{"id":22291,"date":"2020-04-17T22:47:02","date_gmt":"2020-04-18T05:47:02","guid":{"rendered":"http:\/\/amicuscuria.com\/wordpress\/?p=22291"},"modified":"2020-04-18T01:11:45","modified_gmt":"2020-04-18T08:11:45","slug":"financial-oligarchs-contemporary-despots","status":"publish","type":"post","link":"https:\/\/amicuscuria.com\/wordpress\/financial-oligarchs-contemporary-despots\/","title":{"rendered":"Financial Oligarchs: Contemporary Despots?"},"content":{"rendered":"\n\n
\n\n\n\n\n
\"\"\n\n
V0010596 A man with a torch walking alongside a cart of plague victim\nCredit: Wellcome Library, London. Wellcome Images\nimages@wellcome.ac.uk\nhttp:\/\/wellcomeimages.org\nA man with a torch walking alongside a cart of plague victims; a woman is holding a dead child. Chalk drawing by E.M. Ward, 1848.\n1848 By: Edward Matthew WardPublished: – \n\nCopyrighted work available under Creative Commons Attribution only licence CC BY 4.0 http:\/\/creativecommons.org\/licenses\/by\/4.0\/<\/figcaption>\n\n<\/figure>\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\n\u201cThe development of our financial oligarchy followed, in this respect, lines with which the history of political despotism <\/em><\/strong>has familiarized us: usurpation, proceeding by gradual encroachment rather than by violent acts<\/em><\/strong>; subtle and often long-concealed concentration of distinct functions\u2026.\n\n\n\n\n
\n\n\n\n\n\u2026\u2026which are beneficial when separately administered, <\/em><\/strong>and dangerous only when combined in the same persons. It was by processes such as these that Caesar Augustus became master of Rome<\/em>.\n\n\n\n\n
\n\n\n\n\nThe makers of our own Constitution had in mind similar dangers to our political liberty when they provided so carefully for the<\/em><\/strong>separation of governmental powers<\/strong><\/em>\u201d.\n\n\n\n\n
\n\n\n\n\n(1914) Other People\u2019s Money and How the Bankers Use It\u2013 Chapter I: Our Financial Oligarchy<\/em><\/a>\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nWhat you are to read is a collection of stories that have been buried by the captured financial news media. The author takes tremendous risk by posting this online<\/strong>, and\u00a0it is strongly recommended that you archive this page before it is removed\u2026<\/strong>\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nAs they say, \u201cthe golden rule is: he who holds the gold makes all the rules\u201d, and the mega-banks that have seized control over governments worldwide have crowned themselves emperors of our time.\n\n\n\n\n
\n\n\n\n\nThey own the regulators<\/a>; they own the brokerage houses; they own the clearing houses; they own all of your investments; and it\u2019s even been shown that they can exert complete control over the government<\/a>.\n\n\n\n\n
\n\n\n\n\nOver the years, like all despots throughout history, these mega-banks have proven that they can get away with practically whatever they want.\n\n\n\n\n
\n\n\n\n\nThey will print fake shares with absolute impunity, and in effect, artificially control their supply and demand; manipulate corporate elections via their ownership of the shareholder communications infrastructure, influencing who sits on the board of American corporations; and worst of all, they will block anything that threatens their hegemony \u2014 even if it can save the elderly 100\u2019s of billions of dollars and revolutionize entire industries.\n\n\n\n\n
\n\n\n\n\nBut why should we be surprised? From the Trail of Tears to the Rape of Nanking; and the Wounded Knee Massacre to the Bataan\u00a0Death March<\/em>\u00a0; over the ages, history has shown time and time again:\n\n\n\n\n
\n\n\n\n\n\n

Absolute power corrupts absolutely<\/strong><\/em><\/p>\n\n\n\n\n\n

\n\n\n\n\n
\"\"\n\n
ClearingHouse<\/figcaption>\n\n<\/figure>\n\n\n\n\n
\n\n\n\n\n\n

The Depository Trust and Clearing Corporation<\/strong><\/p>\n\n\n\n\n\n

\n\n\n\n\nTo understand the essence of their supremacy, one must first understand the securities clearance system. If you happen to be new to all this information, that\u2019s okay \u2014 it is very easy to understand.\n\n\n\n\n
\n\n\n\n\nA clearinghouse is the\u00a0middleman that sits between a trade<\/a>, guaranteeing both the buyer and the seller receives their cash or securities. If a buyer or seller fails to deliver the cash or securities, the clearing house guarantees delivery to the counterparties by making up for the loss with their own money.\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nWithout this essential service, a stock exchange will struggle to survive because nobody will be sure if the counterparty will deliver, and all it takes is the slightest bit of doubt for the entire system to collapse. The exchange may be able to operate on a small scale, but not at the capacity that you would expect to see on the NASDAQ or NYSE, and if you have competitors, bankruptcy is not only a possibility, but a certainty.

