The Next In Line

Actually, what is generally called  "freedom" here is only freedom from being oppressed by the government. But unless sufficient intentional efforts were put to protect from other forces trying to fill that gap, people would be oppressed by the next in line force which happened to be the financial power in this case.

You won't be left alone. And having the tool of a government you can choose is a big step that can empower the path to freedom but it is not in itself the final destination.

From Freedom To Corruption

Congratulations, freedom has been converted here to a very deep corruption. Moreover,like a person with neurosis who requires even more intensive level of treatment because his spoiled ego sees his neurosis as good thing, not much can be seen in concern about the problem.

" Justice For All"

That is the slogan here and these are the corrupted government agencies and the courts and how they work for this hedge fund guy and the like of him. So what could have happened had that not been the slogan here? Congress and the president would have had gladly allowed the hedge fund guy to use a Drone to attack me?  

The Earlier VKNG Encounter -2

Here are some links related to that story

My buying for Viking System's (VKNG) stock on 10/22/2009 (which also represent all my buying of that stock in my account there)

Snapshot of my account on 11/17/2009

Midsummer's  filed selling of Viking System's (VKNG) stock:

 Midsummer's filed selling of Viking System's (VKNG) stock -01

Midsummer's filed selling of Viking System's (VKNG) stock - 02

Midsummer's filed selling of Viking System's (VKNG) stock - 03

Midsummer's filed selling of Viking System's (VKNG) stock - 04

Midsummer's filed selling of Viking System's (VKNG) stock - 05

Midsummer's filed selling of Viking System's (VKNG) stock -06

Midsummer's filed selling of Viking System's (VKNG) stock -07

Midsummer's filed selling of Viking System's (VKNG) stock -08

Midsummer's filed selling of Viking System's (VKNG) stock -09

Midsummer's filed selling of Viking System's (VKNG) stock -10

Midsummer's filed selling of Viking System's (VKNG) stock -11

Midsummer's filed selling of Viking System's (VKNG) stock - 12


Midsummer's  unseen before in the market and very hard to be believed claim of buying back for all the shares it sold according to the fillings above. Read the green text under "Explanation of Responses":  :

Midsummer's buyback claim filed on 12/14/2009 for 420500 shares it reported as sold in its filings above

Midsummer's buyback claim filing of 12/15/2009 for 451000 shares it reported as sold in its filings above

Midsummer's buyback claim filing of 12/17/2009 for 906500 shares it reported as sold in its filings above

Midsummer's buyback claim filing of 12/18/2009 for 650000 shares it reported as sold in its filings above


Although it is not needed to prove that my buying on 10/22/2009 was from a hedge fund, here are links showing an entity filing that support it sold an amount of shares that can include those I bought on 10/22/2009 :

First, here the entity filing an ownership of 1977394  shares on 10/26/2009 four days after my buying on 10/22/2009. Note also the "October 22, 2009" mentioned at the first page as an answer for "(Date of Event which Requires Filing of this Statement)".

Filing entity ownership on 10/26/2009

Now, here is the February 13, 2009  for that same entity which is the most recent ownership filing
before the filing above and it shows an ownership of 4227394.

Filing entity ownership on 02/13/2009

Subtract the first number (1977394) from the second (4227394) and you will reach 2250000 shares which clearly can include the shares I bought on  10/22/2009 (2159247).

 [(Added 9/20/2013)
The stock stayed on the SHO List not only for 13 days continuously but from 11/14/2009 to 1/4/2010 continuously. Here is link where the reader can click on all the dates in the range mentioned above and see the "VKNG"  in the list of all those dates.

 ftp://ftp.nasdaqtrader.com/SymbolDirectory/regsho/

 ]



 

I don't want to dwell too long on the topic of the preceding post except to add that encouragement of entrepreneurship ,if not being used as an excuse to favor some group over other ,may require a scope of view that is wider and more comprehensive than it seems to be implemented in this country. There should be a balance between encouraging entrepreneurship for a specific line of business in contrast to that of the entire market. That balance seems to be missing here. Maintaining that balance may require the government to enter as a competitor in one line of business so that it can support entrepreneurship for the rest of the market.      

