Why Ron Paul May Cut a Deal With Mitt Romney

Alex Altman

For Ron Paul, victory is finally in sight. No, not a swearing-in ceremony next January 20, or even a single statewide win. Halfway through the primary season, Paul has won only a preference poll in the U.S. Virgin Islands, and he is running dead last in delegates among the four GOP candidates for President. He has spent a lot, if not always wisely: the $31.55 he has dropped per vote (more than even Mitt Romney) is a sum that might shock even a Democrat.

But winning the presidency was never Paul’s foremost goal, and as he nears the end of his last presidential crusade, he has one more chance to promote his ideas. The Republican race is a muddled mess. Even after his southern losses, only Romney has a real shot at amassing the 1,144 delegates required to wrap up the nomination, and he would then face the task of unifying the GOP’s warring factions. Which is why Paul’s campaign has sent discreet signals to Camp Romney that the keys to Paul’s shop can be had for the right price.

Read the rest here.

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via Zero Hedge

A company whose value is dependent on the continued success of two key products, now has a larger market capitalization (at $542 billion), than the entire US retail sector (as defined by the S&P 500). Little to add here.

See the chart here.

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via Vix and More

For a variety of reasons, investors seem unwilling to embrace the current rally and with each day the market rises, I see a scramble in the indicator forest to find some sort of proof that stocks are finally, inevitably going to correct…and soon. I need to give this phenomenon a name, so I am going to call it indicator hunting and define it as a companion to confirmation bias.

Read the rest here.

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Thomas Sowell

Derrick Bell’s options were to be a nobody, living in the shadow of more accomplished legal scholars — or to go off on some wild tangent of his own, and appeal to a radical racial constituency on campus and beyond.

His writings showed clearly that the latter was the path he chose. His previous writings had been those of a sensible man saying sensible things about civil rights issues that he understood from his years of experience as an attorney. But now he wrote all sorts of incoherent speculations and pronouncements, the main drift of which was that white people were the cause of black people’s problems.

Bell even said that he took it as his mission to say things to annoy white people. Perhaps he thought that was better than being insignificant in his academic setting. But it was in fact far worse, because the real damage was to impressionable young blacks who took him seriously, including one who went on to become President of the United States.

Read the rest here.

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“The irony is that he probably right now has the biggest audience he’s had in years, and the double irony of all this is sponsors that are fleeing, they’re missing out on the best advertising buy in radio…”

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via Vix and More

With this in mind, I created a chart to show what happened the last time we had a sharp market selloff and a subsequent bounce that lasted three years. The graphic below shows the percentage change in the SPX as well as the absolute VIX level in the three years following the October 2002 lows in the SPX as well as the three years following the March 2009 lows. Note that from 2002-2005, the SPX rallied about 53%; the current rally in the SPX from the March 2009 close is over 100%.

Read the rest and see the chart here.

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By Linette Lopez

So far, the only inside response to Greg Smith’s damning NYT op-ed on Goldman Sachs has been from the company’s PR department. They simply said they didn’t agree with Smith, no color, no context to why he would write this piece.

But a former intern who worked under Smith gave Business Insider a look into who Smith was at Goldman. Aveneesh Singh Saluja, a fellow Stanford alum, was willing to speak out for the guy most Goldmanites are probably fuming at…

Read the rest here.

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[youtube://http://www.youtube.com/watch?v=uVDmNfMLJ-4 450 300]

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Source

“The New York Times bestselling author of the explosive new book, Hollywood Hypocrites: The Devastating Truth About Obama’s Biggest Backers, Jason Mattera, had his crew’s camera snatched and hurled by comedian Chris Rock when he asked the star why he has called the Tea Party racist (video below).

“I was stunned,” said Mr. Mattera in an exclusive interview with Big Hollywood. “Tea Party members get called the worst things imaginable and still remain peaceful. But ask a big Hollywood celebrity to explain himself and the guy goes ballistic, wrestles the camera away from my camerawoman, chucks it 50 feet, and then challenges me to a fight. It’s unreal. And it perfectly illustrates why I decided to investigate and writeHollywood Hypocrites.”

