokerage firms manage to continue to make record profits year after year in a stagnant market).

From the same article:

The SEC has been caught covering up fraud, plain and simple. And if they’ve done it once, chances are they’ve done it a thousand times. Once a liar, always a liar. If there’s any justice left in America whatsoever, Congress will launch an immediate investigation into this scandal, and the media coverage will trigger a public outcry that will topple the hierarchy from Wall Street to Washington.

If that weren’t enough, in the “Once a Liar” article, we quoted from another article from a year before that one, commenting that the information that Patch obtained made that article look prophetic:

Over a year ago, we put it this way:

“Where did those brokers expect to find the shares to cover those trades, since they DIDN'T EXIST? Answer: they didn't expect to cover those trades, just as they haven't covered trades in thousands of other companies' stock for years. They expect the SEC and DTC to just let them get away with criminal counterfeiting, because THAT'S HOW IT'S ALWAYS BEEN.”

Then, today, the SEC (the lying liars that they are), in an article from HedgeWorld.com, said in reference to the proposed changes to Regulation SHO, that it had "’achieved substantial results,’ significantly reducing FTDs without disruption to the markets.” And once again, Dave Patch has the SEC eating their own words, something he’s become extremely adept at over the past few years. Just two days ago, Patch received another stunning bit of information via the Freedom of Information Act. The failed to delivers rceords for the New York Stock Exchange show that from January 3, 2005 (the date that Reg SHO was implemented) to May 31, 2006, that the rate of fails did drop…by LESS THAN ONE TENTH OF ONE PERCENT. And according to the data, at one point, the number of FTDs spiked from the average of 65 million to over 172 million. And if that wasn’t enough, the number of companies on the list actually increased from 553 companies to 590.

One –tenth of one percent. This is what the SEC describes as achieving “substantial results”? This is their idea of “significantly reducing FTDs without disruption to the markets”? If that is indicative of the SEC’s standard for success, I don’t even want to know what they would consider abject failure.

Here’s a funny sidenote from the HedgeWorld.com article. They devoted a substantial part of their article to quoting from a comment letter submitted to the SEC on proposed changes to Reg SHO by one James Brownfield, a small-time hedge fund con artist who delights in following me around and bashing me at every turn, and who used to delight in sending emails bragging about the various companies that he was taking naked short positions in. Not surprisingly, in the Hedge World article, Mr. Brownfield (known on message boards, where he seems to live 24/7, as “Jimmy B”) seems to believe that Reg SHO is nothing more than a hindrance. Come to think of it, having a pathological liar come to the defense of the SEC makes perfect sense.

Meanwhile, in another “we all look like prophets” episode, Christopher Cox commented on the lack of hedger fund oversight in the aftermath of yet another hedge fund collapse, this time involving Amaranth Advisors, who lost more than $4 billion dollars in less than three weeks. After testifying to the House Financial Services Committee, Cox told reporters that the SEC is developing emergency rules to reinstate other aspects of the court-rejected rules governing hedge funds, to which I responded on an email message thread (yeah, I’m quoting myself, get over it):

"Cox said the SEC is developing emergency rules to reinstate other aspects of the rejected rule."

Pardon my language but.....ARE YOU F*CKING KIDDING ME?????

After 3 years of screaming at the top of my f*cking lungs about this (and even longer for some of these so-called crazies), this is suddenly an "emergency"?

This makes me sick to my stomach.

Sometimes I wonder if we’re all beating our heads against a brick wall here, chasing a lost cause, charging at windmills. Then, I see the progress that’s been made by advocates of stock market reform, the growing list of those who have put themselves on the front line of the battle, and the growing outcry from the millions who have joined our cause, and even the increased scrutiny of the SEC from a few courageous Congressional leaders, and I realize that ultimately, we will win the war to take back our country from the clutches of greed and corruption. We will win because we’re too stubborn to give up, and more importantly, we will win because we’re right.

As for those in our federal government who are supposed to be protecting our country’s interests, I might as well close with exactly the same ending that I used a month ago, since Cox and his cronies at the SEC, and everyone else who either perpetuates or condones this travesty, continue to prove my point every time they open their collective mouths:

This reeks of a massive cover-up, one that extends all the way from Wall Street to the SEC, and one that implicates those in Congress who have allowed it to continue unchecked. Wall Street robbed America, the SEC covered the tracks, and the media concocted the alibis. And Congress turned a blind eye to the entire robbery.

One more time, for good measure: If it’s happened once, then it’s happened a thousand times.

Once a liar, always a liar, and that’s the Faulking Truth.


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This article is also posted on Mark Faulk’s blog at The Sanity Check, along with an excellent comment section, at:
http://www.thesanitycheck.com/Blogs/MarkFaulksBlog/tabid/86/Default.aspx

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Mark Faulk is the Editor of The Faulking Truth, and the author of the upcoming book entitled "The Naked Truth: Counterfeiting the American Dream," due out in late 2006 (yeah, the date keeps changing....we're waiting for SOMETHING to happen with the company). For more information on the book and on the stock market scandal, go to http://www.faulkingtruth.com , and to pre-order your copy, go to http://www.theownersgroupinc.com/cart/