Phoenix Associates Land Syndicate (fka PBLSQ)

[grizzy]

about naked shorting:

I just got off the phone with E*Trade. This is what they told me:

E*Trade will not margin stocks that are under $3/share. Because of this, you cannot margin trade those securities AND THEY CANNOT LEND YOUR SHARES OUT. I asked him point blank: is there any risk whatsoever that if there is a forced cover due to an exchange move, that I may lose my shares? He replied "No, absolutely not...not with the stock you are referring to." (PBLS in this case) This is a *company* policy however, and other brokerages may allow you to margin whatever you want.

In addition, he told me that there have been instances where shares were lost due to naked shorting. It can happen on margin trading accounts, but again, only if the brokerage margin trades the security.

He also said that there have been reports in the brokerage, but many of them were speculation and verification was challenging...