Friday, January 27, 2006

THE BALONEY CHRONICLES: A staid Wall Street institution called the Depository Trust Clearing Corp., which processes trades for securities firms, is one of the leading targets of the anti-naked-shorting fanatics. There's no valid reason to drag these people into court, but that has not kept the anti-shorters from targeting the DTCC time and time again.

The firm today issued a box score: "To date, 14 suits have been brought against DTCC or its subsidiaries involving naked short selling. Of these 14 cases, 9 were either dismissed by the courts or withdrawn by the plaintiffs. In 4 cases, suits were filed, but DTCC and its subsidiaries were never served."

"We are concerned about the continuing effort by third party groups to mischaracterize and misrepresent the facts surrounding these lawsuits and the degree of concern over this issue," said Larry Thompson, DTCC general counsel and managing director. "From what regulators have said, there is little empirical evidence that widespread abuses such as naked short selling are occurring."
Unfortunately, such rational statements fall on the deaf ears of the Baloney Brigade, which continues to press forward a nutty crusade against a nonexistent problem, diverting resources that should be used to address genuine investor issues, such as the unfair arbitration system. That is the focus of the Introduction to my forthcoming book Wall Street Versus America, which was recently posted on my website.

Genuine investor issues don't matter one bit to the cynical con men of the Baloney Brigade. This coalition of stock promoters and crackpots is concerned about one thing only -- artificially elevating the price of cruddy stocks.

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