SurgLine International Inc (SGLN)

[mm107]

of course we are, When the system was put into place, the main "purpose" of being able to sell "air shares" was to keep a liquid market back in the day...

Remember, old days, the sale/buy was not as quick (clearing) and if on a higher volume day, the brokers would "Sell air Shares" to keep the stock honest and not inflating itself due to lack of being able to process the orders.

So did they need to allow "NSS" back in the day, sure did, but this was designed for an old system.

When The huge volume days surge, the market makers sell "Air Shares, AKE IOU".

They place the IOU in your account and this is what is reflected.

Ever Wonder why there is a 3 day period for when you sell a stock in a cash account? Its because the 3 day clearing process locates and verifies the shares are available through the DTC.

If the market maker/broker house can not find the shares within the 3 days, it triggers a failure to deliver. (http://failurestodeliver.com). So what these market makers do is swap shares back and forth to make sure they are always on new "cover cycle".

Market Maker A, sells Short Air Shares, Cant Locate the shares to replace the IOU, or maybe he doesnt want to find the shares at the current price, so A, they "shake the tree" and get the price to drop and cover their IOU's, OR they just call their buddy (another MM) and say "hey im on my 3rd day short, can you sell me some at "xyz" and they iniate the transfer, now Market Maker A, has covered their IOU, but Now Market Maker B will need to find the shares. Market Maker A and Market Maker B will work together to make sure to stay under the 3 day FTD trigger and also COVER at a lower PRICE.

THIS PRACTICE IS PROTECTED UNDER GONVERMENT LAW. BANKING FIRMS DO NOT NEED TO DISCLOSE THEIR TRANSACTION TO AVOID THE COMPETITION KNOWING THEIR TRADE SECRETS, SO ALL THIS WASHING GOES UNDER THE RADAR.

SO NOW, MULTIPLE ACCOUNTS HAVE IOU'S/FAKE SHARES IN THEIR ACCOUNTS AFTER THE 3 DAY CLEARING PERIOD. THAT MEANS THE SHARES ARE YOURS TO KEEP AND IF THEY ARE IOU'S THEN SIMPLY PUT, DURING ACCOUNTING PHASE, ALL AIR SHARES ARE FORCED TO BOUGHT BACK BY THE IOU ON RECORD.