SEC Could Use 'Naked-Shorting,' Apple Alerts
NEW YORK (TheStreet) -- Critics have been saying for a long time that the Securities and Exchange Commission misses all the big investor issues of the day, and is at least 30 years behind the times. That is tragically unfair. Why, look at the Investor Bulletin that the SEC just generated, warning of the dangers of a spanking new investor concern called the "reverse merger."
The SEC isn't 30 years behind the times. It's 25 years behind the times, and not a second more.
As I mentioned in this space last August, reverse mergers have been used by stock scamsters since the 1980s as well as by legitimate companies, and at best are red flags. The SEC is probing a network of Chinese small-cap stocks that are a product of reverse mergers, including China Sky One Medical (CSKI), Fuqi International (FUQI) and Rino International (RINO).
I'm glad the SEC's investor-education apparatus has moved so forthrightly into the concerns of the 1980s. All they need to do now is to move into the 1990s and maybe -- who knows? -- in 20 years or so they'll catch up with the 2000s. In furtherance of that goal, as a public service, I am taking the liberty of suggesting other topics of future SEC Investor Bulletins:Reverse Stock Splits. As long as the SEC is focusing on the word "reverse," perhaps it might focus on another "reverse"-related investor concern: the reverse stock split. The SEC has a long list of Investor Alerts, ranging from affinity fraud to government impersonators, and yet it doesn't include this really odious investor rip-off. Reverse splits artificially boost share prices, which is never a good thing. It should be outlawed, or at least warned against. The most recent subject of a reverse split was Citigroup (C), which carried out a 1-for-10 split in May, and the stock tumbled thereafter -- as reverse-splitted stocks have been known to do. But don't hold your breath on the SEC issuing an Investor Bulletin on Reverse Stock Splits. You can bet that the SEC's fine staff isn't going to tee off a politically powerful potential employer like Citi. Naked-Shorting 'Victims.' Naked-shorting has been a favorite whine theme of inept CEOs and outright scammers since the 1980s and earlier. It's currently a favorite of Overstock.com (OSTK) CEO Patrick Byrne, who is crying about naked-shorting when he isn't restating his financial statements, fending off a consumer-fraud lawsuit by California law enforcement, and posting comments to magazines that mention him in passing.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV