If that was the case then CMKX would have to report and file that they were buying back shares. The naked short shares still have nothing to do with filing financials.
You start with the numbers that they have already provided.
800 billion authorized. 703 billion issued.
It is the TA's responsibility to know what is outstanding of that number issued.
Naked shares short DO NOT show up on a financial statement as they are and couldn't have been issued by the company.
The lawyer's argument in this case imo is total BS.