Nasdaq In Addition To The Novel York Stock Telephone Commutation (And Peradventure Herbalife) Squad Upward To Assistance Organised Crime

Charlie Gasparino suggested inward a tweet in addition to a story that Herbalife, the Nasdaq in addition to the New York Stock Exchange direct hold teamed upward to create an anti-short-seller Bill. The Bill forces disclosure standards on brusk sellers.

I direct hold no conclusive bear witness either agency every bit to whether Herbalife is involved behind the scenes or not. However the Bill is existent in addition to Charlie is normally a fairly thorough reporter in addition to I direct hold no argue to disbelieve him. And Herbalife has non denied the story.

The Bill is a threat to my physical safety. 

I desire to assure readers that I am non exaggerating inward the slightest. 

Bronte has a concern model on the brusk side of maintaining a large database of people nosotros regard every bit crooked in addition to finding stocks associated amongst them in addition to shorting those stocks. Often nosotros arrive at non know the total extent of the crook's concern - nosotros are precisely running on designing recognition.

One such stock was mainland People's Republic of China Agritech. We were brusk it originally because at that spot was a tyke crook associated amongst it. We worked out plenty including some ridiculous disclosures such every bit "proprietary nano-honeycomb embedding in addition to microelement deep complexing technologies" inward their organic fertiliser. Shorting a companionship associated amongst low-level scammers that literally claims to sell high-tech shit is precisely my style. 

Unbeknownst to me at the fourth dimension even hence the Chief Financial Officer of mainland People's Republic of China Agritech - Mr Yau Sing (Gareth) Tang- had a history. Mr Tang in addition to Mr Jimmy Hueng were the directors of a Hong Kong Company called Win's Prosperity Group which collapsed. The story is told past times Professor T. Wing Lo inward the British Journal of Criminology. The straight quote (about a Hong Kong stock scam) is:

This representative began amongst the renaming of a listed structure company, OLS Group, every bit mainland People's Republic of China Prosperity Holdings (CPH) on 29 Apr 1999. Coincidentally, both the Chinese in addition to English linguistic communication words for ‘Prosperity’ were the same every bit inward Jimmy’s company, Win’s Prosperity Group. Jimmy Heung in addition to a Mr Tang were the exclusively directors of Win’s Prosperity Group. Tang was likewise the Executive Director of CPH, but Jimmy, every bit a triad figure, is non allowed to concord directorship of whatever listed company.

Jimmy Heung - now deceased but hence Gareth Tang's regular concern partner - was slow to find. His manful individual raise was the founder of the Lord's Day Yee On Triad. It was widely reported he was the Triad boss at the fourth dimension mainland People's Republic of China Agritech was fleecing American shareholders.

Anyway I publicly ridiculed mainland People's Republic of China Agritech on this blog. Obviously I did non know of Triad interest when I did this every bit I am non stupid or reckless. But non knowing Triads are involved does non obviate their involvement.

I stopped talking nigh mainland People's Republic of China Agritech when I received threats of violence past times telephone from mainland People's Republic of China from people who made really clear that the threats were credible. I reported these threats at the fourth dimension to the Federal in addition to local constabulary which made it apparent to me that the Australian organisation wasn't good equipped to direct hold cross-border threats from China.

And to a greater extent than importantly I vowed to move far to a greater extent than restrictive nigh what I would say nigh brusk positions in addition to what I would bring out nigh brusk positions inward the future. 

Whatever - mainland People's Republic of China Agritech was listed on the NASDAQ. It wasn't a minor pink-sheet companionship in addition to it had institutional shareholders. 

China Agritech is dead in addition to buried immediately - in addition to hence is the Triad figure who was responsible for this fraud - hence I experience prophylactic plenty talking now. I arrive at non experience prophylactic talking nigh this materials generally. Indeed I would never willingly bring out such a short. Unless forced to past times this Bill.

What this Bill volition arrive at is let Triads in addition to other organised law-breaking gangs to listing stocks on American stock exchanges in addition to non worry about market participants anonymously exposing the natures of their crimes. The short-sellers volition direct hold to bring out themselves, non exclusively to the SEC, but likewise to the those that volition arrive at them harm.

I say - without fearfulness of exaggeration - that this is the Organised Crime Stock Fraud Protection Bill.

I tin laissez passer the sack sympathize why crooked companies powerfulness back upward this Bill. And it gives me intermission that Charlie reports a companionship that I ain supports this Bill. But I direct hold no agreement (other than a cynical select direct hold of for listing fees) every bit to why the NYSE in addition to NASDAQ are happy for Lord's Day Yee On Triad companies to listing on their exchanges in addition to why they back upward a Bill to protect them.

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Why should shareholders direct hold to bring out positions anyway?

Running a funds management companionship y'all exclusively actually direct hold ane output. Positions inward stock market. That is your intellectual property. 

There is no other concern I know where the concern is forced to bring out the entirety of their intellectual property.

That said - I tin laissez passer the sack mean value of a decent argue to forcefulness disclosure of long positions. If I ain a portion I ain a vote. If y'all ain a portion y'all likewise ain a vote. If ain thirty per centum of a companionship inward most cases I tin laissez passer the sack effectively command it. My votes impinge on the ability of your votes. 

Because my ownership of shares tin laissez passer the sack alter the value of your ownership of shares most countries forcefulness disclosure when ownership stakes move large plenty to affair (typically, but arbitrarily at 5 percent). This seems a reasonable compromise betwixt keeping the buyer's intellectual holding individual in addition to allowing the rights/control issues around a companionship to move visible to marketplace seat participants.

However when I brusk a portion I direct hold no rights whatsoever - precisely an obligation to purchase dorsum the stock sometime. My brusk seat doesn't impinge on your long seat except inward every bit much every bit at that spot are deferred buyers inward the stock. The inward a higher house declaration for forcing disclosure only does non apply.

Indeed other than symmetry for symmetry's sake I can't mean value of a unmarried declaration for forcing brusk disclosure in addition to I tin laissez passer the sack mean value of potent arguments opposing it.

I would similar the NYSE in addition to the NASDAQ to lay out a cogent declaration (other than mere symmetry) why disclosure should move forced in addition to why this does non protect organised crime.

If Herbalife is genuinely behind this Bill (as Charlie Gasparino reports) hence I would likewise similar an explanation of why they back upward the Bill.




John Hempton

Post script: Charlie Gasparino has since contacted me in addition to assures me that Herbalife has confirmed the story.