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Georgia Bard

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Alias Born 08/30/2000

Georgia Bard

Re: None

Friday, 11/03/2000 1:48:56 PM

Friday, November 03, 2000 1:48:56 PM

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Market Maker Manipulation or Market Influences Part 2

During the course of the trading as we watch the 12 red flags happen, MMs aggressively deny any sort of collusion designed to fix quotes or spreads etc. Are they lying? I would say no they are not Because of all the events that substanuate they they are not. Another underlying basis is mainly because of SEC investigation events, which tell that MMM does exist but in the legal suits they tell the rest of the story, which I hope to point out.

Some examples are:

On January 11, 1999 SEC Fines 28 Brokerage Firms $26 Million and Suspends 51 Individual Traders for Fraudulent Market-Making Activities in the Nasdaq Market http://www.sec.gov/news/press/99-2.txt, which was a possible result of a call to the clearing house firms to assist the SEC in stopping fraud. http://www.findarticles.com/cf_0/m3628/n5_v64/20568018/p1/article.jhtml

However, the SEC may be slow but they are extremely deliberate and thorough as expressed in this article on the SEC investigating Market Makers. http://www.sec.gov/news/extra/21a.txt

Also the NASD does apparently police themselves as demonstrated in this news release on March 2, 2000
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=13027226

Now it has been discovered, by getting the identities of the aliases posting that sometimes, they turn out to be brokers, hedge funds, etc. like in this article where an Internet alias "Cats3" turned out to be Jerome Rosen, a senior trader with J. Alexander Securities, a market maker in the OTC security QNET. http://www.findarticles.com/cf_0/m0EIN/2000_March_23/60585479/p1/article.jhtml

But is Market Maker Manipulation a fairy tale of sorts because it also happens to Market Makers as this Bloomberg news release by MHMY Brokerage files Net defamation suit http://news.cnet.com/news/0-1005-200-342750.html?tag=

So is it always the Market Makers or is it the market as a whole. Most of the times it is a rogue broker, investment institution, hedge fund, debenture partners or even a group of individuals.

Manipulation is not a new tactic either. It goes back to anytime in the market’s history, but the oldest Internet related case involving the internet I could find was new when a Lois Rosenbaum, a partner at the Portland law firm of Stoel Rives represented Beaverton-based Epitope in a 1993 case Epitope Inc. v. [Shortselling Stockbroker] . This case was against a man who posted critical remarks about the company on a public bulletin board on the Prodigy online service. In that case, the comments turned out to be from a stockbroker with an interest in driving down the price of Epitope's shares.

S&D case: 'Reverse Pump and Dump' Suit Filed Against Individuals, Hedge Fund, on March 23, 2000 in a case of Caremark Rx Inc. and Crawford v. Holliday et al., No. CV-00-0-767-9, complaint filed (N.D. Ala., Mar. 24, 2000).

Hemispherx Biopharma, Inc. Amex: HEB; HEBws lost a motion against short sellers but is not deterred by the actions of the short sellers, which included allegedly dissolving their hedge fund Asensio Capital Management, destroying massive amounts of evidence including essentially all trading records required to be kept by NASD, and returning the money under management to investors.

In its lawsuit against the investment firms, Solv-Ex claims Morgan Grenfell, now known as Deutsche Bank Securities, manipulated Solv-Ex's stock as part of a larger scheme to defraud investors. Deutsche Bank fired former fund manger Peter Young in 1996 for allegedly disguising his funds' holdings in Solv-Ex and other risky stocks through a series of dummy corporations. Solv-Ex officials maintained they were unaware of Young's activities. Deutsche Bank ultimately paid $664 million in fines and restitution related to the scandal. Also named in Solv-Ex's lawsuit were eight investment firms and their principals, who Solv-Ex claims sold the company's shares short. In addition to Deutsche Bank, the defendants in the lawsuit were: Quilcap Corp. and its principal, Parker Quillen of New York; Martin Zweig and New York-based Zweig Advisors; Michelle Sarian and her firm, New York-based Fahnestock & Co.; New Orleans-based Rice Voelker Bros. & Frantzen and its principals, George Voelker and Tim Rice; Mikles/Miller Management Inc. of Santa Monica, California, and its principals, Lee Mikles and Mark Miller; Stanley Trilling and his Los Angeles-based Trilling Partners, as well as their affiliate, Paine Webber Group Inc.; and Manuel Asensio and his firm, Asensio & Co. of New York.

OTC BB: CGYC Carnegie International v. [Executives of {b}Ark Capital](D. Md., complaint filed on May 28, 1999).

And even debenture partners can be named as in Dec. 28, 1999--Restaurant Teams International, Inc. (OTC BB:RTIN) announced today that it has reached an agreement with Thomson Kernaghan, Canadian Advantage, Sovereign Partners, Dominion Capital, Stephen Hicks, and Mark Valentine (the ``Debenture Parties'), to settle the litigation between the parties. The company is delighted to return to the business of operating a restaurant holding company and pursuing acquisitions. Which by the way RTIN loss this case .http://www.rteams.com/RTIN_pr_122899.html after the debenture partners filed suit back in Oct. 5, 1999 against 2-OTC companies RTIN & CSGI http://www.rteams.com/RTIN_pr_100599.html

So the bottom line is manipulation is fraught in the market and eventually will be exposed as more cases are made and settled. Even the SEC is beginning to look into this as stated by John Reed Stark, head of the SEC's Internet enforcement unit, "We haven't brought a pure cybersmear case as of yet, but we are very concerned about the issue."

Bottom Line for the support of "Market Maker Manipulation" (MMM) it is not specifically against the market makers but more so to get regulators to access the market makers "Blue Sheets". That is where the proof lies.

How the "Blue Sheets" came about was because historically in the course of its enforcement and market regulatory activities, the Securities and Exchange Commission ("Commission") regularly requests securities trading records from broker-dealers. For many decades, the Commission requested this data by mailing questionnaire forms (known as "blue sheets" because of the color on which the forms were printed) to broker-dealers to be manually completed and mailed back to the Commission. In the late 1980s, as the volume of trading and securities transactions dramatically increased, the Commission and the securities self-regulatory organization ("SROs") worked together to develop and implement a system with a universal electronic format to replace the less efficient manual process. This system is commonly known as the "electronic blue sheet" or "EBS" system.

So basically, "Blue Sheets" is referring to trading data by exchange members, brokers and dealers consisting of information from broker- dealers, generally market makers, including the firm's inter-dealer and agency trades in a subject security by date, price, size and contra-party. Escalator Securities, Inc., Securities Exchange Act Rel. No. 37601 (Aug. 26, 1996), 62 SEC Docket 1927, 1929 n.4.

This is where the proof lies on exactly who manipulated the market. If you would more information on “Blue Sheets” then this link should explain it in more detail. http://www.sec.gov/rules/proposed/34-42741.htm or NASD site: http://www.nasdr.com/5330.htm

Now I hope I have explained why where MMM is the focus it is not accurate to say the evil market makers but more properly stated a force in the market is manipulating and the proof lies in the MM Blue Sheets. However, there is some actual Marker Maker Manipulation directly along with all the other forces in the market. Basically, all MMM is, is the outcry by the public for the MM’s "Blue Sheets" to be pulled on a particular stock’s trading by regulators to see who is doing what to the market of a specific security.

To be continued ….

Hey, this is my own opinion and I could be wrong.

Gary Swancey



:=) Gary Swancey

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