I just want to know why governments (states and federal) is not allowed to enter into the car insurance business? Or is this also one of the things that gives unfair privilege in this country to those with big wealth? I think that governments, especially the federal government because it has better means to do that, should be allowed to enter and compete in any business. Having the government enter as a competitor can help in to two directions. First,clearly, it can provide a significant help in filling the gaps between product pricing and the paying capabilities of potential buyers and in turn help in keeping the wheel of the economy turning. Second, it may provide a way to prevent monopoly and price fixing among those who are supposed to be competitors in away that even antitrust laws cannot reach.

 

Imagine how this idea can improve the economy:Those who are running businesses should always keep in mind that the government may enter any business if they do not compete in a way sufficient to close the gap that provide an opportunity for such entrance. One of the most obvious and direct implementation for that seems to be in that of car insurance business. What is an insurance business? It is nothing more than some entity saying: Hey I got too much money in case something happen. Who is better equipped to say that than the federal government? An insurance business is just an accumulation of financial power because of which further accumulation is allowed. There is no science or any special capabilities needed.So what prevents the federal government from entering such business other than being on the side of the most wealthy instead of all the people? Look at the prices for car insurances then think if you can even make a claim that there is a serious competition there. Car insurance companies can probably charge less than one forth what they charge and still make big profit. Is there any question that the federal government can compete successfully there?

Also, if I am going to pay more money then why not at least make that goes to where it can help others in the like of food or medicine for those in need rather than making the most wealthy even wealthier through such a business. This is how you improve the economy for any one really interested in that more than he is in serving the most wealthy over everybody else. 

Shortcomings Of The Executive Branch

The shortcomings of  congress in implementing a real and fair justice system that works on everybody including those with the financial and connections power are very substantial because courts provide last resort to seek justice. Otherwise, the failure starts with the top of the executive branch. For example, when it comes to the SEC, those who has been coming to the top of the executive branch in this country apparently think that all what they have to do is just assign a head to that entity and, in their walking over the rainbow world, they think that everything will be OK for an entity that ,if wanted to continue, would need extreme cleaning from its most basic level and roots.

If I was the one with the authority

 I cannot imagine myself not turning the world upside down if  I was the one with the authority like those in congress and someone showed me the brazen things I showed here in the federal court system . Those things showed that the system is far from being fit to be trusted especially when things come to those with the connections and financial power. The reaction I saw, instead, was that of people who lack the will to fight corruption and correct things as if they live in a dictatorship.

Courts here and standing in dilution cases-4

Like I said earlier, I am back to this topic. I intend to make this argument short and clear. Here is one current reasoning of mine in dealing with the technical level.

 

Even if we consider "Authorized Shares" in the article of incorporation to mean that the generated shares will be owned by the corporation then the reasonable way to understand that would be in  it is being a conditional ownership. In other words, ownership  by the corporation for the generated shares won't start unless those shares were generated for the best interest of shareholders. What calls for this understanding is that ,unlike the initial capital for example, Authorized Shares can be used in a way that is for the best interest of the corporation but not necessarily for the best interest of shareholders. [(Added 9/12/2013) Notice that the preceding statement also imply that even in cases where there is also an injury to the corporation a sufficient path to recovery for shareholders through the corporation equivalent  to that through direct standing may not exist].Since it is reasonable to assume that , from the start, owners of corporations do not want to give away their ownership unless it is for their best interest, it follows from that that conditional ownership by the corporation for any shares generated as part from the Authorized Shares.[(Added 9/12/2013)  Let me state that in another way. Since it does not make sense that owners of a corporation would choose to authorize a power that can be used to take away their ownership in the corporation for other than their best interest with no right for them to demand legal recovery while there is a better alternative, then the ownership by the corporation for shares issued as part of the Authorized Shares needs to be understood as being contingent on that issuance being for the best interest of shareholders].That means unless shares were generated (issued) for the best interest of shareholders then ownership by the corporation for those shares did not happen and therefore shareholders still have their direct standing to bring  lawsuits in dilution cases.        

