makeuwonder - hawkmoon gave a good answer to your questions. I don't know if there is such a direct connection from one scammy area of our economy to another. But, as I often post, where there is an opportunity to scam, scamsters will take that opportunity irrespective of whether long, short, hedged, democract, republican, religious, etc.
That's why I find it so hypocritical that our financial press and "cyber-sleupps" are so quick to hop on one scam, say it doesn't exist, and then are so quick to convict small companies at earliest stages of development.
If a theory tying scams is to succeed, a light will have to be applied to the DTCC and clearing process. I read many posts about getting certificates or putting stock in cash and IRA accounts, but there is no clarity that says that the clearing process doesn't simply treat lending shares as does a bank. When you go into a bank to deposit, the bank doesn't tell a borrower that he is lending your deposit. There is a commingling. I believe the DTCC, in essence, takes this approach. Enforcement through Reg Sho and its predecessor regulations has been so spotty and with so many loopholes that it has been pretty ineffective.
In other words, if the lending program is just making up shares as it goes along, does it really matter if I tell my broker not to lend my shares?
Even with the current proposals, the hedge fund and manipulative shorters are bombarding the politicians and lobbying for the loopholes to continue. |
