The stock loan departments of 35 brokerage firms are now being issued subpoenas. The subpeonas were issued by the Department of Justice as well as the Securities and Exchange Commission. This is most definitely in connection with the ongoing practice of naked short selling. It is defined as selling short without borrowing the necessary securities to make a delivery, thus resulting in a failure to deliver the securities to the rightful owner. The main goal of naked short selling is to engage in harmfully affecting the price creating downward pressure on the security. Today, that pressure is being forced upon various brokerage firms that have failed to stop the practice, even with the installment of Regulation SHO, which was supposed to prevent naked short selling. More to come soon as the Fed is finally starting to crack down.
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It has been stated as rumor on many blog websites. No one has proof that it is true or who it is. There is no respected news source to back it up. It would be nice but until it is on a major news source then it is still a rumor.
-------------------- Invest with your brain not with your heart.
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