Manuel Asensio: Still Lying After All These Years    

from Mark Cuban's blog
Posted Mar 1, 2005, 10:24 AM ET by Manuel P. Asensio

I am the founder and leader of Asensio & Company, Inc. ("ACO"). I have recieved by email from several subscribers to copies of your comments on short selling. I am involved in lobbying efforts to reform securities legislation and short selling regulation.

ACO was, from early 1996 until it ceased operations in late 2003, the nation's largest dedicated short selling organization. ACO operated as a member of the NASD and was the first and remains the only SEC/NASD registered brokerage firm that regularly took trading short positions, advised large institutional clients on short positions and established and maintained a free internet web site to publish, distribute and promote reports that advocated short selling shares and opposed the stock promotions of our short selling targets.

This activity produced an annual compounded return in our managed account of 71.125% from 1996 thru 2003 (the entire period of the operation). This also generated over a billion dollars of potential civil liabilities from first ammendment and securities litigation filed by 7 of the 30 short selling candidates, all of which was dismissed, settled without any payment by us or tried to a jury where we won the verdict. Along the way, the conversaries led to bad press, conflicted regulatory retaliation, the forced resignation of Richard Syron as Chairman of the AMEX after a congressional investigation into a fight between us and the AMEX, fines and sanctions (and bad press) for Dreyfus, Fidelity and Merrill, and even the resignation of Alaska's Republican Attroney General who we discovered to be invested in the promotion a penny stock scheme doing business in his own state.

These unquie experiences allow me to understand the cost to society of ineffective and biased short selling regulation. I am involved in lobbying for the complete de-regulation of short selling. This includes the elimination of the down tick and borrowing rules, strict restriction on the ability of managers of public companies ability to use their public funds to sue member of the media and securities analysts who critize their stock promotion partices, and the incorporation of holders of short positions into the protections granted all other investors under SEC rule 10-b. This last reform would eliminate harmful class action suits by plaintiff attroney who add no value to markets and allow short sellers to defend themselves against the worse elements of our society--those that abuse our nation's free enterprise system and misallocate capital from our markets.


It seems odd that Asensio is still receiving email if, as is now claimed, he has not had anything to do
with the website since October 2003.  You'd think the "new owners" (who mysteriously have never been identified)
would take care of email from their subscribers.
As for his claim to be the nation's largest short selling organization, with a staff of three, it's actually one of the
smallest.  Whatever, he can't make up his mind what its return has been.  Anywhere from somewhere in the 30%
range to 46% to 71.125 in the firms "managed account."  Who knows, maybe
he'll next tell us it was in the triple
Not that we are talking about something that really happened. Asensio did not manage money from 1996 to 1993
as claimed. He had a small hedge fund, Asensio Capital Management, but it was short-lived.  He incorporated ACM 
in 1997 but disbanded it shortly after the Hemispherx litigation began in 1998 and destroyed all the trading records
in what sounds like an effort to prevent scrutiny of fund's trading.  

As for "winning the verdict," a South Carolina jury did find Asensio committed securities fraud.  He promptly announced
that he had won, which is inconsistent with his effort to overturn the verdict via post-trial motion (which failed) and
appeal to the Fourth Circuit.  The Fourth Circuit likewise upheld the jury verdict.

His "win" against Hemispherx did him no good, since the judge threw out the verdict and ordered a retrial.  He stands
a good chance of being ordered to pay all of Hemispherx's legal costs for the first trial.

Now you understand why
we caution that you can't believe anything Asensio says.