Transcripts

OFFICIAL AMA- Lucy Komisar Monday, May 24th| 🚨Lucy Komisar AMA Summary/ Trascript(1/3)🚨

Hello everyone, B_T here, I know this is out of the ordinary, but along with this post being our AMA Transcript/ Summary this is also going to act as our AMA question thread for the Lucy Komisar AMA part 2.

https://www.reddit.com/r/Superstonk/comments/nj867u/official_ama_lucy_komisar_monday_may_24th_lucy/

🚨 Lucy Komisar AMA Summary/ Transcript 🚨 (2/3)

365 votes, 11 comments. ____________________________________________________________________________ COMPROMISED MEDIA Elle VIDEO CAPTION: Aaron ...

https://www.reddit.com/r/Superstonk/comments/nj86s0/lucy_komisar_ama_summary_transcript_23/

🚨 Lucy Komisar AMA Summary/ Transcript 🚨 (3/3)

317 votes, 30 comments. / BENEFITING FROM UNFAIRNESS Elle Lucy Elle Elle Lucy Elle Lucy TL:DR 🦍 Summary: The solution has been clear for ages ...

https://www.reddit.com/r/Superstonk/comments/nj87lc/lucy_komisar_ama_summary_transcript_33/

• DISCLAIMER*

INTRODUCTIONS

• Elle
• Well, hello everyone. Hello Reddit. Hello Superstonk. Hello, world! Thank you so much for waiting. It is me, u/Luridess or as I like to go with, Elle.
• I'm here today with the amazing, phenomenal, fantastic one and only award winning investigative journalist, Lucy Komisar.
• Lucy, thank you so much for joining us today. I am so excited about this AMA. You know, the more that we've discussed, the more phone calls we've had, the more I've learned about your background and your history, and your involvement in this whole saga with not just GME, but with naked short selling.
• My mind has been absolutely blown away. So, needless to say, everyone is thrilled to have an opportunity to hear directly from you.
• So before we begin, I would love it if you could maybe give us a brief introduction, just about you know, yourself, your background, and how you really got involved in GameStop.

• Lucy
• I got involved in journalism, years ago, I was still in college, in the civil rights movement.
• I went to Mississippi and became editor of the Mississippi Free Press, which was a newspaper focused on the civil rights movement. Later, I ended up coming back to New York, I couldn't get a job in journalism because they weren't hiring women.
• I once tried to get a job at UPI. And the person in charge of the Bureau in New York said, I'm sorry, Lucy, we already have three girls. So I became freelance and began writing about social justice issues, labor, civil rights, women.
• I moved on to writing about what was going on in developing countries when there were groups trying to democratize, to overthrow the dictator. And in the 80s and 90s.
• I went to the Philippines, which was ruled by Marcos.
• I went to Zaire, which was ruled by Mobutu. And,
• I went to Haiti, which was ruled first by the Duvalier, and then the people that followed them, but would have the same click.
• In each of those places, these were in three continents. People said the dictator has looted the country and the money is all in Swiss banks. I thought, What is that all about? I haven't been reading about Swiss banks being the places where dictators, kleptocrats, put their money.
• So I began to look into it. And that started me, in the late 90s, in writing about offshore, the whole offshore banking corporate secrecy system. And offshore by the way, doesn't necessarily mean it's an island although there are many in the Caribbean and islands off the UK. It could mean Switzerland, Liechtenstein, Luxembourg, and right now it also means in many instances, the US and the UK itself

• Elle
• That's interesting Lucy because when people think offshore, you know, they will think Cayman Islands or some Island somewhere.
• But, what you're telling me and as I understand it is that offshore means a secrecy haven. So you still have an offshore account? In the United States.

• Lucy
• Yes, you can. Places like Delaware, Wyoming, they advertise set up a company, you can't have a bank account that is secret, but you can have a company that is secret.

TL:DR 🦍 Summary:

• Lucy and Elle share introductions and get straight to business, i.e. Lucy’s first taste into financial matters was when she discovered ‘offshore’ banking doesn’t really mean what the word implies.

• An offshore bank account can and does exist all over the word, wherever it may be from. An ‘offshore’ bank account is really the ability to set up a secret company to mask what would otherwise be illegal activity in the place the main company is situated

• Elle
• Now, Lucy, how did your initial involvement in these financial crimes and secret bank accounts and the offshore system-- How does that tie into your involvement with GameStop?

• Lucy
• Well, because of writing about offshore, I got invited to be in a film, which would be called the Wall Street conspiracy.
• Which came out in 2012. When the person called me and I talked to the person who invited me. I said, I never heard of naked short selling.
• And he said, Don't worry, we want to talk to you about offshore, and how that is linked. And it certainly is linked. But when I went to the studio, where people were being interviewed for the film, I met everybody who was involved in fighting naked short selling,

• Elle
• Lucy so now you have to spill the tea, when you say you met everybody who do you mean?

• Lucy
• I met Wes Christian. I met Suzanne Trimbath...

• Elle
• You met Dr. T?! Wow

• Lucy
• Yes. Therefore, and other people that were in that film, and the film, by the way, is now on Youtube.

• Elle

• Did you also meet Carl Hagberg?

• Lucy
• I don't remember. I think he was there. But I don't remember meeting him.

• Elle
• So I'm glad you mentioned that the film is on YouTube, because it has the link to that film. And that documentary has been posted consistently on the SuperStonk website by various users, as well as mods.
• So for anyone who's watching and who has not seen the Wall Street conspiracy, it is available to watch for free on YouTube. I suggest everyone go and watch that it is mind-opening, and it is absolutely phenomenal.
• So before we kind of dive into the whole GME saga and some of the questions that users-- sorry, apes have been providing that Lucy, the reason we call ourselves apes is it's, you know, it's kind of building a sense of community. And it's interesting, I actually read a post today on SuperStonk this morning while I was drinking my coffee and reading my daily DD, I saw a post by an Ape (I can't remember who it was, my apologies) they essentially said something along the lines of how they appreciated that we all call ourselves apes because it's a reference to the fact that you have this community of people from around the world who are learning about this very complex, economic and financial system.
• By referring to ourselves as apes were, you know, initially, essentially implying that, you know, we don't, we don't know anything, but we're here to learn.

TL:DR 🦍 Summary:

• Lucy explains her interest in digging into offshore bank accounts resulted in her talents for investigative journalism being spotted by none other than Dr. T and the other usual suspects in relation to those opposed to naked short selling.

• The mods agree all apes should watch the fruits of that labor, and check out the Wall Street Conspiracy. It’s free! Wall Street conspiracy

• Ape = All People Equal, no?

