I know the background here, but does this ad not make Mr Byrne look like a loonie? I mean, the picture, the quotes, etc. Its like he's trying to have a private convo with Cohen, this is pretty weird. :eek:
Now wait a second. Sure SAC is coming under SEC scrutiny. But nowhere does it ever mention *anything* about naked short selling being an issue. The issue has always been insider trading. And that is not the same thing at all. Flytiger has ranted on this topic for many many years now, talking about how many grandmothers that have been hurt by naked short selling. He frankly is a broken record and the way he pontificates translates into no credibility at all. So please don't congratulate him for anything, because he doesn't deserve it.
Gee, I'm crushed. http://www.rollingstone.com/politic...et-al-engaged-in-naked-short-selling-20120515 Like, I need you to validate me.
I've got to disagree with you on this. Under the Cox SEC naked shorting was rampant. It is a criminal act and terribly destructive. We all owe flytiger a debt of gratitude for staying with this issue.
Here is the way I like to explain it. In normal, legal, shorting there are three parties involved. The one who sells stock they borrow and are obligated to return to a lender, the one who buys the borrowed stock, and the one who lends stock to the seller. After the transaction is complete, the seller is obligated to a lender. In naked short selling there are only two parties involved. The one who sells stock they don't own, and is therefore selling fictitious stock that does not exist, and the one who unwittingly buys the fictitious stock. The seller has no obligation to a lender, because there is no lender. Naturally, Naked Short Selling is Illegal. The Cox SEC seemed to completely ignore this horribly damaging practice.
you should at least be accurate. You make it sound as if naked short selling does not involve the borrowing of shares. That is factual incorrect. Even naked short sellers MUST eventually borrow the shares and even in the past that was MOST ALWAYS accomplished on the same trade date. Naked short sellers did not locate such short sells BEFORE the trade was done, so it could and did happen that the to be borrowed shares could not be located and as a result had to be bought back in the market right away. You suggest this never took place or took place days/weeks later, which is not true. The only difference is that now a short seller MUST have located the shares (does not even have to sign or agree to a lending agreement before hands, only needs to have located inventory) before selling them in the market. The world has really not changed much, it just that the little Joes on the street feel that their government has done something for them and the world is now a better place. And yes, if a stock has no lending inventory then it cannot be shorted (but it was most likely not shorted when "naked" short selling was allowed either because the short seller knew that either way he had to borrow the shares which he knew he could not and he knew that such borrow had to be done soon (a matter of hours at most times) not days or weeks.).
No. Certain companies for weeks in the past would be on the list saying that their shares are being naked shorted. This does not mean that the short sellers were stupid. They usually pick bad companies to short. The problem is that this is basically illegal just like front running. And no, the naked short sellers never have to buy their shares back on the companies that they destroy. Once a company goes sub penny it's removed from for example NASDAQ and put on the pink sheets.
total bollocks. First (naked) short selling has nothing at all to do with front running. Whom is a naked or non naked short seller front running? The fund which lent shares? Hardly, as it holds long positions. If it wants to sell the shares than it can do so through an ordinary sell. So nobody is front run here. Secondly, it is simply not true that someone can naked short sell for weeks without covering the shares. Think about it for one second then you notice how incorrect you are: When you short sell you need to deliver the shares to the buyer of such shares. If the shares cannot be delivered then the trade will be declared failed. The Wiki article is inaccurate in that it claims such trade will remain open and that the short seller will eventually get the shares credited by the clearing corporation, SIMPLY NOT TRUE. The trade is declared failed, period. Now, how long the buyer is willing to wait for the shares to be delivered is another question but most always the normal settlement times apply. So, stop spreading wrong facts!!!