Sunday, December 04, 2005

Patrick Byrne Audio Interview

An Internet-based executive profile site has a marvelous two part interview with Dr. Patrick Byrne of OSTK just released, and it is also a must listen.

Of note is part two, where he discusses the naked short selling/Fraudulent Stock Trading problem in considerable detail, and provides illumination on his motives, and his inside knowledge of the workings of Wall Street.

Your's truly, the Easter Bunny, makes a rare audio appearance, mostly for seasoning, a dash of paprika on a dish which really requires none - Dr. Byrne is articulate, funny, smart, and completely self-aware. He also pulls no punches.

My voice is distorted and slowed to the point where I sound like Art Buchwald on Quaaludes after a 4 day drunk, but for the few that follow these things, here is another Easter Bunny sighting. I sort of think it gives the interview an inner-city rapping sensibility - think of me as one of the entourage yelling "yo, yo, tha's right" to punctuate the verbal stylings of Dr. Byrne - if there's demand, who knows, we may do a Valentine's album. Dr. B and MC-EB, phunky-phresh...and so on.

I would recommend listening to both parts, as it offers insight into a fascinating man, who is single-handedly taking on Wall Street, for all the right reasons.

And I remain the Easter Bunny for all the right reasons - to deliver chocolaty treats to good boys and girls the world over.

The website is http://www.businessjive.com/ and the interviews are the two new ones at the top left.

6 Comments:

Anonymous cutty said...

These two pieces are definitely a must listen, and the music absolutely annoying (too loud). Thanks to Patrick I was able to keep listening to the end though.

3:04 PM  
Blogger n-tres-ted said...

PB sounds like a very genuine person to me. Nice to get some deeper background on him.

7:57 PM  
Anonymous Judd said...

A few of the comments I'm getting (I = the interviewer) are from people whose musical tastes differ from mine or are not able to spend 20 minutes listening).

To you, I have posted a music-free, 150% sped-up version.

I call it the NakedShort version.

The link is available under Patrick's #2 interview on the site. You'll see it.

7:42 AM  
Anonymous Anonymous said...

Sorry Judd, apparently you misunderstood some comments (at least mine). I was not discussing the music itself, or your taste. My comment was just about the VOLUME of the music; Sometimes Patrick's voice was drawned by what should normally be a background only. JMHO, and no offence intended here.
Thanks for the NakedShort version LOL.

cutty

9:19 AM  
Anonymous Anonymous said...

I manage the DTC settlements and fed book settlements of a large broker/dealer and reviewed the comments that you made and attempted to follow the story along as best I could but there were some informational gaps.

First, I am intimately familiar with SEC Rule 15c3-3 "The Customer Protection Rule" and the rule was designed to protect customer accounts so I find the situation you described to be somewhat ironic. Anyways, if the trade was supposed to settle ex-clearing one question would pose is whether or not the 50000 shares were fully paid or not. That is a rather pertinent issue never discussed within the story you describe. If the position was not fully paid (i.e., the customer had an outstanding margin debt and shares were loaned out to offset his debt) then the broker can not make good delivery on the securities.

Second, broker/dealer back-offices hate failing trades and work to settle them in a timely manner. Failing trades pose great risk to both the executing broker and the contra custodian. With that said, trades fail on the time whther it is a Prime Broker trade, ex-clearing, DVP or balance orders. The nature of the failing trades, however,have nothing to do with fraud as you seemed to alluded to. If Broker A sells 50000 shares of XYZ stock but can not make delivery because Broker A is owed shares from CNS is that fraud? Hardly...its called the cost of doing business in the delivery versus payment (DVP) world and the customer should understand the risks associated to these transactions before doing a trade.

Third, a "hot stock" with heavy volume are the easiest tosettle which is why your story makes little sense at that point. The tough settlements are IPOs of thinly traded securities.

Fourth, just because a broker gave errnoeous information as to the status of a trade settled does not constitute fraud. Its called making a mistake and being human. Had the person in question did a Prime Broker trade as opposed to an "ex-clearing" trade, the customer would have had the added protection of having a clearance agreement SIA 150 & 151 established between his broker and Prime Broker.

Finally, yes, the broker dealers are obligated via the NASD to issue buy-ins on unsettled trades but that does not gurarantee resolution as the buy-ins may not execute or the other side of the trade may not agree and accept the buy-in. This is where I usually step in on an escalated issue and negotiate the terms of the unsettled trade with whomever the other side is. Generally speaking broker/dealers cooperate w/ each other to make the mutual client whole but there are cases whereby ego and interpretations of the rules get murky.

I doubt my comments offer any help but wanted to give you a slightly different persepective.

6:42 PM  
Anonymous Judd said...

All I know is what appears here. Read this and tell me, based on what you can ascertain from it, how it affects your impressions of the issue. I'm eager to learn...

http://www.businessjive.com/pbmailexchange.aspx

7:53 PM  

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