|
|
Post by centralcoastinvestor on May 17, 2016 9:49:01 GMT -5
A recent Supreme Court ruling allows state courts to rule on predatory naked shorting. Very interesting article. aminewswire.com/stories/510724790-naked-short-sellers-squeezed-by-supreme-courtQuestions this raises: 1. Can a company file a lawsuit or is it just individual shareholders? 2. What kind of evidence is necessary? 3. When can a lawsuit be filed? (I'm not sure if this belongs in the articles section. I believe that this will make a good discussion thread.) |
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on May 17, 2016 10:52:31 GMT -5
The article put a smile on my face but I have no idea what impact it will have. I think the market is starting to get cleaned up. Obviously far from clean but I feel like I am reading more about cracking down on the games being played
Isnt an issue with Naked Shorting figuring out who is doing it?
|
|
|
|
Post by BlueCat on May 17, 2016 11:41:17 GMT -5
One of the challenges about any regulation or law supporting it is enforcement and both its funding and execution. We certainly see the brunt of it from the FDA and SEC perspective now.
But ... without understanding the details - the ruling would seem to empower the state courts to ease enforcement already underway legally, which is a good thing - I think. I guess it will depend from state to state (and their politics) on how they view the practice, and if they impose real penalties and consequences that will ultimately affect behavior.
|
|
|
|
Post by matt on May 17, 2016 14:48:22 GMT -5
I read the opinion cover to cover and whether it helps or not depends on a host of factors. The issue in the case is whether the suit could be brought in state court under state law or whether it had to be heard in federal court under federal law. Under federal law, shareholders have recourse to sue for material misstatements (or omission of statements) of material facts and that is it; suits for all other violations of federal securities law can only be brought by the SEC and that happens rarely. Naked short selling is actionable by the SEC as a violation of Regulation SHO but they are not very aggressive as we all know.
In this case New Jersey had some state laws covering certain securities law violations. Since the shareholder was a resident of New Jersey, the alleged violations took place in New Jersey, the state of New Jersey had a law prohibiting this activity, and federal law did not specifically prohibit or preempt state law in this matter, the court ruled that the shareholders could sue under state securities law without visiting federal court. Many other type of securities violations ARE preempted by federal law and actions MUST be brought in federal court.
Does this help MNKD shareholders generally? No, not unless you live in New Jersey and can prove that the naked shorting happened through a New Jersey enterprise. If you live in Florida, for example, then the suit would be removable to federal court under a different standard called diversity jurisdiction. Beyond that it would be a state by state discussion on whether naked shorting is actionable under state law in YOUR state and whether you can connect the illegal activity it to an enterprise doing business in YOUR state (answering those seemingly simple questions keeps a small army of lawyers employed). For these shareholders in this case the stars aligned properly to bring an action in New Jersey state court, but it will likely be the exception rather than the rule, at least for now, because New Jersey has some rather unique laws and not every financial institution has an office in every state.
|
|
|
|
Post by trondisc on May 17, 2016 15:11:24 GMT -5
Zero impact. Us Longs are already fux0red from MNKD top management squandering the golden opportunity that lies before them with Technosphere. Sure Goldman Sachs, etc. are playing pitch and catch with Naked shares cratering MNKD's PPS but in the end this won't be investigated. As a bagholder Long since August 2015, I fully understand I'm screwed with my 3.50 cost basis. Big bio-tech/pharma is threatened with the Technosphere advancements so I'm not sure this is going to succeed now even though patients worldwide deserve it.
