Short position in London company seized by government

M

m22au

This post relates to Northern Rock. The company was nationalised in February 2008.

The shares were delisted from the London Stock Exchange in February 2008.

An announcement was made on 30 March 2010 that shareholders would receive no compensation from the UK government as a result of the nationalisation.

My broker has told me that despite the announcement of 30 March, that I am still unable to close my short position.

I am looking for any help / guidance you can provide regarding how / if / when I can close my short position.

So far I have called:

My broker, who suggested that I contact CREST (https://www.euroclear.com/site/public/EUI)

I contacted CREST, who suggested that I contact the LSE

I contacted someone at the LSE, who said that they mainly look after broker to broker trading, and that I should contact the FSA, who look after the broker/client relationship.

I contacted the FSA consumer helpline (http://www.fsa.gov.uk/Pages/consumerinformation/consumer_contact/index.shtml)
who suggested that I contact the UK listing authority (44 20 7066 8333).

I contacted the UK listing authority, who said that I should contact the FSA consumer helpline.

So I'm going round in circles, and unfortunately not really getting any guidance regarding if and when I can close the short position.

Any help that you can provide would be greatly appreciated.
 
Quote from Chuck Krug:

It was always my believe that when a company gets delisted your short is closed by your broker.
More...

Chuck, I wish this was the case. I contacted my broker who said that although the shares have been delisted, I cannot close the short position. This mainly relates to the issue of whether or not compensation is payable to shareholders:
http://www.northernrockvaluer.org.uk/

However on 30 March,
"the Independent Valuer has determined that there is no value in the shares (or right to receive shares) as at the valuation date and therefore that no compensation is payable to former shareholders".

This is why I have only asked about closing the position in recent weeks, even though the shares have been delisted for over 2 years.
 
get something in writing (letter/email) from the broker stating they will not cover shares, this may prove invaluable in case of dispute
 
Maybe it's the Decaf talking, but might it be possible to check eBay and see if you can buy some physical shares on paper? Maybe somebody out there bought them when the company was at .01p like we all talk about doing as a novelty. That would make sure that your short was covered, albeit in a roundabout way.

Is this zombie position tying up margin?
 
Quote from SomeYoungGuy:

Maybe it's the Decaf talking, but might it be possible to check eBay and see if you can buy some physical shares on paper? Maybe somebody out there bought them when the company was at .01p like we all talk about doing as a novelty. That would make sure that your short was covered, albeit in a roundabout way.

Is this zombie position tying up margin?
More...

Yes, this zombie position is tying up margin: 90 pence per share (last traded price in February 2008).

I'd be happy to buy to cover at 1 pence per share just to get rid of the position.
 
Quote from m22au:

Yes, this zombie position is tying up margin: 90 pence per share (last traded price in February 2008).

I'd be happy to buy to cover at 1 pence per share just to get rid of the position.
More...

"He who sells what isn't his'n, Must buy it back or go to pris'n"
 
You must log in or register to reply here.
Back
Top