Investors look for justice within Canada's complex trading environment.
The subject of naked short selling comes up on the Stockhouse Bullboards on a regular basis – especially when the junior mining sector falls on hard times, as it has for the past ten months or so.
There is now a single point of gathering for Stockhouse members to discuss the subject of naked short selling as a trading practice. SH member zhengis started a group called Junior Mining Investors Robbed By Canadian Investment Banks, and since May 25 it has already grown to include 111 members.
Here is the group’s mission, as written by zhengis: “The group's mission is to organize investors who believe they have suffered damages and losses from Canadian investment banks illegally shorting junior mining shares.”
zhengis has been directing members to the work of broadcast journalist and finance specialist Jim Puplava, who works as part of a team to operate the information-packed website Financial Sense Online and Financial Sense Newshour. Puplava has been covering the subject of naked short selling for some time now, and he puts an emphasis on how it works at the institutional level with respect to Canadian exchanges, typically at the company financing stage.
The first post to the group’s main discussion thread came from wehrfrjd, who said:
I too have been watching the nonsense for years. The nonsense happens not only on the Vancouver exchange but also on the TSX. Stellar results being rewarded with drops in share price. I hope that we will be able to be a little more then a flash in the pan. It is time that securities in this country are better regulated. I might suggest that there are a lot of moneyed people that, like one Mr. Black, seemed to have nothing but contempt for the rules and the average investor. There are a lot of individuals out there that works hard for their money and do their DD to be rewarded with years of manipulations [sic].
zhengis responded by saying, “Thank you for the support. We need to be consistent in alerting as many investors as we can. As our numbers grow our connections also increase and then we can move to the next step.”
The above is most assuredly true. The group runs the danger of falling apart under its own weight of rumor and hearsay, since anything involving stock price manipulation is notoriously hard to prove, especially if institutions are involved. Members must tread lightly here. In order to make a difference (for that is definitely the group’s goal), they must work together, consolidate their thoughts, and when it comes time they must speak with one clear, confident and knowledgeable voice.
There is no question that the group is looking at taking some real steps. BBOB72, for example, wrote the following proposal for starting an online petition:
1) SH most likely will not support our cause. It is to much of a risk of loosing advertising revenue from the exact people we may be going after.
2) We could construct an "online petition", on an independent site or have someone start our own website, (sorry not me as I am have only a basic working knowledge of computers and the web). I can't think of any reason why anyone who ever invested on the venture or perhaps will in the future not want to become involved in a petition. It could be sent to many different governing bodies.
3) On this site there could be a form letter with addresses that members could print and send in to the proper legistlative authorities. Make it as simple as possible and perhaps many would do this.
That is my suggestion to get some action on this. Who else has any idea's??? Otherwise we could just find our selves grumbling about this but basically doing nothing about it [sic].
Whether or not Stockhouse will “support the cause” is a tricky question – in many respects we already have, simply by providing a forum for this discussion and the communication tools required to get members mobilized. In other respects we cannot support such a cause, particularly when group members are naming companies, institutions and brokerage houses that they believe are involved in naked short selling but with no real proof (yet).
qiaorusi highlighted the difficulty in “naming names” with respect to Puplava’s site: “Hi, I've listened to Puplava's shows, and I've been aware of problems like this for quite some time. Jim, for legal reasons that are understandable is unwilling to name names on his show. I wonder where an investor can go where the names of these crooks are named.”
Whatever happens with the group as it pursues its goals (and we wish them the best of luck), there is one thing Stockhouse does support, openly and with passion, and that is the power of online investment communities to affect change. Stockhouse is home to hundreds of thousands of registered members, most of whom are active investors and / or traders. There are thousands of pockets of communication all over the site, within Bullboards, groups, blogs and via private messaging.
There is a group just getting off the ground, for example, for investors who want to talk about Pink Sheet stocks. There is a group this author is hosting to discuss the current global macroeconomic environment. There is a group that specifically tracks stocks that are potential candidates for receiving trading halts. The point is, if there is an investment subject you want to talk about with like-minded investors, Stockhouse is a fine place to do it.
And, if the conditions are right and the subject is engaged with respect and integrity, you might end up doing more than just talking. That’s what the naked short selling group has in mind, and we’re proud to help them along the way.
Best of luck to this and all Stockhouse groups.
