Naked Short Selling

14:48 CROX Crocs: Cramer on CNBC says he thinks naked shorts are covering CROX today due to new SEC Regulation SHO rule (70.00 +2.32) -Update-

http://www.nasdaqtrader.com/aspx/regsho.aspx

I sure can't find it on the Sho list. and they never obeyed any of the other regulations.

Did Crames, I call him "Crames", just step on his dick, and admit there are x clearing fails in the system????

Maybe it's Paulson buying up all the fails out his pocket to save the world, and make it better for all living things, or not.
 
SEC Sues Hedge Fund Over Illegal Trades
Monday October 15, 3:34 pm ET
SEC Sues New York Hedge Fund Alleging Improper Short Sales

NEW YORK (AP) -- The Securities and Exchange Commission sued Colonial Investment Management LLC on Monday, alleging the New York hedge fund company made more than $1.48 million in profits from illegal trading.
The lawsuit, filed in federal court in Manhattan, alleged Colonial Investment and its Colonial Fund LLC fund improperly used shares purchased in at least 18 registered offerings to cover short sales that occurred in the five business days before the pricing of those offerings.

The SEC claims that Colonial violated a rule that prohibits covering of a short sale with securities purchased in a registered offering if the short sale occurred during a restricted period.

"Short sellers who violate the rule's prohibitions can profit unfairly because they largely avoid exposure to market risk by using shares purchased at a discount in a registered offering to cover restricted period short sales," the SEC said.

Cary G. Brody, a principal of Colonial Management, directed, authorized and supervised trading of the securities, the SEC said. Brody, who also is a defendant in the case, is alleged to have directly benefited from the transactions because he was an investor in the company and his compensation was based in part on its profits, the SEC said.

A lawyer for Colonial didn't immediately return a phone call seeking comment Monday.
 
Back on October 4th, BRLC filed an 8-K, which indicated that BRLC's bylaws had been changed to enable the company to participate in a direct registration system administered by the Depository Trust Company. In so doing, investors can register their shares to prevent them from being loaned out to short sellers.

Any comments re direct registration? I'm not familiar with this. Something new?
 
Quote from nutmeg:

Back on October 4th, BRLC filed an 8-K, which indicated that BRLC's bylaws had been changed to enable the company to participate in a direct registration system administered by the Depository Trust Company. In so doing, investors can register their shares to prevent them from being loaned out to short sellers.

Any comments re direct registration? I'm not familiar with this. Something new?
More...

From what i understand of the problem, it does not seem that registering shares to prevent them from being borrowed would entirely stop the abuse unless the entire float was so registered from the outset, because, under present practices, as as long as some of the shares were available for borrowing they could still be borrowed multiple times without delivery. And it would not be a good thing for a stock's liquidity if all the shares were prevented from being legitimately sold short.

This problem of naked short selling needs to be solved. The sooner the better. I think it is ridiculous that it has been allowed to go on as long as it has.
 
Quote from piezoe:

From what i understand of the problem, it does not seem that registering shares to prevent them from being borrowed would entirely stop the abuse unless the entire float was so registered from the outset, because, under present practices, as as long as some of the shares were available for borrowing they could still be borrowed multiple times without delivery. And it would not be a good thing for a stock's liquidity if all the shares were prevented from being legitimately sold short.

This problem of naked short selling needs to be solved. The sooner the better. I think it is ridiculous that it has been allowed to go on as long as it has.
More...

Where have you been all my life, Bigboy?????

Understand this. They do anything they want to do , anytime they want to do it. On Dec 5, the new rules kicked in. Look At FRPT, OSTK, how many others? So the rules are puke, and nobody obeys them anyway.

First, protect your capital in these stocks. They can kill you, and if you don't understand this type of manipulation, stay out. Simple enough. Secondly, by the size of this cover up, I believe you are looking at a CDO plus type problem. I see the biggest names in the business on the offer of penny stocks. They are renting/loaning out their platforms, and they are responsible for the trades. That's not a question. Ubs was the biggest for a long time. Now, the numbers we have show SBSH as the biggest penny stock "player" of the big firms. With me, it's like that old "porn " comment. I know it when I see it.

To make my point, look at this BRLC. This is well over a year we were posting about this. Last Christmas. They get in, and the first time the company makes a mistake, it's over. They'll kill you. So be careful.

I'm watching a penny right now that has the chance to kill these guys. The numbers are outstanding. I have five year old emails from back offices with hundreds of thousands of shares unsettled. If this company kills them, that back offices will bleed, and that might make some of this nonsense dry up.

And while I'm bitchin', Warren Fucking Buffett? He's a friend of Patrick Bryne. Where is he? Staring at Becky Quicks tits. Gimme a break. He could say three words.........'naked shorting bad'. But I guess that would fuck up his Goldman stake , wouldn't it?
 
From the FRPT Yahoo board. I suggest you pay extra attention the the ATM thing. I"ve posted about Exact Pay before. This is tax fraud. The money is never seen in the US. Remarkable explanation though, and very telling.....

The Anatomy of a Short Attack — Abusive shorting are not random acts of a renegade hedge funds, but rather a coordinated business plan that is carried out by a collusive consortium of hedge funds and prime brokers, with help from their friends at the DTC and major clearinghouses. Potential target companies are identified, analyzed and prioritized. The attack is planned to its most minute detail.

The plan consists of taking a large short position, then crushing the stock price, and, if possible, putting the company into bankruptcy. Bankrupting the company is a short homerun because they never have to buy real shares to cover and they don't pay taxes on the ill-gotten gain.

When it is time to drive the stock price down, a blitzkrieg is unleashed against the company by a cabal of short hedge funds and prime brokers. The playbook is very similar from attack to attack, and the participating prime brokers and lead shorts are fairly consistent as well.

Typical tactics include the following:

Flooding the offer side of the board — Ultimately the price of a stock is found at the balance point where supply (offer) and demand (bid) for the shares find equilibrium. This equation happens every day for every stock traded. On days when more people want to buy than want to sell, the price goes up, and, conversely, when shares offered for sale exceed the demand, the price goes down.
The shorts manipulate the laws of supply and demand by flooding the offer side with counterfeit shares. They will do what has been called a short down ladder. It works as follows: Short A will sell a counterfeit share at $10. Short B will purchase that counterfeit share covering a previously open position. Short B will then offer a short (counterfeit) share at $9. Short A will hit that offer, or short B will come down and hit Short A's $9 bid. Short A buys the share for $9, covering his open $10 short and booking a $1 profit.

By repeating this process the shorts can put the stock price in a downward spiral. If there happens to be significant long buying, then the shorts draw from their reserve of “strategic fails-to-deliver” and flood the market with an avalanche of counterfeit shares that overwhelm the buy side demand. Attack days routinely see eighty percent or more of the shares offered for sale as counterfeit. Company news days are frequently attack days since the news will “mask” the extraordinary high volume. It doesn't matter whether it is good news or bad news.

Flooding the market with shares requires foot soldiers to swamp the market with counterfeit shares. An off-shore hedge fund devised a remarkably effective incentive program to motivate the traders at certain broker dealers. Each trader was given a debit card to a bank account that only he could access. The trader's performance was tallied, and, based upon the number of shares moved and the other “success” parameters, the hedge fund would wire money into the bank account daily. At the end of each day, the traders went to an ATM and drew out their bribe. Instant gratification.
 
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