SEC DEBACLE

UNIVERSAL EXPRESS CASE PROFILE

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Universal Express (USXP) operated as a pristine and exemplary small public company for 17 years.

It was ignominiously and fraudulently silenced by some rogue government officials in days.

For the good of our future economic trading system and other vulnerable United States public companies the following facts need to be exposed and understood.

We ask the interested public to simply allow these chronological facts in this profile to speak for themselves.

Was justice served?   When will it be served?

Does the present Securities and Exchange Commission and the United States Court of Claims need to address these facts?

Our case involves the fraudulent failure of previous SEC administrations to stop naked short sellers and to expose SEC employees who fraudulently and corruptly destroyed Universal Express and thousands of other small publicly-traded companies.  (1)

Despite the efforts of Universal Express and its officers previous SEC administrations had fraudulently failed for more than a decade to take any effective regulatory or enforcement action against illegal naked shorting or naked shorters  themselves.  (2)

The failure to regulate and the failure to enforce naked shorting rules by previous SEC administrations  borders on criminality, cover-up or, at the least, gross fraud.  (3)

The core issue of the naked shorting scandal underlies these paragraphs. Naked short selling is selling shares one does not own, will never purchase nor deliver. These are unregistered and non-existent shares not issued by the companies in whose names they are sold. Each such sale is an illegal violation of the securities laws as the sale of unregistered securities and the anti-counterfeiting statutes of the United States. It is also grand larceny under the laws of every State. This illegal trading was long and fraudulently covered-up by previous SEC administrations who profited along with culpable Wall Street interests in this illegal practice which has been a significant cause of the present financial global crisis.  (4)

Previous SEC administrations fraudulently denied and ignored frequently-requested assistance by Universal Express and its officers to combat the naked shorting of its shares.  (5)

The long-term naked shorting scandal by Wall Street firms of the shares of small public companies under previous SEC administrations destroyed thousands of those companies and the investments of millions of American investors including over 65,000 Universal Express shareholders.  (6)

The previous securities’ regulators total failure to enforce existing securities laws as well as Congressionally ordered regulations patently adds up to the active and fraudulent cover-up of the naked shorting scandal. This has been an ongoing gross breach of its fiduciary duty to small public companies, their investors, officers and employees.  (7)

The previous SEC administration’s willful and paranoid destruction of Universal Express and its continued vindictive attempts to silence its officers as whistleblowers on the naked shorting  issue constitutes corrupt and gross fraudulent misconduct.  (8)

The naked short sellers operated like gangs or economic terrorist cells usually from or within Wall Street houses such as Bear Stearns and Lehman Brothers. They would attack the stock of small developing companies for the purpose of driving the stock down in value and pushing the targeted companies into bankruptcy.  They could sell stock that they did not own. (9)

The naked shorters who attacked Universal Express combined their raid with false and negative internet postings of more than 700,000 messages on the Company’s  chat  board  thus attempting to drive the Company into bankruptcy. Significantly Universal Express heroically fought long and hard since 1998, although Bear Stearns and Lehman Brothers collapsed in only one weekend under the same type of  internet postings and naked short selling  attacks.  (10)

The purpose of pushing these public companies into bankruptcy was that the naked shorters would be able to keep the entire proceeds of their illegal naked short sales because they were never forced by the SEC to cover or deliver shares. When a company was forced to file for bankruptcy there was then no requirement to cover or deliver such shares.  It was a common practice that these “SEC protected” naked shorters did not even have to report these ill gotten profits on their taxes, costing the United States Treasury Department trillions in lost revenue.  (11)

After the naked short sellers drove down the company’s stock price, it destroyed the ability of the company to obtain credit lines and maintain existing credit relationships. This further resulted in shareholders’ lack of confidence and often to predictable panic selling which forced corporate failures.  (12)

On numerous occasions since 1998 Universal Express and its officers complained to the previous SEC administrations about these illegal practices, but surprisingly the SEC always helped the naked short sellers by its fraudulent denials. First, by fraudulently doing nothing, and then by fraudulently attacking Universal Express and its officers while it corruptly stole and tried to cover-up the Company’s jury judgments.   (13)

Failing to get any help from the SEC, Universal Express was forced to sue some of the naked short sellers directly. The Company proudly obtained two Florida jury verdicts totaling $700,000,000 against the naked short sellers. These were the same judgments which the previous SEC administrations seized by corruptly and fraudulently forcing Universal Express out of business.  The SEC has been attempting to permanently silence those naked short selling facts which two juries determined appropriate for victim compensation.  (14)

