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A (Very Brief) Encyclopedia of Securities Fraud

During the cacophony of a Friday evening happy hour at a crowded bar in downtown Washington, D.C. not too long ago, I could not help but overhear a loud conversation between a man and woman standing next to me. Being in the nation's capital, it was easy to peg the two as lawyers--nice suits, well-coifed hair, leather cases stuffed full with brown Redweld file folders. I couldn't hear everything they said, but the discordant bits of conversation I made out got me thinking. Here's a sample:
"They were spring-loading, channel stuffing, and using cookie jar reserves! And all this after the round-tripping!"
"That's nothing. I've seen naked shorting, marking the close, and painting the tape--all by one guy using the same dummy account. And the broker that spotted it had just been tagged with churning and cherry-picking, not to mention selling away."
"I tell you, when you think about the late trading, backdating, and market timing on top of it all, it seems the whole world is just one big Ponzi scheme...."

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