Did you know that the largest litigation case against the SEC was due to cellar boxing a stock trading in the billions on a daily? A 3.87 TRILLION $ suit to be exact.

via Superstonk:

I’m going to keep this short as I had just found it. Also am super smooth-brained so fact-check and this constitutes as NFA pre-amble.

The largest litigation ever against the SEC and the Department of Justice of the U.S. was at the sum of 3.87 trillion. The company? CMKM Diamonds. I’m sure some of you beautifully wrinkled apes already know this tidbit, but to those, like me who did not….

The suit contends between June 1, 2004 and October 28, 2005 “a total of 2.25 trillion ‘phantom’ shares of CMKM Diamonds, Inc. were sold into the public market through legitimate brokers, illegitimate brokers and dealers, market-makers, hedge funds, ex clearing transactions and private transactions.”


Turns out that there were execs in the company working alongside mm’s, brokers and dealers issuing trillions of shares.

Here we go again with the word “glitches”. The ticker experienced it as well:

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During the spring and summer of 2004 the promoter from Saskatchewan, Mr. Casavant, then CEO, issued a paper mountain of stock, probably close to a world record. By September of that year, the shares outstanding had ballooned to nearly 780 billion. (In December 2004, around 75 billion shares were retired, reducing the outstanding to 703 billion, where it stands today.) On one day, CMKM traded 39.6 billion shares, presumably more than all the volume on all the exchanges of the world combined. The trading volume regularly triggered — at 2,147,483,647 shares — a 32-bit signed integer glitch in all quote services except Stockwatch, which programmed around the problem.


[Complaint paragraph 31] During the period of June 1, 2004 through October 28, 2005 a total of 2.25 Trillion “phantom” shares of CMKM Diamonds Inc., was sold into the public market through legitimate brokers, illegitimate brokers and dealers, market makers, hedge funds, ex-clearing transactions and private transactions. The sales of the majority of such shares were at all times known to the Securities and Exchange Commission, including Defendants herein.

[Complaint paragraph 32] At some date prior to June 1, 2004 the Securities and Exchange Commission in concert with the Department of Justice of the United States, together combined with Robert A. Maheu and others to utilize CMKM Diamonds, Inc. for the purpose of trapping a number of widely disbursed entities and persons who were believed to be engaged in naked short selling of CMKM Diamonds Inc. stock and cellar boxing the company.


The kicker is that those plaintiffs have not been reimbursed for it.

An affidavit in 2010 was filed in BC, Canada by a shareholder stating:

  1. “During the period from March, 2004 through August, 2006, on behalf of CMKM Diamonds, Inc. Robert A. Maheu, with assistance from others, negotiated a settlement with the illegitimate brokers, dealers, market makers, hedge funds, and other persons and entities that had engaged in naked short selling of CMKM Diamonds Inc. stock and cellar boxing the company. In exchange for a U. S. Government promise of no prosecution for such sales, the wrongdoers each promised to pay negotiated amounts to a frozen trust for disbursal at a later time.”
  2. The fact that the SEC participated in a sting operation using CMKX, then lied to CMKX shareholder representatives is only one issue in this case, the second is the modus operandi of the SEC and other regulators involved, including the U.S. and Canadian Governments, and in particular the RCMP and FBI. Given the fact the SEC and these authorities have conducted sting operations over the past decade regarding the counterfeiting of the stock market it needs to be explained how the same crime continued unabated for a decade by the same perpetrators. Evidence that will be presented by the Coalition will include congressional investigations and whistleblowers from the SEC that clearly prove the SEC has engaged in several well known cover-ups of crimes involving the counterfeiting of the stock market and are in fact “in bed with the industry” they regulate to the point where they make regulations with the same perpetrators which aid in facilitating the crime and its cover-up. They have ensured that retail victims and the companies they invested in would never recover from the fraud committed against them, and they made sure the perpetrators would not be held accountable, the whole time multiple Government Agencies and authorities watched and did nothing to prevent trillions of dollars in loses to the general public who were unwitting victims in this pandemic fraud.


Link to Hodges and Associates VS SEC 2010 Filing: docdro.id/VrMbEDd

Link to SEC response to Hodges filing: docdro.id/YOPhDCQ



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