Pacific Gold Corp fka PCFG

[Kurupt]

Short selling and OTC derivatives policy options

A different issue is the misuse of short selling (naked or covered) to manipulate markets (for instance by combining short-selling with spreading of negative rumours or manipulative operations in the cash market). This has to be dealt with by regulators through the application of market abuse rules with proper investigation and sanctions. The question which is left is whether supervisors have all the necessary tools for that. In my view, the answer to this question is not positive, so far.


http://www.voxeu.org/article/shining-light-short-selling-and-over-counter-derivatives

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Results
Our audit disclosed that despite the tremendous amount of attention the practice of naked short selling has generated in recent years, Enforcement has brought very few enforcement actions based on conduct involving abusive or manipulative naked short selling. We also found that Enforcement generally received complaints, including naked short selling complaints, by one of three methods:
1.
E-mail complaints received by the Enforcement Complaint Center (ECC) within the Office of Internet Enforcement (OIE);
2.
Complaints, Tips and Referrals (CTR) that are received by Headquarters or Regional Office Enforcement staff outside of normal complaints channels (i.e., the ECC); and
3.
Referral of complaints to Enforcement’s Office of Market Surveillance (OMS) by SROs, such as the Financial Industry Regulatory Authority (FINRA).5
However, during the period of our review we found that few naked short selling complaints were forwarded to Headquarters or Regional Office Enforcement staff for further investigation. Of approximately 5,000 naked short selling complaints received in the ECC between January 1, 2007 and June 1, 2008, only 123 (approximately 2.5 percent) were forwarded for further investigation. Moreover, we found that these complaints were forwarded only because the complaint subjects were involved in ongoing Enforcement investigations. None of the forwarded complaints resulted in enforcement actions, though one of the complaints referenced a pending enforcement action involving naked short selling. Furthermore, only six of the approximately 1,900 complaints entered into Enforcement’s CTR database during the period we examined, alleged naked short selling. Based on the data available to us, these complaints led to no enforcement actions.6 Also, we were informed that none of the approximately 900 SRO referrals received by OMS between January 1, 2007 and June 1, 2008 involved naked short selling.
Our audit determined that Enforcement’s existing complaint receipt and processing procedures hinder Enforcement’s ability to respond effectively to naked short selling complaints and referrals. We found that the ECC’s written



http://www.sec-oig.gov/reports/AuditsInspections/2009/450.pdf


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FINRA Rule 4560 (formerly NASD Rule 3360) requires FINRA member firms to report their short positions on all over-the-counter (“OTC”) equity securities to FINRA. Once the short position reports are received, the short interest is then compiled for each OTC security.

Effective September 7, 2007, then NASD Rule 3360 was changed to require firms to increase the frequency of short interest reporting from monthly to semi-monthly cycles. Please refer to the Short Interest Reporting Deadlines for the current reporting schedule.

The mid-month short interest report is based on short positions held by members on the settlement date of the 15th of each month. If the 15th falls on a weekend or another non-settlement date, the designated settlement date will be the previous business day on which transactions settled. The end-of-month short interest report is based on short positions held on the last business day of the month on which transactions settle. The reports must be filed by the second business day after the reporting settlement date. The short interest data is compiled and provided for publication on the 8th business day after the reporting settlement date.

Pricing and publication restrictions are under consideration.


http://www.otcbb.com/asp/otce_short_interest.asp


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SHORT SELLING BREAKDOWN on PCFG.