April 25, 2008
My husband and I are probably fairly typical small investors with limited knowledge of how the whole market works. We have had a certain amount of trust that the market works in a manner that allows businesses to grow and profit in an atmosphere according to the acumen of its management, the product, fickleness of the public and monies invested. Or lack of the same which may cause a company to go belly up.
We were introduced to the term naked shares, phantom shares and other similar terms to describe the action of some traders that can manipulate a stock that gets targeted. We have been invested in such a stock for several years now that has been a victim of naked selling. This action was a complete surprise to us and we wondered why this activity is allowed. Why was there no attempt to stop this unlawful action. If the general public was aware of this activity, I am sure there would be more complaints and demands to pass laws to stop this stealing from the general public and their efforts to crash a stock.
The stock we are concerned with has had nothing but positive stories coming from management and news stories for 2 years and is in a sector that should have stock growth. A non-polluting, renewable energy source, and also automobile innovations that would allow a SUV to get up to 100 miles per gallon. Everything is moving forward except the value of the stock. It has been crushed several times by naked selling. There are no shares for them to borrow so they 'manufacture' them. The shares do not exist. This is dishonest and that is a basic Americans value.
Phantom trading is not a small problem. I heard that the daily phantom shares traded is $6 billion. That is not small potatoes
Please force these unlawful, unethical greedy people from their activity. Allow business to fail or grow on their own and not manipulated by greedy traders.