What’s Crazier: The SEC or the True Story of the Death of James Foley?

News from the grassroots of Wall Street has been reaching me. My old friend from Staten Island, who seems to be wired into most scuttlebutt on Wall Street, tells me that a broker or two is telling OSTK shorts that they need not worry about the upcoming dividend, because the SEC is going to step in and save their bacon. Every component of what Overstock is doing has already passed the SEC sniff test (I worked there at one time, have left the firm and have no relationship with it now, but those are the hoops through which I carefully jumped these last couple of years).

You see, Overstock has over its lifetime issued 37 million shares of OSTK, it is generating 3.7 million blockchain-based tokens to trade on tZERO, and issuing them on a 1 for 10 basis. Apparently in the eyes of some sages of Wall Street, that’s manipulative. The arithmetic works for most of us, I think. I am pretty sure I  could teach my dog to follow it, but some on Wall Street object that this is unfair. So it is going to give us a chance to find out whether players are above the law if they are guys  “with juice” (as was once said within the SEC about John Mack, when an investigator named Gary Aguirre was told to lay off him, because in the pre-2008 days the SEC was captured by powerful Wall Street interests).

The truth is, of course, it disturbs them because the settlement system is as sloppy as I say, no one knows who owns how much, a blockchain-based dividend reveals and fixes all the slop, and the oligarchy (which derives so much wealth from the fact of that slop in so many different ways), neither wants it revealed nor fixed. They cannot say that, so I am sure they will try to rationalize it in a dozen different ways, but look up the Dole case (“Dole Case Illustrates Problems in Shareholder System” New York Times March 2017 ) or read around on this site and it will all become clear.

It reminds me in some odd way of the true story of the death of James Foley. I thought that was one of the wackiest stories I ever knew, and I have felt no small amount of guilt, keeping the truth in like this, but even that would be topped by this one, were the SEC to interfere so openly with proper price discovery in the market. The SEC exists to protect investors. No retail investor would lose a penny from that dividend going forward. The only market participants in harms way would be the shorts, but shorts are sophisticated investors. They were notified months ago in an 8K that this was happening. They took the risk anyway.

What would be the right thing to do? It has been weighing on my conscience a lot of late: you know, even in my recent and now publicly-disclosed whistleblowing, I never breathed a word of this to anyone. Not even the current and legitimate feds. I am not sure if withholding the truth from his family and the authorities is correct of me. Let me know your thoughts in the comment section.

This story was first published on Deep Capture. Deep Capture features original investigative reporting on the all-too-cozy relationship Wall Street has with regulators, media, government and the intellectual establishment.