Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation

Post by jameshart » Mon, Feb 01, 2021, 1:16 PM UTC

oldgradstudent wrote: post #143

darawk wrote: post #139

This is mostly nonsense. There is nothing wrong with there being more shares short than shares outstanding. It just seems problematic, until you think it through. Person A has 1 share of company Y. Person B borrows 1 share of company Y from person A, and then sells it into the market. This is called a short sale. But person B just sold their borrowed share. Now that share is owned by person C. Person C can now lend i…

> Shorting behaves the same way that fractional reserve banking does Yes. Except that the fractional reserve banking system has a lender of last resort.

Post by [deleted] » Mon, Feb 01, 2021, 1:17 PM UTC

rsp1984 wrote: post #185

Wow, it seems like none of the top commenters here have put in at least minimal effort to read and understand this. The author does not complain about short sellers per se or about the fact that more than 100% of a stock's float can be shorted. That is all nice and fine. Instead what the author does complain about is that fact that the (supposedly regulated) mechanisms for shorting a stock are fraught with loopholes…

Post by varispeed » Mon, Feb 01, 2021, 1:18 PM UTC

growse wrote: post #216

varispeed wrote: post #201

Earlier quoted context omitted.

Isn't selling something you don't own a fraud or the stock market has an exemption? The instance when A essentially sells the share to B accepting the right to receive the share back as a payment also wouldn't fly in any other environment, as this could just open the door to money laundering. So why is this accepted in the stock market? Or simply the law enforcement doesn't know how to tackle it?

Fraud requires intent to deceive. Where's the intent to deceive in short selling?

Post by auntienomen » Mon, Feb 01, 2021, 1:20 PM UTC

jml78 wrote: post #200

matwood wrote: post #181

Earlier quoted context omitted.

> This is mostly nonsense. Agreed. People should be able to take the pessimistic side of a trade. The one problem I could see with short selling is not the technical act of selling short, but the (dis)information campaign around a company that appears to follow. But, this happens both ways good and bad so it's probably a wash. > Most of Wall Street hates short sellers, because they drive down the prices of companies…

> But, this happens both ways good and bad so it's probably a wash. Only if you ignore reality. Huge hedge funds are called market movers for a reason. These hedge funds decide to short your company's stock and they have a direct impact on your stock value regardless of whether the hedge fund has any basis for actually shorting. Their "reason" can be 100% bullshit. Doesn't matter. They put a large short position on y…

Post by varispeed » Mon, Feb 01, 2021, 1:22 PM UTC

nemo44x wrote: post #222

varispeed wrote: post #201

Earlier quoted context omitted.

Isn't selling something you don't own a fraud or the stock market has an exemption? The instance when A essentially sells the share to B accepting the right to receive the share back as a payment also wouldn't fly in any other environment, as this could just open the door to money laundering. So why is this accepted in the stock market? Or simply the law enforcement doesn't know how to tackle it?

People sell things they don’t own all the time line their house or car. When you borrow a share and sell it, you’re really renting it to find one much like someone rented it to you. It’s like subletting an apartment you’re renting from a landlord. In the end there’s a chain and if the person who lent you the share wants it back then the person you loaned it to will need to produce it for you, etc. This is why we have…