Hi Travel, Naked Shorting is borrowing shares to sell in the hope of buying them back at a much cheaper price (legal). Naked Short Selling is NOT borrowing the shares at all, the risk being they may NEVER be able to then acquire/buy back the shares needed to deliver on the sale in the 1st place! This results in FTDs or Fail To Delivers. The SEC created the Reg Sho list to supposedly combat this but NCANS ( NAT. COALITION AGAINST NAKED SHORTING) state it is a sham. The grandfather clause effectively allowing the bank robbers to keep the proceeds.The SEC also contend FTDS can occur because of ordinary long stock sales entirely unconnected with NSS! (See 'The darkside of the looking glass' for an honest and excellent step by step video on NSS and the well documented case of Overstock.com, CEO Patrick M O'brien's on- going battle against NSS).. The SEC have also recently sued Goldman Sachs for illegal NSS and Gryphon Partners (Hedge Fund). The point in all this is HUGE profits are made because in the Pinksheets, a large % of the companies are what are commonly termed as P&Ds (pump and dumps) which are simply companies set up on rumour, which are usually lies by the CEOs, which are overhyped with PRs, the company continues diluting shares into the PRs and then when the share price reaches a certain point or the pump is finished the CEOs run with the $$. Even if the company is honest, it is so incredibly tough for a small company to get off the ground because the NSSers are diluting the sh!t out of the company. (In one case,I forget the company's name; a guy who owned all his own shares of his own company watched in horror as 3 times the outstanding shares were traded in ONE day!!!)
The reference to thieves is simply because in PLYCFs case at least and in the IRs own admission(see Stock Lobster post on the ibox), when PLYCF was FLIRTY GIRL the MMs continued to sell shares under the 'old' cusip no. In my opinion, these can NEVER be recovered (although some others would disagree that these shares are still an issue, as a result of the PR released re PLYCF having 'only' 15 mill short, but, rather intelligently, they never mentioned Flirty Girl!! Which is what the shares were shorted under!) ...So you see the risk is with the shorter and the legit shareholder. The ODDS are with the shorter/NSSer because of my previous explanation of how hard it is to get a legit company up and running even without the illegal NSS. But with it the odds increasingly favour the shorters, simply because the share price is kept at an artificially low pps leaving little cash to operate the company. This leaves the company having to either produce it's own revs or dilute the share structure even more!!
The TA can be responsible for NSS but in this case not. A recent case with BHUB is a fine example of this but we certainly do not have this issue which is one of the prime reasons why the longs here are long. Your question re: The TA closing its net on the thieves is in ref to the PR by NWWV (see ibox) about the company and the TA both stating that NWWV is illegally shorted. As previously mentioned in my other post, the TA is 'open' allowing anyone to receive info on share structure with just a phonecall. This is EXTREMELY rare in pinksheet companies, so rare in fact, it is almost a precedent.
I do not know the answer to your last question re: None margin/IRS accounts Im afraid...Somebody probably does though. I hope I managed to explain some of these issues to you though. :)
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