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Forum Post: Wall St "Naked short selling" threat

Posted 1 year ago on Jan. 15, 2013, 6:49 p.m. EST by NakedShortSelling (8)
This content is user submitted and not an official statement

I am trying to get out the word about "naked short selling" and a film about the people who have been trying to stop it. (see definitions of Naked Short Selling at end of this post) We need more awareness of The practice trades as many as 1 billion "phantom" shares a day on Wall St. This fraud rips off our economy and investors (including retirement plans) while lining the pockets of hedge funds and other traders.

If anyone is interested in organizing a gathering to help spread the word about this film--or you know someone who would be able to and interested--please let me know who/how to contact.

This documentary film is a hard-hitting, inspiring and heart-wrenching journey into a world that is short-selling the American dream. The Wall Street Conspiracy tells the story of how a small, diverse group of activists, entrepreneurs, legislators and lawyers—including an attorney who successfully fought Big Tobacco—have dedicated their lives to protecting that dream. The film chronicles their attempts to expose what’s called “naked short selling,” a trading glitch that allows short-sellers to run down company stocks by flooding the market with trades based on “phantom” shares. Film viewers discover how hedge funds and some of the nation’s largest banks have been part of a systematic fraud, trading on as many as 1 billion nonexistent shares a day while robbing hard-working Americans of trillions of dollars. Small businesses—the heart of American enterprise—have been their easiest targets, and they’ve gotten away with attacking larger and larger companies, some of which were critical in the 2008 financial meltdown. Millions of American workers’ pensions, 401(k) savings, and jobs have been the ultimate victims of this practice, and the entire financial capital structure is vulnerable. A myth of complexity has helped hide naked short selling. But the film reveals its simple bare facts and solutions, leaving viewers inspired and prepared to help raise awareness and rein in this fraud.

review blurb: … a practice that critics say could destroy the U.S. economy. --newstimes See the trailer: http://thewallstreetconspiracy.com

HOW DOES NAKED SHORT SELLING WORK? my description: traders pretend they have borrowed stocks, which they sell on the market. since these are in addition to the the real stocks for a company, they tend to put downward pressure on the values/prices of the stocks that actually do exist. the trader waits for stock values to go down, then they get to buy back at a discount the same number of fake shares they sold at the original higher value.

here's an excerpt from yahoo answers re Naked Short Selling http://answers.yahoo.com/question/index?qid=20080918075628AAEeFIQYahoo Best Answer - Chosen by Voters

[Naked] short selling, is basically, selling stocks you dont have, and buying them back, within a short period. anticipating a rapid drop (before the transaction is settled, usually 3 days)

lets say, a stock is worth $10 a professional investor thinks the stock wil drop further. so he will sell 1000 $10 shares (worth $10'000 he does not have. this will make him go short 1000 stocks. (like being in debt)

2 days later, the stock has indeed dropped, to $90, the investor decides to buy back the stocks he sold before the stockexhange forces him to cough up the shares he doesnt have. he buys 1000 stocks at $9000 and closes his short position.

net profit: $10,000 - $9,000 = $1,000

18 Comments

18 Comments


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[-] 2 points by grapes (3429) 1 year ago

We should have learnt our lesson from the aftermath of the Great Depression. Naked Short Selling should again be banned, just like in those years of hangover sanity.

[-] 2 points by NakedShortSelling (8) 1 year ago

oops - sorry, Builder -- typed "twinkle" for your name. I'm new here ...

[-] 1 points by Builder (4202) 1 year ago

I can see the similarity;

Builder to twinkle. Yeeeeessssss, common error. LOL.

[-] 1 points by DKAtoday (22310) from Coon Rapids, MN 1 year ago

LOL - twinkle on - humble builder.

[-] 1 points by BS101 (3) 1 year ago

srge ...knight capital group involved.....someone even got company listed on berlin exchange so they could short sell more

http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=S2E2:GR

Monitor small international exchanges.

If your firm unexpectedly turns up on the Berlin-Bremen stock exchange and you, the CEO, did not request a listing there, that might be a sign of a problem. Request the removal of your company from that exchange immediately, and keep asking until it’s done.

Realize your choice of financing vehicle may attract naked shorting interest.

In addition to floorless convertibles, PIPEs may also attract undue attention from potential funders. Since shares in a PIPE are sold for below market price, the provider could short the stock down to that level with no risk of capital loss on his part. When issuing warrants with the deal, you’re also effectively pushing the price lower through increased dilution of existing shareholders. While it’s true that sometimes beggars can’t be choosers when it comes to raising funds, go into those negotiations with your eyes wide open.

[-] 1 points by Builder (4202) 1 year ago

Have you made cash shorting?

Seems you have a good insider knowledge of the way it works.

Has anyone actually been caught/prosecuted for shorting?

Or is it like all the crime going on in wall st? (Everyone's doing it, so, nobody is to blame.)

