Green Oasis (GRNO)

[XenaLives]

The list is just MM fail to deliver for that day, it does not give the complete short position. The excerpts below address the SHO list, but I encourage you to read the complete article that it was taken from found at this link, http://www.counterfeitingstock.com/CounterfeitingStock.html

Fails–to–Deliver — The process of creating shares via naked shorting creates an obvious imbalance in the market as the sell side is artificially increased with naked short shares or more accurately, counterfeit shares. Time limits are imposed that dictate how long the sold share can be naked. For a stock market investor or trader, that time limit is three days. According to SEC rules, if the broker dealer has not located a share to borrow, they are supposed to take cash in the short account and purchase a share in the open market. This is called a “buy–in,” and it is supposed to maintain the total number of shares in the market place equal to the number of shares the company has issued.

Market makers have special exemptions from the rules: they are allowed to carry a naked short for up to twenty–one trading days before they have to borrow a share. When the share is not borrowed in the allotted time and a buy–in does not occur, and they rarely do, the naked short becomes a fail–to–deliver (of the borrowed share)


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Fails–to–Deliver — If a short seller cannot borrow a share and deliver that share to the person who purchased the (short) share within the three days allowed for settlement of the trade, it becomes a fail–to–deliver and hence a counterfeit share; however the share is transacted by the exchanges and the DTC as if it were real. Regulation SHO, implemented in January 2005 by the SEC, was supposed to end wholesale fails–to–deliver, but all it really did was cause the industry to exploit other loopholes, of which there are plenty (see 2 and 3 below).

Since forced buy–ins rarely occur, the other consequences of having a fail–to–deliver are inconsequential, so it is frequently ignored. Enough fails–to–deliver in a given stock will get that stock on the SHO list, (the SEC's list of stocks that have excessive fails–to–deliver) – which should (but rarely does) see increased enforcement. Penalties amount to a slap on the wrist, so large fails–to–deliver positions for victim companies have remained for months and years.

A major loophole that was intentionally left in Reg SHO was the grandfathering in of all pre–SHO naked shorting. This rule is akin to telling bank robbers, “If you make it to the front door of the bank before the cops arrive, the theft is okay.”

Only the DTC knows for certain how many short shares are perpetual fails–to–deliver, but it is most likely in the billions. In 1998, REFCO, a large short hedge fund, filed bankruptcy and was unable to meet margin calls on their naked short shares. Under this scenario, the broker dealers are the next line of financial responsibility. The number of shares that allegedly should have been bought in was 400,000,000, but that probably never happened. The DTC — owned by the broker dealers — just buried 400,000,000 counterfeit shares in their system, where they allegedly remain — grandfathered into “legitimacy” by the SEC. Because they are grandfathered into “legitimacy”, the SEC, DTC and prime brokers pretend they are no longer fails–to–deliver, even though the victim companies have permanently suffered a 400 million share dilution in their stock.

Three months prior to SHO, the aggregate fails–to–deliver on the NASDAQ and the NYSE averaged about 150 million shares a day. Three months after SHO it dropped by about 20 million, as counterfeit shares found new hiding places (see 2 and 3 below). It is noteworthy that aggregate fails–to–deliver are the only indices of counterfeit shares that the DTC and the prime brokers report to the SEC. The bulk of the counterfeiting remains undisclosed, so don't be deceived when the SEC and the industry minimize the fails–to–deliver information. It is akin to the lookout on the Titanic reporting an ice cube ahead.

So this means that there means that an iceberg of shorts may still be lurking from pre-SHO days because they were grandfathered in. Since the original company went down, they never expected to cover.

Companies do reverse splits and dividends in order to try to flush out unreported and "buried" short shares.