A market maker should only be there to ensure that there is a bid and an ask on the stock at all times. This ensures an orderly market. In Canada the companies must pay and retain ONE brokerage house to ensure this. ONE and ONE only. That broker ties to maintain an orderly market. I'm not 100 % clear if he can legally naked short for a short period of time but I doubt it. Usually the broker works closely with the insiders and if there is big demand for the shares he insists that insiders sell or else get some kind of a financing going through to dull the demand. A FAR better system. But more importantly what we do have is immensely better monitoring by the exchange itself. When they note a runaway market the trading gets halted .. almost instantaneously.
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