Naked short rule to be applied across entire market

I could solve this mess in a heartbeat. Enforce the law, and make the fines commesurate with what is stolen. When GS naked shorts for three years, don't fine them 2mm and let them walk. Get profits and disgourgement. If the make 200million, the treble damages would be 600 million, and then get the 200 back.

Now, go get yourself some talent. Make them like the IRS. Fine a 200 million settlement, we'll give you two of it. That's how real lawyers work. And a lot of bad stuff doesnt' get done because of the fear of lawsuits. Pretty simple. The SEC would be the be so well funded with proper fines being levied that the best would want to work there. Then, if something needed to be done, someone with a brain would be there to do it.

They'll be plenty of stories to share later, but let's just say the tail wags the dog.
 
Naked shorting doesn't really have anything to do with a stock price. It's basically counterfeit shares pumped in the system by criminal MM, who then takes the money and figuratively takes the money and runs. That a stock depreciates in price is just a byproduct.

I do think shorting should be allowed, but it will always be hard to enforce honest shorting. Futures are luckily easy to short.
Take the following example: A small investor buys 100 shares at a broker. The broker lends 100 shares to a hedge fund who uses it to short. The 100 shares go back on the market because of that. By a fluke, the same small investor buys those same 100 shares. He now has 200 shares which is actually double the 100 shares he used to have. The hedge fund shorts again 100 shares. Because the broker doesnt recognize the 100 shares as shorted shares, the broker uses 100 of 200 shares to lend to the hedge fund. But this is the same 100 shares that were originally used.

Basically the moral of this story is it is possible to short an infinite number of shares, even through legal shorting, even if there is only so many shares a company has given out. That means shorting will always have an 'air' about it.
 
Quote from flytiger:

They'll be plenty of stories to share later, but let's just say the tail wags the dog.
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Are you talking about now or before? In other postings, you've expressed tremendous confidence SEC is a busted agency?
 
Quote from bbqbbq:

Naked shorting doesn't really have anything to do with a stock price. It's basically counterfeit shares pumped in the system by criminal MM, who then takes the money and figuratively takes the money and runs. That a stock depreciates in price is just a byproduct.

I do think shorting should be allowed, but it will always be hard to enforce honest shorting. Futures are luckily easy to short.
Take the following example: A small investor buys 100 shares at a broker. The broker lends 100 shares to a hedge fund who uses it to short. The 100 shares go back on the market because of that. By a fluke, the same small investor buys those same 100 shares. He now has 200 shares which is actually double the 100 shares he used to have. The hedge fund shorts again 100 shares. Because the broker doesnt recognize the 100 shares as shorted shares, the broker uses 100 of 200 shares to lend to the hedge fund. But this is the same 100 shares that were originally used.

Basically the moral of this story is it is possible to short an infinite number of shares, even through legal shorting, even if there is only so many shares a company has given out. That means shorting will always have an 'air' about it.
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Seriously, if they can get away with as much as they do, what stops them from doing more? Seemingly, they would be able to then naked short EVERYTHING, till EVERYTHING goes to zero?
 
Quote from Option Trader:

Are you talking about now or before? In other postings, you've expressed tremendous confidence SEC is a busted agency?
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hypothetical. It's too late for them. It's over. Look at the SEC IG piece.

But my idea would have worked. You can't beat Johnnie Cochran with Marcia Whatever. Well, maybe you could now. But a public prosectuter would probably lose to a dead Johnnie Cochran. That Mo Fo was good.

Can you feel the wind change? These guys are settling ARS without so much as a fight. I have to laugh at these CNBC morons. "Well, anyone that was sophisticated should have known better'. NO, NO, NO. You don't get to pull down 600 g's a year, and spew bullshit. It's up to you to sell the proper security. And homework. The salesman is the one with the license. He's the one with the supposed background ( I think we all know better) to judge the suitability of said securities. Believe me. The AG's have all the sales memorandum that these scum circulated to the sales force while they push this crap. I could have won this case.
 
Quote from bbqbbq:

Naked shorting doesn't really have anything to do with a stock price..
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Why have charts? What do charts portend to 'chart'???? Supply and demand. So you're telling me by hitting the tape with more stock in the float, that has nothing to do with price?

It has everything to do with price. You manipulate the price, and you choke off the air to a lot of companies. Some come back. some don't. It's against the law, unless you're a mm making a bona fide market.
 
"If the make 200million ..... then get the 200 back."

They paid tax on that 200m, guess we'd have to refund the tax.
 
Quote from flytiger:

I could solve this mess in a heartbeat.
More...

You couldn't solve a jigsaw puzzle geared for 3-6 year olds. Just STFU, please. You don't know what you are talking about, go find another site to pollute with your nonsense.

Seriously, no matter how many times it has been explained and argued to you, you retained ZERO information and only backlash with insults & idiotic rants. You don't understand Wall Street, its foundation & its mentality. You do not even understand why SEC was created. Just shut up, you're getting nowhere.
 
Quote from Hydroblunt:

You couldn't solve a jigsaw puzzle geared for 3-6 year olds. Just STFU, please. You don't know what you are talking about, go find another site to pollute with your nonsense.

Seriously, no matter how many times it has been explained and argued to you, you retained ZERO information and only backlash with insults & idiotic rants. You don't understand Wall Street, its foundation & its mentality. You do not even understand why SEC was created. Just shut up, you're getting nowhere.
More...

Wanna bet?

BTW, why does the truth bother you so much?
 
I guess I just can't STFU.

http://www.lloyds.com/dj/DowJonesArticle.aspx?id=400067

MBIA CEO: Assessing Its Options To Sue Pershing Square

By Lavonne Kuykendall

Of DOW JONES NEWSWIRES

CHICAGO -(Dow Jones)- Bond insurer MBIA Inc. (MBI) is assessing whether it can sue short-sellers who may have violated rules against spreading negative rumors, the company's chief executive said Friday.

MBIA and other bond insurers have long battled short-seller William Ackman of Pershing Square Investments over his negative view of MBIA and rival Ambac Financial Group (ABK).

Now that regulators have begun investigating some short sellers to see if they have broken laws on spreading rumors, MBIA will not only cooperate with the investigations, it will consider launching a lawsuit of its own.


"MBIA is assessing all of its options, including any litigation that may be necessary if we believe that is in the best interest of its shareholders," said Jay Brown, chief executive of MBIA, during the company's earnings conference call Friday.
Meanwhile, "we will cooperate with any investigation," Brown said. He would not go into any more detail.

Brown's comments came after New York Insurance Commissioner Eric Dinallo has suggested that his office might begin investigating short selling in insurance stocks, following similar investigations into short-selling by other regulators.

Ackman's Pershing Square Investments hedge fund has been a vocal critic of bond insurers, and has predicted that the companies will run short of capital to pay eventual claims on its insurance policies covering subprime mortgage loans.

Comments and reports by Ackman have had a dramatic effect on bond insurer share prices in the past several months.

Shares of MBIA recently traded up 5.3% to $8.72 after the company reported better-than-expected earnings before the market open Friday.

-By Lavonne Kuykendall, Dow Jones Newswires; 312-750-4141; lavonne.kuykendall@dowjones.com
 
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