"Dark pools" used for currency, bribes, coercion and undue influence
Rigged Leader v. Facebook, likely crashed NASDAQ
(Jan. 7, 2014)—Wall Street "dark pools" are hidden from Main Street by definition. Dark pool stock trades are concealed from the public. As such, U.S. judges and government officials who participate in such pools violate fundamental tenants of public accountability and transparency to "avoid even the appearance of impropriety." Despite the clear rules, the judges in Leader v. Facebook did not disclose even a single share of their substantial Facebook "dark pool" holdings.
Root of Washington's Dysfunction
We at AFI now believe that these "dark pools," sometimes called "black pools," are at the root of the dysfunction in Washington D.C. Many there carry this hidden agenda, just hoping they "get out of Dodge" before the chickens come home to roost. Everyone has Facebook investment dirt on everyone else, Republican and Democrat.
What better way to silence one's opponent than the threat of exposing his unethical investing conduct? We also believe that Chief Justice John G. Roberts, Jr.'s flip-flop on Obamacare will be traced to some threat or other leveled against him regarding his Facebook "dark pool" holdings by his protégé, Facebook's Leader v. Facebook appeals attorney, Thomas G. Hungar, Gibson Dunn LLP. Hungar is a central player in the Leader v. Facebook improprieties.
Abuse of the public trust is an ugly thing
Did we mention that Hungar was counsel to the Federal Circuit prior to the Leader v. Facebook case? Despite this profound conflict of interest, the judges and Hungar were all silent about their prior relationships, in violation of every rule of fair play.
T.Rowe Mary speaks with forked tongue
President Obama's S.E.C. appointee Mary L. Schapiro promised to clean up dark pools. Instead, she appears to have aided and abetted the largest dark pools scam in history. See Fig. 2.
Schapiro dove in head first with 51 personal investments in Facebook pre-IPO interests—more than anyone else in the 2009 Obama cabinet. Twenty-seven (27) of Schapiro's investments are in T.RowePrice that purchased 5.2% of Facebook. Just a few months before her appointment, S.E.C. chief counsel, Thomas J. Kim gave Facebook an unprecedented exemption from the well-settled 500-shareholder rule. This rule declares that any company with more than 500 shareholders and $10 million in assets is a de facto public company and subject to public disclosure of their stock sales.
The first problem with this exemption is that Thomas J. Kim is a former Harvard Law classmate of Barack Obama. He also worked previously for Latham & Watkins LLP, counsel to Facebook's then chairman and largest shareholder, James W. Breyer, and the National Venture Capital Association, whose directors included Fidelity's Robert C. Ketterson, Vanguard's Anne Rockhold and Athenahealth/Castlight Health (Obamacare)'s Ann H. Lamont. These people are the presumptive "dark pool" ring leaders, along with Lawrence "Larry" Summers and his head gopher, Sheryl K. Sandberg, COO of Facebook.
The second problem is the exemption itself. The 500-shareholder rule is one of the most enforced rules on the books. It prevents shysters from setting up their own private +stock markets—just the sort of thing that happened in the 1930's. Neverthless, Kim issued the ruling without even a public hearing.
S.E.C. Exemption Grossly Abused
Facebook’s underwriters Goldman Sachs, Morgan Stanley and JPMorgan grossly abused the Kim exemption. They used it as their permission to sell billions of dollars of private Facebook stock promoted by the same dark pools that T.Rowe Mary publicly decried. Billions of dollars of those shares were even sold to Russian oligarchs allied with Goldman Sachs and Lawrence "Larry" Summers in Moscow.
The S.E.C. Chairman's Deception:
Schapiro says she believes in investor protection, transparency, accountability, and disclosure, however...
She secretly invested in 51 Facebook "dark pools"
On Jan. 15, 2009, Mary L. Schapiro told Congress:
"We need an SEC that is the investors’ advocate… to vigorously prosecute those who have broken the law and cheated investors"
"Second, I want to reengage the SEC with the people we serve, namely investors. The investor community, from the largest pension fund to the family who has scrimped and saved in their 401(k) or 529 plan, needs to feel they have someone on their side, that they can go to the SEC for advice, to seek redress, or to have their opinions heard. Third, as I work to deepen the SEC’s commitment to investor protection, transparency, accountability, and disclosure."
