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A Failure to deliver = a naked short (as one did not have the intention to cover) ...
Reporting a trade as long, while shorting = a naked short (as one did not have the intention to cover)
My 2 cents :
It's not because there's no crime reported, that crime does not exist. I live in Belgium and the aurthorities over here were able to crack the Sky ECC phones used by criminal organisations. By doing that they had access to over half a billion drug cartel messages. This unfolded 100's of cases to go after some really bad people (even showing proof of police/ government people being involved).
My take : if you look at the billions of trades daily; the complexity of all these systems/ organisation ... you're not going to tell me that 'crime' is staying away. Knowing some of these organisations have more means and money that authorities, it just speaks for itself that some stuff will not be uncovered or it will be difficult to proof. The cases I gave were just some articles which I googled. You'll find much more on this.
And yes, some of these companies are doing wrong things as well. You're not going to tell me however they are all bad.
https://www.sec.gov/news/press-release/2014-20
A bit older ...
Data Analysis by SEC Staff Breaks Case
FOR IMMEDIATE RELEASE
2014-20
Washington D.C., Jan. 31, 2014 —
The Securities and Exchange Commission today charged a pair of college professors in Tallahassee, Fla., with perpetrating a complex naked short selling scheme for more than $400,000 in illicit profits.
Abusive naked short selling occurs when shares are sold without having the shares to deliver, and then intentionally failing to deliver the securities within the standard three-day settlement period. An SEC investigation found that Gonul Colak and Milen Kostov repeatedly engaged in a series of sham transactions designed to perpetuate a naked short position as part of an elaborate options trading strategy. Colak and Kostov were required to deliver the securities underlying their short positions within the standard three days. Instead, their sham reset transactions created the illusion that they had delivered the underlying securities when in fact they had taken no steps to do so. They maintained the uncovered naked short positions and profited.
Colak and Kostov agreed to settle the SEC’s charges by paying more than $670,000.
https://www.bloomberg.com/opinion/articles/2023-06-13/naked-short-seller-gets-in-trouble
There is, however, a good (illegal! but possibly lucrative) real use case for naked shorting, albeit sort of a strange and specialized one. It goes like this:
A publicly traded company is having some tough times and is looking to raise a bit of money. Ordinary financing options like a bond deal or a public stock offering are not available for whatever reason, so the company is looking for weird trades.
You arrange to buy some stock from the company, in the future, either at a fixed price or at some floating price indexed to the market price. So you sign a contract to buy 1 million shares two weeks from now at $1 per share (a fixed price), or to buy 1 million shares two weeks from now at the volume-weighted average price 3 of the stock over next two weeks (a floating price). You are giving the company money, and you are getting back stock, and because the company is a bit desperate you get a pretty good deal.
The stock is trading at, like, $1.25 today: You are getting a discount, buying at $1, because the company needs the money. (Or if you are buying at a floating price, it might be at a discount to the average market price.)
If you could sell 1 million shares at $1.25 today, then in two weeks you will buy them at $1, and you will make a $250,000 guaranteed profit. Whereas if you wait the two weeks, buy the shares at $1, and then sell them, maybe the stock will be below $1 by then and you will lose money. This company is risky! You want to lock in the profit now. (Similarly, but slightly more complicated, with a floating price: You want to sell the stock over the two-week period so you can get the average price, rather than waiting to buy at that price and then sell at whatever the price is in two weeks.)
But, look: If you have this sort of arrangement with this sort of troubled company, there is a good chance that it is hard to borrow 1 million shares. The company is small, its stock doesn’t trade that much, probably a lot of people have already borrowed it to short it. So you have to pay a large borrow fee, or more likely you simply cannot find 1 million shares to borrow at any price.
If you just naked shorted the stock, and sort of strung your brokers along for two weeks, you’d be fine: Sell at $1.25 today, buy at $1 in two weeks, and deliver the 1 million shares you bought to close out your short position. No harm done!