In the United States of America, there is only one central clearinghouse: The Depository Trust and Clearing Corporation<\/a>, and for almost 50 years they have maintained a virtual monopoly over this essential service.\n\n\n\n\n
\n\n\n\n\nIt is a private corporation that is owned by these mega-banks and brokers:\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nJust to give you an idea of the influence these banks have over this institution, we are going to analyze a recent lawsuit filed by a consortium of pension funds against the largest banks and brokers in the United States. It perfectly illustrates their\u00a0stranglehold over our capital markets<\/a>, proving beyond any shadow of a doubt that not only will these massive corporations work together behind closed doors to\u00a0stifle competition<\/a>, but they also have the ability to\u00a0instruct the directors of the DTCC<\/a>\u00a0to block new entrants that pose a threat to\u00a0their hegemony<\/a>.\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nBefore we go any further, it is important for you to understand that there is tremendous risk for those who post this online, and much of what you are about to see has been buried. Don\u2019t be deterred by the length; the article looks much longer than it actually is because of all the screenshots, and everything has been condensed so it should only take you about 60 minutes to read.

If you plan on finishing this later, it is recommended that you archive this page because there is a strong chance that it could suddenly disappear.

A backup bibliography tagged with all the linked keywords is included at the bottom just in case archive.is decides to go under one day.\n\n\n\n\n
\n\n\n\n\nThe links alone took months of research, and many of them are not easily found online. The world of finance is very opaque and litigious, so everybody minces their words and beats around the bush; shrouding simplicity in a long maze of bullshit phraseology and inventive acronyms. There will be none of that in this article \u2014 it will be straight to the point. The average millennial \u2014 those born\u00a0between 1981 and 1996<\/a>\u00a0\u2014 only has a\u00a0net worth of $8000<\/a>, and the gap between the rich and the poor in the United States is almost double that of every other country in the western world. They\u2019ve even started censoring us with Orwellian algorithms that watch and listen to everything we say online. The time for mincing words is over.

But let\u2019s get back to the story.\n\n\n\n\n
\n\n\n\n\n\n

Stock Loans<\/strong><\/p>\n\n\n\n\n\n

\n\n\n\n\nThere is probably no better example of their anti-competitive behavior than in the stock loan industry, where for the past 20 years<\/a>,<\/em> pension funds, endowments, and mutual funds have all been forced<\/a> to use their services for lack of any viable alternative.\n\n\n\n\n
\n\n\n\n\nMost of the time, retirement funds tend to hold their investments for very long periods of time, and in order to take advantage of these dormant positions, fund managers will often attempt to increase their clients returns by loaning out these shares to short sellers and market makers so they can be used for arbitrage.\n\n\n\n\n
\n\n\n\n\nBut there is one big problem: still to this day, there is no centralized exchange available for the stock loan industry, which forces massive money managers like Blackrock<\/a> and CalPERS <\/a>, along with every hedge fund in America<\/a> , to employ brokers to match borrowers and lenders, siphoning $100\u2019s of billions<\/a> from our retirement savings.\n\n\n\n\n
\n\n\n\n\nToday, most of these transactions are\u00a0still facilitated over-the-counter<\/a>, meaning lenders and borrowers have no way of accessing live price data. Only the brokers and \u201cTBTF\u201d banks have access to this information, and this allows them to charge practically whatever they want without anybody knowing if they received a fair market price.\n\n\n\n\n
\n\n\n\n\nI think the securities lending market is just like the mob. I think it\u2019s\u00a0<\/em>completely rigged.<\/em>.<\/strong>.It\u2019s a completely manipulated black hole…

