Friday, February 08, 2008

Universal Express, Again and Again and Again

Naked shorting poster child Universal Express is the General Hospital of Corporate America. No, strike that. It is a cross between General Hospital and Reno 911. New York Times chief financial correspondent Floyd Norris observes today that he has been getting some weird emails from stock market conspiracy nuts -- weird, that is, to those unfamiliar with naked shorting nuts.

The former management of Universal Express, about which I have written once in a column and numerous times in blog postings, continues to have supporters.

That is remarkable to me, since the court record estabishes that Richard Altomare, who was chief executive, ran the company as his own piggy bank. Employees paid company expenses on their personal credit cards while he had the company pay for hundreds of thousands of dollars worth of jewelry. The company was financed by selling stock illegally for years, with the sales continuing even after a federal judge ruled it was illegal. Its reports to shareholders were filled with lies.

Former CEO Richard Altomare, he says,
always claimed he was the victim of an S.E.C. vendetta, viewing himself as a whistle blower who has exposed the role of naked short selling. There is scant evidence of such trading in the stock, however, which may not be a surprise since the company itself was selling billions of illegally issued shares.
That's strong language for the Times, and stronger still for Floyd, who is something of the dean of New York financial writers. I guess it must have something to do with the naked shorting nuts' charm offensive. One email he has received reads:
“Your criminal intentions are quite transparent. As the truth is exposed your rants will be proven lies. What is the market price for a soul??
Your name will be synonomous with ‘paid schill’!” [sic]
Floyd goes on to observe that a rumor is floating around the Internet that an upcoming appellate court hearing is expected to be a winner for Altomare. Baloney. No such hearing is scheduled.

One commenter made a good point on Floyd's blog:
For ten years I’ve watched in disgust as the Feds ignore most penny stock scammers and play softball with the few they do catch. Altomare violated a permanent injunction and didn’t even get cited for contempt of court. It’s no wonder penny stock fraud is rampant. It’s probably the safest form of theft available.

© 2007 Gary Weiss. All rights reserved.

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