This is illegal in part because you are unfairly ducking the costs of short selling, but also because it is kind of a scammy way to do a stock offering: You are basically able to lock in a big profit by selling the stock to the company’s public shareholders before you buy it from the company, and it seems a bit unfair.
https://www.natlawreview.com/article/sec-brings-naked-short-selling-case
What is “Naked” Short Selling?
Naked short selling is unlawfully short selling shares that have neither been borrowed nor located. If sellers are engaged in naked short selling, then the volume of stock may be larger than the tradeable shares in the market, which can lead to sellers failing to deliver securities sold by the settlement date.
What Did the BD Allegedly Do Wrong?
According to the Complaint, the BD mismarked 96% of a certain hedge fund’s short sale orders of two separate issuers’ stock, totaling more than $250 million, as “long” or “short-exempt.” This mismarking allegedly generated $1.6 million in brokerage fees to the BD. The effect of the mismarking was that the hedge fund was able to sell the securities short even though it already had a short position in the securities and did not borrow or locate additional shares to sell short.
Maybe consider listening to the last conf call they did. They gave an overview of cases which resulted in fines. Different scenarios popped up. One can check on these.
You report them as long and not short trades ... hence you don't 'fail to deliver'
Just one example.
4.5 million and pps plus 25% ... not bad
This is indeed taking toooooo long ... amateurs ...
You've made some points where I agree on. Tony could have tackled this better. Anyhow, he stated to me he's continuing his search for a suitable candidate. Counting on him to deliver.
I understand your frustration. I'm down as well.
Anyhow, you're right Tony did not deliver. This does partly explain the sinking pps. To me however the fact that Moonmarket pumped this stock some time before the 'bad' news caused extra pressure on the pps. New people bought, saw the pps sinking and started selling.
The elements that count (low OS, float and the fact that we still need to be sold) however are still intact.
Waitinggama and yes, a gamble imo.
Setting up nicely
I was ok like you with the oil and gas ... well ... wait and see it is, I guess
Still have my batallion of shares.
Low float
Low OS
No dilution, the reverse
A CEO who is honest
You don't often see that in OTC land.
Counting on him to still find the Holy Grail
Will ask Tony if he has alternatives ... he must have been talking to more than one party ...
Pfff ...
Let's wait and see ... end of Summer in trips ? Not going to happen in my opinion
You could already have bought millions ... exactly what I did :)
Unless they know what's coming ...
Thin till 65
My 3s ans 4s looking good
As already stated ... I flip 50% of my position, the rest I don't touch. With a part of the profit, I than increase again the position. Been doing this on this stock for over 3 years ...
Done adding, I think. Back to my initial position before the last run.
Rinse and repeat please :)
Burp ... doing it again ... adding
Burp ... I added again today.
Added some today
Which alert ?
I'm stargazing in total disbelief to this ... sinking of the price share :(
I hope so to ... been holding large chunk of my position for years and flipping a smaller chunk. Added the past weeks and am now far the number I wanted to keep.
(1) why would one sell at the low (selling on the news only happens if you win) ?
(2) he did not miss the deadline (yet) - end of May is in sight, but not there yet ...
That's up for you to decide. I just wrote what he replied.
We go higher on lower volume, setting up nicely imo
No, I was in contact with him last week. He stated we're still on time. Guess any day now ...
BB has been with us already a while (a whale :)) ... welcome to this board !
Moonmarket at stocktw has been doing some coverage on it (on youtube as well).
Seems to be building. Not bad as the weak hands get flushed out on forehand.
My assumption is that with (1) a good merger (2) the consolidation around the current level (3) accumulation by a larger group of buyers (3) the reductions to the float (4) the low total OS (5) a cautious CEO, this is bound to go back to its 0.4-0.5 level.
If the CEO keeps word and gives us more news by end of May, this will go wild ...
LOL - lots of negativity on this board lately. But you're right, if only there was something to talk about ...
Could we go back and discuss the stock ?
Selling started when a stocktwit poster started he heard negative news ...
Thanks ... much appreciated. Agree on the fact that it is strange they go out of EM but don't do nothing about it
Hope you get something out of them ... thanks anyhow for taking this up