Spongetech Delivery Systems, Inc. (fka SPNGQ)

[loanranger]

"Notably, the ftd data do not include “exclearing”
transactions—that is, trades cleared
directly by brokers that bypass the dtcc.
Those trades are also referred to as “non-cns”
in that they occur external to the nscc and
are reported differently. Neither the sec nor
the exchanges will disclose the names of the
institutions failing to deliver on the grounds
that “fails statistics of individual firms…is proprietary information and may reflect firms’ trading strategies.” That statement seems odd; what is proprietary about data on illegal trading activity? Moreover, how are ftd data more proprietary than short interest data, which are reported twice monthly?"

That's the complete paragraph, which I think may add some important context. This stuff is not easy for me to grasp, so I'm hoping that I can get a little clarification.
re: "the ftd data do not include “exclearing”
transactions—that is, trades cleared
directly by brokers that bypass the dtcc."
Does this mean that the data does not reflect a failure of customer A to deliver shares, whether long sales or short, to customer B with both parties being customers of the same broker?

re: 'Neither the sec nor the exchanges will disclose the names of the institutions failing to deliver on the grounds that “fails statistics of individual firms…is proprietary information and may reflect firms’ trading strategies.”'
There is no source provided for any of that. No source confirming that that is in fact the policy....although I believe that the purpose of the stats is analytical versus the determination of any culpability, so it might make sense. And no source for the quoted statement that purports to provide the reason for the policy, if it is a policy. Do we know whether any of it is true?

re: "That statement seems odd; what is proprietary about data on illegal trading activity?"
If my understanding of the trade in which an ftd occurs above (Customer A&B of the same broker)is correct, would it enhance or detract from the ftd statistics to include it? The fact that the trade occurs intra-broker means no shares are created, so it's not a naked short sale in the sense that no new shares are coming to market. The ftd rules aren't meant to identify two customers who have the purpose of creating wash sales, are they?

I thought that there was the belief by some that SPNG shares were sold short without a borrow, up to 50 billion of the suckers, creating so-called phantom shares. How would identifying customer A in the example, who didn't do that, prove anything? I assume that, should customer B sell the "shares" to a buyer that is not a customer of the same broker that, at that point, the ftd would be picked up in the statistics because B never had shares to sell and hence couldn't deliver them.

At the risk of showing my ignorance (again), and to assure that this has at least a vague resemblance to an on topic post, wouldn't any existing naked short position in Spongetech be quantified by the number of current ftd's? Isn't it correct that while the same may not be true of a stock that continues to trade regularly, offering the opportunity to satisfy any ftd's, the fact that SPNG cannot trade stops the clock on that process?

Can someone who believes that there is a naked short position in SPNG of any size take a stab at clearing this up for me, please? Or am I beyond hope?