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Post by mannmade on Sept 16, 2014 19:41:26 GMT -5
Failures to deliver spikes when the stock tanks. I.e. funds are naked shorting Mannkind to the stone age and happily getting away with it LOL Well this makes sense as it is the Naked Shorting that allows for them to get the volume they need to force it down by putting too many sell orders in play... And if anyone wants to get something done about this, I personally think it is up to us and not Mannkind to pursue this... As I have mentioned before, imho, their job is to do what they have done and are continuing to do... Focus on the goal line and get us to market... Then the real market forces can take over and determine our future... |
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Post by jpg on Sept 16, 2014 23:16:57 GMT -5
Failures to deliver spikes when the stock tanks. I.e. funds are naked shorting Mannkind to the stone age and happily getting away with it LOL Well this makes sense as it is the Naked Shorting that allows for them to get the volume they need to force it down by putting too many sell orders in play... And if anyone wants to get something done about this, I personally think it is up to us and not Mannkind to pursue this... As I have mentioned before, imho, their job is to do what they have done and are continuing to do... Focus on the goal line and get us to market... Then the real market forces can take over and determine our future... I would argue Mannkind by definition represents 100% of shareholders and no one is better placed to, if judged by them to be true, bring illegal naked short selling of their/ our stock to the SEC's attention. Knowledgeable investors could bring this to the attention of the media though. A good news story about how criminal naked short sellers are threatening innovative baby biotech in the US could get the attention of a few politicians and focus the SEC. The beauty of this would e that any politician doing this would seem to be anti corruption, pro innovation and pro business. Hopefully avreporter from BusinessWeek or Barrons reads us. Yeah... JPG |
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Post by vissertrades on Sept 17, 2014 7:32:49 GMT -5
Not sure I understand the mechanics of naked short selling completely. Short selling is using borrowed shares that need to be accounted for so how do they bypass this? Is this a market maker(s), hedge fund(s), broker(s) collusion? Are the FTD shares traceable? I would think they would be selling lots at market but would this be tagged as a short sell? It would be interesting to follow the trade. If this is really happening there must be some mechanism for accountability to shares traded.
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Post by vissertrades on Sept 17, 2014 8:03:50 GMT -5
More than a plumbing problem There is much more at stake than the amount of damages Overstock was claiming, thought to be $55m. If the case ever does get to trial, it would shed light on the huge but still opaque businesses of prime brokerage (services for hedge funds) and securities lending (the loaning, for a fee, of the shares that short-sellers are supposed to borrow before selling). Regulators have struggled to grasp the inner workings of these markets. The unredacted court documents have provided a tantalising glimpse into the complex transactions, legal or otherwise, employed by prime brokers and their clients, such as options trades that allow unsettled short positions to be rolled over regularly, keeping them under the regulatory radar. The failure to deliver shares (and thus to settle trades) that goes hand-in-hand with naked shorting is more than just a plumbing problem: a buyer who does not receive his share cannot technically vote it. And the case has relevance far beyond smaller companies like Overstock. The huge spike in settlement failures in the shares of Lehman Brothers and other large financial groups in the turmoil of late 2008 suggests, to some, that they were subjected to sustained raids by bears that were not bothering to properly locate and borrow stock before selling it short. Lehman's problems were so acute that it would have almost certainly collapsed anyway, but its demise may have been accelerated by naked shorting. Furthermore, settlement failures are still a problem. It is true that there have been fewer fails in single-company stocks since the SEC further tightened up its rules on shorting (known as RegSHO) in 2008. But there are still some loopholes. The SEC has conspicuously intensified its policing of the issue over the past year. Moreover, the problem seems to have migrated. Settlement failures have increased in exchange-traded funds, or ETFs, and in mortgage-backed securities. Fails have also been an issue in the Treasury-bond market, where new penalties have been introduced for dealers who do not conduct and settle trades properly. Goldman and Merrill have always vigorously denied they were involved in any kind of manipulative scheme. Their supporters argue that the fall in Overstock's share price in the period in question, 2005-07, was primarily down to poor management and products, not pressure from shorts. The two brokers won a key legal victory this week. But Mr Byrne seems determined to engage on another front. “Until at least twelve Americans have had a chance to issue their own ruling on these facts, we will carry on,” he said after the ruling. Regardless of whether he begins to score victories of his own or merely goes down fighting, this saga has some way to run. www.economist.com/blogs/schumpeter/2012/01/naked-short-selling |
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Post by vissertrades on Sept 17, 2014 8:11:37 GMT -5
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Post by BD on Sept 17, 2014 9:16:22 GMT -5
This is the documentary my friend Mark Faulk made about NSS; if you're willing to shell out a few bucks, it's very informative: thewallstreetconspiracy.com/ |
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Post by vissertrades on Sept 17, 2014 9:28:24 GMT -5
Why is Naked Short Selling Both Illegal and Common Practice?
