EnableTS Inc. (fka ENTS)

[QaB2i]

The threshold lists

have been a major league disappointment with all of the loopholes it contains. First of all, Reg SHO only pertains to FTDs held in a “registered clearing agency” like the DTCC. When Reg SHO became effective there was a mass exodus of FTDs from the DTCC to ex-clearing.

Secondly, it’s ultra easy to “cross” a naked short position from yourself to a co-conspirator shortly before any mandated buy-in gets triggered. The FTD stays alive it merely goes from one party to a different one which restarts the “clock”. The mechanism used is an illegal “wash sale” wherein the FTDs are “parked” elsewhere.

Thirdly, the phraseology applies to FTDs held at an one clearing firm. I got a kick out of a research piece done shortly after Reg SHO became effective that mentioned that all of a sudden hedge funds seem to be utilizing all kinds of clearing firms instead of just 1 or 2 like in the past.

Time and time again we see victimized corporations popping off of the lists at the same time that their share price is in free fall. Wouldn’t the share price be expected to go up if all of this covering were theoretically occurring?

As to the majority of abuses occurring now via “ex-clearing arrangements” both the DTCC and the SEC chime in as if on cue that “these contractual arrangements occurring amongst NSCC participants have to do with contract law and we only regulate matters associated with securities law”. The trouble is that these “arrangements” are being enterred into in order to circumvent securities laws specifically 15 c6-1 of the ‘34 Act forbidding the intentional postponement of settlement date.

The threshold lists might even prove to be counter productive in that they identify the corporations under attack which invites crooks to “pile on” with massive amounts of their own FTDs to finally crush the corporation targeted for destruction.