Garner, Skimm, & Pilfer, wholesale house serving institutional funds managed by Garner’s dad, Skimm’s second cousin, and Pilfer’s brother-in-law, also has a big retail operation ripping off small investors like you and me. Typically, this kind of chop shop needs every little guy it can get.
With BAC selling around 15, a blood relative calls in his intention to cut portfolio losses by selling up to 10 million shares if the price drops to 13. In the world of Organized Crime, the word of a blood relative is his sacred bond.
Immediately thereafter, crew wise guys start short-selling into what is, in effect, a solemn oath, driving BAC down because a) they know their trades will be taken out by this guy as soon as they chop the quote to 13, b) regulatory hotshots at the Securities and Excuses Commission let them issue all the play shares they need, and c) chop shop Families have more money than Iceland.
Iceland among others, of course.
These short-sold shares are bogus. Totally fake. Play shares. At the same time this is going down, Garner, Skimm retail grifters start talking you and I into buying what we believe to be real BAC shares for all those small accounts of ours. But they aren’t real shares. Our tickets get crossed with chop shop short sales during the scam, and the mobsters don’t own any BAC to sell us.
To control firm risk, the Consigliore keeps watch over both amounts, fake shares shorted about equaling fake shares believed real all the time the scam goes on. Basically Garner, Skimm only shorts as much BAC as they’ve sweet-talked retail clients into thinking they’re buying.
At 13, the blood relative would sell his real shares. Ten million of them. To Garner, Skimm, of course. Family bean counters can finally replace shares believed to be real in our accounts with really real shares that just left the blood relative’s portfolio. The chop shop's own books show fake shares sold canceled out by shares faked as bought for the chop shop, probably the only transaction of its kind in the accounting profession that does not trigger a fraud investigation. Then, and only then, do the bogus shares sold short get purged from the marketplace.
If the mobsters get an average price of 14 for their shorts, the crew’s take would be $10 million. ((14-13) times 10 million shares).
However, the consigliore knows a good thing when he sees one. In actual practice, his racketeers will step in somewhere above 13, and start buying themselves, covering their entire short position in-house, driving the price back up in the process, and then start scamming around that solemn oath all over again, keeping fake shares in retail accounts for months. The take will be less - if The Family only gets an average price of 13.5 on the buyback, Garner, Skimm nets $5 million ((14-13.5) times 10 million shares). But the wise guys more than make up that difference with volume.
Do it four times, and the total take grows to $20 million. Sixteen, and they're up to $80 million overall.
A consigliore can set up an entire BAC trading station around a single solemn oath, and in good times add a new trader to the crew just to handle the increased action. One blood relative announcing his intentions to the mob this way becomes a gold mine for organized crime.
One blood relative and a slew of small investors manipulated into covering proprietary trading positions taken by the Family.
Given that I witnessed this kind of racketeering back in the 1950's, as explained by a mob source with close matrimonial ties to my mother, who was a Saint, after he’d been observing such goings-on since about 1917, and organized criminal activity has only escalated since then, one must be excused for concluding that our hotshots at the Securities and Excuses Commission operate under the assumption, “what the hell, anything goes with these people,” or else they’d have broken up Gangland rackets generations ago.
And now the taxpayer has bailed the Families out.
Maybe that’s why the SEC keeps so many lawyers on the payroll. Clearly, agency staff has to be functioning with no ethics at all.
