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Indeed, there is no such thing as a sure thing. I can not state with 100% certainty that Megas won't, at some point, actually go through with a 10-12G filing. I also can not state with 100% certainty that if he goes through with such a filing, that we won't furthermore find a way to go about creating value for his shareholders.
But I do know he hasn't done this to date. And I know that if he was going to do either of these things, he probably would have done them by now.
That's why anyone who might have taken a naked short position against BCIT probably made the right call.
Read the post that followed. The "8" was supposed to have been the ASCII character for infinity that iHub couldn't read.
Ultimately, you will not find a contra-party who will sit on the other side of a naked short position from you without some sort of capital committed to the position. Call it "collateral" if you like.
Apparently, iHub doesn't recognize the ASCII character for infinity.
There is no limit on the aggregate size of a naked short position.
It doesn't matter what's going on in the background if no one's working on a 10-12G.
Indeed, you do have seven years to file a 1040-X. But the real issue comes down to when you decide to come to grips with reality. Right now, if you decided to write off your BCIT losses, you'd have the choice of doing an accommodation with your broker, if they offer such a service, or using the November 3, 2009 date.
Sooner or later, the broker/dealer community is going to journal off all the old BCIT positions. You could use that date as well when it comes.
There are some instances where you can take the write-off without going through the exercise of "closing" the position. For example, if you own stock in a company that's gone chapter 11 and the plan of reorganization states that the old equity has been cancelled, then you don't need an accommodation trade to write off the loss.
However, stocks that have been cancelled by a plan of reorganization never come back to life.
The IRS probably wouldn't hassle you too much if you tried to write off your BCIT shares without an accommodation trade. However, you'd have to come up with a reasonable date to deem BCIT worthless.
You could choose the date November 3, 2009 as a reasonable date, as that was the day the stock got revoked. But to take your deduction now with that date you'd have to file 1040-X's, at least for 2009, to take advantage of the deduction. If you wanted to be able to write off your losses in 2012, you'd need an accommodation trade from your broker.
But your broker doesn't need an accommodation from you.
Oh, you mean an accommodation trade so that a customer can write-off a worthless security? Sure, there are brokers who will do an accommodation trade for you. But they won't do it for $1 per share. They'll do it for a dollar for the whole position. And there is no mandate for brokers to perform accommodation trades like that. Some will do it as a service for their clients, others won't.
The point is, they're not going to go out and buy you anything for your account if the security in question is not publicly registered.
Broker/dealers that trade a revoked security are subject to sanctions and/or fines by their regulatory bodies. They simply aren't going to trade BCIT until they're publicly registered.
As for the goofball in Fresno? All he got was his trade cancelled and a refund of ~$800 in a small claims court. Given that E*Trade sent an inept paralegal to handle the case, and she foolishly agreed to stipulate to the finding of a temp judge, that's unlikely to occur again.
The "205's" aren't publicly registered either. It doesn't matter what kind of a Chinese fire drill Megas decides to play with the CUSIP's. If your securities aren't publicly registered, they're not going to trade.
Naked shorting a worthless security is always a smart bet.
Thought it was obvious I was referring to Megas.
He doesn't even have to "take care" of BCIT. For that matter, there's no reason to believe BCIT has anything to manage. But there seems to be a group of people who think that BCIT could possibly trade again some day. All I've done is outlined the steps that Megas would have to take in order for the shares to be publicly traded again.
But no, I don't really expect him (Megas) to do anything.
None whatsoever. Either he finds a way to publicly register the shares or nothing moves.
A clean, pink shell would put him back around a quarter of a million dollars, give or take.
Then he'd have to file an S-4 to register all the old BCIT stock that was going to come into this shell.
He'd still have to clean up the mess he left at Darbie & WSG though.
The laws regulating the registration of securities prior to their trading aren't going to be changing any time soon.
A broker/dealer can't trade a security without a public registration.
Yeah, it is needed, if you want to see BCIT trade again. The shares must be publicly registered before any transactions can take place.
Where's the 10-12G?
BEAUTIFUL!!!!!!
ENSSFM = Every Naked Short Seller Finds Money
None of us are stuck with revoked, worthless stock.
The law was upheld when BCIT got revoked.
Judges do not create laws.
Well, no. They're not. When it comes to fundamental corporate finance, "float" has no meaning. Shares authorized, issued, and outstanding are the only figures that have any meaning at the corporate level.
And naked short selling does not result in a change in any of those numbers, nor does it affect the amount of equity that a corporation has on its balance sheet.
If that were true, you would be able to cite that section of the U.S.C. which prohibits naked short selling.
But no such prohibition exists.
On the other hand, I can point you to past legal precedents which have established the legality of naked short selling.
If a stock is fundamentally worthless (like BCIT) then the size of any naked short position is irrelevant. It could be two TRILLION shares, and it'd still be the right position for an investor to have taken.
They're not going to.
Eventually they're all going to get journaled off of the books.
You can keep repeating the same lie over and over again, but it's not going to make it true.
And it's not going to make your worthless stock trade again.
The point is that they're not illegal.
For a little bit of case history, you might want to try Googling "LTV" and "Scattered Corporation". It's established case history. No one's going to be forced to buy in a worthless security like BCIT.
I'm afraid you're incorrect. For securities that go bankrupt, like General Motors and WorldCom, or stocks that get revoked, like BCIT or FFGO, the naked short position is the best place to be. Those naked short positions never get covered. Why would anyone pay more than $0 to cover a position that is worthless?
No one is going to be ordering anyone to buy in a security that doesn't trade and will never trade again.
I've already addressed this issue. Counterfeiting securities, which is illegal, is not the same as naked short selling, which is legal.
In the United States.
There is no point in buying in a worthless security.
Someone who is willing and able to sit on the opposite side of that trade away from the traditional broker/dealer community.
(Usually referred to as "the fourth market".)
Unfortunately, you won't find many institutions out there who would want to sit on the long side of a BCIT trade, for obvious reasons.
1. No. I can't. I have never stated it was something I could do "at will". It takes a lot of preparation and networking to engage in some of my transactions.
2. Not quite. I am the managing partner of a private equity partnership.
3. Naked short selling is not illegal in the United States. It IS a procedural violation for certain registered entities that are subject to various SRO rules and regulations here in the United States, but my investment management company is exempt from registration with those SRO's that have rules against naked short selling.
Naked short selling and securities counterfeiting are two completely different activities that are wholly unrelated.
If you want to learn more about the counterfeiting of securities, visit http://www.secic.com/
There is nothing corrupt about naked shorting securities that are fundamentally worthless.
Unless he's got a 10-12G to share with you, you can go back to sleep.
Still no 10-12G. So you're no closer to trading.