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To: Kevin Podsiadlik who wrote (88)	4/17/2005 11:24:12 AM
From: rrufff	Read Replies (1) \| Respond to of 120

Opinions Kevin - lies are mis-statements of facts. I read the SEC report and the response. I tend to be a middle of the roader. By that, I agree that many scammy companies want to use this as an excuse. OTOH, there are many developmental stage companies that have a hard time once the naked shorts get an opening. The abuses in naked shorting are IMO a function of hedge funds and MM abuse of their exception. That's a simplification. What I've been advocating is a thorough investigation and re-write of the SEC acts and then regs thereunder. Irrespective of your view, I can't understand why the hedgie shortie crowd wouldn't want that unless perhaps it takes away their livelihood. As far as Overstock goes, every time I've looked at it, I thought it was too expensive. Of course, each time I said that, it went up. Again, I'd prefer to go with Byrne's message which was well-written and understandable, something needed to keep this before the public.

To: Kevin Podsiadlik who wrote (88)	4/17/2005 11:25:27 AM
From: rrufff	Read Replies (1) \| Respond to of 120

This paper by a Fordham U prof is probably not something for the public but it states the case well. Some of the highlights are the history of short selling, some background of Reg SHO. footnote 8 was of interest 8 Placing false notices on electronic bulletin boards in Internet chat rooms is an example of the type of manipulative behavior that is difficult for regulators to monitor. 8 and employing trading strategies that impede the price formation process, such as naked shorting, wash sales, matched trades, and painting the tape, all of which inject misleading trading information into the market, to move market prices in the direction that benefits the manipulator. Illegal short selling, such as naked shorting, can distort market prices by creating artificial supply-demand imbalances (Thel, 1994). Consequently, the securities laws in the United States proscribe various restrictions on short selling that are designed to constrain it so that it can not be misused to manipulate stock prices below the true asset value (Thel, 1994, SEC, 2003b, 2004). SHORT SELLING, DEATH SPIRAL CONVERTIBLES, AND THE PROFITABILITY OF STOCK MANIPULATION John D. Finnerty Professor of Finance, Fordham University March 2005 Abstract The SEC recently adopted Regulation SHO to tighten restrictions on short selling and curb abusive short sales, including naked shorting masquerading as routine fails to deliver. This paper models market equilibrium when short selling is permitted and contrasts the equilibrium with and without manipulators among the short sellers. I explain how naked short selling can routinely occur within the securities clearing system in the United States and characterize its potentially severe market impact. I show how a recent securities innovation called floating-price convertible securities can resolve the unraveling problem and enable manipulative short selling to intensify. The rest of the article is here: ncans.net