Interesting "What If" naked shorting.
Consider this and really think about it. Let's say that someone was doing some toxic funding and they were given a lot of CSHD shares. Now let's say that same person "illegally, i.e. naked" shorted a lot of shares (although not truly naked because they have shares but the shares are not in the hands of the broker). So now this person has created a real naked short position in the company. Now let's say that the company is in on this and knows for fact now that naked shorts exist. The company uses that to try to manipulate the stock price. The true naked shorts are "partners" with the company and are in no danger of being burned by a short squeeze because they have shares they can deliver at a later date. The "parnters" can make money when the stock is up by selling shares. The "partners" can also make money on the way down by shorting the stock. The "partners" make money going and coming and a number of other creative ways. So, yes, in this case, there really are naked shorts, but the catch is the company planned the naked shorts.
The only losers are the shareholders that have blind faith.
This is all hypothetical and should not be considered as a real scenario. It's just a "what if" and something to think about.
The SEC isn't big enough to keep up with all the big board filings and monitor those companies. Do you really think they can take on the pinks?
If you want the pinks monitored, it's going to take tax money and a new division of goverment or branch of the SEC. I'm all for it, but you can't magically create it out of no funding.