From this article I noted these comments:
"Naked short-selling isn't necessarily illegal. Broker-dealers may sell imaginary shares to maintain liquidity in a stock that sees a sudden surge in demand. And it's not unheard of for a daisy chain of short investors to borrow, sell and reborrow shares of a stock so many times that the number of positions held is greater than the shares outstanding, says Darryl Duffie, professor of finance at the Stanford Graduate School of Business.
What is illegal, though, is knowingly creating a short position with a stock that a broker has no ability to deliver. While Regulation SHO was supposed to eliminate that practice, a glance at a list of threshold stocks compiled by buyins.net shows that Imergent is far from the only stock that is apparently being raided by naked short-sellers. "
When Broker dealers use practices which have plausible deniability, as a shield to protect them from the failure to let supply and demand work, its called Churn, and it too is illegal.
Professor Duffie is he a mouthpiece? He's wrong about the legality of stock issuance by broker dealers....this fact will be proven over time.
I was pleased to see that others have started to do Free Float work, because knowing Free Float data sets the stage for understanding how significant the shananigans are.
The rationalization of; we are only creating temporary liquidity is nothing more than a rationalization against previous law breaking....in effect the broker dealers loose control by incessant printing, until smoke and mirrors become the float. These problems are epidemic, and are denying investors a market price every single day they are overlaid onto a companies trading.
*I had no knowledge of this particular company,,,,,prior to reading this article. |
