China Crescent Ent. Inc (fka CCTR)

[sparky trader]

Naked short selling, or naked shorting, is the practice of short-selling a financial instrument without first borrowing the security or ensuring that the security can be borrowed, as is conventionally done in a short sale. When the seller does not obtain the shares within the required time frame, the result is known as a "fail to deliver". The transaction generally remains open until the shares are acquired by the seller, or the seller's broker, allowing the trade to be settled.[1] Naked shorting is not necessarily a violation of the federal securities laws or the Commission's rules. Indeed, in certain circumstances, naked short selling contributes to market liquidity.[2] But it is illegal when manipulators use the practice to force stock prices down by temporarily increase the supply of stock, some people argue.[3] However, the practice is not considered abusive or illegal when utilized by market makers, if they fulfill the close-out and pre-borrow requirements, as they are not exempt.[4] It's also not illegal when there is a legitimate reason for failing in the delivery of the stock.[4]