On Oct. 21, 2009, Mary L. Schapiro convened an all-hands-on-deck meeting about Dark Pool Regulation and said:
"In recent years, a large number of dark pools have entered the markets, and now represent a significant source of liquidity in U.S.-listed stocks. Given the growth of dark pools, this lack of transparency could create a two-tiered market that deprives the public of information about stock prices and liquidity . . . Transparency is a cornerstone of the U.S. securities market. That is why I asked the staff earlier this year to begin a comprehensive review of dark pools, as well as other types of dark liquidity" (emphasis added).
On Jan. 20, 2010, Mary L. Schapiro remarked on her concerns about dark pools at the 37th Annual Securities Regulation Institute meeting in Coronado, California:
"Already we have proposed rules that would effectively prohibit broker-dealers from providing customers with "unfiltered" access to an exchange or alternative trading system. We have proposed rules that would strengthen our regulation of dark pools of liquidity” (emphasis added).
On Mar. 10, 2011, Mary L. Schapiro told Congress:
"After the flash crash [market swung 1,000 pts. down, then back up, in one day], I had many foreign regulators call me just horrified. What happened? What are you going to do? How are you going to prevent this? I mean, there was more international interest in that event directed into my office than I have seen in my two years at the SEC, with the possible exception of international accounting standards. It suggests to me that there is deep concern everywhere—and other markets are starting to see the kind of market structure we have developed with the prevalence of dark pools and more fractured and fragmented trading" (emphasis added).
" . . . more than 30 dark pools, three electronic communication networks (ECNs), and more than 200 internalizing broker-dealers. Currently, more than 30 percent of the volume in U.S.-listed equities is executed in venues that do not display their liquidity or make it generally available to the public, reflecting an increase over the last year."
"The continuing growth of trading in dark pools and other types of dark venues can challenge the quality of the market’s price-discovery function. And the complexity of the market structure sometimes makes it difficult for even sophisticated investors to pursue their own best interests" (emphasis added).
On, May 18, 2012, Mary L. Schapiro’s dark pool investments began cashing in after the Facebook IPO. See Fig. 3 above.
Hidden "dark pool" agendas destroy public confidence
T.Rowe Mary talked a good game, but failed to deliver. As telling as any misstep in this ethical wasteland, Schapiro as S.E.C. Chairman, failed to require Facebook to disclose these "dark pool" risks in the pre-IPO S-1 Disclosure, even though her own fund, T.RowePrice, had acquired a 5.2% ownership stake in Facebook. Worse, she abused the public trust by engaging in the very secret investing schemes she told the American people she would protect them from. To the investing world, Chairman Schapiro's empty words are analogous to the President's lies about healthcare and keeping one's doctor.
Thank you Leader Technologies
Concurrently with Chairman Schapiro, Commerce Secretary Rebecca M. Blank and Patent Office Director David J. Kappos, and all the judges in Leader v. Facebook participated in Schapiro's Facebook IPO dark pools, including T.Rowe Price, Fidelity, Vanguard, TIAA-CREF, Blackrock, Morgan Stanley, JP Morgan, Goldman Sachs.
If the Leader v. Facebook judges had not behaved so badly and so illegally, it is unlikely that this dark pools scheme would have come to light. It all started with District Court Judge Leonard P. Stark’s misconduct in Leader v. Facebook and has fanned out from there. Every freedom-loving American should contact Leader Technologies with words of support, encouragement and resolve not to rest until justice is served
Hidden investments by judges make bad justice
Everyone knows that judge bias and hidden agendas destroy equal treatment before the law.
Chairman Schapiro cleverly stalled her S.E.C. investigations into "dark pools" until all her Facebook friends had cashed out, including the Leader v. Facebook judges. Alan D. Lourie, the presiding judge in Leader v. Facebook holds up to $14.4 million in 24 dark pools [These judges do find ways to take care of themselves, don't they?], including five (5) T.RowePrice pools. The judges, including Chief Justice John G. Roberts, Jr., appear to have run interference for her and the rest of the Facebook cartel; to guard against a Leader Technologies victory. Even so, these actors could not completely control the jury, which found Facebook guilty of patent infringement on 11 of 11 counts. Leader’s victory would have ruined their promised IPO payday.
