Multiple wayS to hide naked shorting because ITS ILLEGAL. Marking a short position Long to conceal Naked Shorting is just one way!
Go DBMM
"• that the BD was aware of prior compliance concerns regarding the hedge fund;
• the hedge fund’s net short position in the securities it was selling in its brokerage account;
statements by hedge fund employees that they did not expect to deliver the securities by the settlement date;
• the hedge fund’s failure to provide documentation showing that it owned the securities on the trade date; and
• the hedge fund’s repeated failure to deliver the securities by the settlement date.
Despite these and other red flags, the BD allegedly continued to mark the hedge fund’s orders as “long” and “short exempt” without taking reasonable steps to determine whether those order markings were correct. The BD also allegedly failed to borrow or locate the shares before effecting what were, in reality, short sales."
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