DEATH SPIRAL FINANCING

• Lucy
• To start with, I’d like to show you how the offshore system really does connect with naked short selling, and it's about the Sedona story. And that started out about 20 years ago.
• Sedona is a software company based in King of Prussia, Pennsylvania. It was just starting out, and it wanted to expand. So an investment banker named Micheal Vasinkevich, was working at a company called Ladenburg Fahlman. and he said he could help finance their growth. Now, this Ladenburg Thalmann was owned by corporate raiders, Carl Icahn, and Bennett LeBow.
• The deal was Vasinkevich was going to get Sedona, a two and a half million dollar deal in which he would locate investors and sell shares to them, the lenders would be paid back when the loans came due, they would be converted to shares.
• So, you have a loan and what we promised to pay are shares, the amount of shares depended on the stock price at the time of the conversion.
• This would come to be called Death Spiral financing and you will see why.
• That's where offshore and naked short selling came in. Thomas Badian and his brother, Andreas, are from Vienna. They had a company called Rhino Advisors and they would be the intermediaries working with Sedona and the man from Ladenburg Fahlman.
• They were working with an offshore fund called Amro International, which was registered in Panama, based in Zurich, to offshore places. Ladenburg investors included the Batliner Group. Well, if anybody did some due diligence they would find Herbert Batliner, or according to a 1999 German intelligence report, was in the business of laundering illicit funds.
• US prosecutors told a Colorado trial in federal court that Batliner had been handling the money for a very prominent Latin American drug dealer. So the contract with Amro said no shorting because the shorting would push down the price of the shares. And the less the shares were worth when it came time to convert them (the loans to shares), the more of the stock that Amro would get.
• But the Badians went to work.
• When Sedona signed the deal with Ladenburg Thalmann in February 2000, the shares were trading at $6.
• Every time the company made a good deal, good news, such as a relationship with IBM, it should have tripled their shares. The shares went down, and they couldn't figure out what was going on.
• But it turned out that the Badians were shorting the sale through an electronic communications network that allowed the seller to hide. And a month before the conversions, Andreas Badian told the brokers at the infamously corrupt and now-defunct New York brokerage called Refco to start selling Sedona stock short from an account at an offshore Refco affiliate.
• Refco was not a fly-by-night, it had $4 billion in some 200,000 customer counts. It was the largest broker on the Chicago Mercantile Exchange. In a month, they pushed down the price of the share from $6 to $1.
• Now, Badian told the brokers (and this was on tape at Westminster brokerage in New York): keep selling, use unbridled levels of aggression, because every dollar that you sell is a dollar in my pocket.
• The price fell to 75 cents, then it fell to 10 cents.
• The Badians, the trading that they had been doing in one month represented 40% of all trades.
• Somebody should have been looking at that trying to figure out what's going on.
• The conversion left Sedona still out of their $2.5 million loans owing $1.9 million, and they would have to issue more shares because they would end up letting the Badians control the company.
• So, they (Sedona) started out in February of 2000 with:
• 77 employees;
• 65 clients that wanted their software;
• an IBM contract;
• $17 million in financing.
• When the stock tanked:
• they lost business - companies don't want to buy software when there may not be anybody around to service it;
• they couldn't get other financings;
• they had to fire employees.
• So Sedona finally went to the SEC, and the Justice Department.
• They were looking at what was going on. They charged Andreas in a criminal case, but he jumped sail and went to Vienna.
• Austria doesn't have a treaty with the US that where somebody is a miscreant and a financial crime, you can't demand that person come back. There's no extradition.
• So Thomas Badian and Rhino have settled with the SEC for $1 million, without admitting any guilt.
• But the SEC did not sue Ladenburg or Batliner or Westminster, or anybody else involved.
• In May ‘03, that's when lawyer Wes Christian got involved. He filed a civil suit against Ladenburg Thalmann, against Vasinkovich, Badian, Rhino and some others.
• However, Judge Swain in New York, heard the suit and over nine years she blocked the suit by not ruling on the very first key motion. She also never allowed Sedona to get discovery, which would have given them the documentation they needed.
• She dismissed most of the defendants, including the central figures, and finally Wes Christian settled with Ladenburg, which was a few months before the case was scheduled to be heard in federal court.
• So Sedona is still in business. It's trading at less than a penny a share.
• What are the lessons that we have here?
• Major companies, such as Ladenburg, may enable fraudsters.
• The SEC and the courts do not provide protection to the victims.
• Sedona was taken down in 2001 when the SEC passed Reg SHO, which was to deal with naked short selling.
• In 2004, they included massive loopholes, which have facilitated naked short selling at GameStop.
• And it, for example, ignored fails that didn't happen in public exchanges.
• The Badians had moved trades through Canada.

• Elle
• Sorry, I heard you referring to fails - fails to deliver?

• Lucy
• Fails to deliver.
• But it's only-- they've actually put out a paper saying this only refers to trades on exchanges.
• This doesn't include when you call it-- nobody knows what's happening in Canada or some other places that are not providing information or in dark pools.
• So they did not take the lesson.
• They knew about the case. They were involved in the case. And they just let it slide.
• Wes Christian told me that more than 1200 hedge funds and offshore accounts were working through more than 150 broker-dealers and market makers to strip these small and medium companies of their value with these death spiral deals.
• And the lawsuits showed that the illegal shorters use shell companies and offshore Guernsey the Caymans, Costa Rica, the Bahamas.
• And many of the companies that the Badians cheated were put out of business.
• That's the first important lesson.
• And in the end, as we go down and look through the years, the decades... It ends with GameStop.

TL:DR 🦍 Summary:

• Lucy goes through and breaks down the situation surrounding Sedona (A software company) who was targeted by similar short-seller tactics to GameStop.

• In order to explain Lucy’s case in point, she explains the story of the Badian Brothers and a company named Sedona. Sedona decided to finance a $2.5 million dollar loan where repayment was going to be made via shares, with the number required to be repaid dependent on the stock price at the ‘conversion’, i.e. 250,000 shares if the stock was at $10, or 2,500,000 if the stock was at $1.This would later be dubbed ‘death spiral financing’.

• Sedona shouldn’t have been hurting as bad as it was, the company had a lot going for it, but for every piece of good news that would come out, the stock wouldn’t move or it would even go down (I wonder where we have seen that before). The goal was partially to carry out an asset grab on the company.

• “Wes Christian told me that more than 1200 hedge funds and offshore accounts were working through more than 150 broker dealers and market makers to strip these small and medium companies of their value with these death spiral deals.”

• It was thought that RegSHO would help prevent the abusive short-selling practice but there were too many loopholes that would then go on to allow the activity that we see today with $GME.

• Lucy explains Reg SHO is littered with loopholes that, for example, don't count fails to deliver on nonpublic exchanges! But

• “And in the end, as we go down and look through the years, the decades... it ends with GameStop.”

SEC INTERVENTION

• Elle
• Thank you so much for that Lucy and I'm glad that you gave that explanation of where it first started because that actually ties into one of the questions that we have from one of our users.

• Lucy
• That's correct.
• Sometimes they go after the low-hanging fruit. For instance, they went after the Badians, they got a settlement for $1 million, they did file a legal complaint against Andreas, but what about the guys at the top? What about Ladenburg Thalmann, a very important company, which was then owned by a very important guy named Carl Icahn.
• They don't go after the big players.

• Elle
• So then speaking of low hanging fruit that is-- so if you could just pull that question up again. Because there are a few other questions in that screenshot that I'd like to ask.

• Elle
• Do you have any thoughts on that, Lucy?

• Lucy
• Well, what's happened in the cases-- and Wes Christian knows a lot about this-- what was discovered for bringing the cases in federal court is that even if they got to a certain level, then they might be knocked out because in certain cases, the judge has ruled that only the SEC has jurisdiction in that kind of complaint.
• So the federal courts were not useful.
• So then Wes started going to the state courts, and once you can get discovery, which is you find out where the bodies are buried and evidence of the dirty stuff-- which you can do when you're in a court case, you can demand that the other side, give you particular documents that you are asking for.
• And that is how you get the evidence. You go to court. Now you have to go to a state court and you demand the documents.
• And I'll talk a little bit later about how that worked out for another major company. But I think that that's the way to go.

TL:DR 🦍 Summary:

• Historically, The SEC has not had a good track record in punishing the “big guys” for their misconduct, beyond a fine and a slap on the wrist. This has been corroborated by many different individuals at this point.
• This is why it's such a big deal that we are seeing The SEC working to change things now!

• Wes Christian will have a wealth of knowledge on the legal side of this conversation.

• Lucy goes on to mention that going through with legal action has worked, somewhat, in the past. Once a case enters discovery, that's when the really juicy stuff can be uncovered.

JOURNALISTIC INTEGRITY? NEVER HEARD IT!

• Elle
• Thank you. And if we could just pull up that question again, because I think this is a perfect time to segue into our next topic, Lucy, and this is a hot topic with a lot of users on the forum.

• Elle
• So back on March 10 of 2021 GameStop was able to reach a price of $344 until suddenly, journalists wrote negative articles which stated that the price of GameStop dropped, but the price of GameStop didn't drop until 15 minutes after the negative article stated that it dropped.
• This was huge, Lucy, because we had several screenshots from several users around the world who were posting this on social media on r/Superstonk and other places.
• Do you have any thoughts or comments on how something like this could even be possible?

