compradun,congrats on your thread, I just stumbled upon it..Perhaps you could shed some light(and lead me to where the info is) on a subject we've been discussing...An investor buys floorless debs in company xyz, which is a bulletin Board stock trading under .50. The debs are convertible at a 30% discount to the average 5 day closing price before conversion..Can (and I know it's done) they short against these debs using the debs as the colateral? Can they do this legally(I think it is legal)..how is the margin requirements etc..taken care of? Here is a post by Zeev, in reference to this subject..
exchange2000.com
Can the debs be used for the purpose of shorting? Must it be done naked,and can it legally? Any input would be appreciated..TIA,DD
PS: we know many of these placement are ruthless,Reg S,Reg D..But is this game being played within the bounds of the law? EXSO comes to mind, with their Reg S placement,,when conversion was called,they needed more stock than authorized and finally settled with the bandits,which leads me to believe it can be done ,legally (although, this was an offshore reg s..) Hope you can understand what I am asking...Thanks for any help you may offer.. |
