The reason why these decade long allegations of naked shorting undermining NWBO’s stock prices are erroneous IMHO is twofold:
First, the company has never shown any tangible evidence of extensive naked shorting either in the form of failure to delivers, which is normally how naked shorts are tracked, or any other tangible market based evidence. This is unlike the spoofing allegations that has enough evidence to support a predicate for a lawsuit. And NWBO has never taken any legal action against naked shorting sellers despite continuing to make these claims. Where’s their evidence?
The second reason is without evidence in hand, any allegations of naked shorting must imply this is happening outside of the existing DTCC clearance system, where all trades are cleared and settled.
If there are criminals that possess enough sophistication to bypass the DTCC system undetected, then it would undermine the entire trading platform for the stock market. In the same way if currency counterfeiters could counterfeit at-will without detection, that would undermine the entire banking system.
I would also add, if these naked short sellers are so outside exchange system, then how does anyone know what the presumed naked short numbers are that get thrown around in this forum?
In my opinion, the naked short narrative is both used as a deflection to avert responsibility for management’s own weaknesses, and as an appetizing conspiracy theory that some enjoy believing because it provides an easily digestible explanation without the need for a more sophisticated understanding.
Below is AIChat’s response to a very simple question I asked about why naked short selling is difficult to go unreported:
1. Regulatory requirements: Stock exchanges and regulatory bodies have specific reporting requirements in place for short selling activities. Market participants, including brokers and traders, are generally required to report their short positions and provide necessary documentation. Failing to comply with these requirements can result in regulatory violations and penalties.
2. Market surveillance: Stock exchanges employ sophisticated surveillance systems to monitor trading activities and detect any suspicious or manipulative behavior, including naked short selling.These systems can track trading patterns, identify irregularities, and trigger investigations by regulatory authorities.
3. Investor scrutiny: Investors, especially institutional investors and activist shareholders, closely monitor market activities and scrutinize short positions. They often conduct their own research and analysis to identify any potential market manipulation, including naked short selling. If they suspect any irregularities, they may raise concerns and demand investigations.
4. Public disclosures: Stock exchanges require regular reporting and disclosure of trading activities, including short positions. These disclosures provide transparency and allow market participants to access information about short selling activities. This makes it difficult for naked short selling to go unnoticed or unreported.
5. Legal consequences: Engaging in naked short selling can have serious legal consequences. Regulatory bodies and stock exchanges actively enforce regulations and take disciplinary actions against violators. The fear of facing penalties, fines, or legal actions acts as a deterrent for market participants to engage in unreported naked short selling.
While it is possible for some instances of naked short selling to go undetected or unreported, the regulatory framework, market surveillance systems, investor scrutiny, and public disclosures collectively make it challenging for such activities to remain hidden for an extended period.
About DTCC:
The Depository Trust & Clearing Corporation (DTCC) and its subsidiary, the Depository Trust Company (DTC), play a role in tracking and monitoring securities transactions, including short selling. However, it's important to note that DTCC's primary function is to provide clearing, settlement, and custody services, rather than directly tracking naked short selling activities.
DTCC tracks short selling transactions through its automated systems and processes, which are designed to facilitate the efficient and accurate clearing and settlement of trades. When a short sale transaction occurs, DTCC records the details of the trade, including the quantity of shares sold short.
DTCC also maintains records of securities lending and borrowing activities, which are closely related to short selling. When shares are borrowed for short selling purposes, DTCC tracks the borrowing and lending of those shares to ensure proper delivery and settlement.
While DTCC tracks short selling transactions, it is important to note that monitoring for potential instances of illegal naked short selling is primarily the responsibility of regulatory bodies such as the Securities and Exchange Commission (SEC) and self-regulatory organizations like the Financial Industry Regulatory Authority (FINRA). These entities employ sophisticated surveillance systems and regulatory oversight to detect and investigate potential violations, including instances of illegal naked short selling.
DTCC cooperates with regulatory bodies by providing data and information related to short selling transactions, which can assist in their monitoring and enforcement efforts. By working together, DTCC and regulatory bodies aim to maintain market integrity and ensure compliance with securities regulations.
AI
