iTalk Inc. (fka TALK)

[lloydm]

KNIGHT CAPITAL CHARGED WITH ABUSING “NAKED SHORTS”

Nowhere did it say small firms were charged with naked shorting. It said Knight capital was charged, and we're making it look like it's no big deal. ITS A BIG DEAL. Finra does not levy charges lightly against one of the largest Penny Stock Market Makers, but they did. KGG tried to make up some petty excuse about risk-less principal basis to no avail.


What Knight did was illegal, and they were charged by Finra. EOS!

Maybe $TALK$ was one of those 3,477 instance of KGG illegal naked shorting? Only Finra knows for-sure.

Finra staff reviewed four separate time periods from 2012 to 2015, spot-checking for errors. Most of the problems were found between June and July 2013, when Finra found 3,477 separate instances of KCG engaging in “a short sale for its own account without first borrowing the security,” a description of naked short selling, “while it had a fail-to-deliver position… that had not been closed out.” According to a footnote, these naked shorts were done “to facilitate a customer(s) long sale order on a riskless principal basis.”

This matches DiIorio’s explanations. “This is how KCG generates trading profits in penny stocks,” he said. “There is no such thing as riskless principal basis unless you’re doing something illegal.”