\u2013Marc Cohodes, Copper River Partners<\/em>\n\n\n\n\n
\n\n\n\n\nThe stock loan industry has been described by experts as \u201cthe mother of all dark pools<\/a>\u201c, and people have been calling for change for practically two decades<\/a> now.\n\n\n\n\n
\n\n\n\n\nPictured below is an example of how this process works:\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\n\u201cThe current stock loan market involves h<\/strong>igh search costs<\/strong> and inefficient prici<\/strong>ng<\/strong><\/em>.\n\n\n\n\n
\n\n\n\n\nIt can take\u00a0numerous\u00a0phone calls over several hours to locate a hot stock and negotiate pricing<\/em><\/strong>.\u00a0The lender has no indicative level of pricing other than the demand information provided by the brokers, which the lender has no way to verify. In other words, the securities lending market requires considerable manual effort to complete transactions that\u00a0in other markets take seconds or minutes at most<\/em><\/strong>. Because of the fragmented nature of the market,\u00a0identical loans can trade simultaneously through different channels at very different prices<\/em><\/strong>.\u00a0These high search costs preclude arbitrage across liquidity pools\u201d\n\n\n\n\n
\n\n\n\n\nhttps:\/\/archive.is\/c0Qt6#selection-24833.5-24875.41<\/a>\n\n\n\n\n
\n\n\n\n\nFour companies \u2014\u00a0Quadriserv\/AQS, SL-x<\/a>, and\u00a0Data Explorers<\/a>\u00a0\u2014 all spent several years creating an\u00a0electronic exchange<\/a>\u00a0for this massive $1.75 Trillion market, and their technology could have finally put an end to this\u00a0backward and opaque<\/a>\u00a0system that has been plaguing pensioners, endowments, and hedge funds for more than\u00a020 years<\/a>. Unfortunately, even though their technology took decades of collaboration and\u00a0$100\u2019s of millions<\/a>\u00a0in start-up capital, they were all blocked by these mega-banks.\n\n\n\n\n
\n\n\n\n\n\n

It threatened their cartel<\/h1>\n\n\n\n\n\n
\n\n\n\n\nThe mega-banks that dominate this industry simply had too much to lose by allowing us to have access to this information, so in order to stop this technology from reaching the market, they banded together<\/a> and refused to provide key services<\/a> to these bright start ups, even going so far as to threaten their top hedge fund clients<\/a> with the loss of critical prime brokerage services if they found out they were using their platforms.\n\n\n\n\n
\n\n\n\n\nIn 2016, it was estimated that these brokers were extracting as much as\u00a065% of the revenues<\/a>\u00a0from the stock loan market, most of which was going to a very small group of investment banks.

The cumulative effect this can have on our pension funds is astronomical. Just to put that into perspective,\u00a0Frontline estimated<\/a>\u00a0that as little as a 2% annual fee charged by your average mutual fund over a period of 50 years would result in a 66% reduction to your retirement savings.\n\n\n\n\n
\n\n\n\n\nOn an annualized basis, the stock loan industry is said to produce $9 billion in revenue<\/a>. That equates to $180 billion in profits over a period of 20 years, and this is without accounting for compounding interest. Quadriserv<\/a> \u2014 one of the companies that attempted to challenge these brokers stranglehold over the industry \u2014 estimated that their platform could have saved pensioners $4.5 billion per year<\/a>, and one veteran bank executive was even quoted as saying that it could \u201cdo the work of six traders in one<\/a><\/em> \u201d.\n\n\n\n\n
\n\n\n\n\nNow, you might find this part hard to believe, but it has also been alleged by reliable sources that for several years these mega-banks and brokers have been conducting \u201cprivate gatherings\u201d for the purpose of coordinating elaborate schemes <\/a>so they can maintain their dominance over this essential financial service; what they jokingly refer to as a meeting of the \u201cFive Families<\/em><\/a>\u201d \u2014 a mafia related term that they will often use to describe themselves collectively. This should clearly indicate to anybody how little these people probably care about the lives of average hard working people<\/a> (or even how much they should be trusted<\/a> for that matter).

Just click on those links and see for yourself. It should take you to the exact line of text. If the link stops working, just highlight the keyword and you can find an excerpt at the bottom of the page.\n\n\n\n\n
\n\n\n\n\n\n

The New York Clearing Association<\/h1>\n\n\n\n\n\n
\n\n\n\n\nAs we all know, history has a tendency to repeat itself, and the brazen anti-competitive behavior showcased in that stock loan lawsuit is certainly not the first time something like this has happened. It almost perfectly emulates the Cartel from the days of the New York Association, when a consortium of the country\u2019s largest financial institutions could shutdown any bank in the nation simply by refusing their services. In fact, it was this very behavior that eventually went on to become the primary focal point of the\u00a0Pujo Committee<\/a>\u00a0in 1913, immediately before the passing of the Federal Reserve Act.\n\n\n\n\n
\n\n\n\n\nIncluded below are key excerpts from this Committee that will show you the true power of a clearinghouse. Quotes from the book, \u201cOther People\u2019s Money and How the Bankers Use It\u201d (1914)<\/a>, a collection of essays written by Louis Brandeis<\/a> during that time period, will also be included, and everything has been broken down so it will only take about 5 minutes to read.\n\n\n\n
\"\"\n\n
Robber Barons<\/figcaption>\n\n<\/figure>\n\n\n\n\n
\n\n\n\n\n\n

