Statement to Shareholders March 6 2011 - Broker-Dealer laws on non-delivery of stock

March 7, 2011 - PRLog -- 8000 Inc. asks our shareholders to contact their broker-dealers and inform them of their obligations under the cited authority.

Failure To Deliver Summary

“Whenever a trade is made, both parties in the transaction have to transfer the cash and assets before the settlement date. Subsequently, if the transaction is not settled, one side of the transaction has failed to deliver. Failure to deliver also can occur if there is a technical problem in the settlement process carried out by the respective clearing house.  

As previously announced, 8000 Inc. (EIGH.pk) has uncovered evidence suggesting manipulation of its stock, including a significant naked short position and multiple examples of broker-dealers and clearing firms failing to honor or otherwise act upon  shareholder requests for delivery of their certificates, having allowed reasonable time to undertake this request pursuant to SEC Rules 17a-3 and 17a-4, respectively. The underlying factual information has been volunteered to the SEC with the hope the Staff would/will take action.

EIGH understands that, since the time permitted under applicable rules re shorts (especially naked shorts) has now elapsed, the failure to deliver rules apply and the short positions must be closed immediately pursuant to SEC Rule 13c3-3.

Moreover, EIGH understands that, as more than 0.5% of the shares in certificate form have failed to be delivered by certain broker-dealers to shareholders, the “threshold limit” (see standard cited below) is also exceeded pursuant to the SEC’s RegSHO regulations as well as FINRA Rule 4320. Consequently, EIGH believes applicable standards regarding short positions are being and have been ignored, those short positions are being and have not been recorded and, in our opinion, the “threshold rules” (see cited authority below) are being and have been ignored and therefore all short positions in EIGH stock must be closed out immediately by those broker-dealers and clearing firms carrying short EIGH positions. So far, EIGH has been advised by its shareholders that not less than 1.3MM shares have been requested from broker-dealers and not delivered, an amount twice the allowable limit according to RegSHO and associated FINRA Rule 4320. Again, as the time allocated for adherence to this FINRA Rule, and the number of shares permitted to avoid the threshold list, have been exceeded (unless the SEC or FINRA were to tell us differently), the Rule requires those EIGH short positions to be closed out immediately.

The market, public and regulatory authorities have now been presented with evidence of shareholders who have demanded that their brokers issue certificates for their holdings, evidence of non-recorded transactions, missing certificates and, in our opinion, documented practices that evade the applicable market rules and regulations. EIGH believes the situation and activities presented violate Nevada state law as well due to the non delivery of shareholder certificates (NRS 78.235 cited below) and the spirit, if not the letter, of federal law and regulations. We call on all authorities to begin an investigation into what we are convinced is an injustice and ask that all shareholders who have requested certificates which have not be delivered to contact their broker-dealers to inform them of their obligations under Rule 15c3-3 (as well as FINRA Rule 4320) and insist they close out their naked short position and deliver the requested certificates immediately as applicable Rules require.

We submit that the use of Rule 15c3-3 and non-delivery of shareholder certificates associated with naked short positions, and the applicable law has legal precedent, the most well known of these being the case of CMKX (May 2010) resulting in a settlement of nearly $4B USD.  (See link below.)

Summary

Under Nevada state law 78.235, quoted below, every shareholder has the right to request delivery of their rightfully owned certificates in a corporation. Under SEC Rule 13c3-3 as well, every shareholder is entitled to delivery of their requested certificates. As the number of certificates requested and not delivered account for more than 1,214,000 shares and have been requested more than 30 days ago, EIGH believes the broker-dealers and or clearing firms must provide the certificates or close out all associated short positions immediately.  As the number of shares not delivered is greater than 0.5% of the total issued—and for more than 35 days--the short position held in EIGH stock by the broker-dealers and clearing firms must be recorded and the stock listed on the “threshold securities” list as described below. Very specifically, in our opinion, the broker-dealers and clearing firms must comply with FINRA Rule 4320, whereby all failures to deliver must be closed out and covered immediately. Said another way, we believe the request for delivery of these certificates has been greater than the time allowed and thus failure to deliver by the broker-dealers shorting EIGH stock  has been demonstrated, the short positions must be closed out immediately. Furthermore, this situation has been on-going for over 12 months and, in our view, is considerably outside all allowable time frames for acceptable delivery of requested certificates. Rules 17a-3 and 17a-4 allows for a reasonable time to permit delivery of certificates to the rightful owner. Reasonable time, in our opinion, has been exceeded by all broker-dealers and clearing firms currently holding naked short positions in shares of EIGH. Furthermore, we submit that (i) non-delivery of certificates has been proven and, thus, (ii) failure to deliver has been demonstrated, and thus SEC Rule 15c3-3 applies immediately and the short EIGH  positions must be immediately closed out.

Very simply, more than 1,214,000 shares have been requested for delivery and not delivered for over 30 settlement days, in contravention of SEC Rule 15c3-3 and FINRA  Rule 4320. We believe that more than 0.5% of the total issued stock has been naked shorted, not recorded or reported for over 35 days, as proven through shareholder documented non-delivery by broker dealers of physical certificates.  

For the full copy of the shareholder statement e-mail enquiries@8000inc.net or visit the Company’s Facebook page

EIGH will continue to keep its shareholders apprised as events unfold. Also keep updated on 8000 Inc. developments on Facebook or Twitter.

www.brand8000.com
www.8000incgroup.com
www.8000inc.net

-ENDS-

This news release contains forward-looking statements that are subject to certain risks and uncertainties that may cause actual results to differ materially from those projected on the basis of such forward-looking statements. The words "estimate," "project," "intends," "expects," "believes," and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are made based on management's beliefs, as well as assumptions made by, and information currently available to, management pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. For a more complete description of these and other risk factors that may affect the future performance of 8000 Inc., see published disclosure documents at www.OTCMarkets.com. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made and the Company undertakes no obligation to disclose any revision to these forward-looking statements to reflect events or circumstances after the date made or to reflect the occurrence of unanticipated events.

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8000 inc is the culmination of 15 years of networking experience and success in the corporate world, stock markets and the technology and financial arenas with direct accessto corporate networks and Investment Banks.