The confrontation, which took place around 2:00 a.m. on January 23, 2012, at Spike Lee’s Sundance Film Festival after party at Tao night club, ended with Chris Rock challenging the conservative author to a fight, says Mr. Mattera:

“Chris Rock shouted, ‘You want to throw down?  Let’s throw down right now!’ Of course, he was standing safely behind two bodyguards when he said it.”

The clash was ignited when Jason Mattera inquired about disparaging comments Chris Rock made about the Tea Party in an Esquire article in 2011:

When I see the Tea Party and all this stuff, it actually feels like racism’s almost over. Because this is the last — this is the act up before the sleep. They’re going crazy. They’re insane. You want to get rid of them — and the next thing you know, they’re fucking knocked out. And that’s what’s going on in the country right now.

Jason Mattera says his confrontation with Chris Rock is just the opening salvo in a series of forthcoming ambush celebrity interviews with some of the big name stars he chronicles in Hollywood Hypocrites.

“Hollywood celebrities preach to us to vote for Barack Obama and his leftist policies, yet not even they live by the values Obama and the progressive left stand for,” said Mattera. “If conservatives and Republicans are going to win in 2012, we must muzzle Obama’s backers. And that starts with a full-scale investigation of the positions they take and the lives they actually lead.”

Among the celebrity targets Jason Mattera’s investigates in his new book are:

 

• Alec Baldwin
• Matt Damon
• Leonardo DiCaprio
• Madonna
• Bruce Springsteen
• Whoopi Goldberg
• Bono
• Arianna Huffington
• Jon Bon Jovi
• Spike Lee

Andrew Breitbart endorsed Jason Mattera’s book, saying that it “unleashes a barrage of body blows to Hollywood’s holier-than-thou limousine liberals that may make them think twice next time they open their pretty mouths.”

As for when he plans to release his next celebrity interview for Hollywood Hypocrites, Mr. Mattera says: “As President Ronald Reagan used to say, ‘You ain’t seen nothin’ yet!’  The next video is likely to drop sometime next week.”

 

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Another view of Goldman backing up this mornings op-ed on GS culture…..

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Source

“The United States encourages the Freedom of the Press both in America and abroad — at least they claim. But in actuality, the Obama administration is going out of their way to keep journalists from exposing the truth.

US President Barack Obama claims he runs an administration hell-bent on being transparent and open. At the same time, however, the commander-in-chief has condemned WikiLeaks contributor Bradley Manning for allegedly aiding the enemy by revealing the truth behind America’s war in Iraq. Now it has been divulged that Obama even appealed with the president of Yemen to ensure that one of their own journalists would stay behind bars for telling the truth.

Journalist Jeremy Scahill tells RT that Yemeni reporter Abdulelah Haider Shaye was instrumental in exposing the falsities of a covert war in Yemen. In December 2009, Scahill says the press reported that a Yemeni strike had killed 34 members of al-Qaeda. When Shaye went to investigate though, he soon learned through spending time on the ground that the US was actually directly involved in the attack — an attack which took the lives of civilians.

“They were concerned that this was a guy who was telling al-Qaeda’s side of the story and they wanted it shut down,”says Scahill.

Shaye was eventually put on trial for exposing the truth behind the event and allegedly the court introduced false evidence, which in the end yielded a conviction that potentially  carried a death sentence. But since the entire case against the journalist was fabricated by his government, the journalist got off with a relatively mild sentence of just five years. Under pressure, Yemeni President Saleh intended to pardon Shaye. This is when he got a call from President Obama himself, personally requesting that Saleh switch his stance on pardoning the reporter.

