Naked Shorting-Hedge Fund & Market Maker manipulation? Message Board

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Microcap & Penny Stocks : Naked Shorting-Hedge Fund & Market Maker manipulation?

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From: pcyhuang	1/9/2010 11:07:01 PM
	3 Recommendations Read Replies (1) of 5034

MTLQQ: Bankruptcies Are Not What They Used to Be Bankruptcies are notwhat they used to be: nytimes.com A new rule of the Securities and Exchange Commission, which took effect in July, has made it virtually impossible for anyone to sell Motors Liquidation shares short, and is forcing those who had short positions to close them out. In a short sale, a traders normally sells borrowed shares and then pay them back with shares purchased later, at what they hope will be a lower price. Under former rules of long standing, traders were supposed to sell a stock short only if the shares could be borrowed, but there were exceptions, including one for market makers. Under the new rule — adopted because of complaints about so-called naked short-selling, in which there was no borrowing — it is almost impossible to do that legally. Moreover, the number of shares available to borrow declines when a company goes into bankruptcy. Institutional investors, who are usually willing to lend out shares, sell their stake and must recall shares they have lent. Fewer shares are held in margin accounts, another source of shares for lending. People with short positions are gradually being forced to buy the shares from real shareholders. Other short-sellers cannot get into the game. Source: nytimes.com Cheers,

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