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Microcap & Penny Stocks : Naked Shorting-Hedge Fund & Market Maker manipulation?
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To: makeuwonder who wrote (3722)8/22/2008 11:44:48 PM
From: shag007  Read Replies (1) of 5034
 
Anybody who knows about clearing firms I would like to know when naked share positions are closed where does the money come from to fund the account that was naked?

If hedge funds put a company out of business by selling short $10Million of a company that only has $7Million float for example where does that extra $3Million come from to fund that account once the company folds.

Even for small naked shorts when the trade is closed out if there were no shares borrowed where does the money come from?

I would assume the broker has to eat it for not clearing the trade properly and allowing the transaction to stand.
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