Fund.com Inc (FNDM)

[Molybucks]

Market Makers get away with naked shorting for 2 reasons.
1) The SEC has it's attention on bigger issues.
2) Shareholders of record don't demand the certs or verification of their shares from their holding institution or broker.
A call of the certs forces the Market Makers to actually provide the shares sold. If not thru other institutions, it's done on the open market and it's the infamous short squeeze scenario. They also don't have to put up the additional 50% contingency money as they are dealing out of the same bank account which helps them.
Naked shorting is a dangerous game as there is no cap to the potential losses to close out the position. Conversely, the average investor going long can't fall further than going back to zero. I just had this very conversation yesterday morning with a friend who was a broker for many years.
To summarize, I'm not in the least bit concerned. My certs will be provided however, those holding the naked short positions will have a very, very, bad day at the office.
Lets not get too far ahead of ourselves either. The details and structure of the settlement haven't been made public and deals come in all forms. There was a lot on money at stake and I'm confident Ben Klein did a great job.