Posted on 02/05/2016 6:10:55 PM PST by Lorianne
Last night ABC began its two-part series on the Bernie Madoff fraud. Viewers will be reminded about how investment expert, Harry Markopolos, wrote detailed letters to the SEC for years, raising red flags that Bernie Madoff was running a Ponzi scheme – only to be ignored by the SEC as Madoff fleeced more and more victims out of their life savings.
Today, there are two equally erudite scribes who have jointly been flooding the SEC with explosive evidence that some Exchange Traded Funds (ETFs) that trade on U.S. stock exchanges and are sold to a gullible public, may be little more than toxic waste dumped there by Wall Street firms eager to rid themselves of illiquid securities.
The two anonymous authors have one thing going for them that Markopolos did not. They are represented by a former SEC attorney, Peter Chepucavage, who was also previously a managing director in charge of Nomura Securities’ legal, compliance and audit functions. We spoke to Chepucavage by phone yesterday. He confirmed that two of his clients authored the series of letters. Chepucavage said further that these clients have significant experience in trading ETFs and data collection involving ETFs.
Throughout their letters, the whistleblowers use the phrase ETP, for Exchange Traded Product, which includes both ETFs and ETNs, Exchange Traded Notes. In a letter that was logged in at the SEC on January 13, 2016, the whistleblowers compared some of these investments to the subprime mortgage products that fueled the 2008 crash, noting that regulators and economists were mostly blind to that escalating danger as well. The authors wrote:
(Excerpt) Read more at wallstreetonparade.com ...
If someone could find out what ETPs these are, they could short it. Then if the SEC acts, they could rake in dough.
It is most likely an ETN, those things are full of garbage. Only suckers buy them anyway.
http://money.cnn.com/2015/08/24/investing/stocks-markets-selloff-circuit-breakers-1200-times/
The whistleblowers state that much of the ETP's "asset base" consists of synthetic/derivative positions ... They're just words on paper with no assessment of the counterparties ability to cover...
YES , I too would like to short these beasts but as they are SEC protected wall street fraud vehicles I'd always be afraid of manipulation ... I personally suspect that his is how wall street creates fictional shares of companies so that they can pretend that they are shorting borrowed shares instead of admitting that they are completely naked (an illegal market manipulating practice that the SEC has NEVER INVESTIGATED OR ENFORCED).
Frankly, Wall Street is a mess and the intermingling of our government executives with the big firms and the Federal Reserve has brought crony capitalism to it’s pinnacle in America.
It’s not capitalism when the game is rigged.
It is not surprising, for there was no effective reform after 2007-2008 - nothing but bail outs.
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