From the Depository Trust and Clearing Corporation\u2019s 2018 Annual Report<\/strong><\/p>\n\n\n\n\n\n

\n\n\n\n\n
\"\"<\/figure>\n\n\n\n
\"\"<\/figure>\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\n(February 28, 1913<\/strong>) \u201cReport of the Committee appointed pursuant to House resolutions 429 and 504 to investigate the concentration of control of money and credit\u201d.<\/em>\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nKnickerboker Trust was banned from using the clearing services of National Bank of Commerce of New York, leading to its immediate collapse.\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nWithout the services of the the New York Association, the most dominant Clearing House at the time, it was well known by customers and bank owners alike that they would almost certainly fail within as little as a few days.\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nEven so much as a rumor would cause a bank run\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nThe New York Clearing House forces Oriental Bank to stop working with two Brooklyn Banks, even though they pose no risk to anybody and represent an important percentage of Oriental Bank\u2019s profits.\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n
\"\"<\/figure>\n\n\n\n
\"\"<\/figure>\n\n\n\n
\"\"<\/figure>\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\n\u201cThe men who through their control over the funds of our railroads and industrial companies are able to direct where such funds shall be kept and thus to create these great reservoirs of the people\u2019s money, are the ones who are in position to tap those reservoirs for the ventures in which they are interested\u00a0and to prevent their being tapped for purposes of which they do not approve<\/strong>. The latter is quite as important a factor as the former.\u00a0It is the controlling consideration in its effect on competition<\/strong>\u00a0in the railroad and industrial world.\u201d<\/em>\n\n\n\n\n
\n\n\n\n\n\u2013(1914) Other People\u2019s Money and How the Bankers Use It<\/a>\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nA sort of gentleman\u2019s agreement decided the fate of the entire country..\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\n\u201cThese bankers are, of course, able men possessed of large fortunes; but the most potent factor in their control of business is not the possession of extraordinary ability or huge wealth. The key to their power is Combination<\/em><\/strong>\u2026.\n\n\n\n\n
\n\n\n\n\n\u201cThere is the obvious consolidation of banks and trust companies<\/em><\/strong>; the less obvious affiliations\u2013through stockholdings, voting trusts and interlocking directorates\u2013of banking institutions which are not legally connected<\/em><\/strong>; and the joint transactions, gentlemen\u2019s agreements, and \u201cbanking ethics<\/em>\u201d <\/strong>which eliminate competition among the investment bankers\u201d.\n\n\n\n\n
\n\n\n\n\n\u2013\u201cOther People\u2019s Money and How the Bankers Use It\u201d, (1914)\n\n\n\n\n
\n\n\n\n\nAll it took was 1\/4 of its members to block somebody from joining, regardless of their qualifications, and even if these people were competing with the appellant.\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n
\"\"<\/figure>\n\n\n\n
\"\"<\/figure>\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nEven if the bank was a member of the club, in the event of a change of control, the bank would be expelled if the members did not approve of the new management.\n\n\n\nIt\u2019s a clique; a private club; a\u00a0Cartel<\/em><\/strong>.\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nDo you see how powerful these organizations are? They shutdown two healthy banks for no reason whatsoever. People\u2019s life savings were in those banks, and this was before social security, so you could literally starve back then; you and your family.\n\n\n\n\n
\n\n\n\n\nWhat most people fail to recognize is that profits are only secondary to these mega-banks. Following the repeal of the Glass-Steagall Banking Act and the massive bailouts that followed, these corporations have becomes empires, and there\u2019s a reason why the\u00a0blood drained out of that banker’s face\u00a0<\/a>at the mere mention of Quadriserv\u2019s technology, but it has very little to do with profit.