The Earlier VKNG Encounter

Flashback to the preceding post:

I started trading stocks from August 2004. Two years after that ,in 2006, while watching the trading of a small/micro cap stock I was holding I started paying attention to how the selling of shares there seemed to be part of an attempt to pressure the price of the stock rather than trying to get the best price possible. I complained to the SEC and as a result of that my name was revealed to the hedge fund guy who was the same guy here. Anyway, later I started to pay attention and recognize the same thing everywhere I go in the world of small/micro cap stock. For years and years, I also wrote about it in the message boards of these stocks and my writings sounded weird and drew very little ,if any, expressed agreement. That did not affect my believe in what I thought was very clear and I became more interested in making a lemonade from these kind of lemon. In October 2009 I noticed what seemed to me as one opportunity to apply that understanding of mine on a stock that seemed to be played in that same way on the stock of a public corporation (at that time) called Viking Systems which was trading under the ticker VKNG. I noticed that the stock was being pushed down to an extremely low prices.On 10/22/2009 I jumped in and bought over 2 million shares for less than $13000. The guy playing the stock was this same hedge fund guy here and he did not care about selling me all these shares. In fact, if I wanted I probably could have bought much more from him in the next days at also extremely cheap prices but I had to stop buying because of the filing requirement on 5 percent owners of individual investors (According to 17 CFR 240.13d-1 (b) (2) it seems that a hedge fund,on the other hand,can acquire and dispose of ownership less than 10 percent as much as it like and wouldn't have to file unless it has that ownership on the last day of the year). A few days after that the stock started to move higher and reached over $1 a share before the middle of November 2009. Along the way,this hedge fund guy continued his pressure on the stock ignoring the reality that he himself chose. He did not have enough shares to do that and as a result the stock entered the Regulation SHO Threshold Security List (SHO list) three times. The SHO regulation is related to the selling of shares without really delivering those shares to the buyers account. If these shares reach a specific percentage and remain at that percentage for a specific period of time then the seller of those shares (or his broker) will need to buy and deliver those shares .Yes, I know,it is absurd. It is like saying you can steal but don't exaggerate too much. However this the best individual investors can get from the legislators and regulators. If that was not enough, consider when was this regulation enacted? 1934?No. 1950?No.1965?No.1980?No.1990?No .It was not until 2005 that apparently they reached the recognition that selling nothing as shares is not acceptable. Anyway, returning back to the main story here, the hedge fund guy sold enough fake non existent shares to make the stock goes to that SHO list three times. At least in one of these three times it stayed long enough there to satisfy the buying back requirement of the SHO Regulation while in the other two it came very close.[(Added 9/20/2013) Checking back the record shows that actually the stock stayed on the SHO List from  11/14/2009 to 1/4/2010 continuously]. Nevertheless there was not any noticeable buying back and the pressure on the stock at low prices continued. It was not unreasonable to expect that buying back of these shares could have resulted in the stock reaching a price higher than $5 a share because of how squeezed this guy was.In fact that could be an understatement.Yet, there was not anything to indicate that even a part of that required buying of shares to be delivered to those who bought shares that were not delivered to them. Instead of that there was something that even on its own and without any of the above should have aroused a great suspicion to investigate what was going on. That thing was a sears of SEC fillings the like of which I had not and still have not seen. These SEC filings were filed on 12/14/2009, 12/15/2009, 12/17/2009,12/18/2009 by a company called Midsummer Investment Limited. This company initially filed that it sold millions of shares after the stock started moving higher starting from 11/03/2009 and filed on 11/16/2009. The newer filings on the dates mentioned above all contained this very unusual paragraph with variations only in the number of shares mentioned which I wrote in italics here

"On November 16, 2009, the Reporting Person filed 12 Form 4s reporting the disposition of shares of Common Stock of the Issuer (Accession Numbers 0001144204-09-059660 through 0001144204-09-059664, 0001144204-09-059666 through 0001144204-09-059670, 0001144204-09-059672 and 0001144204-09-059663, collectively, the "November Filings"). Subsequent to the disposition of the sales, on account of the failure to obtain legal transfer of the sold shares through the issuer, the Reporting Person's broker involuntarily elected to buy 451,000 shares previously reported as sold by the Reporting Person to cover the sales disclosed in the November Filings. The Reporting Person does not consent to nor has it exercised any discretion or control over the buy-in. Accordingly, this filing reverses the previously reported sale of 451,000 shares of common stock pursuant to the November Filings"

There were 2428000 shares in total reported in these filings which probably represented all the shares initially filed as sold. [(Added 9/15/2013) There was no need to say "probably" in the preceding sentence since I did count them and they are exactly the same number]. So, there were supposedly a buying back that ,again supposedly, reversed the initial selling of all these shares. There was not any indication that this buying of shares really happened. How this buying happened?From whom? People were talking about the stock in messages boards and none of them spoke about a buying back happened to him/her. Again,there were absolutely nothing supporting that claimed buying back really took place.This made the suspicion that 2428000 fake shares sold and kept in the system unavoidable.

