Naked shorting, redux
The number of companies affected by naked short selling keeps growing — at least in the minds of some.
Richard Altomare, who continued to serve as the chief executive and only director of Universal Express for months after a federal judge barred him from serving as an officer or director of a public company, has the latest number.
Last week, Universal’s general counsel, Chris Gunderson, told me 3,000 companies had been destroyed by naked short-selling, a number he raised to 4,000 after I asked for a list. Now Mr. Altomare says “6,000 companies were damaged or failed due to the trading problems caused by naked short selling.”
There are about 9,500 companies that file financial statements with the S.E.C., so that is roughly 60 percent of the total.
Mr. Altomare wants people to believe that the S.E.C. is out to get him because he complained about naked shorting, the practice of selling shares without borrowing them. It would rather not address the finding of a judge that the company finances itself by illegally selling shares while it pumps up its stock price with false and misleading news releases, but Mr. Altomere is outraged that the S.E.C. wants to appoint a receiver to replace him.
The company treated the judge’s original order as something to be ignored, neither mentioning it to shareholders nor bothering to ask that it be stayed until last week, months after it was issued but just days after I began asking questions for my column that ran Friday.)
Mr. Altomare’s latest statement compares himself to Rosa Parks and Susan B. Anthony, as well as offering the 9,000 number.
In his ruling in February, Federal District Court Judge Gerard E. Lynch said Mr. Altomare had “chutzpah.” The latest statement from Mr. Altomare does not contradict that opinion.