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Microcap & Penny Stocks : Naked Shorting-Hedge Fund & Market Maker manipulation? -- Ignore unavailable to you. Want to Upgrade?

To: basserdan who wrote (3611)	7/22/2008 11:58:21 AM
From: Hawkmoon	Respond to of 5034

I think all of this is ranting is a bit of smoke and mirrors. Broker/Dealers have the obligation to make sure that they have the proper locates on shorted stock. Yet, they recognize that, by pushing the envelope and playing their shell game, they can retain the margin interest they're losing from liquidating margin calls upon the longs, with interest revenue paid by the shorts (legitimate and naked). Thus, it's incumbent upon the regulators to ENSURE that broker dealers achieve price discovery via legitimate market forces. When margined long positions are liquidated, the B/D should be required to go out into the public markets to obtain the shares they need to maintain the short positions they permitted, with them taking the risk. Shorting should ONLY be permitted against long positions that are established based upon borrowing money from the B/D (not stock purchased 100%, despite purchase being made in margin account). In sum.. if I borrow money from a B/D, they have a lien on my stock. If I purchase that stock with cash, they should not be permitted to loan it out, no matter what kind of account I hold it in. As I understand it, that was the original reason for permitting short-selling in the first place, to offset the increased demand created when people borrow money from the B/D to purchase additional stock. Hawk