Less than a month later I started telling this hedge fund guy through a message board on which he posts frequently that the game he was playing with that claimed buyback should be corrected or he will be reported. I had over $2 millions of gain and a potential of a much higher price because this guy was squeezed which all were taken down and stayed down because of the support of that fake buyback claim but I still wanted to give this guy time to realize the danger of the game of he played.

I waited for more than a 100 days trying to give this hedge fund guy time to deal with reality and manage himself in a fair way. What he did instead was to go to the company and offer them financing they were looking for at terms that sounded very tempting in exchange of shares. He sent a company called Dutchess Opportunity Fund, II, LP and made that deal through it. [(Added 9/10/2013) To be fair, the agreement was signed two days before I started writing about that buy back trick] .That financing deal gives the company the right to sell Dutchess shares anytime time they want based on a price that is only discounted by 4 percent from the market price. Initially I complemented those inside Viking Systems for getting such a deal. I based that complement on what is in the deal on its face while depending on the judgment of those inside with regard to how real it was and what was behind it. After a while I realized that the Dutchess was only a face and this guy was behind it. Who would accept to put himself under obligation to buy shares based on market price chosen any time by the seller without any restrictions? I don't think Goldman Sachs would accept such a risk not to mention a small fund. Moreover, who would want to take such a risk with a stock that jumped from under a penny a to over a dollar a share within less than a month? One thing that would make taking such risk reasonable is if Dutchess was counting on someone to keep the pressure on the stock inside the market. The financing agreement with Dutchess was also contingent on registering with the SEC for resale in the market 15 million shares.The company (specifically those who get this financing the CFO and/or the CEO) couldn't get financing anywhere before that not to mention one with such terms .All these and other factors and the timing of the deal made the conclusion that Dutchess was only a face and extension to this hedge fund guy unavoidable.

After realizing this I started writing to the SEC about that earlier strange filing and the rest of the story here. But that was after over a hundred days and millions of shares were already added through this financing agreement which may at least cover the original problem at the surface level. That doesn't mean that the initial game became untraceable. But one try as much as possible not to give any excuse to that fake entity called the SEC.What really changed by the passing of time ,however, is that the hedge fund guy had already dragged with him some of those on his side who were not inclined to take the unnecessary risk he was taking but lacked the will power to refuse continuing with him. Had I started fighting back early I probably could have strengthened that side of them.

But if you think the role of the SEC with the like of this hedge fund guy is only to stay away from investigating and prosecuting them then you are mistaken. It is also there to protect and serve. It may act to protect them from justice and also to serve their unjust actions. For after sending my complaints ,to my surprise,this time I received a response. That response came from the office of the SEC in New York which claimed that they want to make a teleconference with me regarding my complaint. Although at the beginning I tried to be more optimistic, by the end of the day I could no longer keep even a modest amount of hope that their interest in my case was real. It was very clear that they did not care about my complaint. Although I would still have seen it clearly without knowing what was their real intention, I had a very strong suspicion about what they really wanted and that suspicion became firmly established after attending that conference call they wanted. What they were really interested in was serving the hedge fund guy. Although he had his suspicions because of my posting and big interest in the stock, it appears that the hedge fund guy wanted to make sure I was the one who jumped in and made that big buy of the stock and not another hedge fund and for that purpose he used the SEC to extract that information.Here is some of what I wrote about that. At that time I was still not revealing my early entry and the position I made.

http://unallowedthoughts.blogspot.com/2010/07/corruption-beyond-belief-inside-sec.html

For this hedge fund guy, with the help of the shares he was acquiring through his Dutchess face were able to keep the price continuously under pressure inside the market on the stock. Then, taking advantage of the low price in the market which he himself was causing,in May 5, 2011 the hedge fund guy came again through a third face to buy shares in private placement.Of course, it can be much cheaper to buy shares through a private placement after the stock was kept at low price all that time than at the beginning.The new face he came through was a company called Clinton Group,Inc. (the investment manager of Clinton Magnolia Master Fund,Ltd.) and acquired 12 million shares and 9 million warrants exercisable at 25 cents a share for a total of $3 millions. In addition, although he had already acquired over 10.97 million shares through Dutchess financing agreement, he also made the deal contingent on registering for resale with the SEC those 12 million shares acquired in the private placement and it was declared effective with the SEC without any problem.