The Company filed 68 annual and quarterly reports with the SEC over a 17 year period without receiving any questions or criticisms. The previous SEC administrations disregarded the rights of Universal Express and its officers and shockingly went to the aid of the illegal short sellers.  Despite the SEC’s fraudulent statements of denial and even mistruths to the courts, Universal Express had the absolute right to issue stock under its bankruptcy exemptions to counteract the SEC protected naked shorting of its shares. By obtaining a summary judgment fine with SEC fraudulent statements, Universal Express and its six subsidiaries were corruptly closed, liquidated and corporate documents shredded despite an ongoing request for a trial or hearing. (15)

It might be further observed that in due course the same naked short selling wolfpack turned on two of its own. When Bear Stearns and Lehman Brothers were  having financial difficulties during the last half of 2008, the naked short sellers were there to drive Bear Stearns and Lehman Brothers out of business in the same fashion of naked short selling combined with false rumors and  negative internet posts.  (16)

While Universal Express was being attacked by the SEC, Bernie Madoff  was writing with the SEC’s blessing the short selling rules for the financial industry. He was, as we sadly note today, operating one of the biggest unregulated naked short selling scams in decades.  (17)

On July 15, 2008 and September 15, 2008 the previous SEC administration admitted under intense media exposure that naked shorting was a huge national problem underlying the failure of major financial institutions as a major cause of the financial meltdown.  It was during this period of  breaking public disclosure on naked shorting that the SEC shockingly incarcerated and sought with deceitful efforts to fraudulently maintain in chained solitary confinement for 83 days Universal Express’ CEO, Richard Altomare, the most prominent speech giving whistleblower on naked shorting. No crime. No cause.  Just corrupt abuse of power.  (18)

At that point, the previous conflicted SEC administration fraudulently sought to protect from the naked shorting scandal only selected Wall Street banks that were doing the naked shorting of thousands of small public companies for over ten years. Many of these banks now turned on each other in their own insatiable and unregulated greed adding to unregulated confusion.  (19)

The SEC had fraudulently denied for over a decade that naked shorting was a problem and fraudulently failed to take any enforcement action to prevent the issuance of trillions upon trillions of counterfeit and unregistered shares sold into the market by vulture-like Wall Street interests in the names of small public companies destroying their market prices, in violation of the anti-counterfeiting statutes and securities statutes of the United States Congress.  (20)

As a result of this now accused fraudulent regulatory failure and cover-up by previous SEC administrations of the naked shorting scandal bordering on criminality thousands of small public companies were destroyed and forced into bankruptcy by the naked shorters, millions of small investors lost their life savings and hundreds of thousands of employees lost their jobs.  (21)

Universal Express was one of those estimated ten thousand small public companies destroyed by the naked shorters, in league with previous SEC administrations which has been  fraudulently paid (yes, “paid”) a fee for  every naked shorted, counterfeit and unregistered share illegally traded.  (22)

Universal Express, it�����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������s President and CEO Mr. Richard A. Altomare and Mr. Gunderson, its General Counsel, have been prominent whistleblowers against naked shorting for more than ten years.  Instead of supporting and protecting these whistleblowers, they were fraudulently and illegally harassed and targeted by previous SEC administrations in order to silence them even by fraudulently closing down and defaming their 17 year respected business model.  (23)

The previous SEC administrations vehemently and fraudulently denied the existence of naked shorting as a problem for stock marketplaces and illegally failed to enforce its own regulations to stop the practice. They also were determined after years of fraudulently targeted harassment to continue to try to silence by any and all corrupt means these very persistent whistleblowers, Universal Express and its CEO who was also a United States Marine, respected educator and unblemished business man.  (24)

These SEC actions to fraudulently harass, destroy and silence Mr. Altomare on behalf of the naked shorters culminated on May 2, 2008 at the corrupt behest of the SEC in the brutal incarceration of Mr. Altomare into chained solitary and illegal confinement for eighty three (83) days for purged civil contempt which Mr. Altomare, after a 40 pound weight loss, sadly proved was improper.  (25)

In a few days, at the corrupt behest of the vindictive, conflicted and fraudulently acting previous SEC administration, this viable and growing American small public company that was Universal Express having a market capitalization during its fiscal year 2006 of $111 Million Dollars was fraudulently defamed in the business marketplace and improperly liquidated for $35,000 by a receiver of highly questionable credentials.  (26)

