Spongetech Delivery Systems Inc (fka SPNGQ)

[crashman]

No, the SEC teaches that fails to deliver are not necessarily naked shorts. On the other hand every naked short would be a fail to deliver.

Please note that fails-to-deliver can occur for a number of reasons on both long and short sales. Therefore, fails-to-deliver are not necessarily the result of short selling, and are not evidence of abusive short selling or “naked” short selling.

http://www.sec.gov/foia/docs/failsdata.htm

In a "naked" short sale, the seller does not borrow or arrange to borrow the securities in time to make delivery to the buyer within the standard three-day settlement period. 3 As a result, the seller fails to deliver securities to the buyer when delivery is due (known as a "failure to deliver" or "fail").

http://www.sec.gov/spotlight/keyregshoissues.htm