Sadly, with a cooperative judge and a grossly deceptive expert witness in Dr. Saul Greenberg, Facebook confused the jury on the Pfaff Electronics and Group One legal tests for on-sale bar. These bad actors cajoled an unfounded on-sale bar ruling which was sustained on appeal by the fellow "dark pool" Federal Circuit appeals panel, led by Alan D. Lourie.
The U.S. Constitution now looks to Congress—"the People's Body"—to fix this gross injustice spewing from two branches of government, the Executive and Judicial.
Judge Alan D. Lourie, Leader v. Facebook Presiding judge, had 24 holdings valued up to $13.9 million in Facebook "Dark Pools"—he chose personal greed over justice
Investigations into Judge Lourie's T.RowePrice holdings have taken a strange turn. Significant ties were uncovered with key actors in the HealthCare.gov debacle, as well as with Facebook officers, directors and investors. See Judge Lourie's financial disclosure below, Figure 5. In summary, Judge Lourie's investment ties him to Marc Andreessen (Facebook director), Todd Y. Park (HealthCare.gov architect, Castlight Health, Athenahealth), Ann H. Lamont (Meritech Investment - early Facebook pump and dumper), Athenahealth, Castlight Health), David A. Ebersman (Facebook CTO), Castlight Health, Athenahealth, HealthCare.gov and Robert Kocher (Obamacare architect, National Economic Council, Athenahealth director).
Judge Alan D. Lourie, Federal Circuit, Leader v. Facebook, Financial Disclosure
Keep Congress Informed
File a complaint with the S.E.C. Inspector General. While we are skeptical that the S.E.C. will honestly and forthrightly investigate one of its own, we need to make the shout for justice from the public louder and louder. Share the Inspector General's responses with your elected representatives. No one in this transparency process can be allowed to hide any longer. Keep them busy with your complaints.
(Also file Freedom of Information Act (FOIA) requests as well. It is your constitutional right. Use it or lose it.) These citizen requests carry the weight of law. Keep your mailing receipts and correspondence. Even if they stonewall you, stonewalls are evidence in and of themselves. T.Rowe Mary and her accomplices must be exposed.
Also, file a complaint with the U.S. Department of Justice Inspector General. Ask why our top law enforcement officer, Eric H. Holder, does not investigate for possible criminal wrongdoing by the U.S. Securities & Exchange Commission. Ask why Attorney General Eric H. Holder holds 22 Facebook "dark pools" including five (5) T.Rowe Price funds.
Be sure to provide your Congressperson and Senators with regular updates about the Leader v. Facebook property confiscation injustice and this blog. Ask for a meeting to brief them and ask them to act and correct this abuse of fundamental constitutional property rights. This information will help them and their staff members get up to speed when the matter comes before Congress formally. A growing national bipartisan group is determined to make sure it does.
If this property rights case is not worthy of our full advocacy, then none is, in our opinion. We will not find a cleaner, more clear-cut case to advocate.
Don't procrastinate. If not you, who? If not now, when?
If you need additional information for your briefings, just post your request in the comments and we'll post the link to the documents in reply.
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Eric H. Holder, U.S. Attorney General, Facebook Cartel Conflicts, Financial Disclosure
Fig. 6—Attorney General Eric H. Holder holds at least 16 Facebook "dark pool" investments. This makes him conflicted on any matters related to Facebook or Facebook bankers, including JPMorgan, Goldman Sachs and Morgan Stanley, among others. Click here to download a PDF directly.
Chief Justice John G. Roberts, Jr., U.S. Supreme Court, Leader v. Facebook, Financial Disclosure
Fig. 7—Chief Justice John G. Roberts holds at least 21 Facebook "dark pool" investments. This makes him conflicted on any matters related to Leader v. Facebook. Click here to download a PDF directly.
