Perhaps the SEC should perform surprise audits and confirm directly with the actual shareholders ( not just their brokers) who supposedly have lent the shares.
IMO, anything less can be papered up with time.
Case in point, see the excerpt (next 5 paragraphs) from below link:
In this case, that resulted in absurdities like the following disclosure in this document, in which a Goldman executive admits in a 2006 email that just a little bit too much trading in Overstock was going on: “Two months ago 107% of the floating was short!”
In other words, 107% of all Overstock shares available for trade were short – a physical impossibility, unless someone was somehow creating artificial supply in the stock.
Goldman clearly knew there was a discrepancy between what it was telling regulators, and what it was actually doing. “We have to be careful not to link locates to fails [because] we have told the regulators we can’t,” one executive is quoted as saying, in the document.
One of the companies Goldman used to facilitate these trades was called SBA Trading, whose chief, Scott Arenstein, was fined $3.6 million in 2007 by the former American Stock Exchange for naked short selling.
The process of how banks circumvented federal clearing regulations is highly technical and incredibly difficult to follow. These companies were using obscure loopholes in regulations that allowed them to short companies by trading in shadows, or echoes, of real shares in their stock. They manipulated rules to avoid having to disclose these “failed” trades to regulators.
Read more: http://www.rollingstone.com/politics/blogs/taibblog/accidentally-released-and-incredibly-embarrassing-documents-show-how-goldman-et-al-engaged-in-naked-short-selling-20120515#ixzz24FQFqSxm
With all fraud cases, the fraud is not exposed until someone asks for real evidence. ( and then does not receive it)
If all lent shares can be confirmed by the rightful owners, then so be it.
IMO, This (extremely high percentage of float shares sold short) just does not smell right............. and should be immediately investigated!
Who here agrees?
lots of naked shorts no doubt...the SEC has been a sleep at the wheel for years and years...A bunch of young guys without a clue is what I have read..What good are any NEW regulations when current ones go unenforced? That's usually the path that government takes...Just writing more and more laws.....Chris Cox days were awful for sure...This new gang doesn't seem to be any better..
don't forget the Porn allegations, quite a few SEC workers have been found to be spending most of their time watching porn. So while they are jack-a-lacking around everyone else is getting screwed!
article from 2010, but it's still a good read.
GLTA - Go Skul!
You make a good argument, it isn't like the market is not aware that SKUL is the most shorted stock on Nasdaq. You as an investor have the right to not allow your shares to be loaned by calling your brokerage. You can make an inquiry to SEC to investigate as well.
It seems like the holders of SKUL have all but accepted this as their fate in life. The float is gone and there are no shares left to short, that means as more investors buy these short shares have to be repurchased if they are restricted.
Can you imagine what price this stock would be if not for 12M shares being sold short? I have shorted stock when I believe the price is too high or a company will miss earnings. I suspect a hedge fund started slowly and made some paper profits then double down and made more, until now they are ensnared in a huge potential loss trying to buy time for an earnings miss or guidance down revision but Skul has executed flawlessly and beat estimates since IPO.
Just like poker game the chips are all on the table no more chips to be used and it is time to turn over the cards SKUL has a royal flush, shorts have weak two pair.
As far as the shorts being weak, all one has to do is to look at the results ever since the Article came out describing how the management was in the process of "teaching the shorts a lesson.I was in options and took a bath, loss of %80.