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Microcap & Penny Stocks : Naked Shorting-Hedge Fund & Market Maker manipulation?
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To: rrufff who wrote (3269)3/5/2008 7:02:18 PM
From: Hawkmoon   of 5034
 
But what would happen to all the do-gooding shorters who claim it's ok to commit fraud (or extort, use purloined FBI data, etc.) if it's done to destroy companies that might commit fraud at some point?

Y'know... Companies that fail to achieve expected results over a period of time eventually get dealt with by market forces. Investor demand for the shares dry up.. Institutional and MMkr support dries up..

The market doesn't need NSS'rs to play "sheriff" in the shares of a stock to deal with scam companies committing fraud. And it certainly doesn't justify committing another fraud by counterfeiting and trading shares that don't exist, or belong to a non-margined owner.

Pretty clear.. the quantity of shares that should be legally available to be shorted should not exceed the quantity of shares that have been purchased on margin. And if a Broker/Dealer can't identify the location and margin status of those shares, they shouldn't loan them out to short-sellers.

Now I know that a broker/dealer has the ability to almost immediately assess the margin status of a customer's account because they'll sell your stock if you don't resolve the equity shortage within several days. So it's BS to say they don't know who's NSS in a stock..

Hawk
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