“He is in prison because Barack Obama wants him in prison,” Scahill tells RT. Although Shaye remains largely unrecognized by western reporters, Scahill says it was his work that served as a smoking gun behind one of the biggest cover-ups of the Obama administration, saying that “his journalism, if anything, is the number one reason why we know anything at all about al-Qaeda in the Arabian Peninsula.” Even if his identity is largely unknown though, says Scahill, the unfortunate consequences are something any war reporter will try to avoid.

“I think a lot of journalists are afraid to speak out on behalf of someone who has been accused of being pro-al-Qaeda or an al-Qaeda spokesperson,” he claims. The writer adds that the case of Shaye may be an extreme one, but that doesn’t mean it will happen again.

“What I am more concerned about,” says Scahill, is “in this culture where this administration is going after whistleblowers in an unprecedented way, we all have an obligation to protect our sources. Myself, I’m really nervous about the safety of some of the people that I talk to.”

“This administration seems intent on going after whistleblowers,” adds Scahill, who continues that as a journalist that covers national security issues, he often deals with government insiders that disclose details that otherwise would not escape the Pentagon. Incidents such as the imprisonment of Shaye and Manning, however, ended up sending“shockwaves through the community.”

In Yemen, where Shaye broke the truth behind the 2009 airstrike, Scahill says the mood has changed entirely for reporters there who are now terrified to talk the truth. With Obama extending his influence all the way to Yemeni journalists, Scahill says soon others may have to worry.

“The message there is that there sort of good terrorists and bad terrorists, and if you’re a former official of the Democratic or Republican Party, you’re allowed to advocate for people that are State Department-designated terrorists,” says Scahill. “But if you’re a journalist, you’re not allowed to interview them. That is chilling.”

Scahill adds that even if the Obama administration believes persecuting whistleblowers will bring a victory for their covert wars, it ultimately hurts America’s counterterrorism efforts.

“You need to understand the mentality of the people you claim to be fighting or you’re never going to be able to address the problem you say you’re fighting to wipe out,” says the journalist. “Even if you accept the framework of this global so-called ‘war on terror,’ you have just taken away one of your best opportunities to get intelligence on the ground” by jailing reporters.”

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Source 

“When Washington, DC decided to try out an Internet voting system to make casting absentee ballots as easy as clicking a mouse, they dared hackers to compromise the contest. It was a feat accomplished in less than two days.

The District of Columbia hosted a public trial before going live with an e-voting program to see if their presumably impenetrable online ballot system could sustain a cyber attack. If you’re wondering why they never followed through, it is because the government is going to need a lot more time with this one.

“Within 48 hours of the system going live, we had gained near complete control of the election server,” researchers from the University of Michigan explain in a write-up of their 2010 hack of an e-voting system that DC was debating on pushing live. They managed to gain access and make massive alterations to the internal configuration of the voting site in two years, write the researchers, who presented their work at a cryptography and data security conference in the Caribbean last month.

With elections regularly plagued with allegations of inaccuracy and fraud, jurisdictions across the country have debated since the dawn of the Information Age if democracy would translate well to the Web. Although logging-on to pick a future president might someday be an option that is a lot easier than driving to the nearest polling place, the report out of the University of Michigan suggests that there is a ways to go before that goal is reached.

Not only did the team of researchers manage to expose the would-be voting system as one with rather lax security, they also explain in their findings that is was rather easy to do devastation once inside the system. “We successfully changed every vote and revealed almost every secret ballot,” writes the researchers — Scott Wolchok , Eric Wustrow, Dawn Isabel and J. Alex Halderman — adding that Election officials did not detect their intrusion for at least two days,“and might have remained unaware for far longer had we not deliberately left a prominent clue.”

The severity of what they accomplished, they write, was something they also felt that DC would be unable to bounce right back from. “Recovery from this attack is difficult; there is little hope for protecting future ballots from this level of compromise, since the code that processes the ballots is itself suspect,” reads their report.

“This case study — the first (to our knowledge) to analyze the security of a government Internet voting system from the perspective of an attacker in a realistic pre-election deployment — attempts to illuminate the practical challenges of securing online voting as practiced today by a growing number of jurisdictions.”