• Lucy
• I'd like for that's a good way to get into another story, which specifically deals with journalists. This is a story about a man named Elgindy, Anthony Elgindy.
• He was an Egyptian who pretended to be an Italian, he lived in San Diago, and he ran a subscription stock message board on the internet.
• He had a few hundred hedge funds that were members, they were paying him $300 to $600 a month for the privilege of being on the website talking about “who are we going to hit next?”.
• Hit next means who we go in to target with naked short selling. So such and such at the street, will publish a story on Thursday, saying this, that you can get a locate in a brokerage in Vancouver, or at Goldman Sachs.
• Among the members was Dan Loeb, who founded and heads Third Point, one of the world's largest hedge funds.
• He used the screen name “Mr. Pink”, which is a reference to a character in “Reservoir Dogs” about a bunch of gangsters and one of them was called Mr. Pink.
• And he has talked about that online, not about what I'm going to tell you, but he says he was a Mr. Pink.
• Elgindy had confederates inside the SEC. He would short a company, go to the SEC, get an investigation opened, the stock would fall.
• Former Lehman broker who had retired to Florida, got a call from a fellow he hadn't heard from in 20 years. It was a former penny stock manipulator, named Jonathan Curshen, who ran Red Sea Management out of Costa Rica. And he told this former broker that the stock of an internet health company he was an officer in was going to be hit by an attack.
• The person said, Why are you calling me?
• He [Curshen] said, well years ago, you treated me fairly.
• So, if there was going to be an attack, he probably was looking at the website of the company and he found out that this guy was one of the offices.
• He also told him about the Elgindy website. And he said the attack would include articles by financial writers.
• So Curshen, on tape, to the broker said, We have journalists on the take.
• Curshen had gone to Aruba. He had gotten cards, you can load with money. He said, you give $25,000 to a bank, they give you a card that someone can use at an ATM machine. “We are using these cards to pay journalists.”
• The former Lehman broker was going to work for Eagletech, a Florida company set up to develop a “follow me” invention on telephones-- people could have phone calls ring on multiple phones or could follow them to other numbers.
• And Curshen said, “Don't do that. We're beginning an attack on Eagletech next week.”
• So with Curshen’s introduction, this prospective Chief Financial Officer of Eagletech logged on to the website.
• And he hired three secretaries because the way the website work, it would go forward but you couldn't scroll back. And you couldn't save online. So he or you just couldn't save.
• So he hired three secretaries and they sat around the clock hitting “print screen” every five minutes.
• He collected banker's boxes of transcripts and stashed them in his garage. Dan Loeb, Mr. Pink, is on the screenshots. (I know because I have them. )
• Now Elgindy’s brother was in the Muslim Brotherhood.
• On 9/10 2001, Elgindy called his broker at Smith Barney and told him to sell all the shares he had because tomorrow the Dow is going to 3000, it was at 9600 [on 9/10]. The next day the planes hit the buildings.
• A day after, the broker at Smith Barney called the FBI said, *I have a client who seems to have known about this.*They looked into it. The Lehman ex-broker gave the FBI the screenshots.
• So aside from Elgindy’s Islamic connections, the FBI found out about the short-selling attacks. They also found out that he had bribed two FBI agents who are giving him tips such as “we are going to raid this company next Wednesday.” And he’d give them $20,000, and he’d short sell the target and put it on the message board.
• Elgindy was arrested in 2002. He was found guilty and sentenced to 13 years.
• The FBI couple also went to prison.
• After seven years, Elgindy got out.
• A few years later, his son posted on Facebook that his father had died.
• Journalists seeking information from the coroner were not provided with anything. They refused. Some believe that he was put into a witness protection program to give information on his Islamic contacts.
• Jonathan Curshen had been living in Costa Rica. And he came for a two day trip in 2008, six years after Elgindy was arrested. And he was arrested. And he was convicted of conspiracy to commit bank wire securities fraud, money laundering, sentenced to 20 years in prison, and he is still there.
• Now there were hundreds of crimes detailed in the Elgindy screenshots, information about journalists, information about important traders.
• There is no indication the Justice Department went after any of the 400 naked shorting miscreants on this website.

• Elle
• Sorry to interrupt Lucy. So what you're telling me that is, if I understand this correctly, is that the Elgindy case is definitive proof that there has been manipulation by the media in the past by journalists to have been bought out? Is that what you're saying?

• Lucy
• Yes, they were paid to do this. And that information comes from the guy, (Curshen) who was paying them.

• Elle
• Wow, that is unbelievable. That I don't even know how to respond to that. Because you would think that the media is supposed to be unbiased and objective, but hearing this I think and having a case that is providing definitive proof is incredibly eye-opening. And that kind of ties into the next few questions that I have.

TL:DR 🦍 Summary:

• In order to illustrate how the media can be bought and is corrupt, Lucy explains the story of Athony Elgindy. Elgindy was an Egyptian who liked to pretend he was an Italian and ran an online messaging board, but not in the same vein we are now accustomed to.

• This webpage was a hitlist, except it did not target people, but companies. Elgindy had contacts everywhere, including the SEC. So not only would this website determine which company was next to be hit; it would prompt SEC investigations to tank the price and paid for articles, as journos were on the take.

• Journalists and others were bought using prepaid bank cards, which had a set sum of money that could be drawn from an ATM, usually in the region of $20,000-$25,000.

• Elgindy was so connected he managed to somehow know about, and profit from (Editor’s note, I can’t contain my disgust) the 9/11 attacks, given he likely knew they were to happen and advised others to sell their entire holdings the day before*.**

• Elgindy is now allegedly deceased, but no proof to this effect has been provided.

• Notwithstanding the above disgust, this shows unequivocally that the media can, and has been, bought*.**

COMPROMISED MEDIA

• Elle
• So I just wanted to play a video very quickly if we could just pull that up.

reddit.com

https://reddit.com/link/nj86s0/video/ch9vhpimgv071/player

• Aaron Task:
• Welcome to Wall Street confidential. I'm Aaron Task joined again by Jim Cramer. Jim, welcome.

• Jim Cramer:
• Good to see you.

• Aaron Task:
• Thanks for being here.
• So on economic data today, we want to talk about something else first.
• Again, today, we have the misdirection from the futures. The futures part of the up market. And as of right now, stocks are down again.
• Is this just because it's the holiday period that we're seeing this?

• Jim Cramer:
• You know, a lot of times when I was short, at my hedge fund (Position short, meaning I needed it down, I would create a level of activity beforehand that could drive the futures.)
• It doesn't take much money.
• Similarly, if I were long and I would want to make things a little bit rosy, I would go in and take a bunch of stocks and make sure that they are there higher and maybe commit 5 million in capital- to do it and I could affect it

• Elle

• So we have this video here from Cramer. And I just wanted to pull up this question now.

• u/Ceraphh and my apologies everyone in advance if I don't pronounce your usernames properly-- u/Ceraphh asked some pertinent questions that I think are kind of relevant to what we are speaking here, Lucy.

• Elle
• So at the bottom, the last two questions, u/Cerapph has asked: Do you believe that major media outlets have been compromised? And in what way? Do you believe it is possible that large institutions compensate media outlets to write false statements that financially benefit the institutions?

• Lucy
• I think they’re compromised in that a lot of what financial reporters do is rewrite press releases from companies and from brokers or whoever, whoever wants to get a word, a line, across.
• And it's partly a little bit of laziness, but also these people are their sources. And if you want to keep having sources, which is where you get most of your stories, you cannot turn them off.
• So that's a problem.
• When you have limited sources and you're not doing your own digging, and maybe your editor doesn't really want you to do any serious digging, how can-- do they compensate them?
• Well, we've heard that some, they are compensated, I don't know if the very big ones do it.
• But you know, there are various kinds of compensation. Sometimes you get a job, you know, you write what people want to hear, and suddenly you leave work at a newspaper where you're paid x, and you get a job someplace else, where you pay 10x. And this is also payment for service.

• Elle
• So that's really interesting, because, you know, one of the questions that a lot of users have brought up, and if we could bring up that question again.

