My brokerage firm canceled a buy order this morning for GreenShift shares. They said there was a "Global Lock" on the shares where they could no longer accept buy orders for the stock . They said they could not receive them from the transfer agent.
I have no idea if it is the case in this instance, however they apparently have done this with other stocks to discover counterfeit shares. Counterfeit shares can be created when illegal naked shorting takes place. Naked short selling has been illegal in the United States since 2008.
"Some commentators have contended that despite regulations, naked shorting is widespread and that the SEC regulations are poorly enforced. Its critics have contended that the practice is susceptible to abuse, can be damaging to targeted companies struggling to raise capital, and has led to numerous bankruptcies."
"In 2008, SEC chairman Christopher Cox said that the SEC "has zero tolerance for abusive naked short-selling" while implementing new regulations to prohibit the practice, culminating in the September 2008 action following the failures of Bear Sterns and Lehman Brothers amidst speculation that naked short selling had played a contributory role."
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It seems it is electronic shares only that are locked. So it could be a company move against Naked shorts - remember the (legal) short report is reported as of the first and 15th. Or a possible buyout, merger or reorgainazation. It does seem to be a company action since the SEC and DTCC have GreenSift on none of the "lists" I can find. Check out some of the dd in the posts here. I suspect things might get real interesting, real fast.
SkunK
Wednesday, December 8, 2010
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5 comments:
It's a death sentence for naked shorts!!!!!
I'm not so sure. Firstly, naked shorting has always been illegal. Naked shorting is buying short without locating unencumbered "long" shares to cover the short. In practice a few days is allowed to deliver the shares, but it has been a widespread practice in recent years to ignore this. There usually is little in the way of any ramifications of doing this and as we see so many times, without accountability, fraud thrives. So I'm sure that naked shorting is a general problem, but on this stock? If there was such practice continuing you'd see large blocks of shares suddenly appear (usually being "washed" through an options exchange with the help of a corrupt prime broker). I don't remember seeing any recently. Secondly, what is there to gain at this stage of the decline? You'll find heavy naked shorting on small caps with a decent size market cap (tens or hundreds of millions) with scope to run the stock down. But at $250K market cap - what's the point?
Finally, I don't think the naked shorting occurs in the sort of electronic accounts that you and I use. The practice takes place at market maker/prime broker level. So I don't buy this as a reason for the block on buying.
Btw to see the SEC talking about a "Zero tolerance" for this practice is a joke. They have been silently complicit for years - going as far as denying it has been happening against all evidence.
Whatever's going on here I don't think is down to naked shorting.
I've noticed many large blocks from out of nowhere, many in A/H which can only be mm's and brokers. And the point is, the shorting has occured all along. The only way they'll profit is to never have to cover so they continue to short. I can't help but wonder if the relentless illegal shorting has anything to do with the lawsuits. After all, infringing is illegal too.
Everyone get on the phone with Scot/Ameritrade in the morning...
Response from Greenshift:
Dear Mr. X,
We understand that GreenShift shareholders with brokerage accounts at TD AmeriTrade, Scottrade and USAA have been restricted by each firm from executing investments in GreenShift Corporation common stock. We further understand that the feedback received from at least one of these firms relates to a restriction placed on electronic transfers of GreenShift common stock by The Depository Trust & Clearing Corporation ("DTCC").
DTCC previously requested information from GreenShift pertaining to its prior issuance of common shares upon conversion of convertible debentures previously purchased by various investors. GreenShift has provided all of the information requested by DTCC as well as an additional opinion of GreenShift's securities counsel confirming the valid issuance of all common shares upon payment of GreenShift's convertible debentures. DTCC staff has advised GreenShift's counsel that the restriction on electronic transfers of GreenShift common stock was temporary and would be lifted upon receipt and review of the requested information. As far as we understand, DTCC is conducting similar reviews of a number of issuers and has not yet completed its review of the information we provided despite GreenShift’s prompt response to their informational request.
GreenShift is a fully reporting company in full compliance with all applicable rules and regulations. We are not aware of any basis for DTCC's actions in this regard except for what DTCC staff has termed a routine compliance check. DTCC is not a regulatory or governmental body and has not published any standard or time limit for their ongoing review. We intend to continue to press DTCC for timely completion of its review.
Further, we have been advised by the DTCC that the DTCC restriction extends solely to electronic transfers of GreenShift stock, and not to physical transfers of stock. We understand this distinction to be analogous to restricting deposits of wire transfers but allowing deposits of checks. We further understand that the procedure for physical transfers starts with advising your broker to request "X-clearing" when transferring shares.
Finally, while we are unaware of any reason for the separate actions taken by TD AmeriTrade, Scottrade and USAA, we understand that transfers of physical stock certificates are more costly as compared to the cost of electronic transfers. This expense may be the reason for the actions of such firms. Shareholders encountering this issue are encouraged to contact their broker directly for additional information.
Please do not hesitate to contact us at investorrelations@greenshift.com if we can be of further assistance in resolving this matter.
Regards,
GreenShift Corporation
Thanks to Jim 4262 Ihub
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