Euthydemus, all I can say is
Thank You. The quote from your post only make the practices that your friend stated all the more glaring.
There is nothing new to what you posted, but compiles a good parital reference post to some very important trading regulations. I already knew the basis of most of these as do many others within the market.
Of course it has always been true that legal short selling is used partially as a balance to the market. No where in your quoted material does it say that illegal strong armed trading practices are legal or allowed to occur. In fact it states just the opposite.
("A market maker would be deemed in violation of the Rule if it entered into an arrangement with a member or a customer whereby it used its exemption from the rule to sell short at the bid at successively lower prices, accumulating a short position, and subsequently offsetting those sales through a transaction at a prearranged price, for the purpose of avoiding compliance with the Rule, and with the understanding that the market maker would be guaranteed by the member or customer against losses on the trades.")
As I said, nss is used in rare situations where the book balance has to be met. No where in any SEC or DTCC regulation will you find NSS as a means to abuse and profit. Further, no where will you find a regulation stated that naked short selling can be used at times when demand for a stock is high.
Part 1 and Part 2 of my posts are telling because of the transparancy of your friend's post. It is as transparant as the clearest glass.
Fair trading is a threat to many I know. But for those who seek nothing more than a fair market, the fate your profit interests and those of your friends who admit to possible crimes are of litte concern to me and countless others.
Later gators,
Bo
