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Federal Judge is a Naked Short Loon

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November 05, 2007 – Comments (0)

Really, you can check the tape:

Money quote:

Judge Mullen: Why in the world don’t you all make them illegal? Don’t you understand what happens in the market when you allow naked short selling to attack companies? I mean, do you understand that?

Justice is sure to be done here, with a judge whose head is so stuffed with baloney bridge nonsense. Of course, naked shorting is illegal in some circumstances, legal in others. I don't know the details of this case, but it appears a typical SEC lawsuit against someone alleged to have shorted a company before a PIPE, then covering with newsly-issued shares -- which is illegal nekkid shortin, and is not that uncommon. Here's a similar case filed two weeks ago. (Yes, Virginia, there is naked shorting, but it's this old-fashioned fraud, as opposed to the vast conspiracy stuff the balogna brigade alleges, which our judge seems to believe in.)

What I don't get is what the SEC lawyer is doing. Clearly, the case alleges some illegal, pre-PIPE naked shorting, yet the lawyer is making a blanket statement that naked shorting is not illegal. Why argue a subtlety (incorrectly, and counter to your claims) with an angry judge? Sounds like bad lawyering.

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