The group goes on to say that they wanted to not necessarily take advantage of the open invite from Washington to test their abilities, but to act as accurately as actual hackers would. “Our objective was to approach the system as real attackers would: starting from publicly available information, we looked for weaknesses that would allow us to seize control, unmask secret ballots and alter the outcome of the mock election,” they write.

After the hack was first revealed, Paul Stenbjorn of the DC Board of Elections and Ethics bluntly admitted, “The integrity of the system had been violated” and said that, upon analyzing the footprints left by the researchers, “they had to be able to change anything they wanted on the Web site.”

Even two years after they admitted to their attack, security is still considered largely under par as far as government entity’s online presence is concerned. The FBI recently called cyberattacks the biggest threat facing America and officials from within NASA admitted that the United States department that overseas billions worth of high-tech gadgetry is not only highly susceptible to hacks — but is also regularly attacked.”

 

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Apparently, when Greg Smith arrived at Goldman Sachs Group Inc. (GS) almost 12 years ago, the legendary investment firm was something like the Make-A-Wish Foundation — existing only to bring light and peace and happiness to the world.

Smith, who was executive director and head of the firm’s U.S. equity derivatives business in Europe, the Middle East and Africa, does not go into details in his already notorious op-ed article in Wednesday’s New York Times, “Why I Am Leaving Goldman Sachs.” But one imagines Goldman bankers spending their days delivering fresh flowers to elderly shut-ins and providing shelters for abandoned cats. Serving clients was paramount. “It wasn’t just about making money,” Smith writes. “It had something to do with pride and belief in the organization.”

It must have been a terrible shock when Smith concluded that Goldman actually was primarily about making money. He spares us the sordid details, but apparently it took more than a decade for the scales to finally fall from his eyes.

Read the rest here.

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Fitch Ratings-London-14 March 2012: Fitch Ratings has affirmed the United Kingdom’s (UK) sovereign ratings as follows:

–Long-term foreign currency Issuer Default Rating (IDR) affirmed at ‘AAA’
–Long-term local currency IDR affirmed at ‘AAA’
–Country Ceiling affirmed at ‘AAA’
–Short-term foreign currency rating affirmed at ‘F1+’

The Outlooks on the Long-term IDRs have been revised to Negative from Stable.

The affirmation of the UK’s ‘AAA’ ratings reflects the progress made in reducing the government’s structural budget deficit and the credibility of the fiscal consolidation effort. The UK’s ‘AAA’ rating is underpinned by a high-income, diversified and flexible economy as well as political and social stability. The UK sovereign credit profile also benefits from the macroeconomic and financing flexibility that derives from independent monetary policy and sterling’s status as an international ‘reserve currency’. However, the government’s structural budget deficit is second in size only to the US (‘AAA’/Negative) and indebtedness is significantly above the ‘AAA’ median, although currently broadly in line with France (‘AAA’/Negative) and Germany (‘AAA’/Stable).

Fitch judges the government’s fiscal consolidation plans to be credible, reflecting the strong political commitment and institutional capacity. The forthcoming Budget is expected to reaffirm the government’s commitment to deficit reduction as set out in the 2010 and 2011 budgets, the 2010 Spending Review, and the 2011 Autumn Statement. The adjustment is focused on permanent reductions in current spending underpinned by structural reform to public services and welfare. The front-loaded fiscal consolidation is proceeding broadly in line with the path set out by the government. The cyclically-adjusted primary deficit halved over the past two years, to 3.5% of GDP in 2011-12 from 7% of GDP in 2009-10, although the government’s plans include further reductions in spending beyond the term of the current parliament.