It\u2019s about\u00a0control<\/em>.\n\n\n\n\n
\n\n\n\n\nIf the stock loan market were to emerge from the shadows of the \u201cOTC\u201d and on to a public exchange where everything is closely scrutinized, it would be much easier to track who was borrowing stock, and at what price, which could potentially reveal what these mega-banks are up to behind the scenes. People might even start recommending that they include all these loans into a Consolidated Tape, making it much harder for them to hide their activities.\n\n\n\n\n
\n\n\n\n\n\u201cUnder Graber, I learned that Wall Street was an illusion<\/em><\/strong>,\u201d.. \u201cThere were different magicians using different tricks in different ways. But everyone cheated<\/em>.<\/strong> It shocked me so much in the beginning. I admired these people. And they cheated\u201d.\n\n\n\n\n
\n\n\n\n\n\u2014Samuel Israel III<\/em><\/a>\n\n\n\n\n
\n\n\n\n\nKeeping this market in the dark doesn\u2019t just give you control over the spread, like what is seen here:\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nIt gives you control over the supply of equities, and it also allows you manipulate voting outcomes in contested elections.\n\n\n\n\n
\n\n\n\n\n\u201cAnd then as time went on and\/or a position got bigger, the rate would get jacked up on us\u2026\u2026 So our cost of doing business in a particular name would<\/em>
go from not costing us anything to costing us tens of millions of dollars\u201d\u2026<\/strong><\/em>

\u2014Marc Cohodes, Copper River Partners<\/em>\n\n\n\n\n
\n\n\n\n\nThe same thing happened before the financial crisis<\/a> when CDO\u2019s were still popular. They refused to allow anybody to access live pricing data, so everything had to be traded on the OTC markets with no centralized clearing.\n\n\n\nEven when they were offered the opportunity to trade on a public exchange,\u00a0they still refused<\/a>, and it would\u2019ve saved them money..\n\n\n\n\n
\n\n\n\n\n
\"\"\n\n
Give me control over a nations equity supply and I care not who makes its laws<\/em>..<\/figcaption>\n\n<\/figure>\n\n\n\n\n
\n\n\n\n\nIf somebody were to tell you that you do not technically own your shares in a public company, you probably wouldn\u2019t believe them would you? That seems rather ridiculous, doesn\u2019t it? Many people have their life-savings invested in the stock market, and how could somebody else own something that you paid for with your own money?\n\n\n\n\n
\n\n\n\n\nUnfortunately it\u2019s true, and you are not the legal owner of your investments. The banks and brokers are the true legal owners, and you are just issued an entitlement; an unusual relationship that they characterize as \u201cstreet name<\/a>\u201d ownership, and all shares are held in book-entry form (electronically) at the DTCC, with the banks and brokers acting as the\u00a0registered holders<\/em>\u00a0on the company\u2019s books.\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nBy transferring ownership to the DTCC and registering the brokers as the true legal owners of your investments, it solved the problem of constantly having to transfer physical certificates from one location to another; a process that was cumbersome and created liability issues.\n\n\n\n\n
\n\n\n\n\nBack the in the 70\u2019s, they describe this unusual relationship as a \u201cJumbo Certificate\u201d\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nA perfect example of this ownership structure is illustrated in the document snapshot pictured below from a recent Broadridge Financial Services note offering, dated Dec.5th, 2019, only a few months ago.\n\n\n\n\n
\n\n\n\n\nThey refer to this debt obligation as a \u201cGlobal Note<\/em>\u00a0\u201d that is owned by the DTC (a DTCC subsidiary).

It also says that the owners of the \u201cbeneficial interests\u201d will not be\u00a0legally\u00a0<\/em>considered owners of \u201cany notes<\/em>\u00a0\u201d under the \u201cGlobal Note\u201d. A\u00a0\u201cbeneficial interest\u201d<\/a>\u00a0would be you, as you are the brokers\u2019 customer for which they have granted you \u201centitlements<\/em>\u00a0\u201d to these investments.\n\n\n\n\n
\n\n\n\n\n\u201cUnder Article 8, the beneficial owner of the shares held in a custodial account with an intermediary (such as a broker) is considered to be the holder of a \u201csecurities entitlement\u201d <\/em><\/strong>in a \u201cfinancial asset\u201d which is ultimately held by a depository\u201d,\n\n\n\n\u2014Marcel Kahan, The Georgetown Law Journal<\/em>\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nThey say explicitly in the first paragraph that the DTC will credit the \u201cbeneficial interests \u201d represented by the \u201cglobal note \u201d to the accounts of the \u201cparticipants<\/em>\u201c.\n\n\n\n\n
\n\n\n\n\nBut who are these\u00a0participants<\/a>?\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nThe \u201cparticipants\u201d are the same banks and brokers that are buying the debt securities from Broadridge.\n\n\n\n\n
\n\n\n\n\nBut doesn\u2019t that make them the indirect <\/em>owners of this \u201cJumbo Certificate<\/em> \u201d \u2014 or in this case, \u201cGlobal Note \u201d \u2014 through their ownership of the DTCC?\n\n\n\n\n
\n\n\n\n\nThe answer is yes, it does.\n\n\n\n\n
\n\n\n\n\nIn the age of artificial intelligence, crypto currencies, smart phones and quantum computing, you might be wondering why we still need these brokers and banks to act as the legal owners of our investments. Nobody uses paper certificates anymore, and certainly there should be some kind of SAAS technology out there by now that could solve the liability and book-keeping issues that come with transferring these ownership interests back and forth between accounts.\n\n\n\n\n
\n\n\n\n\nIn reality, this system hasn\u2019t been necessary for practically\u00a020 years<\/a>, and many\u00a0experts\u00a0<\/a>are equally as perplexed by this unusual \u201centitlement<\/em>\u00a0\u201d system as they are about the opaque black-hole that governs the stock loan industry today, where retiree\u2019s (\u201cthe elderly<\/em>\u00a0\u201c) are literally being forced to utilize middlemen that actively collude to separate buyers and sellers so they can charge higher spreads.

