March 20, 2008
Naked shorting is already illegal. The SEC already has authority to use it's discretion to force closure and settlement of all failed deliveries for a security, under proper circumstances.
Assuming the detail of these circumstances must surely be public knowledge, I wrote/called the SEC asking what the circumstances are or which documents make them explicit. Here is what I was told in a reply dated Mar 20, 2008:
"I dont believe that we have information available to the public as to what criteria our Enforcement Division may use to guide its exercise of discretion as to whether it should take action, and if so, what action it should take regarding questionable situations involving naked short selling. I am sorry that I do not have more information responsive "
So, it's a secret how they apply their authority to uphold the laws they are charged with assuring compliance with? This would never work for any other regulatory agency. How can this be? How? What a travesty against the investor who relies on the rule of fair play.
Please introduce some transparency as to the SEC's role around naked shorting.