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Microcap & Penny Stocks : Naked Shorting-Hedge Fund & Market Maker manipulation?
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To: rrufff who wrote (4409)5/6/2009 9:32:43 AM
From: gregor2 Recommendations  Read Replies (1) of 5034
 
The operative statement would be "If we decide that the return on your investment may be increased by lending out shares to those who may short the shares you own, we may do so."

In the prospectus that I read there is no mention that the fees they would reign in by loaning out our shares is pocketed by the investor. The mutual fund family makes the fees, not the investor. They loan out our shares, collect the fees, pad their earnings. This is a blatant conflict of interest in the fiduciary relationship they have with the investor, likewise with brokers who hold stocks in street name.

I would like to know how shorting a stock has ever made an investment increase in value. But I agree with you. The least they could do is give every account holder the right to elect that they wish to participate. However I would question why anyone would volunteer to do so.

As long as I'm beating my drum, let me make a final point and that is about disclosure. How often do your read the top ten holdings of a mutual fund, notice that a certain stock is included and then hear a fund manager on Bloomberg state that he holds a short position in the stock. There is no way of knowing if a fund is long or short a position.

I cannot fathom why The SEC holds the "short position" so sacred. Like, Vagas and Atlantic City casinoes does 'the street' hold the short position as the house edge. An analyst discloses his ownership. What is the difference.

I am solely hammering the fiduciary relationship with your broker or mutual fund family, here.
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