The mix of tight fiscal and ‘loose’ monetary policies allowed for by the flexible monetary and exchange rate regime, including ‘quantitative easing’ (QE), is supportive of the necessary rebalancing of the UK economy. Although Fitch recognises that the purpose of QE is to forestall deflationary pressures and promote the flow of private credit, it has also reduced the government’s cost of fiscal funding and its reliance on the market, at least over the short to medium term. Combined with an average maturity of government debt of over 14 years – around double that of its ‘AAA’ peers and a rating strength – on current policies the risk of a fiscal financing crisis is assessed to be negligible.

In Fitch’s opinion, the credibility of the government’s fiscal commitment was further enhanced by the announcement in the Autumn Statement of additional measures to ensure that the government’s target of a cyclically-adjusted current budget surplus by 2016-17 and public sector net debt (excluding financial sector interventions, PSND ex) is falling in 2015-16 in response to the Office for Budget Responsibility’s (OBR) substantial re-assessment of the UK’s economic growth potential and growth prospects. Nonetheless, general government gross debt (GGGD) and the government’s preferred measure – PSND ex – are forecast by the OBR to peak in 2014-15 at 93.9% and 78% of GDP, respectively, compared to its previous forecast of 87.2% and 70.9% in 2013-14 at the time of the March 2011 Budget and Fitch’s previous formal review of the UK’s sovereign ratings. Consistent with Fitch’s sovereign rating criteria and historical and international precedent, the projected peak for government indebtedness is at the limit of the level consistent with the UK retaining its ‘AAA’ status. With debt not expected to peak until 2014-15, three fiscal years from now, the risks and uncertainty surrounding the realisation of debt reduction by the middle of the decade are material.

The evolution of the eurozone debt crisis has significant implications for the UK in light of the substantial trade and financial linkages between the two. The easing of financial market tensions in the eurozone in recent months has diminished the risks to the UK, but in Fitch’s opinion, the crisis is not resolved and could once more intensify. Fitch’s current assessment is that UK banks are relatively well placed to absorb future episodes of financial market turmoil and losses on eurozone exposures without additional recourse to the UK taxpayer for capital. UK banks have strengthened their capital positions in recent years and they have reduced their exposures to the weaker eurozone economies over 2011. In addition, the UK government has announced its intentions to reform the banking system to make future crises less frequent and costly. Both these factors should help reduce future fiscal risks. Of greater concern would be the broader economic impact of an intensification of the eurozone crisis on the UK government’s ability to meet its deficit reduction targets and place the debt to GDP ratio on a downward path in 2015-16.

The revision of the rating Outlook to Negative from Stable reflects the very limited fiscal space to absorb further adverse economic shocks in light of such elevated debt levels and a potentially weaker than currently forecast economic recovery. In light of the considerable uncertainty around the economic and fiscal outlook, including the risks posed to economic recovery by ongoing financial tensions in the eurozone and against the backdrop of a still large structural budget deficit and high and rising government debt, the Negative Outlook indicates a slightly greater than 50% chance of a downgrade over a two-year horizon.

The triggers that would likely prompt a rating downgrade are as follows:
— Discretionary fiscal easing that resulted in government debt peaking later and higher than currently forecast;
— Adverse shocks that implied higher levels of government borrowing and debt than currently projected; and
— A material downward revision of the assessment of the UK’s medium-term growth potential.

Conversely, economic and fiscal performance in line with Fitch’s baseline expectations with general government gross debt peaking at around 94% in 2014-15 would likely result in the stabilisation of the rating Outlook. In the absence of adverse shocks, Fitch does not expect to resolve the Negative Outlook until 2014. The agency’s medium-term economic and fiscal projections are set out in a new Special Report on UK Public Finances, available at www.fitchratings.com.

Fitch last formally reviewed the UK sovereign ratings on 14 March 2011 and has completed the current review in a manner consistent with its regulatory obligations.

