11 US Banks Sued Over 'Naked' Short Selling
A firm on Wednesday filed an antitrust lawsuit against 11 major U.S. broker-dealers, accusing them of colluding over six years to collect unearned fees as a result of a "naked short selling" practice. . . .So, what's new? That's what bankers do best. One big happy crime family.
[The usual suspects] include the broker-dealer units of Bank of America, Bank of New York, Bear Stearns, Citigroup, Credit Suisse Group, Deutsche Bank, Goldman Sachs Group, Lehman Brothers Holdings, Merrill Lynch, Morgan Stanley and UBS AG.
Short-selling involves a bet that a company's stock will fall. Typically, an investor sells borrowed stock, and hopes to buy it back at a lower price to replenish the lender.
In a naked short sale, the investor sells stock that has not yet been borrowed. Naked short selling is usually illegal, in part because the stock supposedly underlying the transaction may never be borrowed or may not exist. It can be permitted to promote market stability.
The 32-page complaint claims the broker-dealers charged the plaintiff and others for the cost of securities lending, when in fact the broker-dealers did not "cover" short sales, failed to disclose this, and nevertheless charged inflated fees.
"Defendants dominate the market for prime brokerage services to short sellers and tolerate among themselves chronic failures to deliver by which clients are charged for 'borrowing' when in fact NO BORROWING actually takes place," the complaint said.
"Plaintiffs and class members were charged fees, commissions and/or interest for NOTHING."
Besides, interest is not 'earned.' It's collected by extortion.
Nevertheless, this is a welcomed development, provided plaintiffs didn't file it just to settle.
posted by qrswave @ Wednesday, April 12, 2006
4 Comments:
INSIDE MAN information gained by LENGTHY detailed APPLICATIONS. Who uses this data mining technique? IRS. INSURANCE. MEDICAL. Employers. Computer internet web hackers (hired guns) etc. Telephone companies and stock broker analysts.
Bankers are not only a crime family, they are a family of terrorists.
i just got ripped off by bank of america, i closed out my accounts 2yrs ago, but my gibill payment went there by mistake. they said i owed them money, and sent me a check to the wrong address for the remainder. i checked out the laws and they cant do that. any body know the lawyers involved?
anon Apr 17, 12:59, you can contact the plaintiffs, Electronic Trading, and see if they'll refer you to their lawyers. But, from what you've described your case is unrelated to what they've filed, although it has merit.
Even though you didn't owe them anything, I would consult with a lawyer that specializes in debtor and creditor cases and represents debtors. He or she will probably be the best person to advise on the various laws the bank has violated.
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