[-] 1 points by BS101 (3) 1 year ago

go to IHUB boards and you will find naked short selling look under (TICKER SYMBOL SRGE) it has been shorted over a billion shares bashers working boards 24/7 trying to cover their short sale and bashing to get investors to sell their shares. A ring of criminal activities are taking place and is truly amazing to see...Then go to raging bull and read SRGE message boards you will find a lot of info on whats going on and court cases against ihub and all their criminal cases. they are literally destroying companies. Please look at this.

[-] 1 points by NakedShortSelling (8) 1 year ago

Thanks all for your responses and the great info on naked short selling. Patrick Byrne has been great! He is a key part of the group fighting naked short selling. (sometimes for fun they call themselves the "Dirty Dozen.") They and their work are what this film is about. They need help--that's why I am trying to help them raise awareness and action with their film. I think Naked Short Selling, and the purposeful lack of any regulations / enforcement that successfully stop it, present a very good microcosm and macrocosm picture of power & abuse against the 99%.

[-] 1 points by oldepro (2) 1 year ago

Read here how the SEC purposely misled a Federal Judge in regard to Naked Short Selling, in 2005.

June 11, 2012, I received, under the FOIA, File no. 3-11858 Exhibit 17 from May 10, 2005 Administrative Hearing.https://docs.google.com/file/d/1uMBzM9NB5... Reviewing this document has raised some questions.

Prior to and after the Hearing, meetings were conducted between the parties, concerning Naked Short Selling in CMKX stock. Judge Murray ruled, http://www.sec.gov/alj/aljorders/2005/3-... Not only are the volume figures false, the documents are misleading. Possibly by design. This is why I feel compelled to bring it to your attention. In our phone conversation, I was convinced we want the same thing. the truth. So here goes:

June 11, 2012, I received, under the FOIA, File no. 3-11858 Exhibit 17 from May 10, 2005 Administrative Hearing.https://docs.google.com/file/d/1uMBzM9NB5... Reviewing this document has raised some questions.

Prior to and after the Hearing, meetings were conducted between the parties, concerning Naked Short Selling in CMKX stock. Judge Murray ruled, http://www.sec.gov/alj/aljorders/2005/3-... Not only are the volume figures false, the documents are misleading. Possibly by design. This is why I feel compelled to bring it to your attention. In our phone conversation, I was convinced we want the same thing. the truth. So here goes:

Read more:

http://capwiz.com/politicsol/bio/userletter/?letter_id=8626030571&content_dir=politicsol

[-] 1 points by nomdeguerre (1775) from Brooklyn, NY 1 year ago

A ticket to steal. Highway robbery, in broad daylight. Why don't we just give them printing presses to print money? Totally illegal.

So why aren't they prosecuted? Because we have loonies and criminals running the asylum, the banks, the casinos, the country. Eric Holder is simply their in-place felonius accessory after the fact.

[-] 1 points by OTP (-203) from Tampa, FL 1 year ago

Amen to that.

[-] 1 points by NakedShortSelling (8) 1 year ago

Twinkle--it is for real. amazing, no? a non-naked short seller normally would go to a big institution to "borrow" shares, which then the short seller would sell on the market, making money at current price of stock, & then buy back same number of stocks after the price goes down., then return the same # of shares borrowed to the lender. The naked short seller could theoretically be found out after 3 days after sale of phantom shares, which is the legal deadline for deliver shares after their sale (I'm 90% sure the 3-day clock starts ticking after sale of the stock--but welcome any confirmations from people that know). The privately owned company that runs the New York Stock Exchange, the Depository Clearing & Trust Organization (DTCC) is supposed to track trades and whether they have been delivered, but they do not monitor as they should. The SEC regulations, which are too little and too late--and too soft--are meaningless without tracking. SEC adds insult to injury by posting the names of companies that have been targeted by naked short sellers if there are shares outstanding after a long time. Of course, the result is the stock value of the company goes down even more--playing right into the hands of the naked short seller, who, by the way, is not identified by the SEC on their posted list. It is believed that this is happening with bonds, too, and was involved in the mortgage-debt shares that crashed leading up to the 2008 meltdown. Still no one has gone to jail for any of the malfeasance.

[-] 1 points by NakedShortSelling (8) 1 year ago

Toobighasfailed-- thanks – the infographic is good, but doesn’t really illustrate the casino aspect. I agree we should all switch banks, though, to local ones and/or credit unions—and make sure their investments aren’t against our interests. Maybe OWS should demonstrate against the privately owned company that runs the New York Stock Exchange, the Depository Clearing & Trust Organization (DTCC), which should be making sure trades are real.

[-] 1 points by toobighasfailed (117) 1 year ago

I'm curious what you mean when you say the infographic doesn't illustrate the casino aspect. What would you add to emphasize that aspect? Details about how credit-default swaps and naked short selling work?

[-] 1 points by toobighasfailed (117) 1 year ago

Yes! Thank you: naked short selling is a critical component of how banks became casinos. It's good to see posts like this, that can talk about the specifics of Wall Street's problems. I'll try to spread the message about the film.

This infographic explains about the other components to the casino that is Wall Street.

http://www.switchyourbank.org/how_megabanks_became_casinos

[-] 1 points by Builder (4202) 1 year ago

Is this for real?

Does the phantom sale never attract attention?