|
|
|
|
Post by centralcoastinvestor on May 17, 2016 15:40:05 GMT -5
I read the opinion cover to cover and whether it helps or not depends on a host of factors. The issue in the case is whether the suit could be brought in state court under state law or whether it had to be heard in federal court under federal law. Under federal law, shareholders have recourse to sue for material misstatements (or omission of statements) of material facts and that is it; suits for all other violations of federal securities law can only be brought by the SEC and that happens rarely. Naked short selling is actionable by the SEC as a violation of Regulation SHO but they are not very aggressive as we all know. In this case New Jersey had some state laws covering certain securities law violations. Since the shareholder was a resident of New Jersey, the alleged violations took place in New Jersey, the state of New Jersey had a law prohibiting this activity, and federal law did not specifically prohibit or preempt state law in this matter, the court ruled that the shareholders could sue under state securities law without visiting federal court. Many other type of securities violations ARE preempted by federal law and actions MUST be brought in federal court. Does this help MNKD shareholders generally? No, not unless you live in New Jersey and can prove that the naked shorting happened through a New Jersey enterprise. If you live in Florida, for example, then the suit would be removable to federal court under a different standard called diversity jurisdiction. Beyond that it would be a state by state discussion on whether naked shorting is actionable under state law in YOUR state and whether you can connect the illegal activity it to an enterprise doing business in YOUR state (answering those seemingly simple questions keeps a small army of lawyers employed). For these shareholders in this case the stars aligned properly to bring an action in New Jersey state court, but it will likely be the exception rather than the rule, at least for now, because New Jersey has some rather unique laws and not every financial institution has an office in every state. Matt, I am continually impressed with your knowledgable posts. Can I ask what you did or do for a living? Because you know a lot more about this stuff than I probably ever will. Oh, and thanks for your in-depth analysis on this subject. CCI |
|
|
|
Post by boytroy88 on May 17, 2016 19:50:35 GMT -5
Matt, I am continually impressed with your knowledgable posts. Can I ask what you did or do for a living? Because you know a lot more about this stuff than I probably ever will. Oh, and thanks for your in-depth analysis on this subject. CCI Yes, I agree with CCI and I'm curious as well. |
|
|
|
Post by brotherm1 on May 17, 2016 20:52:26 GMT -5
I too thought about asking you the same question Matt
|
|
|
|
Post by dejude42 on May 17, 2016 22:42:11 GMT -5
Excellent find thank you for sharing, naked shares and manipulated shares become the tool used every day with Mannkind and all other stock volatility.
Does anyone else feel the Current ASK PPS is stagnated, lowered and controlled by ASK orders which turn into widen spread windows? Anyone else feel this is the devious traders backdoor? I feel shares must be relinquished to move price and develop widen spread windows between the current BID and ASK page.
Do you feel the only stop for such ASK lowering abuse is a two-step process?
1.) A Tight Current Bid and ASK spread control must be maintained.
2.) There must be a high level BID ORDERS in Current Page and lower levels.
This need is Volatility control to a long share holder and becomes a very unfair advantage to a corporation and a stock supporter. Any ASK Order placed into a Widen SPREAD WINDOW Lowers current ASK PPS.
Please try- insert an ASK order---Then write SEC, FBI, Senators, Congress, news outlets and White House and remember this thought: to manipulate a stock price for individual personal gain is illegal.
Obtaining a large mass of shares on the BID is difficult for stocks that are highly shorted and struggling. I sometimes wonder should individual buying shares divide their order and place 50% on both the BID and ASK Page.
Direct ASK orders buys guarantee shares while helping to raise the ASK PPS.
Direct BID orders are wishes for more shares at a bargain price while helping to secure tight spreads.
Do you feel a person should observe and stair step their BID order up as current ASK PPS rises quashing spread windows while keeping their orders alive to purchase more shares?
Have you observed relinquished share amounts in the current ASK become larger as ASK PPS rises; while at the same time BID share orders become smaller during an ASK rise.
I do hope you can feel it to be someone special whom relinquishes their shares to create the above scenario and remember it is an honor to void them of their shares. GLTAL
|
|
|
|
Post by petech on May 18, 2016 10:27:34 GMT -5
|
|
|
|
Post by onemann on May 18, 2016 10:55:15 GMT -5
I live in NJ. Shareholder for 2.5 yrs now and like many completely underwater. If there are any other shareholders in NJ who have a better understanding of the litigation side then I'd be up for meeting.
|
|
|
|
Post by centralcoastinvestor on May 18, 2016 12:06:42 GMT -5
I live in NJ. Shareholder for 2.5 yrs now and like many completely underwater. If there are any other shareholders in NJ who have a better understanding of the litigation side then I'd be up for meeting. It seems to me that even the filing of a suit along with the discovery process involved would likely give the short sellers pause in continuing their campaign on this particular stock. Can you imagine how great it would be to get the shorts to move on? I just want them to go away. |
|
|
|
Post by onemann on May 18, 2016 13:03:09 GMT -5
I would love that! I'm just unaware of the cost associated. I'm also on the road a lot so in not up to speed on the most recent ruling in NJ. If it were as easy as paying a small fee and some attorneys knew who to go after and what to do if probably look into it more. Fees probably aren't shall though.
|
|
|
|
Post by petech on May 23, 2016 9:17:12 GMT -5
|
|
|
|
Post by babaoriley on May 23, 2016 12:57:09 GMT -5
Hey, CCI, just going from your subject line, and applying about 12 years of experience, the answer has to be "no" doesn't it?  |
|
