about this blog
Alexis Glick is an anchor for FOX Business Network. Prior to joining FOX, Glick served as a correspondent for the Today Show and co-anchored the third hour of that program. Before her stint at NBC News, she was the senior trading correspondent for CNBC and reported from the floor of the New York Stock Exchange.
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rob Kornfeld
Great article. Unfortnately, it's like the fox guarding the hen house. After all, the SEC has done a lousy job policing the naked short selling practice which is illegal and which has caused many innocent shareholders to lose hundreds of millions of dollars. Until the SEC starts cracking down on hedge funds, and financial institutions, this practice will continue. I suggest that if one major financial institution was prosectued and made an example, this practice would be placed in jeopardy. It is so rampant that many firms would go out of business because they simple short a stock, don't deliver and trade imaginary shares back and forth with other cohorts. Rather than worring about the ramifications and fall out to Wall street firms if the SEC acts and enforces the laws, the SEC should look out for the innocent guy and not worry about its financial associates or their firms going down. I ask that the SEC take immediate action to stop this horrific pattern and practice which is simply abusive and erodes trust in our financial system.
Jean-Paul
Former S.E.C. Commissioner Roel Campos has published a remarkable commentary in FORBES, entitled "Protection for All." Straight from one who knows. The facts and data are there. Congress do something! Demand the SEC and regulators enforce existing laws against this theft of a nation. Here's the damning opening and link to the full story: PROTECTION FOR ALL Roel Campos, 07.31.08, 5:25 PM ET Naked short-selling is a major contributor to market turmoil. After years of arguing to the contrary, the Securities and Exchange Commission has finally acknowledged that the practice of short-selling without pre-borrowing or locating shares can be harmful to large public companies. It is time that it acknowledges the harm it does to small ones as well. http://www.forbes.com/opinions/2008/07/31/naked-short-selling-oped-cx_rc_0731regulation.html
shawn brandom
i like this quote from mark mitchells recent article. "Certainly, there is nothing “imaginary” about the SEC data showing that as of March 31, $8.7 billion worth of stock had “failed to deliver.” Most of those failures were the result of illegal naked short selling – hedge funds and their brokers offloading stock that they had not, and never intended, to borrow. Experts agree that there is at least ten times more of this phantom stock in parts of the system – such as “ex-clearing” – for which the SEC provides no public data." i downloaded the data on fails to deliver from the s.e.c. web site for the first quarter of this year and it totalled well over 64 BILLION fails. SEEMS LIKE A FRIKKEN PROBLEM TO ME.
Tom Vallarino
As to the critics that say the number of "fails to deliver" have increased due to the increase in general trade volume, I have a few things to say: 1. Regardless of the trade volume, "fails to deliver" should not be happening at all 2. "fails to deliver" securities have increased in number faster than the trade volume "From December 2006 to December 2007, fails to deliver at the National Securities Clearing Corporation (NSCC) increased by 99%.2 At the same time, the value of transactions entering CNS increased by only 62%.3." This naked short selling problem also extends to bonds and treasuries: "In fact, the value of settlement failures in the bond markets is many times that of equity markets. My research shows that bond trade fails also increased from 2006 to 2007, though not at the rate of increase seen in equity trades. While some progress was made to reduce bond market settlement failures from about 8% of all trades to less than 5% from 2005 to 2006, bond trades failed at an increased rate of 5.4% in 2007. Preliminary data for 2008 indicate that this will be a record year for settlement failures." - Susan Trimbath, May 2008 "Nearly 9% of US Treasury trades resulted in a failure to deliver in the first 5 months of 2008, compared to 1.2% in the same period last year. This figure is for trades involving Primary Dealers only and may be substantially higher for all trades." - Susan Trimbath, May 2008