They don\u2019t even let companies send \u201cproxy\u201d (voter) materials directly to their shareholders; the company is forced to send the voting materials to the brokers first, and only then will they send them to you.\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nPictured below is an illustration of how this process works:\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nIf you had trouble with that first one, this next illustration might be easier to understand. The other one is kind of old \u2014 from 1976 to be exact.\n\n\n\n\n
\n\n\n\n\nYes, the same system that existed back then is still being used today.\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nTake a guess who these brokers contract out to send you these \u201cproxy\u201d materials (voting cards).\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nBroadridge Financial Services..<\/strong>\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nThey control 80% of the \u201cproxy\u201d (voter) communication industry. Don\u2019t worry, we\u2019re just getting started. It gets much worse.\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nDid you know that you can borrow shares immediately before a corporate election for the sole purpose of influencing the outcome? Yes, in America if you borrow shares, the voting rights will be transferred to you.\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nYou get to keep the dividend, but not the vote? Seems rather counter intuitive, doesn\u2019t it? Or better yet, rife for exploitation?\n\n\n\n\n
\n\n\n\n\n..That\u2019s because it is..\n\n\n\n\n
\n\n\n\n\n\u201cThe existing system of shareholder voting is crude, imprecise, and fragile. Gil Sparks, a leading Delaware lawyer, estimates that, in <\/em><\/strong>a contest that is closer than 55 to 45%, there is no verifiable answer to the question \u201cwho won?\u201d<\/em><\/strong>\u201c<\/em>\n\n\n\n\n
\n\n\n\n\n\u2014The Hanging Chads of Corporate Voting<\/em><\/a>\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nOver and over again, and for multiple decades, it has been shown that votes are constantly being misappropriated, yet the only entity that can reconcile this problem is owned and controlled by them: The Depository Trust and Clearing Corporation.\n\n\n\n\n
\n\n\n\n\nBroadridge, the company they contract out to send us our proxy (voting) materials, even admits in their corporate filings that their relationship with these brokers constitutes as a \u201cconflict of interest<\/em>\u00a0\u201c.\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nShould we really trust these people to fairly tabulate our votes? You can make $100\u2019s of million\u2019s from being on the right side of a corporate merger, and as recent history has shown, these banks will rig anything<\/a> so long as they can get away with it. Only 30% of shareholders<\/a> were shown to have voted in 2014, and as we all know, there is no better industry than Wall Street at finding legal loopholes, so rigging such an opaque and outdated system should be a piece of cake for these mega-banks.\n\n\n\n\n
\n\n\n\n\nThat alone should be enough cause for concern, but combined with the fact that they can borrow shares for the sole purpose of influencing an election, and it\u2019s easy to see how this system could be manipulated. They even have a name for this practice:\u00a0Vote Buying<\/a>

Yes,\u00a0Vote Buying<\/a>..\n\n\n\n\n
\n\n\n\n\nFrom now on we\u2019re going to try to avoid using the word \u201cProxy\u201d because it acts to cloak what is actually going on: a vote, not a \u201cproxy\u201d. That word makes it sound much more complicated than it actually is, especially considering all the technology we have today. Every country in the western world holds elections, yet for some strange reason, the only place that exhibits such unusual complications is on the stock market; the lifeblood of the American economy.\n\n\n\n\n
\n\n\n\n\nBob Drummond wrote an\u00a0article\u00a0<\/a>about this for Bloomberg years ago, but in typical Bloomberg fashion,\u00a0it was deleted<\/a>).\n\n\n\n\n
\n\n\n\n\n\n\n\n\n\n
\n\n\n\n\n\u201cIt is an abomination<\/em>,\u201d says Thomas Montrone, chief executive officer of Cranford, New Jersey-based Registrar & Transfer Co., which oversees shareholder elections. \u201cA lot of the time we have no idea who\u2019s entitled to vote and who isn\u2019t. It\u2019s nothing short of criminal.\u201d

