Another Proud SEC Moment - Defending the Crooks
Here is the quote from the news piece breaking the story:
"NASD in March 2000 accused Elgindy of manipulative short selling in Saf T Lok shares over several weeks in 1997. In May 2003, an NASD adjudication committee barred Elgindy from the securities business, banished Key West Securities from NASD, and fined him and the firm $51,000 each.
Elgindy and Key West appealed the NASD ruling to the SEC, which oversees the NASD. The SEC is a government agency and the NASD is a self-regulatory organization to which most U.S. brokerages must belong and obey as their regulator.
In March 2004, the SEC questioned the evidence in the Saf T Lok case and overturned most of the NASD's sanctions. The agency lifted both Elgindy's industry bar and Key West's expulsion from NASD, and reduced the fines to $1,000 each ."
So Egyptian national and two time convicted felon Anthony Elgindy is free to go right back to scamming companies and investors, after paying a grand. He is responsible for many many millions of destroyed value and ruined investors' savings, but tut tut, the SEC says, "hey, nobody's perfect...it happens, hmm 'kay?"
You are reading this correctly. The SEC overturned the NASD, which basically understood what a piece of fecal material Elgindy is and barred him from the business, and instead did the equivalent of swatting him with a Nerf bad and saying "you've been very bad, stop it, you bad man."
If anyone is incredulous as to what this says about the SEC, fear not. Apparently you can participate in overt stock manipulation using a network of hedge funds, be a two time convicted felon, have ties to money laundering and middle eastern arms dealers and whatnot, but suffer no ill effects from the SEC.
But there's more:
"In an unprecedented response, the NASD three months later appealed the SEC's actions to the court, arguing in September that its reputation is undermined when its attempts to regulate the Nasdaq Stock Market (NDAQ.O: Quote, Profile, Research) are challenged by the SEC.
The SEC replied that the adjudicatory process for disciplining brokers would be complicated if the NASD could get a court to overturn an SEC change to an NASD sanction."
This is self explanatory - if the NASD could force the SEC to not let bad guys off the hook, then the SEC's power base would be harmed, presumably reducing the number of crooks that would get hall passes from them - and we can't have that.
I would write more, but anything I write would be insufficient to express my disgust.
And meanwhile, OSTK, which really has virtually no legitimate shares trading, is down $2+ on over a half million shares so far today, on no news.
We have a wonderful system, folks. And people wonder why more and more folks are putting their money into Gold and Real Estate. At least when you walk into a casino, you understand that the lights and free drinks are a lie to soften the blow of losing your money. On Wall Street, apparently you can dispense with the niceties of rigging the games, and simply inform patrons that they lost while collecting their money. Much more straightforward, and the cops are there to make sure nobody robs the bad guys on their way out to the getaway car.
I am not making this up.
I wish I was.