• Elle
• So at the end, they asked, in addition, how can a regular consumer differentiate between trusted sources and compromised outlets?
• And I think this is a really important question, because for a lot of people who aren't necessarily familiar with media, or news outlets, it's difficult to determine what is an actual objective news outlet versus what is potentially a biased-- and you know, some examples that come to mind are Motley Fool for example, or Market Watch or possibly even CNBC.
• So what recommendations or suggestions can give to the community when they're trying to find trusted sources versus compromised outlets?

• Lucy
• First, you look for evidence after they make claims, documentary evidence.
• And then, you know, maybe you have to, you keep a record of they said this, and after a month or so, or more, the truth turned out to be this, which was not what they said.
• Because people tend to forget: they listen to something on the media, or they read something, and they forget a month later that it turned out not to be true.
• So I think it takes some time to continue to keep these people honest, by reporting when they said something a month or two ago, which turned out to be false, and which was not based on any evidence.

• Elle
• Thank you for that clarification, Lucy, I appreciate that.
• And that kind of ties into the next question that I have on the same sort of theme. Now, I've read your article about GameStop on your website, The Komisar Scoop. And I suggest everyone go and read it, because it was an excellent read.
• But I just wanted to pull up a question from another user.

• Elle
• So u/banjobeardARX has asked-- he would like to know your opinion on mainstream media, for example, CNBC coverage of the GameStop saga since the January run-up.
• So how would you compare their coverage to your coverage? And do you think that what they have done has been objective and unbiased?
• Sorry, before you continue, I also want to frame this in the context of the fact that we have documentary evidence that when CNBC was broadcasting the congressional hearings, they actually edited, even though this was a live stream, they edited out those questions from those politicians who seem to be asking the right questions and the tough questions.
• So if someone was watching the congressional hearings on the official website, on YouTube, they would have seen, for example, Dennis Kelleher, President and CEO of better markets asking this question, whereas if you were watching that same live stream on CNBC on TV, that segment was actually edited out and they've made no mention of it.
• So with that in mind, what's your opinion on mainstream media coverage of the GameStop saga?

• Lucy
• Well, I agree with your distrust, and because of that I haven't watched television for 20 or 30 years at all. I don't have a working TV. And when there are hearings, I go to the website of the committee and I watch the live hearing.
• I certainly would not trust any place like MSNBC or CNN or any of them, to tell me the truth.
• So, the one quick way to avoid being deceived is to stop watching that media.

• Elle
• Sorry, can you repeat that, please what you just said,

• Lucy
• I haven't watched television for 20 to 30 years*, because every time I see a story, where I know the facts, (because it's something I'm working on), they are lying.**
• So why should I waste my time? If there is a hearing, go to the committee site-- you click on the URL for the hearing and you watch the hearing. The hearing will go on correctly and nobody will censor it. But I certainly wouldn't get my news from CNN or NBC or any of them.

• Elle
• So you would get your news directly from the source?

• Lucy
• Yes, also, I find it very useful to look at articles that people are posting to the internet and I know who's writing them so I know whether to trust the source.
• Very often they're not mainstream media, I have found for example, that the postings on Superstonk are brilliant, they give me so much more information than I get in the media mainstream or even in so-called “alternative media”
• Much better, go to the source! Well, that's one of the sources. people are doing research where they are going through actual documentation.

TL:DR 🦍 Summary:

• Lucy is shown the infamous Jim Cramer interview where he is talking about how he as a short seller would manipulate the narrative to fit his needs

• When asked if she believes that mainstream media could be compromised, Lucy points out that in many cases the stories are picked up and spread out of laziness more than malice. Now that is not to say everyone is innocent, but many are just reporting “tips” or Press Releases without researching further.

• Compensation can often mean many things to people, so when we speculate that someone in the media might be “Paid off” to report that a company is going to zero, it might not be cut-and-dry with regards to the methods of compensation.

• How to find trusted sources of news, Lucy’s recommendation:
• Check for evidence of claims made by said source
• Document the claims to fact check later, most people never go back to see if what’s being claimed ends up to be true “People tend to forget”

• “ the one quick way to avoid being deceived is to stop watching that media”.

THE ELEPHANT IN THE ROOM

• Elle
• Lucy before we get too far here, you say “go to the source”, which in this case is r/superstock, we have politicians who have certain opinions about superstock and about us Apes.
• I'm just gonna play a video, This was from the most recent congressional hearing.

reddit.com

https://reddit.com/link/nj86s0/video/ndkjdhi8iv071/player

• VIDEO CAPTION:
• David Scott:
• When erroneous, inaccurate information posted on Social Media sites has the ability to broadly influence investors and move the market, sometimes drastically.
• This, gentlemen... poses a serious question for you, our regulators. There is now such a huge hole in our regulatory process because of GameStop with inexperienced investors relying on unverified information from unqualified Social Media

• Lucy
• Oh, he's so ignorant.

• Elle
• Wow… (Editor's note: Wow is right…)
• You have this elected official, this politician, who's saying that r/Superstonk and r/GME*,** and before that r/Wallstreetbets, has unverified information, unqualified sources. What do you make of that?

• Lucy
• I'm sorry, the man's ignorance is showing. When I saw him speaking at the hearing, I couldn't believe what he was saying.
• The real evidence is the
• Statistics that come from FINRA, which is the broker self-regulator,
• From the SEC
• From the DTCC, which is the clearinghouse.
• Very often these are put out by Bloomberg and other market analysts. The actual data is put out because they have a lot of people that can spend every day going into all these places and getting the data. The things that I read on, for instance, on r/Superstonk are all based on the data with charts and graphs and links to FINRA, all based on the data.
• We don’t know the number of trades that were made by people who were reading r/Superstonk, or the trades that were done by hedge funds, or by anybody else. We don't have that information. But in terms of moving the markets, that is the mainstream media, that is the Wall Street Journal, the New York Times. Can you compare the numbers of people who see those articles and have a lot of money, very often institutional money, to the people on a website?
• I think there's no comparison, it would be really interesting if we could ever find out where the buys and sells were coming from. We know some of it, but not all of it. But, I totally disagree with this person who is obviously showing his ignorance and I bet he never even looked at r/Superstonk And saw the very granular, serious analysis that is being done there. (Editors note: 🤯)

• Elle
• Lucy... I am blown away. I bow down to your intelligence and your amazingness. You are now officially my spirit animal. I want to be you when I become an adult. So I'm just putting that out there.
• I just want to pull up another question. So question number four on this topic of media and collusion. This is a question by retread 83.

• I'm just going to read it out for you, Lucy. So, retread. 83 is asking, I would like to know your thoughts on the third congressional hearing? Actually, well, let's let's broaden this up, on all the congressional hearings (because I know that you've watched them) Who, in your opinion, who was the best speaker of all these congressional hearings?

• Lucy
• I think that Keith Gill was really the best.

• Elle
• Sorry, can you repeat that?

• Lucy
• Keith Gill! He was the retail investor that had bought GameStop through r/Wallstreetbets. He made the most important comment, he said that the same share could be located dozens of times, even for multiple clients. That option market makers like Citadel, were exempt from the rules, and that they had to locate the stock and he said the ability for the same share to be shorted infinite times is a pathology*.**
• We don't have the ability to track what shares are shorted and how many times. Now even Robin Hood CEO, Vlad Tennev said yes, someone could have no shares when the music stops. And this would, and how would the claims on the shares be solved? There were three hearings. There were supposedly very smart people. There were people in Congress asking questions. There were the leaders of the market regulators Gary Gensler, SEC, Robert cook of FINRA, which is the broker self-regulator, Michael Bodsen of DTCC which is the clearinghouse. None of them asked about naked short selling, failures to deliver, no one asked about any of the funny business that goes on which I'll talk about in a minute. that relates to the overstock case, none of them talked about that the best person in those hearings was Keith.

• Elle
• Okay, sorry, I- I- I just have to take a moment here.
• So you're telling me that, of all three congressional hearings, and you have watched them all Correct?

• Lucy
• Correct.

