Naked Shorting-Hedge Fund & Market Maker manipulation? Message Board

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Microcap & Penny Stocks : Naked Shorting-Hedge Fund & Market Maker manipulation?

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From: rrufff	6/3/2008 4:51:07 PM
	of 5034

Naked short selling irks Stockhouse members 6/3/2008 12:54:34 PM \| Darin Diehl Crowdsourcing delivers naked short selling information. The investment industry, rife with institutional titans, can be an imposing playing field for the seemingly lowly individual investor. But gather a few of these intelligent and independent-minded individuals together and the odds can seem not so insurmountable. That seems to be the thinking of a new group of investors that have rallied together on Stockhouse to take on the issue of naked short selling. The group has given itself the provocative, if lengthy moniker "Junior Mining Investors Robbed by Canadian Investment Banks." Their self described mission is to "organize investors who believe they have suffered damages and losses from Canadian investment banks illegally shorting junior mining shares." In other words, they're as mad as hell and they're not going to take it anymore. Naked short selling is the process of selling a stock short without first borrowing the shares or ensuring that the shares can be borrowed - which is the normal practice for short selling. It's not really something an individual investor can do. But in the domain of large financial institutions that can cover all sides of a trade, it's possible for them to, in a sense, create a false supply of stock - and thereby drive the price of that stock down. So an individual investor who had bought into the stock before the naked short selling will see their investment whither. Thinly traded, small market cap stocks, the bailiwick of many Stockhouse members, are especially vulnerable to this practice. While it's technically against SEC regulations, regulators in Canada and the U.S. have not been overly aggressive in their attempts to curtail the practice. Stockhouse Community Editor Robert Arber has been following the group in its early days and you can read his article for more background. The group formed on May 25 with a handful of members and has grown to about 150 in less than one week. Join the discussion and debate. U.S. financial journalist Jim Puplava has picked up the story on his internet radio show. The Stockhouse group is mentioned and a member is quoted. Power to the people. ABOUT THE AUTHOR Darin Diehl Darin Diehl is executive editor, publisher of Stockhouse stockhouse.com

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