Bill Wexler's Dog Pound Message Board

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Non-Tech : Bill Wexler's Dog Pound

REFR 1.655

+2.8%

Dec 3 3:58 PM EST

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To: Kevin Podsiadlik who wrote (9189)	2/22/2003 12:48:58 PM
From: Mike M	Read Replies (2) of 10293

<<In any case, the article proceeds along in a lame fashion, talking about the need to clamp down on naked short-selling, which is selling stock that you did not borrow. I don't know anyone who does that, and most brokerage firms will not let you do that. So that seems to be a paper tiger. The other rationale in support of a clampdown was so preposterous that it almost makes the article laughable: "But others say it [short-selling] is too often abused to corner small companies by controlling most or all of a company's publicly traded shares." >> In general I like Fleck. He was right-on about the ridiculous over valuation in the markets. He also was correct that many companies misrepresented their wares. Nor do I disagree with his arguments regarding the value that shorting provides. I think it is an important option and contributes to an orderly market. It is the above part that I don't agree with. First, the suggestion that naked short selling isn't a problem because "he doesn't know anyone doing it" is a canard. He should get out more and limit his writing to areas in which he is more familiar. It exists and is becoming more prevalent: rgm.com and: rgm.com and if these stories aren't enough there are a plethora of others: rgm.com Naked short selling has the prospect of creating an unlimited stock float. That virtually guarantees the outcome of a small company's stock against a well organized stock manipulation effort. The market place is supposed to be about legitimate company's ability to come to the capital markets to raise the money to manage capital needs. Not whether the share price of a legitimate business can be pulverized before they reach their stride. The SEC attempts to enforce against boiler room operations and fraud companies(not as effectively as one would like), but is toothless to protect against organized naked shorting. Some form of controls on this issue is essential.

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