• Elle
• … of all three congressional hearings, the best, most educated, most qualified speaker that you heard, was the retail investor named Keith Gill. or as I know him, his Reddit name, (as you know) u/DeepFuckingValue and on Twitter, he goes by u/TheRoaringKitty-- you're saying that this retail investor was the most eloquent, most intelligent, and most qualified speaker?

• Lucy
• Now on this question, remember that the title of the hearing was about GameStop and short selling. Short selling?! You have to be talking about naked short selling!
• Now, I'm not saying all the other people didn't say interesting things about their subjects. But they ignored the question. They ignored the elephant in the room, because the elephant in the room is naked short selling.

• INSERT ELEPHANT IN THE ROOM MEME-

TL:DR 🦍 Summary:

• Lucy Komisar drops the amazing bombshell that she considers us the top source for well researched and cited investigations into GameStop. Furthering that point by saying that it's been decades since she has ‘wasted her time’ with television news as they are often reporting poorly researched, many times incorrect, information.

• “If you want to avoid being deceived then my advice is to stop watching that media

• Elle brought up a clip from the most recent Financial Services Committee meeting on Gamestop, where Representative [???] calls into question the tireless research r/Superstonk performs

• This representative is then called out on his ignorance regarding our community, with Lucy scoffing upon being shown the video “he's so ignorant.”

• Lucy also shared our frustration regarding the participants in the hearing, essentially ignoring the main problem the whole time… which as we all know is Naked Short Selling.

• When asked whom she thought was the best at all the hearings, Lucy says Keith Gill (u/DeepFuckingValue). Her reasoning was that he was one of the only ones to actually touch on the real issues here, and beyond that he was intelligent and well spoken.

OVERSTOCK AND PATRICK BYRNE

• Lucy
• I want to get to another story, because you started to ask about the media before and this is a story which talks both about the media and also about the flim-flam that's going on, which none of these people alluded to except Keith Gill, and Vlad Tennev

• Elle
• The boy from Bulgaria!

• Lucy
• and he's the CEO of Robin Hood.
• So, this is the Overstock story, it is very important. So the part about [NAME] paying off the media takes us into the Overstock story, where many of the crooked tactics used against GameStop were perfected.
• So in about 2004, overstock was targeted by naked short selling, the CEO Patrick Byrne got a call from someone on a stock message-board. This is not [NAME] he warned him, he said that gradient analytics, (which is one of the companies that analyzes stocks and puts out the information), they would continue to publish outrageous information at the behest of short selling hedge fund clients, such as Rocker Partners. He said journalists are going to call you-- and he listed reporters to Byrne. He said they will write hatchet jobs on Overstock nd the same information that ends up in the Wall Street Journal would get into the hands of reporters in Fortune, Forbes, Barron's, The Street, Market Watch. All of whom did call in the coming weeks. Your short interest, which is the shares that have been sold short, but not covered, is going to skyrocket.
• And Byrne said Oh, no, I don't believe that's going to happen. And then he said, You will come under federal investigation. These people are wired into the federal government. You will see stocks appear on small foreign exchanges, like Munich, Hong Kong, Singapore, without overstocks authorization, making it easy for hedge funds to sell Phantom stock. And then he predicted overstock would appear on the SEC's threshold list. This was a list of naked short selling victims where they hadn't had the had not been covered for a number of days and weeks. He said to me, (Byrne did). Every one of those predictions came true.
• The stories in the financial press, the investigations by the Federal Trade Commission, and the SEC. He said one was opened by Richard Salar who left the SEC to be a securities lawyer for Rocker Partners. So Byrne was learning about other companies, also on the Reg SHO List of companies that had been shorted and FTDs had not been covered. They had the same group of journalists attacking them.
• Byrne said there was an incredible similarity, a coincidence of time between lawsuits, federal actions, stories by the same reporters and enormous spikes in fails to deliver. They were patterns, people seem to know, in advance, what was happening.
• So he took his information to the SEC, and Mark Ficus of the SEC San Francisco office started investigating some reporters for their role in the criminal targeting of Overstock, but the financial press got to the SEC Commissioner Chris Cox, and he canceled the subpoena.
• Now another player in the scheme was a law firm, Milberg Weiss. It hired shills, to short sell targeted companies.
• The companies would be attacked by the journalists, by people in some of these agencies. When they declined in value, the law firm would sue companies! Not the short-sellers or someone else, but sue the companies in the name of the shill. You have not acted properly. That's why the price has gone down.
• In 2006. The SEC filed the lawsuit and the DOJ indicted Milberg Weiss saying it paid plaintiffs to purchase the securities. They would be told to buy stock in a company, months later, it would crater. They didn't ask them How do they know that the stock was going to crater?
• The only charge was it was illegal to pay shill plaintiffs. So the 8th largest law firm in the country--

• Elle
• Wait. Did you just say Shill plaintiff?

• Lucy
• Yes, it means a fake plaintiff

• Elle

• Shill is a real word then?

• Lucy
• The word? Yes.
• So the question is, two lawyers from Milberg Weiss went to prison. But why did these agencies, the SEC, and the Justice Department not look for the other part of the scheme? There were many parts of the scheme. It didn't happen, but Milberg couldn't have decided this by itself. How did he figure out which companies to short? Part of the scheme. They didn't, the regulatory agencies didn't go after it.
• Now, I want to connect something more to GameStop which is, Overstock filed suit against 11 Prime brokers in 2007. These are all the big guys. So they're
• Morgan Stanley,
• Goldman Sachs,
• Bear Stearns.
• Bank of America
• Bank of New York
• Citi group,
• Credit Suisse,
• Deutsche Bank,
• Merrill Lynch,
• Lehman Brothers,
• UBS
• 11 of the real biggies, who have most of the trades in the country because the smaller brokers are their clients. In the charges, Overstock said of Goldman “it pursued a strategy of buying conversions from market makers who have to buy and sell shares of the stock they make a market in. The conversions were to create inventory for stock lending at below-market rates. Now, what are conversions?
• 4 years later, in 2011, when the case finally got to the point of being in court, people making depositions. Marc Cohodes, who is the managing partner of the one and a half million dollar Copper River Partners, (which had been called Rocker Partners till David rocker left and Marc Cohodes had been one of the partners) It was one of Goldman's largest short-selling hedge fund clients. He described how the conversion trades created faked shares.
• First up, for those who don’t know,
• a call is an option to buy a stock at a certain price by a certain time
• a put is an option to sell a stock at a certain price by a certain time
• Cohodes said a firm or a market maker would synthetically create a short by doing options trades. Buying the stock, selling a call or buying a put. The other partner would do just the opposite. By doing that, they could create a borrow of the option trade. And it would leave them neutral. But it would create a long stock. And they could lend that out to cover sales.
• But they were counterfeit shares that Goldman had created. This is the kind of thing that you have to read several times in order to understand it.
• Cohodes, who was angered, upset, he was being charged to borrow stock, he said, Goldman didn't have. And the thing is, fees for stock lending are a major part of Goldman's income, they can charge 30/40/50% for hard-to-borrow stock.
• The Overstock suit said conversions were bought by Prime brokers and used to acquire or invent long stocks that they could then loan out and they would get fees and even sell as if they were real because they were real on their books.

• A staffer in the back office of a trader explained to me that such conversions gave Goldman the chance to lend stocks it didn't have, when Goldman did that with Overstock, and never delivered. They could turn around and say, we've cleared this trade, we can now offer it to our other customers on a stock loan, and there would be huge benefits. And clients would turn a blind eye and say, well, we got the stock. We borrowed it, even though it would never settle because it wasn't a real stock

• When the documents came out, and Overstock was able to get emails that were talking about this, between Goldman and its clients, Goldman settled with Overstock and 2015 and paid $20 million dollars. There was something there if they didn't have the evidence that Goldman was being crooked. Golden would not have paid.

• Now, Byrne told me he got subpoenaed to turn over to the Justice Department, the evidence that he was able to get through discovery-- through getting the documents from Goldman. And he said “by 2010 I know the FBI had an indictment drafted against Goldman Sachs. We had all the data, we spent then $20 million on Discovery to get these guys. All he had gotten back was 20 million but he said to me*, it was well worth it.*

• There were agents working three years on this. They went to Eric Holder, who was Attorney General head of the Justice Department and he refused to sign their indictment.... And a week later, he went to Congress, he said there were some companies too big to fail,... too big to fail.

