Sold Short In America. Richard A. Altomare
of Wall Street firms, as well as itself. (just as it also failed to prevent the Madoff scandal)
A number of Senators have recently called for a ban on naked short selling, which, in the past, the SEC vehemently and repeatedly denied the existence of.
This failure by the SEC to regulate our trading markets for years has led to the destruction of thousands of small public companies, substantial devaluation of investments, the loss of 401Ks by millions of Americans, and the tragic loss of hundreds of thousands of jobs.
The SEC has permitted, and actively covered up this national scandal of naked shorting for more than 15 years and, as you will painfully witness in the pages of this book, it actively harassed and persecuted prominent whistleblowers to silence them in the interest of the naked short sellers, and the SEC itself.
Trillions of counterfeit and unregistered shares in the names of small public companies have been permitted by the SEC to be traded - destroying their market values and thereby contributing to many of their eventual bankruptcies.
Naked short sellers do not have to purchase the stocks they originally sold short, when the subject company fails due to the downward stock price pressure of the naked short selling of its stock, as well as the internet posting of negative propaganda on the company.
Proper taxes are not paid on the revenues the naked shorters collected through the illegal selling of these phantom non-existing shares. These unpaid taxes, it is estimated by the Wall Street Journal, would be enough to pay off the National Debt.
Naked Short Selling, selling shares you do not own and never deliver, is Grand Larceny under the laws of every State. It is also a violation of the counterfeiting Statutes of the United States.
Those who commit these crimes and those who, by their denial fail to prevent and thus perpetuate them, deserve to be imprisoned … not their victims or the whistleblowers exposing them.
PROLOGUE – Case Profile
Universal Express (USXP) operated as a pristine and exemplary small public company for 17 years. It was ignominiously silenced by rogue government officials in days. For the good of our future economic trading system and other vulnerable United States public companies the following facts need to be exposed and understood. We ask the interested public to simply allow these chronological facts in this profile to speak for themselves.
The present Securities and Exchange Commission and the United States Court of Claims need to address the facts that this book will present.
This case involves the failure of previous SEC administrations to stop naked short sellers and to expose SEC employees who destroyed Universal Express and permitted the destruction of thousands of other small publicly-traded companies.
Despite the ongoing efforts of Universal Express and its officers previous SEC administrations had failed for more than a decade to take any effective regulatory or enforcement action against illegal naked shorting or naked shorters themselves.
The failure to regulate and enforce naked shorting rules by previous SEC administrations bordered on criminality, cover-up and, gross fraud.
Naked short selling is selling shares one does not own, and has no intention of ever purchasing or delivering. These are unregistered and non-existent shares not issued by the companies in whose names they are sold. Each such sale is an illegal violation of the securities laws and the anti-counterfeiting statutes of the United States. It is also grand larceny under the laws of every State. This illegal trading process was long covered-up and until just recently, its existence denied by previous SEC administrations that profited along with culpable Wall Street interests. Naked Short Selling has been a significant cause of the present financial global crisis, and resulted in all the events that made the writing of this book an historical necessity.
Previous SEC administrations denied and ignored frequently requested assistance by Universal Express and its officers to combat the naked shorting of its shares on behalf of over 65,000 of its (USXP) shareholders.
Failure to enforce existing securities laws as well as congressionally ordered regulations adds to the active cover-up of the naked shorting scandal. This has been an ongoing gross breach of the SEC’s fiduciary duty to small public companies, their investors, officers and employees.
The previous SEC administration’s willful and paranoid destruction of Universal Express and its continued vindictive efforts to silence and defame its officers as whistleblowers constitute gross fraudulent misconduct.
The naked short sellers operated like gangs or economic terrorist cells usually from within Wall Street houses such as Bear Stearns and Lehman Brothers. They attack, by selling large quantities of the stock of small developing companies for the purpose of driving the stock price downward, destroying investor confidence in the stock as well as the company’s ability to maintain cash flow to the point where the targeted companies were often forced into heavy dilution or bankruptcy. They simply were allowed to sell vast quantities of stock that they did not own.
The naked shorters who attacked Universal Express combined their raid with false and negative internet postings of more than 700,000 messages on the Company’s chat board, thus attempting to destroy the Company’s stable image. Universal Express heroically fought long and hard since 1998 and continues to do so even now, although Bear Stearns and Lehman Brothers collapsed in only one weekend under the same type of internet postings and naked short selling attacks.
The sole purpose of pushing these public companies into bankruptcy was that the naked shorters would be able to keep the entire proceeds of their illegal naked short sales because they were never forced to “cover” by purchasing and delivering the shares when the targeted company failed. It remains a common practice that these “SEC” protected naked shorters do not have to report these ill-gotten revenues on their taxes.
After the naked short sellers drove down the target company’s stock price, it destroyed the ability of the company to obtain credit lines and maintain existing credit relationships. This further resulted in shareholders’ lack of confidence and often predictable panic selling forcing the corporate failures.
On numerous occasions since 1998 Universal Express and its officers complained to the previous SEC administrations about these illegal practices. Surprisingly, the SEC always helped the naked short sellers through its denials, first by fraudulently doing nothing, and then by actually attacking Universal Express and its officers.
Failing to get any help from the SEC, Universal Express was forced to sue some of the naked short sellers directly. The Company obtained two Florida jury verdicts totaling $700,000,000 against the naked short sellers. These were the same judgments which the previous SEC administrations seized by fraudulently forcing Universal Express out of business. The SEC has been attempting to permanently silence those naked short selling facts which two juries determined appropriate for victim compensation.
The Company filed 68 annual and quarterly reports with the SEC over a 17 year period to accurately disclose the additional shares of stock authorized and released for sale to generate needed capital so USXP could attempt to outlast the naked short sellers and continue building the company. These reports prepared and certified by CPA’s and Tax Attorneys, were timely filed, received and approved by the SEC without any questions or criticisms, again – for 17 consecutive years.
Despite the SEC’s fraudulent statements of denial and even mistruths to the courts, Universal Express had the absolute right to issue stock to counteract the SEC protected naked shorting of its shares. Under SEC fraudulent statements, it orchestrated a questionable summary judgment against Universal Express. Its six subsidiaries were immediately and improperly seized, closed, liquidated and corporate documents shredded despite the ongoing trial request and appeal against the ill-founded summary judgment.
While Universal Express was being dismantled and silenced by the SEC, Bernie Madoff was writing, with the SEC’s cooperation, the short selling rules for the financial industry. He was, as we sadly note today, operating one of the biggest unregulated naked short selling scams in history.
Finally on July 15, 2008 and again