The stock market is a tough game to monitor with many players playing and large amounts of money at stake. Large volumes of securities are bought, sold and traded and not everyone is interested in playing by the rules. Many have more sinister plans in mind, such as cheating the game.
One prominent example of cheating the system is known as naked short selling. It is illegal, but widely practiced.
What is naked short selling?
To understand naked short selling, it is important to first have an understanding of short selling. Short selling a stock is a legal trading technique where a trader borrows securities from a shareholder with the understanding that they will be returned upon demand. The trader then sells and delivers the securities to a buyer. A trader does this in hopes that the price of the securities will drop so that he or she can buy them back and return them to the lender, thus making a profit.
Naked short selling is closely related, but it has an illegal twist. Short sales are considered naked when securities are sold without first being borrowed from a shareholder. Because no real securities have been sold, they are often not delivered in time.
When the securities are not delivered by T+3 it is called “failing to deliver”.
Shares must legally be delivered by the transaction day plus three business days, otherwise known as T+3. Buyers are often unaware of a failure to deliver, because their accounts will be show a “securities entitlement” credit and they will believe that they have purchased stock, when all they actually hold is “phantom stock”.
At times, these invalid entitlements are represented to be real to buyers by their brokers, because their brokers have made a commission on the sale and do not wish to lose it. This deception can lead to counterfeit shares being bought and sold as real.
What are the effects of naked short selling?
The effects of naked short selling can be far reaching. Some argue that the practice can enhance the liquidity of shares that are difficult to move and that it adds efficiency to securities lending. However, most argue that this practice creates counterfeit stocks that can drive a company’s stock prices down by flooding the market with fake stock so that the supply exceeds the demand.
This stock manipulation practice can make investors shy away from certain stocks, serve to put companies out of business and even threaten the market as a whole.
How did it become so pervasive?
The practice of naked short selling seems to be a common practice for a variety of reasons. Some argue that it is primarily because those who have profited on these illegal transactions such as hedge funds, brokers and dealers don’t want to give any money back, and there are no real regulations in place to make them do so.
The Depository Trust & Clearing Corporation or DTCC (the final depository where all U.S. trades are settled and cleared) cannot settle fraudulent trades. According to the DTCC website, "We don’t have any power or legal authority to regulate or stop short-selling, naked or otherwise.”
While DTCC may not have the authority to regulate any short selling, it could create computer programs that would track share holdings to determine if they are real shares or simply entitled. Some believe that the DTCC chooses not to monitor these transactions more closely, because they make money on the interest and the loaning of these shares.
So, what can be done to stop naked short selling?
One suggestion would be a return to the old system where no money could be exchanged until securities are delivered. This would seem like a rather obvious approach, but with the thousands of electronic transfers that occur daily it does not seem entirely practical.
In the past, the SEC has made attempts to screen for and resolve failure to deliver issues. They implemented Regulation SHO on September 7, 2004. According to the SEC website, this rule was designed to:
Fulfill several objectives, including (1) establish uniform locate and delivery requirements in order to address problems associated with failures to deliver, including potentially abusive “naked” short selling (i.e., selling short without having borrowed the securities to make delivery); (2) create uniform marking requirements for sales of all equity securities; and (3) establish a procedure to temporarily suspend Commission and SRO short sale price tests in order to evaluate the overall effectiveness and necessity of such restrictions.
Regulation SHO helped a bit with the naked short selling situation in the marketplace, but whatever relief it provided was short-lived. Later in 2004, the SEC adopted Rule 17Ad-20, which prohibited issuers from withdrawing their securities from DTCC so that they could be settled by their transfer agencies. This rule made little sense, as transfer agencies are the only ones that keep a true record of shareholder lists for each corporation.
The rule only served to make DTCC more powerful, and it enabled them to hide certain activities from the SEC and issuers nationwide. Perhaps it is time for DTCC to "enter the age of transparency" and build a much-needed tracking system into their clearing and settlement software.
In the meantime, the SEC has come up with other ways to try to thwart the spread of naked short selling. In July of 2008, the SEC issued a month-long emergency order to stop all naked short sales on the securities of 18 large companies. On October 17, 2008 the SEC adopted Rule 10b-21. This rule addressed naked short selling and the resulting failure to deliver of securities. Its intent was to hold those who have engaged in the illegal practice, such as brokers and dealers, liable when they deceive others about their ability to deliver securities by a scheduled settlement date.
