Spongetech Delivery Systems, Inc. (fka SPNGQ)

[loanranger]

I guess there was a purpose to your not providing any attribution or dating, but in case it just slipped your mind:
Investing 101 - Dec 30, 2004
- Death of an Investment Class
by Dave Patch

It WAS an interesting read. And it WAS relevant on Dec 30, 2004. And there were regulatory responses that addressed the issues raised (thanks in part to DP) which had a significant impact on the lack of transparency that allowed certain problems to persist. Maybe you've heard of these:
Regulation SHO Threshold List
REG SHO Overview
NASDAQ-Listed Securities

Effective, on January 3, 2005, as defined in Rule 203(c)(6) of Regulation SHO, a “threshold security” is any equity security of any issuer that is registered under Section 12 of the Exchange Act, or that is required to file reports under Section 15(d) of the Exchange Act (commonly referred to as reporting securities), where, for five consecutive settlement days:

* There are aggregate fails to deliver at a registered clearing agency of 10,000 shares or more per security;
* The level of fails is equal to at least one-half of one percent of the issuer’s total shares outstanding; and
* The security is included on a list published by a self-regulatory organization (SRO).

A security ceases to be a threshold security if it does not exceed the specified level of fails for five consecutive settlement days.

For detailed information, please visit the SEC's website at:

* http://www.sec.gov/divisions/marketreg/mrfaqregsho1204.htm
* http://www.sec.gov/spotlight/keyregshoissues.htm

Rule 3210

On April 4, 2006, the Securities and Exchange Commission (SEC) approved new Rule 3210, (superseded by Rule 4320), Short Sale Delivery Requirements, which applies short sale delivery requirements to those equity securities not otherwise covered by the delivery requirements of Regulation SHO, namely non-reporting OTC equity securities. Rule 3210, among other things, requires participants of registered clearing agencies to take action on failures to deliver that exist for 13 consecutive settlement days in certain non-reporting securities. In addition, if the fail to deliver position is not closed out in the requisite time period, a participant of a registered clearing agency or any broker-dealer for which it clears transactions is prohibited from effecting further short sales in the particular specified security without borrowing, or entering into a bona-fide arrangement to borrow, the security until the fail to deliver position is closed out.
http://www.nasdaqtrader.com/Trader.aspx?id=RegSHOThreshold


The author of the article is around here and I suspect that he would respond to any questions that you might have on the subject as it CURRENTLY exists. Because things are a bit different now.


ps. To enhance this posts prospects for existence, allow me to point out that the appearance of SPNG on the RegSho threshold list were as a result of shares that were illegally moved into the market through RME. Some folks continue to be determined to pin the tail on the wrong donkey.