\u201cIn a little-known quirk of Wall Street bookkeeping, with the growth of short sales, which involve the resale of borrowed securities, stocks can be lent repeatedly\u201d.
https:\/\/archive.is\/PR9Ww#selection-3583.0-3586.0<\/a>\n\n\n\n\n
\n\n\n\n\n\u2026.\u201dThe\u00a0loans allow three or four owners to cast votes<\/em><\/strong>\u00a0based on holdings of the same shares\u201d.\n\n\n\n\n
\n\n\n\n\nhttps:\/\/archive.is\/PR9Ww#selection-3587.0-3590.0<\/a>\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nDrummond later described three specific contested elections where this was known to have occurred. As you can see in the image below, all one needs is a few extra shares to tip the pendulum in a contested election, making the corporate executives and\u00a0wolf -packs<\/a>\u00a0who front-run these predatory schemes millions from carefully facilitated mergers, acquisitions and hostile take overs.\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\n(CARL T. HAGBERG AND ASSOCIATES) \u201cOver-voting is, quite simply, untenable. Allowing it to continue makes a mockery of the idea of corporate democracy. There is ample evidence that people do try to \u201cgame\u201d the system, since votes do indeed have value \u2013 especially when the\u00a0voting outcomes have the potential to move the stock price<\/em><\/strong>, as often they demonstrably do. (See, for example,\u00a0\u201cVote Trading and Information Aggregation\u201d<\/a><\/strong>\u00a0which is easily accessible on the Internet and which documents\u00a0huge spikes in share purchases near meeting record dates and corresponding sales immediately thereafter<\/em><\/strong>). There is also a great deal of evidence that the \u201cgamesters\u201d quite often succeed in gaming the vote, since, (a) as the study pointed out,\u00a0one can buy votes for about $6 per million votes and\u00a0<\/em><\/strong>(b) vote buyers will vote 100% of the time, while long-term owners tend not to vote at all, which allows the voters with \u201cduplicate voting credentials\u201d not just to go undetected, but to have their way in terms of the election outcomes. It is especially important to note in the context of election \u201cgaming\u201d that the interests of short-term and long-term owners are, almost always, diametrically opposed in election contests\u201d.\n\n\n\n\n
\n\n\n\n\nhttps:\/\/archive.is\/aUv1B<\/a>\n\n\n\nhttp:\/\/www.sec.gov\/comments\/s7-14-10\/s71410-68.pdf<\/a>\n\n\n\n\n
\n\n\n\n\n\u201cThe customer doesn\u2019t know this is happening,\u201d says John Wilcox, head of corporate governance at TIAA-CREF, the biggest private U.S. pension plan for teachers. Often, the broker still permits the customer to vote the shares even though they\u2019re out on loan. That policy is not sound. It definitely means that shares can be voted twice.\u201d\n\n\n\n\n
\n\n\n\n\nhttps:\/\/archive.is\/PR9Ww#selection-4015.0-4018.0<\/a>\n\n\n\n\n
\n\n\n\n\nBut most of the time none of these tactics are necessary, because again, people usually don\u2019t even show up to vote anyways.\n\n\n\n\n
\n\n\n\n\n\u201cIt\u2019s invisible,\u201d says Paul Schulman, executive managing director of Altman Group Inc., a proxy solicitor based in Lyndhurst, New Jersey. Most of the time you don\u2019t get overvotes because so many shareholders don\u2019t vote.\u201d\n\n\n\n\n
\n\n\n\n\nThey\u2019ve certainly shown that they are perfectly capable of rigging everything else<\/a>. These companies will do anything to buff up those quarterlies; they will even instruct the directors of the DTCC to block new technology that can save pensioners hundreds of billions of dollars.\n\n\n\n\n
\n\n\n\n\nPensioners: those people who\u00a0worked their whole lives<\/a>\u00a0and finally want to settle down after decades of toiling at their job 5, maybe even 6 days a week. They took you to school, fed you while you were a child; taught you everything you know about life..\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nThink about it this way: not only will these banks steal from the future by printing trillions of dollars so they can cover their reckless stock market bets, but they will also steal from the past by siphoning value from your retirement savings..\n\n\n\n\n
\n\n\n\n\nNone of this is a conspiracy. You can click on the image below and it will take you directly to the exact line of text.\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\nJust imagine the power you would have if you could manipulate the voting outcomes in a corporate election.\n\n\n\n\n
\n\n\n\n\nJust going off the Wilshire 5000, the combined market cap of every publicly traded company in America is equal to roughly $33 trillion, and some of these corporations are larger than most countries. Directors can also exert significant control over the company finances, and they pour billions into our\u00a0elections<\/a>.\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\n\u201cHow Broadridge and its customers\u2014the bank and broker custodians\u2014adjust overvotes, revocations, and other problems within its system is entirely opaque\u201d<\/em><\/strong>.\n\n\n\n\n
\n\n\n\n\n\u2014The Hanging Chads of Corporate Voting<\/a><\/em>\n\n\n\n\n
\n\n\n\n\nIf you wanted to influence the outcome of an election, what do you think would be the easiest way to accomplish this? You would probably want to wait until you could see the results first, right?\n\n\n\n\n
\n\n\n\n\nGuess what, that\u2019s how they can do it! It\u2019s up to them whether they want to count the votes before, or after receiving the tallies. Yes, they can literally wait until they know the results, then tabulate everything knowing what the outcome is going to be.\n\n\n\n\n
\n\n\n\n\nJust imagine if the American people found out a political election was being handled like that? There would probably be a revolution the very next day..\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\n
\"\"<\/figure>\n\n\n\n\n
\n\n\n\n\n\u2026 \u201cthere is no guidance in the rule (NYSE\u2019s Rule 452) itself or from the Exchange in any other form as to how a member firm is to handle a situation where it receives proxy voting instructions for more shares than it holds in record ownership. Thus a member firm apparently enjoys substantial flexibility when it cannot act on all the instructions received, and in particularit presumably may select at its own discretion which voting instructions it will disregard<\/em><\/strong>\u201c\u00a0. . . (SEC (1991), p. 28)
Vote Trading and Information Aggregation,<\/a>\n\n\n\n\n
\n\n\n\n\nThis is just the beginning. There is\u00a0much\u00a0<\/strong><\/em>more.\n\n\n\n\n
\n\n\n\n\nLet\u2019s say there is a voting discrepancy because these TBTF banks and brokers decided to issue more voting entitlements <\/em>than actually exist; it turns out that the entity that counts the votes doesn\u2019t even have a fixed procedure for dealing with this problem.\n\n\n\n\n
\n\n\n\n\nSometimes they will count the votes on a \u201cfirst-in\u201d basis, and other times they will count the votes on a \u201clast-in\u201d basis, meaning your votes could be completely discounted in favor of somebody who borrowed stock immediately before the record date, or worse, they could include fake votes because one of their better customers had an interest in the outcome. Again, they own the DTCC, and Broadridge openly admits in their company SEC filings that their relationship with these brokers constitutes as a \u201cConflict of Interest\u201d\n\n\n\n\n
\n\n\n\n\n\n","protected":false},"excerpt":{"rendered":"

