Post by DJ on Jun 14, 2005 20:01:53 GMT -5
Jeffrey K. Plummer
Ameritrade, Inc.
P.O. Box 2148
Omaha, NE 68103-2148
Attn: Compliance Department
Re: Request for information from CMKX account holders
Dear Jeffrey:
Thanks for answering two of the questions which were sent to you on May 25, 2005. You did not answer the questions which were of the greatest concern to Mr. Martin and the other 2,511 Ameritrade shareholders that I presently represent. Your letter concludes by informing me that you will only respond with information specific to John Martin's account. I apologize if I was not clear in my letter that I represent by contract 2,511 customers of Ameritrade in addition to Mr. Martin for purposes of this inquiry. This is not a request by a single Ameritrade customer but a request from quite a significant number of your customers. If it is necessary for me to name each customer that desires answers to these questions, please advise and I will begin the task of compiling such list.
I was very disturbed when I received a letter from one of your Ameritrade customers who told me had received an identical response. I am hopeful you consider this request for information an important one. A canned response does not address properly the concerns of your customers. These are legitimate concerns of quite a large group of paying Ameritrade clients. I am hopeful there can be some communications short of litigation to get responses to my questions.
Since my original letter was sent to you, this office has received 1,624 additional monthly statements from Ameritrade customers representing ownership of 45,132,421,222 shares. Thus, this firm has now received statements from 4,217 accounts held by Ameritrade customers. These accounts show a combined amount of 154,345,477,862 shares represented by these monthly statements. I reiterate the concern I expressed on May 25, 2005.
The NOBO/OBO list dated April 27, 2005 indicates the account totals of CMKX at Ameritrade as 180,519,376,324. The statements from the shareholders I represent are less than one fourth of the total accounts which ADP reports you have in CMKX. I strongly believe our shareholders represent a very fair cross section of shareholders. Our average holding per shareholder has remained fairly constant since we began accepting this information from CMKX shareholders. If our numbers are even remotely close to an average, Ameritrade should be reflecting a significantly larger number of shares being held in street name.
It is your customers' belief that Ameritrade should answer these questions fully and factually in light of your good faith duty to these customers that paid you a fee to represent them in their trading activity. If facts are known to Ameritrade that may adversely affect their holdings, you should inform these customers so that they can take whatever steps they deem necessary to protect their investment. You are also under the regulation of NASD and you have certain obligations as set out by NASD. With this in mind, I would like to ask again for your response to my questions of May 25, 2005.
1. Are the number of shares held in Ameritrade accounts reported by the NOBOIOBO accurate? If the numbers are not accurate, could you possibly explain any inaccuracies?
At an SEC hearing a couple of weeks ago, we were advised of a letter from one of the market makers in this stock that resulted from an SECINASD investigation into some irregular trades in CMKX. See attached Exhibit "A".
2. As the attorney for John Martin and several thousand of your customers, I ask you to confirm whether or not any trades in this security were made on an ex-clearing basis through any market maker to which you are associated.
Under Regulation SHO, the DTCC is required to report open fails to deliver of stocks that meet certain threshold criteria to the SEC. [Rule 203(b)(3)] The law is well settled in Texas and most other states that broker/dealers have a fiduciary duty to their clients/customers. In furtherance of your fiduciary duty to Mr. Martin and the thousands of other Ameritrade customers I represent, please answer the following question.
3. Are there any open fails to deliver in CMKX at Ameritrade at this time?
Your letter of June 8, 2005 to me clearly sets out that Ameritrade is not a market maker nor does Ameritrade trade on its own account. My questions below were not directed to you in your capacity as a market maker or trader, nor was I implying that you were acting in such capacity. In light of your fiduciary duty to your CMKX customers would you respond to the following questions?
4. Has Knight, in its market making capacity in CMKX stock, advised you of any substantial short position since you began brokering sales of CMKX stock?
5. Has Knight or any other market maker or broker/dealer sought your assistance in obtaining CMKX shares? If so, when did such occur?
6. Does Knight presently have any open fails to deliver in this stock? If so, what is Knight's open position?
These questions do pertain to Mr. Martin's account and to all other CMKX shareholders that maintain a position at Ameritrade. Each of these questions relate to information which Ameritrade may have in its possession. Conscious refusal to impart such information, if you possess the same, could be a significant breach of your common law duty to the customers you represent. I ask these questions only on behalf of those 2,512 shareholders which have asked me to assist them in this investigation. Feel free to respond to these questions by referencing numbers only. I am not asking for information as to any particular trade (by customer name) or to any particular firm by name.
I look forward to your response,
Sincerely,
Bill Frizzell
Attorney for John Martin et al
CMKX Owners Group
Cc: John Martin; Don Stoecklein; Leslie Hakala
www.cmkxownersgroup.com/BillsResponsetoAmeritradeLetter.pdf
Ameritrade, Inc.
