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Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation

counterfeitingstock.com

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Re: Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation

#11

Post by jariel »

dragosmocrii wrote: post #5

Holly shit, this is an exceptionally informative piece of information. It makes sense now why the GME movement, but I doubt that most who joined it actually understand the purpose. This needs to be more widespread

There needs to be a lot more evidence than some random screed on the web.

He barely gave a single example 'TASER' and frankly didn't really specifically indicate how that worked.

With 100 companies at any time under the squeeze it should be relatively easy for him to give a lot of examples and to specifically list the trades themselves, but also point at the 'media barrage' and highlight the asymmetrical effect those 'shadow shares' have.

It's a neat idea and maybe there's some truthiness to it, but there's no evidence.

Re: Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation

#12

Post by konschubert »

Shitty companies failing is a necessary and important mechanism of a functioning economy.

Look at the Soviet Union for an example of what happens when no companies ever go bankrupt.

Short activists expose shitty companies and as such, they play an important role in the economy.

Maybe Wirecard's fraud scheme would still be going on if it wasn't for short sellers.

Maybe shorting, in particular naked shorting, is not ideal. But there needs to be a way to reward people for taking shitty companies down.

Re: Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation

#13

Post by konschubert »

rax0m wrote: post #10
SheinhardtWigCo wrote: post #4

Correct title is “Counterfeiting Stock 2.0”. The document doesn’t allege illegal activity; it describes things the author believes should be illegal. Also: > In compiling the information contained in this website, the author relied on sources — both public and private — and, for the most part, accepted the information from the source as reliable. This only works when the piece is written or published by someone willi…

Naked short selling is illegal [1] [1]: https://www.investopedia.com/terms/n/nakedshorting.asp

> Despite being made illegal after the 2008–09 financial crisis, naked shorting continues to happen because of loopholes in rules and discrepancies between paper and electronic trading systems.

Doesn't sound like it was properly made illegal. Should probably fix those rules.

Re: Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation

#14

Post by JumpCrisscross »

konschubert wrote: post #13
rax0m wrote: post #10

Earlier quoted context omitted.

Naked short selling is illegal [1] [1]: https://www.investopedia.com/terms/n/nakedshorting.asp

> Despite being made illegal after the 2008–09 financial crisis, naked shorting continues to happen because of loopholes in rules and discrepancies between paper and electronic trading systems. Doesn't sound like it was properly made illegal. Should probably fix those rules.

> Does your broker automatically loan out your shares?

The “loopholes” are intentional carve outs for market makers [1]. Something you want unless you like market makers disconnecting every time the market hiccups.

[1] https://www.law.cornell.edu/cfr/text/17/242.203

Re: Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation

#15

Post by [deleted] »

SheinhardtWigCo wrote: post #4

Correct title is “Counterfeiting Stock 2.0”. The document doesn’t allege illegal activity; it describes things the author believes should be illegal. Also: > In compiling the information contained in this website, the author relied on sources — both public and private — and, for the most part, accepted the information from the source as reliable. This only works when the piece is written or published by someone willi…

[deleted]

Re: Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation

#17

Post by siegecraft »

TekMol wrote: post #6

I wish there was an audio version of this. I find it much easier to consume information via headphones while I do the dishes then to sit down and read it through. It is also a good opportunities to give the eyes some reast from monitor work. Any tips if one wants to learn this via listening?

I used to use the text-to-speech feature of pocket for this use case.

Re: Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation

#18

Post by woopwoop »

The author seems to be really upset about this, but I don't understand why. Nothing they are describing, if you ignore histrionic language like "counterfeiting", seems especially nefarious. Maybe I am misunderstanding. Basically, a short is when A borrows from B a share of corporation C with the promise to return a share of corporation C at a later time, plus some cash interest. A naked short is where instead B gives cash equal to the value of a share of corporation C minus some interest to A, with the promise that at a later time A will deliver a share of corporation C to B. The second activity seems functionally equivalent to the first, and I don't understand why I'm supposed to be outraged by either.

Re: Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation

#19

Post by jb775 »

bouncycastle wrote: post #8

Counterfeit shares? Really? These are not really counterfeit shares, because they do not pay dividends or have any voting ability, the companies do not recognize them. More like "synthetic assets" that have the price pegged to the asset they mimic.

The author likely used the term "counterfeit" since they're essentially copying the shares and redistributing them as if they represent the same value as the original, just like counterfeit money.

Re: Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation

#20

Post by sanxiyn »

konschubert wrote: post #12

Shitty companies failing is a necessary and important mechanism of a functioning economy. Look at the Soviet Union for an example of what happens when no companies ever go bankrupt. Short activists expose shitty companies and as such, they play an important role in the economy. Maybe Wirecard's fraud scheme would still be going on if it wasn't for short sellers. Maybe shorting, in particular naked shorting, is not id…

Japan banned naked shorting (of course Japan did not ban shorting) and seems to be doing fine. US probably can ban naked shorting without much problem too.
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