• So at the very top, someone like Eric Holder was in cahoots? Supporting? Protecting the miscreants, the people who were breaking the law. That was Eric Holder, who is still held in high repute by people in power.

• That's important, there is a closer connection to GameStop. One of the Goldman clients was Wolverine trading. And among the documents that overstock got was an email that Wolverine trading sent Goldman Sachs asking whether there was some effort at cleaning up fails. Now cleaning up means buying the shares and actually delivering them to the lender or the buyer to cover the short, Goldman said, we will let you fail*. That's on an email that was in the court case, that violates sec rules. That is illegal.** And Wolverine was not a normal market maker. It colluded with broker-dealers to promote naked short selling.

• In 2011, it had to pay $2.4 million after NASDAQ found guilty of violating Reg SHO (the rule about naked short selling) by failing to close and deliver positions, engaging in sham transactions, to improperly reset delivery obligations in the threshold securities. Those are companies whose fails to deliver have persisted for weeks.

• The scam, which the SEC has actually written about in papers even if it doesn't always go after these people, was called buy-right.
• The trader buys a security, at the same time, sells a call (which is an option to buy) on that security, uses the bought shares to cover the short, but now has to deliver the same shares to the buyer of the call.
• Only this is a new transaction. So the short sale timer is reset. So forget about T+3 (now it's T+2), the trader may never deliver the shares. Because the trader can rollover the trades and do the deal over and over again, with these fake options connected to buying shorts, conversions.

• And more evidence, for me, that Wolverine was very likely guilty of more manipulation because the other one it had to pay, they found out they were really doing that.

• In February of this year when Robinhood made-- the broker made hundreds of thousands of trades, for $1 a trade in dark pools to manipulate the price. And it had never traded in dark pools. It had sent its trades through Citadel was trading hundreds of thousands, up to 700,000 shares in a period of some months. At $1.

• Dark pools were set up for huge trades; they wanted to have them secret so they wouldn't move the market.

• So, if somebody was buying 2 million shares of IBM, they couldn't get it only from one other broker. So they had to get it in pieces. Well, as soon as they made the first deal to buy, everybody would see it if it was an open exchange. And that would bid up the price. You want this you can have it but for more money, for more money, more money. That's what the dark pools were about, so that you could make huge trades and not move the market.

• One dollar? That's not a huge trade. And Wolverine, they traded several hundred thousands worth of trades. And the average was $3.85 a trade, Wolverine was doing that. So that makes me suspicious that Wolverine has not changed. It's a very questionable practices.

• Now, why do I suspect that these tactics we use to create fake shares? Because the obvious sign of market manipulation is massive short interest, FTDs, nobody has covered the shorts. If it's huge and lasting, it means the shares were never borrowed to cover and deliver. Well, at one point GameStop, short interest, interest was 226% 226% of existing shares had been sold short, more than twice as many shares as existed, and of course, not covered.

• So that's how Overstock discovered some of the things, these share conversions, they also had buy rights. These are things I think were also used in the market manipulation of GameStop shares.

TL:DR 🦍 Summary:

• As with our past guests, Lucy touches on the Overstock situation. Walking us through some of the events that transpired.

• Overstock was a company that had been targeted by predatory short sellers in 2004.

• Patrick Byrne (CEO of Overstock) filed suit against 11 huge brokers for using methods that we see being used on GameStop. (Lucy expands on how options can be used to create “Phantom Shares’ above.)

• Lucy believes that the similarities between Overstock’s manipulation and Gamestop’s manipulation are too big to ignore, going on to say that the Overstock situation is where a lot of the techniques we are seeing today, were perfected and refined.

BENEFITING FROM UNFAIRNESS

• Elle
• That's absolutely mind-boggling, Lucy. Everything that you have described, from previous cases, previous examples, as it relates to GameStop. It's just so similar, we see the same patterns over and over and over again. It's just incredible that this has been going on for so long.
• Now, Lucy, I'd see that we have reached the one-hour mark. And I know that in our previous conversations, we spoke about just ending it at the one-hour mark. The feedback that I have received from the Mod team and in the chat is that they would be honored if we could continue hearing from you for maybe another 20 to 25 minutes, if that's okay with you.

• Lucy
• Thats fine with me. There’s just so much information.

• Elle
• Yes, and there are some questions that I want to get to at the end. But what I would like to do right now is I have a number of questions that I just want to go through very, very quickly, a rapid fire type of scenario, just hit as many questions as we can before we get to the final conclusion.
• so the first question we have here from Mexican red is…

• Elle
• My new number one question is, in whose interest is it to not have a fair and equitable system?

• Lucy
• It's in the interest of the big broker-dealers, and the hedge funds, the big traders, they are making money off this corruption. They are mostly given a pass by the SEC and other exchanges. Sometimes they get a slap on the wrist, they pay a few million dollar fine, but they're making billions. That's the problem. You can’t stop it unless there's real punishment.
• If somebody robs somebody else of $1,000, or $10,000 they go to jail, These companies are robbing society of many millions. They need to change the laws so that the people who do this go to prison, which will certainly concentrate their minds. Even when the fines are paid, they don't pay them. The fines are paid by the stockholders of the companies that are found guilty-- of Goldman. Goldman... the head of Goldman is not paying those fines, probably getting a boost in his pay. If these many millions aren't enough, let's double it. So I think that's what has to happen. But it makes a lot of money. Follow the money. That's why this continues.

• Elle
• Wow…
• The next question from the community, Does speaking out on topics that involve high profile corruption and/ or the very rich, powerful people, ever make you fearful of publishing certain stories?

• Lucy
• No, I have not been threatened physically. Somebody once sent a threat of a lawsuit to a publication and the publication killed the story. But, I haven't been afraid. And I think there's no point in being an investigative journalist, If you're going to be afraid, you might as well get another job.

TL:DR 🦍 Summary:

• The solution has been clear for ages, perpetrators of these large-scale financial crimes must be punished with more than just a fine. These fines are no more than a “Cost of doing business”, this problem has been pervasive for far longer than it should have been.

• Those that knowingly manipulate our markets for their gain, must be given serious jail time. (Kenneth 👀)

WE ARE THE SOURCE

• Elle
• So this question From u/pdwp90

• Elle
• Wants to know whether there's any data or disclosures that you've been keeping an eye on recently. so this person runs an investment data site (Quiver Quantitative). And they're always curious to hear what information others find interesting. So Lucy, where do you get your information from? When it comes to the GameStop situation?

• Lucy
• I get it from r/Superstonk.
• They cite all their sources. Every time I see a chart or some numbers, they say, this comes from here, and this is the URL. Those are the best places. I mean, that's the best source that I can think of.

• Elle
• But, that politician said that this information was unqualified? and, you're telling me that an award-winning, investigative journalist gets her DD from r/Superstonk.

• Lucy
• I read everything that I can, but most of the articles on this story don't provide data.
• Therefore, I'm suspicious, I always follow the numbers and follow the proof. It doesn't matter who put it up, it just turns out in this case, that is who's putting it up.
• And I think that they're one could then see where did the word, who did they cite? What is the URL, and then you can go to that place. And maybe they have many other things that also would be useful. But that's that's where I go first.

• Elle
• So, I've had to mention a few usernames and I didn't know how to pronounce them. So I think it's your turn now hahaha.
• So can you cite some of the users that you have been referring to, you know, who's who's DD do you look at, because I would love for you to try to pronounce their usernames.

• Lucy
• Oh, okay.. I may not remember that. Now, if you'd asked me before, I would’ve written it down. Well, there is one called u/broccaaa, He's very good.
• I’ve been working on an article about the whole GameStop case. And I am quoting and using material from a bunch of them, maybe half a dozen or 10 of the people who have been writing. So, that's one of them. When the story is finished, and when it's published, I will certainly send the link to r/Superstonk and also put it on my Twitter (@LucyKomisar). It'll be there, you'll see the names and I'm sorry, I can't remember them now. And part of it is that a lot of these things are not real words, you have to sort of remember them because they're, they're connections of syllables that are not, they're not real words. Makes it a little bit difficult.

