The MacDougal Post: RICO

December 18, 2010

RICO

    The following press release was issued day before yesterday. It can be found on the Overstock.com website:

Overstock Adding Racketeering Allegations to Ongoing Lawsuit vs. Goldman Sachs and Bank of America Subsidiary Merrill Lynch

Company Files Motion to Amend its Lawsuit to Add Claims of Civil RICO

SALT LAKE CITY, Dec. 16, 2010 /PRNewswire via COMTEX/ --
    Overstock.com, Inc. (Nasdaq: OSTK) today announced that as a result of evidence gathered through discovery in its prime brokerage lawsuit, Overstock.com has filed a motion in California State Court to amend that suit to include claims under New Jersey's Racketeer Influenced and Corrupt Organizations (RICO) Act. Civil RICO claims carry the possibility of treble damages. See www.overstock.com/Patrick-Byrne/7371/static.html for a redacted version of the motion and a declaration, filed conditionally under seal to protect information designated by the defendants as 'confidential' or 'highly confidential' under a court protective order.

    The San Francisco action, first filed in February 2007, alleged prime broker defendants engaged in "naked short selling" and similar manipulative practices designed to profit from failing to deliver shares required to close trades, and that this resulted in downward pressure on Overstock.com's share price.

    Jonathan Johnson, President of Overstock.com, stated, "Recently discovered revelations of concerted action among certain market makers and these two brokerages necessitate that we amend our complaint to include additional claims. We expect that this conduct of Goldman Sachs and Merrill Lynch is fully actionable under anti-racketeering laws."
    In documents filed with the court yesterday, the company alleges "Merrill, Goldman and certain of their market maker clients agreed to and created a scheme to effect the naked short selling in Overstock securities that is the subject of this action, in order to perpetuate short selling and drive down the price of Overstock, to their mutual profit."

    End of press release.

    We seem to recall that BankofAmerica stock got shorted from the 50’s to 3 back in 2008/09 along with the pack of them. Why don’t they sue anybody under the Rico Act?

    Because racketeering is where their bonuses come from. It’s more profitable for investment banking CEO’s and them destroying America than financing it.

    A few thousand of these lawsuits would be appropriate, and it’s time somebody threw our regulatory hotshots on the industry cheerleading squad over at the Securities & Exchange Commission in these suits too.

    Shutting down hearings on short-selling because the crash caused by short-selling wasn’t caused by short-selling.  What a piece of work.

Inside the Scam

Short-sellers flood markets with bogus shares, involving buyers in bookkeeping transactions, not stock, and not telling them about it. Wall Street helps hide the fraud with Madoff accounting, even letting shorts pay dividends as part of this scam, duping investors into believing they get real dividends paid by the company they thought they invested in.

Worse, short-selling, in effect, adds these phony shares to the actual total number reported in company financial statements, which goes into the various earnings per share (EPS) calculations, essential components of the critical metric universally used to value common stocks, the price/earnings ratio (P/E). In a selling frenzy, EPS can be cut from, say, $4.00 to $0.40 or $0.04 or whatever, by the immense volume of fake shares these pretend investors are drubbing the real ones with at point of purchase.

Every reference made to P/E as a calculable metric is a lie. Our stock market is gamed by short-side racketeers, rendering equity investment in this country a massive securities fraud. Their humongous swindle purloins much of our savings during every market downdraft.

Odds are the SEC staff belongs in jail. Gangland racketeering is more than enabled by the complicity of our regulatory hotshots. Mob stooges inside that agency have spearheaded these cons for generations, flat out lying to us all those years.

Surely, the SEC's remarkable contention that short-sellers borrow their shares from you and me is, in its downright absurdity, the nadir of arrogance and criminal obfuscation.

That's why we're never asked to go along with it.

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As our young readers know, any loser who steals mommy and daddy's savings is a stupid ninny.

Wall Street hires the biggest dumbbells in the world. That's because God hates stealers, and the nincompoops don't even know it.

Keep an eye on bad men like hedge fund managers, bank CEOs and proprietary traders right here in The MacDougal Post. Incorrigible dingbats like Mucus Poole-Knightly, Pockets MulGoon, and Lewie the Dip, just to name a few of the head cases found on the site, are contracted to appear here exclusively.

You won't find that kind of financial coverage anywhere else in cyberspace.

Check in with us regularly to find out what's really going on with your money, if there's any left. And when it's all gone, take a shower whenever you can and drop in on us from the local public library.

The MacDougal Post

Prize

December 18, 2010

RICO

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