With all of the rules in place to discourage the practice of naked short sales some might think twice before engaging in the deceptive practice…others may not. Until there is either a transparency-based software tracking system put in place, or Rule 17Ad-20 is rescinded, however, there will always be some who will try to outwit the current structure.
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Post by Stop Naked Shorting on Sept 23, 2014 15:11:16 GMT -5
To all those interested in joining proposed lawsuit against naked shorts for illegally manipulating PPS of MNKD and against SEC , NTCC for negligence and dereliction of duty in letting them get away with it. Email me at alfredamus at yahoo dot com.
MNKD a couple years ago was part of a 25 company lawsuit against Optionsexpress for naked shorting stocks illegally and won with fines issued and the trader responsible was forbidden to ever trade again. There was also a lawsuit against SEC found on Deep Capture site filed by Mark Mitchell which is an interesting read involving insider trading and naked shorting.
This illegal naked shorting could be easily prevented with implementing same type of safe guards which prevent anyone one of us from buying stock that is restricted from shorting from our brokerages. All that needs to be done would be to impose steep fines and mandatory jail,time for any violators and install safeguards preventing any hedgefund or MM from shorting shares over the limit of actual real shares available. Why SEC has not implemented such safe guards is up for debate but one could speculate the NTCC makes commissions on volume so they obviously wouldn't like to have such safe guards in place and SEC has looked the other way for years despite new SHO rules implemented in 2005.
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Post by biotec on Sept 23, 2014 17:11:44 GMT -5
Um let me think about this. Oh not interested. Get real people!
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Post by vissertrades on Sept 23, 2014 17:52:20 GMT -5
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Post by kc on Sept 23, 2014 21:14:03 GMT -5
Interesting read. I wonder Who can track the 39,500,000 shares on the failed to deliver list since January 1, 2014. Ho many were from same or related parties. How many of them since 2007 are the same folks making this their daily activity. How to find out who the offending traders or institutions are?
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Post by jpg on Sept 23, 2014 21:22:30 GMT -5
Interesting read. I wonder Who can track the 39,500,000 shares on the failed to deliver list since January 1, 2014. Ho many were from same or related parties. How many of them since 2007 are the same folks making this their daily activity. How to find out who the offending traders or institutions are? The problem is the SEC doesn't even seem to care about their own rules and laws. With that as a starting point I am surprised there aren't more people doing this then now. What surprises me is how passive MNKD seems to be with all this allegedly criminal activity suing their shares. JPG |
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Post by jpg on Sept 23, 2014 21:28:58 GMT -5
Um let me think about this. Oh not interested. Get real people! I again fail to understand why you say this? My recurrent lack of understanding of your thought process is exposing a pattern! You may not be interested but others certainly would he interested in doing what they can in exposing criminal manipulation of shares of our company. How to go about doing that is another much more complicated matter obviously... |
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Post by biotec on Sept 24, 2014 6:11:35 GMT -5
Um let me think about this. Oh not interested. Get real people! I again fail to understand why you say this? My recurrent lack of understanding of your thought process is exposing a pattern! You may not be interested but others certainly would he interested in doing what they can in exposing criminal manipulation of shares of our company. How to go about doing that is another much more complicated matter obviously... Who has been criminally manipulating the shares? please tell me! Shorting is no crime, The pps is at $6 not by the manipulation but becouse we have no revenue, We make no money yet.We have to stop blaming everyone else and wait until Afrezza sells. |
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Post by cybergym66 on Sept 24, 2014 6:23:56 GMT -5
I again fail to understand why you say this? My recurrent lack of understanding of your thought process is exposing a pattern! You may not be interested but others certainly would he interested in doing what they can in exposing criminal manipulation of shares of our company. How to go about doing that is another much more complicated matter obviously... Who has been criminally manipulating the shares? please tell me! Shorting is no crime, The pps is at $6 not by the manipulation but becouse we have no revenue, We make no money yet.We have to stop blaming everyone else and wait until Afrezza sells. The point of this thread is to discuss NAKED shorting, which IS criminal manipulation. Many suspect this is occurring with MNKD and wonder why the SEC fails to enforce their regulations which drives people nuts. Shorting is legal and also occurring with MNKD, NAKED shorting shouldn't be allowed. Agree that the stock price won't see $10 until we get clear guidance from MNKD/SNY (Production numbers, Marketing plans, sales projections, etc). |
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