The topic is extremely complicated. When you have time, take a look at my board on SI and www.thesanitycheck.com.
Fidelity has an obligation to provide you with good shares by law. However, the MM that sold to them has an obligation to provide them with good shares, and so on and so forth.
If there are no shares and the MM's just "make it up," that is where the issue of MM games and abuse of their exception to prohibitions vs. naked shorting comes in.
Fidelity receives the same feedback regarding orders as does every brokerage house from the DTC. It's the DTC, which is owned and operated by many different brokerage houses where the FTD's exist.
Why has there been so many cases of small companies asking shareholders to request for certs? What should be a relatively straightforward system, has been corrupted to a degree very few of us realize currently.
The electronic manufacturing of shares is a matter of every day business now. Closing this loophole in the system should be a top priority for the SEC.
Why are FTD's not reported daily? Why are hedge funds allowed to operate without being registered and licensed?
Changes to these two issues could go a long way toward correcting the problem. The process is happening in the halls of Congress and the SEC as we speak.
Despite the power of hedge-funds, change is coming.
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