Signalife Sues Brokers, Demanding|$12 Billion For Naked Short-Selling Scam

LOS ANGELES (CN) – Medical technology developer Signalife sued a group of lawyers and brokerage firms, citing SEC charges accusing them of orchestrating a phony sell-off of Signalife shares to whack Signalife’s stock value and manipulate the market. Signalife seeks $12 billion, and injunctive relief for market manipulation.     It says the American Stock Exchange confirmed that the defendants engaged in naked short selling of Signalife stock from the day Signalife was listed on the ASE until the day it filed this lawsuit in Superior Court.      When it obtains an injunction, Signalife says it will expand the lawsuit into a class action that will include the families of cardiac patients who died after the fake sell-off denied them access to the company’s electrocardiography monitoring system.     Short-selling is a method of making money off of overvalued or declining stocks. An investor borrows stocks from a broker and sells it, hoping the price will decline. If it does, the investor buys the stock back at the lower price and pockets the profit. If the price goes up, the investor takes a loss. Either way, the investor must give the stock back to the broker, who often had borrowed the stock from another investor who is holding it as a long-term investment.      In naked short-selling, the broker short-sells a stock without getting permission from its owner: it’s illegal.     Signalife says the defendants stole tens of millions of shares from the company treasury, patients and investors. To pull off the scheme, Signalife says, “20 million shares were just electronically created out of thin air.”      The defendants allegedly sold the fake shares to create the appearance of a widespread market sell-off.      Law firm Vianale & Vianale allegedly informed people that Signalife stock was not sellable, despite a large sale to publicly traded medical technology company Medtronics.      Signalife also says brokerage firms Scott Trade, ETrade and Charles Schwab have a policy that allowed Signalife stock to be sold, but refused to facilitate the purchase of Signalife stock.      Here are the defendants: Kenneth Vianale, Julie Vianale, Vianale & Vianale, William McMahan, Scott Trade Inc., ETrade Securities, E*Trade Bank, Charles Schwab, Morgan Stanley & Co., The Goldman Sachs Group, J.P. Morgan, as successor to Bear Stearns Securities Corp., Banc of America Securities, The Bank of New York, Citigroup, Credit Suisse (USA), Deutsche Bank Securities, Merrill Lynch, Pierce, Fenner & Smith, Lehman Brothers, and UBS Securities.     Signalife is represented by Joseph Maher.

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