GNCC Capital Inc (GNCP)

[BigBake1]

Well that statement is incorrect, a naked short is a failure to deliver the stock for a purchase. One should read SEC Reg SHO:

https://www.sec.gov/divisions/marketreg/mrfaqregsho1204.htm

Rule 204 — Close-out Requirements. Under Rule 204, participants of a registered clearing agency (as defined in section 3(a)(24) of the Exchange Act) must deliver securities to a registered clearing agency for clearance and settlement on a long or short sale transaction in any equity security by settlement date, or must close out a fail to deliver in any equity security for a long or short sale transaction in that equity security generally by the times described as follows:the participant must close out a fail to deliver for a short sale transaction by no later than the beginning of regular trading hours on the settlement day following the settlement date, referred to as T+4; if a participant has a fail to deliver that the participant can demonstrate on its books and records resulted from a long sale, or that is attributable to bona-fide market making activities, the participant must close out the fail to deliver by no later than the beginning of regular trading hours on the third consecutive settlement day following the settlement date, referred to as T+6. In addition, Rule 203(b)(3) of Regulation SHO requires that participants of a registered clearing agency must immediately purchase shares to close out fails to deliver in “threshold securities” if the fails to deliver persist for 13 consecutive settlement days. Threshold securities, as defined by Rule 203(c)(6), are generally equity securities with large and persistent fails to deliver.

Pretty simple process of Debits and Credits, the account has a debit issued and is awaiting a credit of shares, that is a Naked Short, fail to deliver the shares in a timely manner results in a Fails to Deliver. The only way to close out the position is to deliver shares, otherwise it remains as fails to Deliver.