\u201cThe development of our financial oligarchy followed, in this respect, lines with which the history of political despotism has familiarized us: usurpation, proceeding by gradual encroachment rather than by violent acts; subtle and often long-concealed concentration of distinct functions\u2026. \u2026\u2026which are beneficial when … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-22291","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/amicuscuria.com\/wordpress\/wp-json\/wp\/v2\/posts\/22291","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/amicuscuria.com\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/amicuscuria.com\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/amicuscuria.com\/wordpress\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/amicuscuria.com\/wordpress\/wp-json\/wp\/v2\/comments?post=22291"}],"version-history":[{"count":22,"href":"https:\/\/amicuscuria.com\/wordpress\/wp-json\/wp\/v2\/posts\/22291\/revisions"}],"predecessor-version":[{"id":22377,"href":"https:\/\/amicuscuria.com\/wordpress\/wp-json\/wp\/v2\/posts\/22291\/revisions\/22377"}],"wp:attachment":[{"href":"https:\/\/amicuscuria.com\/wordpress\/wp-json\/wp\/v2\/media?parent=22291"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/amicuscuria.com\/wordpress\/wp-json\/wp\/v2\/categories?post=22291"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/amicuscuria.com\/wordpress\/wp-json\/wp\/v2\/tags?post=22291"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}