• Elle
• But that's fine, Lucy. I'm so glad that you did that. Yeah, my name is the same thing.
• So if we can just pull up my next question here. I apologize in advance for this person's name.

• Elle
• Yeah, so I'm not going to pronounce the name. But this person has said, What are the best tools to determine how many shares are currently in circulation? What techniques can be used to hide those numbers?

• Lucy
• I don't know. I mean, it seems to me that the people that FINRA knows, the DTCC knows (Depository Trust and Clearing Corporation), they clear shares except, they don't clear what goes off-clearing, which is through the dark pools. Off clearing means not through the regular clearing house, that's where a lot of the dirty stuff goes on.
• Then the DTC, which is a subsidiary, is the vault that actually holds all the shares in all the stocks. People do not have their own shares, they have a digital entitlement to shares. So the DTC, I would think, would have all the shares.
• The NSCC, (National securities clearing Corporation, it's another subsidiary) they do the actual clearing. When stocks move around, they will know it. There is a continuous net settlement system where stocks are moved to be settled. And there are all these but this is not one and I don't know whether the people who are running this really want there to be one. But those are the agencies that would know it.
• Nobody, no private person, would really know it unless you got all of the big prime brokers like Goldman and JP Morgan and the others to all agree to tell everybody that all the shares that they were moving, but I don't think they're going to do that.

TL:DR 🦍 Summary:

• Lucy praises r/Superstonk*’s DD, purely on the basis the authors of the DD and others cite their sources and data, which Lucy always follows.**

• In response to the question on how to understand the number of shares outstanding, Lucy states it seems apparent FINRA and the DTCC know what happens openly, but not off-exchange which is where the real dirty stuff goes on.

• Ultimately, it is Lucy’s opinion no private person (or ape) could ever know the number of shares outstanding, those with the best idea would be the DTCC and its umbrella companies, but neither they nor the big prime brokers seem like they’re going to spill those particular beans.

APES AND ANTS

• Elle
• Thank you for that. So I'm just gonna pull up the next question here. So this is from Half Dane…

• First this person said he remembers reading your article back in March and they're starstruck by the fact that you are here with us. So this person has asked, being a European, as I've read many claims that this kind of market manipulation wouldn't be possible over here, especially naked shorting, would be effectively prevented. Do you think that is accurate? Is there a way to effectively prevent naked shorting?

• Lucy
• I'm not as familiar with Europe. I know that South Korea has been very active in dealing with naked shorting and attempting to prevent naked shorting. But, I don't know enough about Europe.
• But, of course, there's a way. This was actually this was proposed. Some years ago, when Biden stopped being a member of the Senate in order to become the Vice President, the person that he that was appointed was Ted Kaufman, who had been his chief of staff, Ted was excellent on this issue.
• This is mentioned in the article that was in American prospect that I wrote in, that was published in March, his chief of staff was Jeff Cavanaugh.
• Now, they got some other senators involved. And they attempted to get the DTCC, SEC, to agree to require what they would call a 'hard locate'.
• That means a broker could not just say we're shorting this, but we know where we can get a share when it's time to cover this. We know where... except they say that “we know where” to 10 or 20, or 50 different places, but it's the same share that they're pointing at.
• So what Cavanaugh wanted was to give a number to each share. I don't know whether they already have numbers, but each share would be identified by a number.
• So when you say I am borrowing a share, or I have located this share, it has to have a number. So the next person or that same person with another claim, cannot locate the same share with the same number.
• … It got knocked down, it got totally knocked down at that time, more than 10 years ago. So now that Biden is in the White House. I wonder what Ted Kaufman is doing. Kaufman is still a major advisor to Biden, I wonder whether he is trying to press him on this on the hard locate. They tried to do it, so we will see. But that would be a way to stop naked shorting. It's easy, but the people in power don't really want to do it.

• Elle
• Lucy I'm thrilled that you mentioned South Korea, because, it's interesting, in South Korea, there are a group of retail investors, and they refer to themselves as Ants 🐜. That goes back to their history, there was an event that happened in the 1980s. And so they refer to themselves as ants, in a very positive way, as if to say the group is strong together, and so on r/superstonk whenever they join us, there's always this sentiment of apes and ants uniting. So it's really interesting that you mentioned that, that there are these very strong laws against naked short selling in South Korea.
• So I'm thinking maybe it would be beneficial for all of us to learn from some of those recent regulatory changes. Now, having said that, I know we're getting towards the end.

• In response to a query from a Euro-ape regarding prevention of naked short selling, Lucy explains she is not so familiar with Europe but is very familiar with South Korea and applauds their efforts at tackling the issue.

• Lucy recalls that an attempt in the US was made to prevent naked short selling, via assigning each particular share a unique numerical identifier, and in order to short, that share’s ‘number’ must not already be spoken for in respect of another short position, or else it can’t be shorted. This got completely knocked down more than 10 years ago. Nothing to see here, move on. Lucy hopes this can be revived again.

• Elle explains that those from South Korea call themselves Ants, just as r/Superstonk does apes; all are welcome here. 🐜

• Elle
• So I just want to end off with a few final questions. So if you could just pull up the screen again. So this person has asked, Have you ever been threatened by those who investigated and if yes, what was the situation? What were the types of threats and what came of it?

• Lucy
• No, no, I haven't, I haven't been threatened. The real, you know what the threat is?
• That major media do not want to tell this story because if you're an investigative journalist, that's the real threat to you. When people don't want to run the story.
• I was very glad that the American prospect, which is run by a very smart guy named David Diane, they ran the story. And I'm also, by the way, one of the reasons I know a lot about this is I've been investigating naked short selling for years, because I'm working on a book about it.
• It will start decades ago, at least with at least as far back as Sedona, which was in 2000. And it will end with GameStop. And go all the way through telling the stories that I've told you now, talking about what the regulator's haven't done, what what the Congress hasn't done. And there is really, so much more that we can talk about even in an hour plus.
• But I hope that when that comes out, because it has never been written about this will will be the first book that attempts to tell the whole story starting from back then.
• And so I hope that it that it will get published. And that it will begin to educate the public, because I think the public has to move the members of Congress to make changes on the issue of naked short selling.
• It's, as we could see from the hearings, it doesn't come from Congress. And it doesn't come from people running the major regulators.
• It comes from people that are not really the little guys. But it comes with some very smart people who know what's going on, and who can get attention, because they bring out the truth.

• Elle
• So I have to unmute myself, I'm really glad you mentioned your book Lucy, because I think that is exciting news. And that really answers a question from this user u/retread83(???),
• Whoo wanted to know if you're going to do a deep dive into the underbelly of Wall Street. So I think all of us are going to be very excited for this book. And, and we would love to see it published. And so So having said that, Lucy, um, let me just see if I can pull up this question here, I just have to find my mouse so I can move to the last question.
• In terms of, getting this book published, or just being able to support investigative journalists, such as yourself, you know, independent investigative journalists, such as yourself.
• What can we do as social media users as regular people around the world as on SuperStonk?
• What can we do to either support you financially, so that you can continue investigating things, or so that you can actually publish this book, because I'm sure many of us would love to read this book!

• Lucy
• I haven't put my articles on any kind of a paywall, because I want people to read them. And to me, that's the most important thing.
• But there are people who have donated, my website has something that you click, and I think it goes through PayPal, or people could send me an email if they want to make a deposit to my bank account or send a cheque. And my email is listed on the contact on my website. And it's also listed on Twitter, on my ID on Twitter. And people have, and I think some of it comes from SuperStonk, because I've got some donations just in the last few days.
• So it would have it would have been that, that's what, what people can do. To do this book, I did initially get a grant from the George Polk Foundation, which is a very prestigious, fine Foundation, but that allows me to do some research over a year or more. But that ran out. And so now what would help, what would help is a contract from a publisher, that's really what would help.
• And in the past, it wasn't it was one of these issues that you can't convince them because the media is all saying "Oh No, this can't possibly be true". Now with the interest in GameStop. And now with more data coming out and people paying more attention. I think maybe that attitude will change. We will see if it does change.

