What I am saying is this, how long would any of the dozens of stock brokers in business today stay in business with satisfied customers if they sold investors shares that don't exist? When a buy takes place, the seller, no matter who, has 3days (t+3) to deliver the shares. If those shares aren't delivered within that time frame an FTD occurs and is reported. And it doesn't matter where those FTD's originated, when the number of FTD's reaches .5% of the O/S the stock appears on REG SHO. Sure, the broker will take shares from its own inventory to place in the account of the buyer but the broker is then "owed" the shares and those share have to be delivered to the broker so that broker can take them off of the books so they will no longer be shown as an FTD.
This ain't rocket science and there is a paper trail, electronic or otherwise, for every share sold into the markets, imo.