P.O. Box 2148
Omaha, NE 68103-2148
Attn: Compliance Department
Re: Request for information from CMKX account holders
Dear Jeffrey:
Thanks for answering two of the questions which were sent to you on May 25, 2005. You did not answer the questions which were of the greatest concern to Mr. Martin and the other 2,511 Ameritrade shareholders that I presently represent. Your letter concludes by informing me that you will only respond with information specific to John Martin's account. I apologize if I was not clear in my letter that I represent by contract 2,511 customers of Ameritrade in addition to Mr. Martin for purposes of this inquiry. This is not a request by a single Ameritrade customer but a request from quite a significant number of your customers. If it is necessary for me to name each customer that desires answers to these questions, please advise and I will begin the task of compiling such list.
I was very disturbed when I received a letter from one of your Ameritrade customers who told me had received an identical response. I am hopeful you consider this request for information an important one. A canned response does not address properly the concerns of your customers. These are legitimate concerns of quite a large group of paying Ameritrade clients. I am hopeful there can be some communications short of litigation to get responses to my questions.
Since my original letter was sent to you, this office has received 1,624 additional monthly statements from Ameritrade customers representing ownership of 45,132,421,222 shares. Thus, this firm has now received statements from 4,217 accounts held by Ameritrade customers. These accounts show a combined amount of 154,345,477,862 shares represented by these monthly statements. I reiterate the concern I expressed on May 25, 2005.
The NOBO/OBO list dated April 27, 2005 indicates the account totals of CMKX at Ameritrade as 180,519,376,324. The statements from the shareholders I represent are less than one fourth of the total accounts which ADP reports you have in CMKX. I strongly believe our shareholders represent a very fair cross section of shareholders. Our average holding per shareholder has remained fairly constant since we began accepting this information from CMKX shareholders. If our numbers are even remotely close to an average, Ameritrade should be reflecting a significantly larger number of shares being held in street name.
It is your customers' belief that Ameritrade should answer these questions fully and factually in light of your good faith duty to these customers that paid you a fee to represent them in their trading activity. If facts are known to Ameritrade that may adversely affect their holdings, you should inform these customers so that they can take whatever steps they deem necessary to protect their investment. You are also under the regulation of NASD and you have certain obligations as set out by NASD. With this in mind, I would like to ask again for your response to my questions of May 25, 2005.
1. Are the number of shares held in Ameritrade accounts reported by the NOBOIOBO accurate? If the numbers are not accurate, could you possibly explain any inaccuracies?
At an SEC hearing a couple of weeks ago, we were advised of a letter from one of the market makers in this stock that resulted from an SECINASD investigation into some irregular trades in CMKX. See attached Exhibit "A".
2. As the attorney for John Martin and several thousand of your customers, I ask you to confirm whether or not any trades in this security were made on an ex-clearing basis through any market maker to which you are associated.
Under Regulation SHO, the DTCC is required to report open fails to deliver of stocks that meet certain threshold criteria to the SEC. [Rule 203(b)(3)] The law is well settled in Texas and most other states that broker/dealers have a fiduciary duty to their clients/customers. In furtherance of your fiduciary duty to Mr. Martin and the thousands of other Ameritrade customers I represent, please answer the following question.
3. Are there any open fails to deliver in CMKX at Ameritrade at this time?
Your letter of June 8, 2005 to me clearly sets out that Ameritrade is not a market maker nor does Ameritrade trade on its own account. My questions below were not directed to you in your capacity as a market maker or trader, nor was I implying that you were acting in such capacity. In light of your fiduciary duty to your CMKX customers would you respond to the following questions?
4. Has Knight, in its market making capacity in CMKX stock, advised you of any substantial short position since you began brokering sales of CMKX stock?
5. Has Knight or any other market maker or broker/dealer sought your assistance in obtaining CMKX shares? If so, when did such occur?
6. Does Knight presently have any open fails to deliver in this stock? If so, what is Knight's open position?
These questions do pertain to Mr. Martin's account and to all other CMKX shareholders that maintain a position at Ameritrade. Each of these questions relate to information which Ameritrade may have in its possession. Conscious refusal to impart such information, if you possess the same, could be a significant breach of your common law duty to the customers you represent. I ask these questions only on behalf of those 2,512 shareholders which have asked me to assist them in this investigation. Feel free to respond to these questions by referencing numbers only. I am not asking for information as to any particular trade (by customer name) or to any particular firm by name.
I look forward to your response,
Sincerely,
Bill Frizzell
Attorney for John Martin et al
CMKX Owners Group
Cc: John Martin; Don Stoecklein; Leslie Hakala
www.cmkxownersgroup.com/BillsResponsetoAmeritradeLetter.pdf