Thursday, May 22, 2008

Washington's Premiere Corporate Lobby Embraces Naked Short Selling Cause

In previous posts I've described how the U.S. Chamber of Commerce, the premiere lobbyist for the interests of Corporate America and against the public, has embraced the cause of money losing CEOs blaming their misfortunes on "naked short selling."

The Chamber sent an impassioned comment letter to the SEC and even put the former chief mouthpiece of the naked shorting clowns, the now-imprisoned Universal Express CEO Richard Altomare (right), on three Chamber committees.

Now comes word that another major Washington lobbyist that aggressively fights against the public interest, the Washington Legal Foundation, has aligned itself with the anti-shorting forces in a comment letter to the SEC.

As you can see from reading the letter, the WLF takes an extremist view against all short-selling, not just the much-exaggerated scourge of naked shorting, even suggesting that shorting be ended for penny stocks -- something that would make stock fraud even easier than it now is.

As I described in Wall Street Versus America, short selling is the only market force that can impede the inflated pricing of hyped stocks. Countless studies of short selling have proven that shorting improves the liquidity of the market, and is the only means by which negative information is incorporated in stock prices.

That obviously is not something that would please the WLF. The group supposedly supports "free markets," but not, I guess, when the markets work against the interests of bad companies.

Note, by the way, that the WLF is supporting the anti-naked shorting nonsense as part of its "investor protection program." That's not surprising, given that anti-naked shorting campaigners frequently cloak their anti-investor initiatives in such language. But in the case of WLF this is particularly hypocritical, as the WLF fights against a wide range of investor interests, such as by arguing against the very existence of the Public Company Accounting Oversight Board on flimsy technical grounds.

It's not just the fight against investor interests that spur the WLF to action. Look at the WLF website. Wherever there is a fight of Corporate America vs. the public, the WLF wades in, fists flying, fighting for corporate interests.

In fact, the WLF's "investor protection" record consists mainly of screwing investors by making it harder for them to sue bad companies. So obviously, making it easier for companies to screw investors by pumping share prices, and promoting phony "counterfeit stock" conspiracies, is right up WLF's alley.

As can be seen from this Sourcewatch article, the WLF has taken up the cudgels of Big Tobacco in the past, and is fighting doggedly against lawyer trust accounts. So this latest cause, in favor of corporate crooks and inept CEOs, is very much consistent with the WLF's record of fighting for the sleaziest elements of Corporate America.

The naked shorting nuts, and the cynical corporate benefactors who manipulate them, have clearly found a suitable champion.

© 2008 Gary Weiss. All rights reserved.

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