Replies to post #35834 on Techcom Inc (TCRI)

[breezin_chs]

I'll stand by my original question.

When does bona-fide market making become abusive short selling?

For the record, I understand the benefits of short selling. If the Pinks are one step up from selling shares out of a car trunk outside of a strip club, then I'm glad somebody is willing to make a market in them, which includes short selling to provide liquidity.

However, I still have a hard time reconciling the fact that market makers can OWN Pink stocks and CANNOT own listed stocks.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=50860557

If abusive shorting was that easy to recognize; why hasn't the SEC noticed it?

They have and that's one reason, IMO, they're finally consolidating their audit trail.

In some of the more recent SEC/FINRA docs, the regulators are acutely aware (finally) of the abuses.

Feb. 26, 2010_Amendments to Regulation SHO_34-61595
Although short selling serves useful market purposes, it also may be used to drive down the price of a security or as a tool to accelerate a declining market in a security. In addition, short selling may be used to illegally manipulate stock prices. One example is the “bear raid” where an equity security is sold short in an effort to drive down the price of the security by creating an imbalance of sell-side interest. This unrestricted short selling could exacerbate a declining market in a security by increasing pressure from the sell-side, eliminating bids, and causing a further reduction in the price of a security by creating an appearance that the security’s price is falling for fundamental reasons, when the decline, or the speed of the decline, is being driven by other factors.

In a FINRA doc, twenty types of suspicious activity are identified, including market manipulation, money laundering/structuring, prearranged or other non-competitive trading, securities fraud, wash or other fictitious trading ...

the friction factor is 0, which means there is no manipulative activity detected.

You're kidding, right? The Friction Factor is only ONE measure of behavior in the share price, plus you only chose two zero days. In that doc, which only covers Feb 1-Mar 9, there were eleven off-the-wall days by that factor.

Sorry, common sense and the SEC/FINRA docs/regs lead me to believe that there is a reason for the enormous daily-short percentages. A guess: Huge speculative position in RMDM held by the MM's, which is supposedly illegal?

Time to buy?

IMO