Gold and Silver Juniors, Mid-tiers and Producers Message Board

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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers

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To: tyc:> who wrote (63341)	2/6/2009 3:59:02 PM
From: forceOfHabit	Read Replies (1) of 78424

tyc, I'm no expert, but I imagine the worrisome scenario is something like this. Investor A buys all the outstanding SLV, (foolishly) loans them to B who then sells them (short) to C. Then C presents his share certificates to SLV, demanding silver in return (as is his right, at least if he's one of the qualified institutions). SLV gives him all the silver in their vault and A is screwed. SLV has no assets so its shares are worthless. (B gets rich, C breaks even). I'm not sure anyone thought of this possibility when they listed SLV and let it trade as an equity (including short selling), so I suspect there is nothing technically illegal about it. or, more likely, unwittingly allows his broker to loan the shares Feel free to correct me if I'm wrong. habit

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