Great post, Torvecian! Welcome back. As you said, these aged fails are accounted for as "sold not yet purchased" liabilities on the broker/dealer's balance sheet. I also know naked shorting stays a theoretical issue unless the SEC judges otherwise in a finding. I believe there is a principal client and I believe I know who it is, as well as the circumstances which precipitated this presumed short position. But I still need to do more research beyond what I've already done. At a minimum for the sake of thoroughness. Now with a product likely to market things are looking up.
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