S.E.C. Chair Mary L. Schapiro, Financial Disclosure
Fig. 8—S.E.C. Chairman Mary L. Schaprio holds at least 51 Facebook "dark pool" investments. New research proves that some of those funds held direct investments in Facebook. This evidence renders the Facebook IPO a complete sham, and Schapiro's conduct fraudulent. Click here to download a PDF directly.
Thomas S. Ellis, III, Financial Disclosure, Rembrandt Social Media v. Facebook (E.D. Virginia)
Fig. 9—Thomas S. Ellis, III holds at least 21 Facebook "dark pool" investments. He presides over the case Rembrandt Social Media, LP v. Facebook, Inc. et al, 1:13-cv-00158-TSE-TRJ (E.D.V. 2013). New research proves that some of those funds are holding Facebook stock directly, in addition to dozens of stocks in the Facebook cartel. This evidence demands Judge Ellis's immediate recusal and sanction. Click here to download a PDF directly.
 Guide to Judicial Ethics: Canon 2: "[a] judge should avoid impropriety and the appearance of impropriety in all activities."
"Canon 3C(3)(c) provides that a financial interest means ownership of a legal or equitable interest, however small . . . Ownership of even one share of stock by the judge’s spouse would require disqualification." (p.20-2) (emphasis added).Guide to Judiciary Policy. (Sep. 05, 2013). Vol. 2, Ethics and Judicial Conduct, Pt. B, Ethics Advisory Opinions, Ch. 2, Published Advisory Opinions, U.S. Courts, transmittal 02-014, last rev. Sep. 5, 2013. U.S. Courts.
 Leader v. Facebook Summary: Petition for Writ of Certiorari, Leader Technologies, Inc. v. Facebook, Inc., No. 12-617 (U.S. Supreme Court Nov. 16, 2012).
 T.Rowe Mary sanctioned Facebook's securities fraud: AFI. (Dec. 20, 2013). Securities Commission Chair Mary L. Schapiro Knew Facebook Was a Fraud. Americans for Innovation. ("Securities Chair Mary L. Schapiro knew Facebook and its IPO were frauds – Schapiro sanctioned the 500-shareholder exemption so her 51 Facebook fund boats would all float in the IPO."). HTML.
 Facebook IPO "Pump & Dump:" AFI. (Mar. 28, 2013). The Real Facebook - A Portrait of Corruption. Americans for Innovation. (SEC counsel cleared the way for the Facebook "pump and dump” scheme in 2008.). HTML.
 Congressional Briefing: Briefing. (Oct. 19, 2012). Briefing for Representative Jim Jordan (OH) - House Oversight Committee—American and Russian Opportunists Undermining U.S. Sovereignty and Corrupting U.S. Financial and Judicial Systems. U.S. Congress.
 T.Rowe Mary (Schapiro) Testimony, Jan. 15, 2009: S. Hrg. 111-32. (Jan. 15, 2009). Nomination of Mary L. Schapiro for Chairman of the U.S. Securities and Exchange Commission, Hearing of the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Y 4.B 22/3, Jan. 15, 2009, p. 12, 13. GPO.
 T.Rowe Mary Testimony, Oct. 21, 2009: Mary L. Schapiro. (Oct. 21, 2009). Speech by SEC Chairman: Statement on Dark Pool Regulation Before the Commission Open Meeting by Chairman Mary L. Schapiro, Oct. 21, 2009. Securities & Exchange Commission. HTML.
 T.Rowe Mary Testimony, Jan. 20, 2010: Mary L. Schapiro. (Jan. 20, 2010). Speech by SEC Chairman: Embracing the Change by Chairman Mary L. Schapiro, Jan. 20, 2010. Securities & Exchange Commission. HTML.
 T.Rowe Mary Testimony, Mar. 10, 2011: S. Hrg. 112-25. (Mar. 10, 2011). Testimony of Mary L. Schapiro, Chairman, U.S. Securities & Exchange Commission, Hearing, Subcommittee on Securities, Insurance, and Investment of the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, 112th Congress, Mar. 10, 2011, Y 4.B 22/3, p. 21, ¶7. GPO.