Midsummer Investment (the company who made the strange filings talked about earlier), "sold" all its holding of the stock (7,223,457 shares and 5,551,034 warrants) to the Clinton Group at the same time when that financing agreement was made. That shows even more how much these actions really belong to parties who are acting as separate entities or in fact parties acting as one entity with these games.

That claimed transfer of ownership also helped avoiding a restriction on the conversion of those warrants held by Midsummer not to lead to Midsummer's ownership exceeding 4.99 percent of the total outstanding shares.

The next step after that for the hedge fund guy was to use the ownership he made in the corporation to have his directors added to the board and three of them were added.

Now that he has his directors inside ,and certainly is  even in a much better position to keep the pressure on the stock price inside the market, he came through a company called Conmed to take the company through a merger. The offer price of 27 cents a share was empowered by how it sounded relative to the market prices which he himself had been keeping down under pressure.The merger agreement was agreed on by the three added directors and only one of the original directors with the rest of the original board abstaining from voting.

After all that, he did not wait long to play the kind of manipulation he played in this case and repeat the arrogant response in the manner I described in the preceding post.

This was only a summery and more could be added and elaborated on.

Not a slip and fall case

I am not here ,with this case,  going after someone for the like of a slip and fall case or other  unintentional injury or even  an intentional injury occurred once or twice or even  an intentional injury occurred several times. No, for months and months I kept buying shares and this hedge fund guy could have stopped selling me shares any time he wanted but he did not care. The basic reality of either to sell something and abandon its ownership or not to sell and keep it imposed on mere mortals was not sufficient for him or those whom he was using inside. He  sells then he fraudulently take back what he sold. People make onetime intentional action, or even unintentional, and have to live the consequences of that decision. This guy on the other hand continuously made the decisions to sell me shares for  ,again, months and months where he could have stopped any time he wants.  Not only that, but after I stop buying at each price stage he takes the price down to a lower stage not caring about the consequences of his decision in giving away that ownership to me. But why would he care? He can do whatever he wants and that SEC is more in his pocket than the change he may carry in it. Furthermore, he did all that for not a really worthy game. Even more, even if that worthless game  of taking a stock down to extreme levels was some kind of a necessity for him to play, he reached very low prices to achieve his aim and could have stopped from continuing to sell me ownership in the corporation before I acquired much of the percentage I acquired. But no, it was the arrogance of that who think he is in control of everything. After all that, is it any wonder when one put considerable effort to fight back such unjust arrogance?             

Not even close to sufficiency

The  court's  justice I am seeking ,which is until now is a joke, while necessary , even if found it is still far from being sufficient for making things work fairly and properly. The court system can only work with situations where the injustice and its proof can be seen and pointed out directly which are only the tip of the iceberg. The showing and proving of other law violations is dependent on  honest investigations by the authorities and the moon is probably closer than making that happen on the like of this hedge fund guy. Unless there is a real watch and willingness to prosecute the like of this hedge fund guy like anybody else then things are not running  properly and the whole justice system is only a fantasy. What I have seen yet is a ridiculously huge inequality in applying justice on the ordinary person and the like of this guy. Even if things are not stopped from the top it is only a dream that the investigation would proceed smoothly without being affected by a million things along its progression path inside. Look at what happened at this district court with my case. If this what can the like of this hedge fund guy cause to happen outside in front of everybody, imagine the probability that an investigation in the darkness of the inside, where no body can see what is going on, can be a real thing. In fact, if any thing, the investigation can help support what is being investigated like ,for example, with how the SEC investigation of Madoff ,instead of revealing what was really going on,became instead a device to support the legitimacy claim of what he was doing to those who were counting on the honesty of the SEC (which the poor people probably did not know is like counting on the human rights support from the like of Hitler or Saddam).