It is also estimated that since naked shorters never need to deliver or “cover” their positions with actual shares of companies, their gains from these illegal activities have never been reported to the IRS. The Wall Street Journal stated in a July 5, 2007 article that the naked shorting losses to American taxpayers was valued at $2.5 billion daily!  Accordingly, the lost tax revenues to the United States Treasury Department from this illegal naked shorting fraudulently permitted by the previous SEC administrations over the relevant period was conservatively more than $7 trillion – sufficient to pay off most of our national debt.�� (27)

It is clear that the culture of previous SEC administrations was to defer to and not to regulate powerful Wall Street elites, but only to target and eliminate less powerful companies. Despite the fact that the SEC’s Charter mandates protection for ordinary investors not just brokers and hedge funds these now documented facts remain painfully true during this period.  (28)

The revolving door of the SEC leading to huge accounting, legal and consulting salaries with these same Wall Street elites also fostered the SEC’s lack of regulation culture, especially its fraudulent cover-up and corrupt failure to act on naked short selling.  (29)

Presidential Candidate Senator John McCain on September 18, 2008  called for the firing of former SEC Chairman Cox for failing to regulate the naked shorting scandal.  (30)

On December 18, 2008, President-Elect Obama, in nominating the new SEC Chairman, stated that the SEC, as the regulator assigned to oversee Wall Street had failed to regulate and had “dropped the ball” over the years, substantially causing the present financial crisis.  (31)

On January 27, 2009, the Senate Banking Committee at hearings accused the previous SEC administrations of a total failure to regulate Wall Street.  (32)

On February 4, 2009, the House Financial Services subcommittee determined at hearings that the previous SEC administrations had totally failed to regulate Wall Street and that the SEC had operated only to protect Wall Street institutions and not ordinary Main Street investors as it is charged by Congress in its charter.  (33)

On March 18, 2009,  the Office of Inspector General of the SEC issued a report finding that previous SEC administrations had failed to regulate the naked shorting scandal, that naked shorting was a significant factor in the present financial collapse and that the SEC had ignored many thousands of complaints on naked shorting from small public companies and investors.  (34)

On June 2, 2009, the Chief Executive of the NASDAQ told the U.S. Chamber of Commerce that naked shorting was the real problem underlying the present financial  crisis.  (35)

On March 3, 2009, April 1, 2009, June 24, 2009 and July 22, 2009, numerous United States Senators sent joint letters to the new SEC Chairman Mary Shapiro urging that the SEC finally ban naked shorting as a huge problem and a principal cause of the present financial crisis and the cause of great damage to and destruction of public companies, especially smaller public companies like the now corruptly and fraudulently destroyed Universal Express.  (36)

On June 25, 2009, United States Senator Edward E. Kaufman in a floor speech to the Senate stressed in great detail the “fierce urgency” for the SEC to ban naked shorting as a huge problem and a principal cause of the present financial crisis and the cause of great damage to and destruction of public companies, especially smaller public companies.  (37)

On July 27, 2009, the present SEC, after more than ten years of fraudulent denial, admitted that the naked shorting of the shares of all public companies including smaller public companies like Universal Express was a huge national problem.  (38)

On August 5, 2009, the present SEC finally, after more than ten years of fraudulently denying that this illegal process existed, announced it had brought its first enforcement action against naked short sellers, but only against a few small house brokers who  naked shorted from 2005 to 2007.  (39)

These long overdue but still ineffective tentative actions were taken after more than a decade of previous SEC administrations fraudulently denying that naked shorting existed or was even a problem. It fraudulently ignored naked shorting. It actively and fraudulently covered-up and failed to regulate the naked shorting scandal. Its’ inactions bordered on criminality and, at the least, gross fraud. Its’ inactions were in the long-term and perpetual interests of Wall Street banks and firms who were illegally committing the naked shorting while at the same time the SEC corruptly, illegally, vindictively and fraudulently incarcerated and sought to silence the most prominent and heroic whistleblower CEO.  (40)

On October 21, 2009, Senator Edward E. Kaufman in a floor speech to the Senate urged the SEC to finally and effectively ban naked shorting which has been a huge national problem for all public companies, now finally including small public companies.  (41)

In that same speech, Senator Kaufman referred to Senate Bill No. 605, to force the SEC to ban naked short selling, which he and a number of other Senators have introduced and cosponsored. He concluded, “We need to send a strong  message to the SEC that the United States Congress will not tolerate (its continued) inaction on this critical issue.” (42)

On February 3, 2010, Senator Kaufman in a video interview with Steve Forbes  of Forbes Magazine indicated that naked short selling is not only a major factor in the financial meltdown but is a systemic financial fraud, criminal enterprise and a very dangerous situation which the SEC has failed to stop. (43)