• Elle
• Lucy, it has been truly an honor and a privilege to have you here. I could listen to you talk for hours. I just wanted to apologize to you and to everyone watching if at some points I interrupted.
• There's just so much information. That we wanted to get from you. And there's so many more questions. I would love to meet you at some point, if we could have you back on.
• It would be an honor to have you again. And I'm sure that when gamestop moons, one of these apes is going to start a publishing company, and I'm sure they're going to publish your book.
• So if it doesn't happen before, I'm sure it's gonna happen after. But But let's see, you know, in the final few minutes that we have left,

TL:DR 🦍 Summary:

• In response to a question regarding being threatened, Lucy explains she has not received personal threats. The biggest threat to her as an independent, investigate journalist is the threat of never having your stories heard.

• Lucy then goes on to state she hopes to be published for her book which seeks to outline in great detail this story, which couldn’t possibly fit within an hour of interviewing.

• Lucy believes it is important never to put anything behind a paywall, and thanks any and all who could support her in any way. The apes are grateful for her time!

• Elle
• what's your message to the community? And what's your message to everyone from the world? Who's watching this? And what's your message to the naked short sellers?

• Lucy
• Well, to the community up, keep doing what you're doing.
• Because you because what's on social media, and particularly SuperStonk is the one that I see is so solid, that I think it can't help but persuade many people of the truth of what you what I'm saying about the corruption of the markets, and how in this case, GameStop was, a victim of the market manipulation.
• So I think keep doing that work, keep following the following numbers as, people on who are writing the articles are doing.
• This is true in other countries, people can begin to look into what is going on in their country. And the UK is a very good place to start. As well as Canada, which has a history of market corruption, especially around Toronto, real long history of market corruption.
• In the UK-- Lehman Brothers collapsed in '08, one of the reasons it collapsed was that it was moving shares to its subsidiary. In London, there's something called rehypothecation. It's a long word, it means that you can take shares that are in the account, on who the ones on margin, I don't not sure if they can do this, if it's totally paid,
• But who knows, you can move it to, you could you can lend them out, we know that? Well, in rehypothecation, the same shares can be lent out more than once this sounds a little crazy, right?
• You can lend them out. And then whoever got them, can lend them out to somebody else.
• But maybe they are using the loan to cover something, but they're lending them out to something else!
• Well, the US has a rule that you can only rehypothecate, eight to 140% of the real number of shares. You can go 40% above the real well, the UK has no limit, none at all.
• So what happened was, I talked to a lawyer who represented some clients, who in the US said they couldn't find their shares.
• They had been re hypothecated to London, and then re hypothecated again, and re hypothecated. They couldn't find their shares. And this is part of what Cahodes talked about is the rigged lending market.
• But that is one issue that people agree on. The other thing is this lawyer, New York American lawyer told me, there was a meeting that I went to in London, where people in the business, the lawyers and others of brokers had a meeting about this problem with Lehman Brothers and that a lot of it came from rehypothecation.
• And maybe we need to also have a limit the way the Americans do, 140%. Maybe they said,
• "Oh, no, no, no, no, no, because she said, they're making too much money off it".
• "They don't want to go by any rules of law. No, no, no. We'll just relearn and relearn and relearn".
• You know, it's all smoke and mirrors. So the if there are people in England, this would be a very good thing to study. How is rehypothecation working?
• And by the way, a couple of years ago, there was an IMF paper on rehypothecation. It's a serious problem that people know about, except you won't read about it in the media because it's another example of corruption of the market. My book will talk about rehypothecation.

• Elle
• I can't wait to read the book, Lucy so I I know we have to wrap this up. But I've been getting hundreds of messages. So one final quick question. People want to know, the apes on Superstock would like to know your thoughts on Gary Gensler?

• Lucy
• Well, that's a good question he has, I thought he had a good reputation at the CFTC, the Commodity Futures Trading Commission , one person I talked to said - well, that's a little bit exaggerated.
• Let me tell you There are some issues there.
• I'm hearing a lot of the questions that were answered because I've only been on the job three weeks. I will ask my staff to look into it.
• Let's see what happens. I think he's better than the ones… the last five or 10 that we can remember. He's better than them. But let's see what he'll do on naked short selling. He has a chance.
• What about the hard locate? What about the hard locate of the type Calvin wanted?
• That was about 2009, I think when he was doing that. So let's see what he does. There's just so much time you can spend on studying because the FCC has actually written papers on some of this, about conversions, they put up out an alert and a warning about conversions.
• Well, you know, what a better alert would have been put some of these people in jail, that would have been a real alert, what's the point of writing an alert?
• They have numerous alerts about these tactics, these corrupt tactics. But the issue is, what do you do about that?
• At a risk slap of a million or two, or 10? I'm a company that's making a billion dollars. That's the cost of doing business. That's what we have to watch with Gary Gensler.

TL:DR 🦍 Summary:

• Lucy’s final message? Keep doing what we are doing. Expose the truth, follow the numbers and the data.

• As an aside, she implores apes to check out the UK and Canada, as well as the US as this stuff is not isolated completely within the US market. At least the US market does not allow rehypothecation above 140%, whereas in the UK there is no limit at all*. Hear that UK apes? Get digging!**

• Finally, Lucy explains that the appointment of Gary Gensler is bullish… no wait, a good thing on the basis he seems better than the previous 9 before him, but only time will tell whether big G slaps iron on wrists, instead of just polite business cost slaps we have seen in recent times.

FINAL THOUGHTS

• Elle ‘
• Let's see. So I've just received breaking news updates. This is my moment to be your reporter, breaking news. your Twitter account has just gained 2000 Twitter followers since this AMA, and we're hoping that it will increase from that point.

• Lucy
• If people pose questions to me on Twitter, I will answer them.

• Elle
• Whoa, that is huge. That is definitely breaking news as well. So thank you so much for that, Lucy.
• I think I think that people will test you on that. So we have you know, 250,000 followers. Thanks Lucy.
• It's been an honor.

• Elle
• It's been a pleasure. I am humbled. I am in awe, I'm so honored and grateful to have you here. Lucy, I just want to let you know that.
• Well, I actually wanted to ask you if you would be willing to come back at some point.

• Lucy
• Yes, of course.

• Elle
• Amazing, and without getting into too many details. I also want to know if you'd be interested in getting involved.
• The mods haven't told me what it is. But they have some big things in mind for SuperStonk and the community, and they would be honored. If you would be a part of it.

• Lucy
• Well I'd have to know what it is first!

• Elle
• That's a perfect answer. So you will come back for another AMA. Amazing. Well, Lucy, thank you so much. It's been an honor, a pleasure. Any last words or parting words for the community?

• Lucy
• No, no, I'm very glad to be in touch with the people on SuperStonk.
• I think that you all are doing a really good job in the absence of real, mainstream journalism on this issue. Thank you. Let's see.

• Elle
• Thank you so much. And to everyone who has been watching, thank you for tuning in. Thank you for listening to us. And we will have Lucy back at some point. And it is truly our honor. So once again on behalf of the SuperStonk community, and the Korean community who have been listening in as well. Thank you for joining us today.
• Have a fantastic evening and weekend. And I just wanted to plug our next AMA, (which is going to be with was Lucy, the lawyer that you mentioned). He's going to be joining us next month. So everyone tune in to that as well, because I think that's going to be just as exciting

• Lucy
• Wes Christian is amazing. He has since 2000 when he got involved in the Sedona case, he has done most of the naked short selling cases for 20 years. He knows everything. And so you're really fortunate to have him.

• Elle
• Thank you. So we look forward to spilling the tea with West Christian next week. Thank you so much

• Lucy
• My pleasure, especially since I know I'm speaking to such an intelligent and very well educated audience.

• Elle
• Thank you, we love you. Thank you so much. Take care everyone. Have a good evening.