Contact:

Primary Analyst
Maria Malas-Mroueh
Director
+44 20 3530 1081
Fitch Ratings Limited
30 North Colonnade
London
E14 5 GN

Secondary Analyst
David Riley
Managing Director
+44 (0)20 3530 1175

Tertiary Analyst
Gergely Kiss
Director
+44 (0)20 3530 1425

Committee Chairperson
Ed Parker
Managing Director
+44 20 3530 1176

Media Relations: Mark Morley, London, Tel: +44 0203 530 1526, Email: [email protected].

Additional information is available at www.fitchratings.com. The ratings above were unsolicited and have been provided by Fitch as a service to investors.

Applicable criteria, Sovereign Rating Methodology dated August 2011 are available at www.fitchratings.com.

Applicable Criteria and Related Research:
Sovereign Rating Methodology

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM’. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’ SECTION OF THIS SITE.

Read more: http://www.businessinsider.com/fitch-revises-uk-outlook-to-negative-2012-3#ixzz1p7kmRAa0

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http://www.youtube.com/watch?v=xziSRhMjsxI

RELATED:

DMX drives a car without a license because “he has a car” and once pulled someone over on road, posing as police officer (3:15)

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Munis, treasuries and corporate bonds are all decidedly lower today, as the market climbs higher–making a case for investors fleeing these investments for cash.

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In a CNBC interview today, when asked “what would it take for you to invest in C?”, Meredith replied “a new brain,” saying the company was dead money and unable to grow.

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The SEC has opened up an investigation on Sharespost and other broker dealers, who have used the private markets to peddle shares.

UPDATE: Here is the SEC statement

SEC Announces Charges from Investigation of Secondary Market Trading of Private Company Shares

FOR IMMEDIATE RELEASE
2012-43

Washington, D.C., March 14, 2012 — The Securities and Exchange Commission today charged two managers of private investment funds established solely to acquire the shares of Facebook and other Silicon Valley firms with misleading investors and pocketing undisclosed fees and commissions. The SEC alleges that the fund managers collectively raised more than $70 million from investors.
Additional Materials

SEC Complaint
Administrative Proceeding: Sharespost, Inc. and Greg B. Brogger
Administrative Proceeding: Laurence Albukerk and EB Financial Group, LLC

Separately, the SEC charged SharesPost, an online service that matches buyers and sellers of pre-IPO stock, with engaging in securities transactions without registering as a broker-dealer.

The charges stem from the SEC’s yearlong investigation of the fast-growing business of trading pre-IPO shares on the secondary market.

“While we applaud innovation in the capital markets, new platforms and products must obey the rules and ensure the basic fairness and disclosure that are the hallmarks of sound financial regulation,” said Robert Khuzami, Director of the SEC’s Division of Enforcement.

“Fund managers must fully disclose their compensation and material conflicts of interest. Investors deserve better than the kind of undisclosed self-dealing present in these cases,” said Robert Kaplan, Co-Chief of the SEC Enforcement Division’s Asset Management Unit.
SEC v. Frank Mazzola, Felix Investments LLC, and Facie Libre Management Associates LLC

The SEC alleges that Mazzola, who lives in Upper Saddle River, N.J., and his firms created two funds to buy securities of Facebook and other high profile technology companies. However, Mazzola and his firms engaged in improper self-dealing — earning secret commissions above the 5 percent disclosed in offering materials on the funds’ acquisition of Facebook stock and on re-sales of fund interests to new investors. The hidden charges essentially raised the prices paid by their investors for Facebook stock because it created a disincentive for Mazzola and his firms to negotiate a lower price for fund investors. They also sold Facie Libre fund interests despite knowing the funds lacked ownership of certain Facebook shares.

According to the SEC’s complaint filed in federal court in San Francisco, Mazzola and his firms also made false statements to investors in other funds they created to invest in various pre-IPO companies. For instance, they misled one investor into believing a Felix fund had successfully acquired stock of Zynga. They also made false representations about Twitter’s revenue to attract investors to their Twitter fund.

