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GOLDENBOLLOX

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GOLDENBOLLOX

Re: tecch10000 post# 476

Monday, 01/15/2007 6:44:29 PM

Monday, January 15, 2007 6:44:29 PM

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Rocker Partners, a NY hedge fund run by David Rocker, along with Helmsman Holdings (a BVI fund), solely controlled by David Rocker, is short 30% of the US companies on the NYSE Regulation SHO Threshold list. The companies he is known and documented as being short are NFI, ALD, KKD and PPD. He is also known to be short at least 20% of the US small cap companies on the NASDAQ Regulation SHO Threshold list - AAII, NFLX, OSTK, and TASR. All of these positions are easily confirmed by googling the companies and Rocker.

Could this all be a big coincidence? A fluke? Possible, but in my opinion unlikely. The likely explanation is that this is a very bad guy who believes, obviously, that the rules were made to be broken. They don't apply to him. His modus operendi is clearly to abusively naked short a company without regard for the laws or the rules, understanding that nobody is ever going to enforce them. So why not? It's a lucrative business - in this instance, illegal behavior apparently pays handsomely.

A fair question is how large is the fail to deliver problem in these companies? No one will say. The DTCC and the NYSE and the NASDAQ are all tight lipped as to the size and scope of the fails problem, and they won't tell anyone how large an issue it is. They have stonewalled any attempts to get the numbers by the companies that have been violated, and seem confident that nobody is going to make them tell. Who has the money to go up against them?

So the violations continue. The perpetrator is able to create a virtually endless supply of shares with which to depress the price of the companies he's targeted, and no one is stopping him. And the DTCC and the Exchanges are helping by protecting him and not divulging the size of the problem.

This is a systemic issue, but Rocker is an easy face to put on the bad guy, as he is short so many of companies on the lists.

Why hasn't the SEC stepped in and done an investigation of his trading? Is 30% of the NYSE list not enough of a smoking gun? What will it take? 50%? 80%?

When will the SEC require the DTCC to come clean and tell everyone how large a problem they've created with their "stock borrow program"? Ever? Or is it OK to violate all the rules and facilitate fraud as long as you are a favored entity?

The DTCC is not the government. Far from it. It is a private company chartered under the banking laws of NY, partially owned by the Federal Reserve and by the NYSE. It is a for profit entity. By what right can it simply refuse to answer reasonable questions as to its operations? What rule or regulation can it use to justify its obstinate refusal to fess up as to the number of fails in its system?

It sounds like the DTCC doesn't want to incriminate itself, so it's simply refusing to answer direct questions.

And it sounds as though Rocker Partners is a good example of how a money manager with a lot of contacts and cronies in New York may be using the system to rob companies of their valuations, and shareholders of their money, aided by the DTCC and the complacence of the SEC.

As an aside, it is interesting to note that no accountability mechanism is in place to find out where all the money comes from to fund these types of hedge fund entities. Middle Eastern cash of dubious origin? No problem. Russian dollars of indeterminate cleanliness? Bring it on. The Cali Teacher's Association, or the Bogota Retirement Guild? The cash is all green.

What a travesty of justice.

Crime pays. Big time on Wall Street.

How can the President ask us as a nation to put our money into the markets when this kind of predator is allowed to systematically cheat investors who are in the very same market? What are they thinking? Did they just think no one would notice?

Shame.

The system must be fixed. Now would be a good time to start

http://www.webspawner.com/users/rockerscam/index.html

Disclaimer - I am not a basher, disgruntled ex-employee, hedge fund employee etc etc. I am a regular guy who is fed up with people being scammed.

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