Fortitude Group, Inc. (FRTD)

[Reptos]

When a broker places his ' riskless principle trade' of FRTD shares,for instance, LOL for a client with a MM and the MM does not have the shares available,the MM has two choices either tell the broker to go elsewhere or fill the order with 'air shares' of FRTD.The MM is in effect selling shares that don't exist.This is commonly referred to as naked shorting.The MM has the usual 3 days to cover which is easily extended indefinitely if needed by wash trading back and forth with another MM.( Each transaction resetting the clock to 3 days) The problem arises when MM's naked short for their own accounts or allow the existing short positions to accumulate without covering.Not only can this drive the PPS of the target company down,but it creates a situation where the outstanding shares outnumber the authorized.This situation can easily cause a DTCCC 'chill' or raise red flags with the SEC. This is a well known problem,despite your stated unfamiliarity with the concept or your confusing it with 'riskless principle trades'.If the MM's can succeed in driving the company out of business or stop trading,they never have to make up the fake shares they sold.Very good for them.The fines levied for this abuse of the SEC sanctioned privilege of naked shorting are less than the profits to be made,so unless the rules are changed or the SEC enforcement is strengthened,naked shorting will continue to be a problem