The SEC’s lawsuit against Mazzola, Felix Investments, and Facie Libre seeks court orders prohibiting them from engaging in securities fraud and requiring them to disgorge their ill-gotten gains and pay financial penalties.
In the Matter of EB Financial Group LLC and Laurence Albukerk

According to the SEC’s administrative proceeding against Laurence Albukerk, who lives in San Francisco, he and his firm hid from investors significant compensation earned in connection with two Facebook funds they managed. In written offering materials for the funds, Albukerk told investors he charged only a 5 percent fee for an initial investment and a 5 percent fee when the shares were distributed to fund investors upon a Facebook IPO. However, Albukerk obtained additional compensation by using an entity controlled by his wife to purchase the Facebook stock and then buying interests in that entity for the EB Funds while charging investors a mark-up. Albukerk also earned a brokerage fee on the acquisition of Facebook shares from the original stockholders. As a result of the fee and mark-up, investors in Albukerk’s two Facebook funds ultimately paid significantly more than the fees disclosed in the offering materials.

Without admitting or denying the SEC’s findings, Albukerk and EB Financial consented to entry of a SEC order finding that they violated Section 17(a)(2) of the Securities Act of 1933 and Section 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. Albukerk and EB Financial also agreed to pay disgorgement and prejudgment interest of $210,499 and a penalty of $100,000.
In the Matter of SharesPost Inc. and Greg Brogger

According to the SEC’s administrative proceeding against SharesPost and its CEO Greg Brogger of Park City, Utah, the online platform facilitated securities transactions without registering with the SEC as a broker-dealer. SharesPost engaged in a series of activities that constituted the business of effecting securities transactions and thus were required to register as a broker-dealer. SharesPost held itself out to the public as an online service to help match buyers and sellers of pre-IPO stock and allowed registered representatives of other broker-dealers to hold themselves out as SharesPost employees and earn commissions on transactions they facilitated through the SharesPost platform. SharesPost and affiliated broker-dealers also created a commission pool that was distributed by an executive to employees who were representatives of these broker-dealers. The company also collected and published on its website third-party information concerning issuers’ financial metrics, SharesPost-funded research reports, and a SharesPost-created valuation index. Additionally, the SharesPost platform was used to create an auction process for interests in funds managed by a SharesPost affiliate and designed to buy stock in pre-IPO companies.

“The newly emerging secondary marketplace for pre-IPO stock presents risk for even savvy investors,” said Marc Fagel, Director of the SEC’s San Francisco Regional Office. “Broker-dealer registration helps ensure those who effect securities transactions can be relied upon to understand and faithfully execute their obligations to customers and the markets. SharesPost skirted these important provisions.”

SharesPost and Brogger consented to an SEC order finding that SharesPost committed and Brogger caused a violation of Section 15(a) of the Exchange Act of 1934. They agreed to pay penalties of $80,000 and $20,000 respectively. Subsequent to the SEC’s investigation, SharesPost acquired a broker-dealer and its membership agreement was approved by the Financial Industry Regulatory Authority (FINRA).

These cases were investigated by Michael E. Liftik, Erin E. Schneider and Robert S. Leach of the San Francisco Regional Office. Ms. Schneider and Mr. Leach are members of the SEC’s Asset Management Unit. Fred Jolivet of the San Francisco Regional Office’s broker-dealer program conducted an examination relating to the SharesPost matter. The SEC’s litigation effort will be led by Robert L. Mitchell and Robert L. Tashjian of the San Francisco Regional Office.

The SEC thanks FINRA for its assistance in this matter.

# # #

For more information about this enforcement action, contact:

Robert Kaplan (202-551-4969) and Bruce Karpati (212-336-0104)
Co-Chiefs, Asset Management Unit, SEC Division of Enforcement

Marc J. Fagel
Director, SEC San Francisco Regional Office
(415) 705-2449

Michael S. Dicke
Associate Director (Enforcement), SEC San Francisco Regional Office
(415) 705-2458

http://www.sec.gov/news/press/2011/2012-43.htm

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Fucking idiots.

Full article

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