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Gold/Mining/Energy : Casavant Mining Kimberlite International (CMKM) -- Ignore unavailable to you. Want to Upgrade?

To: rrufff who wrote (2309)	7/12/2006 10:38:40 AM
From: StockDung	Respond to of 2595

What constitutes "reasonable grounds?" That depends on whom you ask. Many prime brokers, for example, satisfy the requirement of reasonable grounds by assuming that, if large long positions reside somewhere in-house, they can borrow from those long positions without bothering to check if the shares are actually available for borrowing and without ascertaining if those same shares have already provided reasonable grounds to permit another short sale of the same security. This can lead to "over-shorting" of securities, a phenomenon in which the number of shares shorted can even exceed the number of shares physically available for trading. To combat naked shorting of heavily shorted securities, technically known as "threshold" securities, the SEC's rule requires brokers planning to effect a short sale in a threshold security to have in place, prior to shorting, a definitive arrangement to borrow those shares.