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Microcap & Penny Stocks : Naked Shorting-Hedge Fund & Market Maker manipulation?
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To: The Ox who wrote (3876)10/2/2008 11:36:56 AM
From: Berk2 Recommendations  Read Replies (1) of 5034
 
"Hard T+3 close-out requirement for naked short selling; penalties for violation include prohibition of further short sales without mandatory pre-borrow. The Commission adopted, on an emergency basis, a new rule requiring that short sellers and their broker-dealers deliver securities by the settlement date (three days after the sale transaction date, or T+3) and imposing penalties for failure to do so. If a short sale violates this close-out requirement, then any broker-dealer acting on the short seller's behalf will be prohibited from further short sales in the same security unless the shares are not only located but also pre-borrowed. The prohibition on the broker-dealer's activity applies not only to short sales for the particular naked short seller, but to all short sales for any customer."

I interpreted this as all securities. I did check with Fidelity and they seemed to agree since I used a stock, EMKR, that was known to have naked shorts. The answer was unless we can pre-borrow it, you aren't shorting it. I'd check with your broker to verify that, even if it's Fidelity. I'm not too confident of anyone's knowledge these days.
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