On February 24, 2010, Senators Isakson and Kaufman issued a bipartisan press release on the national scandal of naked short selling and again castigated the SEC for its long-term failure to protect the public from this scandal of naked-short selling. (44)

Significantly, after more than ten years of the SEC�����s fraudulent cover-up of naked shorting, the Senators stated that �����the real problem is that the SEC does not have an enforceable rule to punish those who undertake market manipulation through abusive naked short selling and rumor-mongering.” (45)

On March 1, 2010, the whistleblower of Madoff’s $65 Billion Ponzi scheme Mr. Harry Markopolos was interviewed on numerous news networks concerning his book “No One Would Listen.” He stated that for nine years he tried to convince the SEC that a massive financial fraud was being perpetrated by Madoff, but that the SEC turned a blind eye to Markopolos’ detailed information on the scam which he said he had easily discovered in only a few minutes of analysis. (46)

Madoff wrote with the SEC’s blessing the short selling rules for the financial industry and was one of the biggest unregulated naked short sellers for decades.���� (47)

When Madoff was arrested in December 2008 Mr. Markopolos said he was afraid that the SEC would come after him and that a friend high up in the SEC called him that day to warn him of the SEC���s position that “we don���t know you” and you had ���better watch your back.” Does this seem to be the actions of a legitimate governmental agency of  our United States of America?  (48)

On March 15, 2010, Senator Kaufman in a speech to the Senate issued a manifesto against Wall Street corruption in the financial crisis and against the SEC���s failure for years to regulate as well as take enforcement action against the perpetrators, including the Wall Street firms committing the naked shorting scandal.  (49)

On March 16, 2010, an article in the Huffington Post entitled ���Senator Kaufman: Fraud Still at the Heart of Wall Street”, described his speech as “devastating” including the very decisive statement that ���fraud and potential criminal conduct were at the heart of the financial crisis.” (50)

On March 19, 2010, Arianna Huffington of the Huffington Post published an article on her interview with Senator Kaufman on his term as a Senator. Ms. Huffington commenced her article with the following statement: ���At a time when our political and financial landscapes are littered with villains and those unwilling to take them on (the SEC), it’s refreshing to find someone in the halls of power that we can unabashedly celebrate.��� (51)

Most importantly, she then quoted Senator Kaufman as follows: “In the beginning,” he told me, “though I was very upset about what had happened on Wall Street, it wasn’t one of my key objectives…. But then I started reading more and more about the way the SEC was failing to curb abusive practices when it came to short selling. So I started speaking out on that….��� (52)

On March 26, 2010, in a speech to the Senate on financial reform, Senator Kaufman stated as follows: “Meanwhile, as the consolidated supervisor of major investment banks, the SEC had similar powers to those of the Federal Reserve. And it goes without saying that its track record of regulatory enforcement was littered with colossal failures.”  (53)

On April 13, 2010, the former CEO of Washington Mutual testified before the Senate’s Permanent Subcommittee on Investigations that the principle reason for the biggest bank failure in US history was that WaMu was the victim of naked short selling. (54)

On May 14, 2010, the New York Times in a front page article on bank bailouts stated that the SEC is to blame for the financial meltdown. �����The SEC., for one, is now eager to prove that it is on its game after failing to spot the global Ponzi scheme orchestrated by Bernard L. Madoff, or head off the Wall Street excesses that nearly sank the entire economy.”  (55)

On May 18, 2010, Germany banned naked short selling of the securities of financial institutions in connection with Europe’s  financial crisis. (56)

During Senate debate on Wall Street Reform in May 2010, Senators condemned the SEC for failing to regulate trillions of dollars of mortgage backed securities, 90% of which failed setting the stage for the housing crisis and the financial meltdown. (57)

On May 27, 2010, Senator Kaufman in an address to the Senate entitled “Redressing the Imbalance of Regulatory Capture” discussed the SEC’s failures on the naked shorting scandal. He stated that “Since coming to office last year, I have highlighted this serious problem…along with seven other senators….”  (58)

He further stated in his speech, “The regulators are surrounded – indeed they consciously choose to surround themselves – by an echo chamber of industry players who are making literally billions of dollars under the current system. Who speaks to the regulators on behalf of the average investor?”  (59)

On June 2, 2010, Germany expanded its ban on naked short selling to the shares of  all public companies. (60)

On June 9, 2010, France and Germany jointly urged the European Union to ban naked short selling of securities.�� (61)

On July 27, 2010, Japan announced a further extension of its October 2008

ban on naked short selling.  (62)

On September 28, 2010, the European Union announced that the EU plans to ban naked short selling.  (63)

