On4 Communications Inc (ONCI)

[ApollyonZ]

Big Players, Little Stocks, and Naked Shorts

..For example, if the market maker earns a penny per share of a $50 stock, that’s only a spread of .02 percent. But a stock worth 25 cents where a market maker sees even a tenth of a penny in profit represents a spread of 2 percent — a 100-fold increase.

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..“Naked” short selling is not necessarily a violation of the federal securities laws or the Commission’s rules. Indeed, in certain circumstances, “naked” short selling contributes to market liquidity.
For example, broker-dealers that make a market in a security[4] generally stand ready to buy and sell the security on a regular and continuous basis at a publicly quoted price, even when there are no other buyers or sellers. Thus, market makers must sell a security to a buyer even when there are temporary shortages of that security available in the market
..“Naked” short selling, however, can have negative effects on the market. Fraudsters may use “naked” short selling as a tool to manipulate the market.

After adoption of Rule 204, why are there still failures to deliver?

..there are many justifiable reasons why broker-dealers do not or cannot deliver securities on the settlement date. A broker-dealer may experience a problem that is either unanticipated or is out of its control, such as (1) delays in customers delivering their shares to a broker-dealer, (2) the inability to obtain borrowed shares in time for settlement, (3) issues related to the physical transfer of securities, or (4) the failure of a broker-dealer to receive shares it had purchased to fulfill its delivery obligations. Failures to deliver can result from both long and short sales.

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It just depends as always. Happens more often than assumed and makers are using our monies making it more difficult to prove wrong doing.