Avid Bioservices Inc (CDMO)

[nuke661]

For some of us this petition to the SEC from NASDAQ can't be implemented soon enough.

Nasdaq Asks SEC for Short Position Disclosure

I would love to see the SEC issue regulations to require short position reporting as requested in the petition and then maybe some of the blatant market manipulations of PPHM stock will be much harder to pull off.

Some of the points made in the NASDAQ petition:

...take swift action to promulgate rules to require public disclosure by investors of short positions in parity with the disclosure regime applicable to long positions, including the timing for such disclosure and when updates are required. 2

As Congress recognized, it is incongruous that certain investors who accumulate long positions are required to publicly disclose their holdings, but there is no corresponding obligation for short sellers to do so, including synthetic or derivative instruments that allow an investor to profit from a loss in value of the underlying security. This asymmetry has several deleterious effects: it deprives companies of insights into trading activity and limits their ability to engage with investors, the market of information to ensure it functions efficiently and fairly, and investors of information to use to make meaningful investment decisions. The Commission's Dodd-Frank rulemaking over the last several years has made important enhancements to transparency and deserves credit. However, Dodd-Frank provides the Commission with the mandate to make further enhancements and lift the veil of secrecy behind which short sellers operate .. It must do so. 5

Instead, short sellers can amass short positions secretly, abetted by increased use of derivatives and other synthetic instruments. This is particularly untenable in light of the fact that in recent years, investors with short positions, or derivative equivalents, have taken a more activist role in corporate policy and governance. Because there is no disclosure required of short positions, the investing public and issuers do not know when such circumstances exist or whether the incentives of these investors are inconsistent with corporate policies and objectives. 9 As a result, without full information about short positions maintained by individual market participants, investors and companies are left to speculate on the extent of short activity, to the detriment of market efficiency, price discovery and shareholder engagement. This information deficiency potentially subjects a company's stock price to trading and volatility based on rumor, speculation and innuendo, not facts or substantive analysis.

There are other important reasons to increase transparency in this area. Net short positions can have a direct and material impact on trading in securities, including when short positions are established through derivative instruments. 13 Further, enhancing transparency would minimize the opportunity for some market participants to engage in manipulative or abusive conduct that can potentially result from large, undisclosed short interests, particularly where investors have taken a public and vocal role in corporate policy. 14

To be meaningful, however, consideration should also be given to the types of instruments and trading activity encompassed by such a disclosure regime. To this end, "short interest" should include all agreements and understandings that allow an investor to profit from a loss in value of the subject security, thereby capturing traditional short sales as well as derivative positions.20 This is consistent with the approach ofthe E.U. SSR, which provides:
"'In order to ensure comprehensive and effective transparency, it is important that the notification requirements cover not only short positions created by trading shares or sovereign debt on trading venues but also short positions created by trading outside trading venues and net short positions created by the use of derivatives, such as options, futures, index-related instruments, contracts for differences and spread bets relating to shares or sovereign debt."

If these NASDAQ recommendations are incorporated into new SEC regs then maybe we might see a reduction in some of the daily BS geared only to support secretive and manipulative short positions in this stock. Of course I won't be holding my breath for that to happen. As Couch says, we're 25 months into the PIII all else is inconsequential, except for manipulative short selling for the purpose of "effecting" a decrease in the price of the company's stock.