In conclusion, Universal Express had corporately developed and had become globally recognized despite the rogue SEC’ corrupt and fraudulent harassment and corrupt and fraudulent conduct supporting the unrelenting attack since 1998 by naked short sellers, unscrupulous Wall Street financial interests, fraudulent brokers, hedge funds and market makers who sold into the market billions of USXP unregistered and counterfeit shares. This caused the collapse of the Company’s stock price from $2.00 to $.02 (2 cents) per share and, thereafter, kept the Company’s share price well below fractions of a cent (1/100ths of 1 cent), despite the strong growth of the Company’s businesses, including a tripling of revenues each quarter for more than five years.  (64)

In more than 100 press releases, letters and visits to government officials and in worldwide speeches and webcasts as well as a full page New York Times announcement, Universal Express, its President and its General Counsel proved that naked short selling existed. These whistleblowers even showed by statistics that the volume of the Company’s shares traded was 11 times the Company’s outstanding shares and more than 68 times its average daily volume. ����(65)

As stated, State court juries in Florida in 2001 and 2003 awarded the Company verdicts exceeding a total of $700,000,000 against naked short sellers.  In a press release issued on September 23, 2003, entitled “Universal Express…Declares War on ‘Naked Short Selling’,����� the Company stated �����If normal everyday people acting as juries can understand this naked shorting scheme, why can’t the SEC?”  (66)

Within a month after the Company’s second jury verdict against the naked shorters and the very wide publicity attending the Company���s verdicts  an  embarrassed   SEC, through its Denver office, commenced in May 2003 a corrupt and fraudulent program of harassment against the Company with more than 13 subpoenas for thousands of documents demanded to be produced in only a few days.  Not one attempt to aid the Company was offered by the SEC.  (67)

The Company volunteered to provide information on contracts for current proposed acquisitions and its’ funding sources for those acquisitions.  (68)

Yet, before these documents were even received by the attorneys at the Denver office of the SEC, its agents were actually calling and visiting those acquisition candidates������� and funders’ senior officers, corruptly and fraudulently threatening them with reprisals or tax audits so that they would move away from the Company and its imminent success.�� (69)

This corrupt, horrific, illegal and fraudulent SEC pattern of intimidation attempting to prevent Universal Express’ continued success was in full swing and successful since several large proposed acquisitions were inexplicably  terminated.  (70)

The SEC���s corrupt and fraudulent harassment of the Company and its officers as whistleblowers on naked shorting and its corrupt and fraudulent harassment of the Company’s business partners and potential business partners and funders continued unabated thereafter.  (71)

The Company, its President and General Counsel, who value free speech under our Constitution, were determined not to be bullied by a corrupt and fraudulent regulatory agency, which had failed the investing public on this national naked shorting scandal in favor of Wall Street interests in clear violation of its Congressional mandate.  (72)

The Company, its President and General Counsel filed with the SEC on May 1, 2006 an official request to the SEC to provide them with all statistics showing the naked shorting positions in the Company’s shares for a 36 month period. The SEC refused.  (73)

This scandal, fraudulently ignored by previous SEC administrations, has destroyed the ongoing American dream of taking small private companies public and growing those businesses through the growth of their stock base and has substantially contributed to today���s high unemployment numbers.  (74)

Due to these SEC failures and corrupt and fraudulent conduct thousands of lost developmental products beneficial to the public and including Universal Express��� innovative logistic businesses have never had a chance for the national market and have moved to other countries.  (75)

Trillions of dollars have been siphoned from the capitalizations of public companies by the naked shorters with the intent and result of bankrupting those companies so that the naked shorts would never have to be repurchased or “covered����� by delivery of actual shares.  (76)

The present SEC’s recent admissions that naked short selling has been a huge problem for all public companies, including small public companies like Universal Express and its recent announcement of its very first enforcement action after all these years, does not bring back Universal Express. (77)

The above facts   constitute the complete vindication of Universal Express and its officers in their over ten year battle against naked shorting and constitutes proof of the SEC’s corrupt and fraudulent actions against them. (78)

These facts incriminate former SEC perjurers and  fraudsters sadly crystallizes the history of the previous SEC administrations’ corrupt and fraudulent conduct against these courageous and long suffering whistleblowers. (79)

It is time for the guilty to be exposed and punished, and for the innocent to be vindicated and rewarded.  (80)

Further information is available on the following website:

www.richardaltomare.com

Exhibits supporting each of the aforementioned paragraphs are available upon request by contacting  chgunderson@gmail.com.

February 18, 2011