I don't agree with all of this - It's a good place to start.
Welcome to the NCANS
The National Coalition Against Naked Shorting
A bi-partisan advocacy group. Click here to join.
For the latest headlines and developments, go to the NEWS page.
For a Primer on Naked Short Selling/Failing to Deliver, Click Here .
For a summary of the issues surrounding the practice, written by Dr. Patrick Byrne, Click Here.
NCANS is a grassroots advocacy group composed of small investors who are tired of the predatory hedge funds on Wall Street violating the rules against naked shorting - the "Failing To Deliver" of the shares they sold to unsuspecting investors, who believe that the electronic tick that is represented in their brokerage statement represents a real share, rather than an electronic counterfeit with none of the attendant rights or protections of a real share. We want the regulators to enforce the rules in an impartial manner, not selectively and for the benefit of those who abuse the system.
The charter of NCANS is simple:
The systematic violation of the rules against Failing To Deliver poses an imminent threat to the credibility of the US financial system.
Our regulators are uninterested in enforcing the rules that have been on the books since the creation of the SEC in 1933 by Congress.
The existence of a Reg SHO Threshold list is a "list of shame" —a sad testament to our regulators’ lack of interest in enforcing the rules against Failing To Deliver. If they did, there wouldn't be a list. Pretty cut and dried.
The grandfathering of all Fail To Delivers prior to January 7, 2005 represents an effective "vacation from the rule of law", and amounts to a pardon for the criminals that have manipulated the system. This is akin to allowing bank robbers to keep the proceeds of their robberies prior to the beginning of the year, and is an affront to those who expect our system to protect us and enforce the rules designed to do so.
The Administration's drive to privatize Social Security is untenable given the egregious violation of the public trust that our regulators' failure to enforce the rules represents.
Our demands are straightforward and reasonable:
1) Make the SEC enforce the rules that were written and designed to protect investors from Failing To Deliver the stock they bought. No exceptions, no back-room sweetheart deals, no looking the other way while America is fleeced.
2) Make the DTCC disclose the number of shares in violation - "Fail to Delivers" - for each company on the list, on a daily basis.
3) Force the Transfer Agents to make outstanding share figures available in daily real time for any company not exempt from registration and reporting.
4) Eliminate the grandfathering "vacation from the rule of law" on an illegal abuse that has been ongoing. Enforce the buy-in provisions on ALL Fail To Deliver positions, not just the latest violations. Don’t reward criminal behavior. Punish it.
5) Demand accountability for how this violation of the public trust occurred, and fix it, rather than covering it up.
From Bob O'Brien's 11/24/05 open letter to the state regulators of NASAA - 7 proposed steps the states could take to curb naked short selling, while avoiding conflict with the SEC's laughably ineffective Reg SHO (the states have jurisdiction over the brokers if they are doing business in their state and have a presence there, as well as over the DTCC by the same nexus rules):
Eliminate partial settlement, and prohibit the release of any funds to non-delivering sellers (regardless of what the share price does), until all shares of the trade involved are delivered to the original buyer. This eliminates the current mark to market release of funds to Fraudulent Stock Traders, and prohibits them from using any portion of the proceeds until the shares are delivered. That terminates a large part of the financial reward for FSTs.
Hold back all commissions until the shares have been delivered.
Force buying brokers to inform their customers when delivery has failed.
Upon notification of delivery failure, give the buying customer the option to cancel the trade, and have his money returned.
If a customer decides not to cancel trade (presumably because the price has changed in his favor), require the broker to implement a buy-in.
Create a "Brokers With Current Delivery Violations" master list , itemized by security - brokers who have current unsettled trades for Reg SHO Threshold List stocks.
Implement a financial penalty for Fraudulent Stock Trades involving SHO Threshold List securities – 33% of the trade value would likely eliminate delivery failure as a trading strategy.
Special thanks to Tommytoyz for much of this list. |
