July 15, 2011
Undisclosed and "naked" short selling should be illegal. Any company receiving a FTD ("failure to deliver") notice should be fined 3x the value of the shorted (borrowed) security. This would eliminate the clear practice of "fake" shares.
One of the companies I own, LDK solar has cleared be attacked by naked short sellers who can effectively produce as many shares as they want, overwhelming the market.
I have NEVER, in 30+ years of investing, seen a growing company trading at a PE of 2, a PEG of 0.3, and below book value. This could not occur in a "normal" market scenario.
This should be considered a criminal act, prevented, and prosecuted when it occurs