OSTK - Shares shorted should be electronically tagged and reported to the TA in real time. The margin interest in those shorted shares should be prime plus some agreed upon premium, say 2-3%.
That annual rate should then be in addition to the rate the brokers and bankers charge for borrows.
At the end of the year, or quarterly, those holding short positions, and/or those hat held a short position should have to pay the company prime plus premium for the time they held their short position, as it relates to their average weighted sale price.
The interest collected should then be paid/distributed to shareholders of record on a quarterly or annual basis.
That would prevent abusive naked short selling. Anyone short selling without reporting to the TA would be subject to penalties, fines, and disgorgement, all payable to shareholders when collected.
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