Rob Kirby On Naked Shorts

Rob Kirby has just posted an impressive story about incompetence in government as to its dealings with the “naked short” problem and the firms that are supposed to be self regulating instead seem to be self serving. And, it’s costing investors millions, maybe billions. Entitled Failure To Deliver Or “Deliverence”? Rob encourages us to view Darkside of the Looking Glass:

The narrative explains, with the aid of graphics, stock settlement mechanisms on the large exchanges. It clearly illustrates how some broker-dealers and their biggest clients – hedge funds and their financial backers can, and do “game” [commit FRAUD] the Depository Trust Clearing Corporation [DTCC]. The DTCC is supposed to act as a back office for Wall Street firms – electronically settling inter-dealer equity transactions.

It explains how a significant portion of the NYSE and NASDAQ’s combined daily trade of roughly 2.5 billion shares – does not settle properly. This means the alleged seller of stock takes the buyer’s money, but never delivers the shares they supposedly sold. Instead, they [or their broker dealer] send a “stock IOU” creating a Failure To Deliver, or FTD, to the buyer’s agent/broker.

Rob Kirby Naked Shorts Darkside of the Looking Glass Mover Mike

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