Replies to post #63663 on Mass Hysteria Entertainment Co. (fka MHYS)

[traderinvestor]

Your POST proves you know NOTHING about shorting. Contact the SEC and Finra? LMFAO they can't track all shorting done nor do they report it all nor HAVE THEY EVER. And to correct your misleading post, the regsho is for reporting fails to deliver which does not mean short all the time nor does it REPORT the shorts/all the shorts.

The Regulation SHO Threshold List

Regulation SHO begat the Regulation SHO Threshold Security List, and later, in 2010, what some choose to call the Reg SHO Daily Short Volume Report, which is generated by FINRA. They are updated each day after the close of trading.

Both of these lists are often invoked by public companies and their followers as evidence of abusive short sale activity, which is presumed to account for those companies’ declining stock prices. In reality, neither list is proof of anything at all. The threshold list comes closer: though it does not track short sales, it does track persistent failures to deliver. A “failure to deliver” is the outcome of a transaction where one of the parties in the transaction fails to meet his respective obligations. When a failure to deliver occurs, either the party with the long position does not have enough money to pay for the transaction, or the party in the short position does not own the underlying assets that are to be delivered. Reg SHO created the Threshold Security List to address failures to deliver in an orderly manner. It was not created to punish short sellers or reveal short positions. Reg SHO was designed to clean up open failures to deliver in certain securities when they reached a relatively low aggregate level without creating a short squeeze.

Failures to deliver can occur in connection with short sales or long sales; the list does not differentiate. There may be legitimate reasons for them. For example, human or mechanical errors or processing delays can result from transferring securities in physical certificate rather than book-entry form, thus causing a failure to deliver on a long sale within the normal three-day settlement period. A failure to deliver may also result from lawful naked short selling. Once the fails are cured by delivery of the stock in question, the issuer’s name is removed from the list. The threshold itself is determined in one of two ways. If the issuer is an SEC registrant, it is based on a percentage of its shares outstanding; if fails exceed that number, the stock is added to the list. If the issuer is not a registrant, addition to the list will be triggered by failures to deliver that are in excess of a value of $50,000. In some cases, SEC registrants have made the list simply because they’ve failed to disclose a substantial increase in their shares outstanding.

Failures to deliver are reported to the exchanges and to FINRA by the National Securities Clearing Corporation (NSCC), the clearing arm of DTCC. Contrary to popular belief, shorts cannot “hide” them, because they aren’t responsible for reporting them. The bottom line is: no threshold fails, no problem with naked shorting.