Vivus: into single digits Message Board

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Biotech / Medical : Vivus: into single digits

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To: Early Out who wrote (787)	8/14/1998 2:25:00 PM
From: VLAD	Read Replies (2) of 1016

John, Many months ago I was considering closing out my long position and actually going short. One of my brokers who uses Pershing as its clearing house told me that there were no shares available for shorting so I decided to just stay long. After researching NASD rules and regulations I found out the following information that made me decide that the NASD market is basically open to manipulation especially on smaller cap stocks. What I found is that a given market market maker can sell short as many shares as he pleases even if he doesn't have the shares to short or borrow. The only NASD rule on these situations is that if the market maker does this he must cover those shares within 10 trading days. So in essence they have to cover these short positions every 10 days but they can reestablish new short positions the following day on shares they covered on the 10th day. This to me is another example of how the market makers basically have carte blanche to do as they please while the small players are forced to play by a different set of rules. VLAD

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