Paper: Boni Analysis of Failures-to-Deliver

Paper

Boni Analysis of Failures-to-Deliver

Robert Shapiro

Sonecon, November 2004

A new study documents that significant failures to promptly deliver shares sold short (“fails” or “failures”) are not, as many market participants assume, rare, brief and inadvertent, but rather pervasive, extended and deliberate. The analysis was done by Dr. Leslie Boni, recently a visiting financial economist at the SEC and now economics professor at the University of New Mexico. Boni’s data show that failures-to-deliver affect almost all public companies and usually last several weeks. On any day, there are 180 million-to-300 million shares involving more than 10 percent of public companies that have gone undelivered for at least two months. Failures of these dimensions can seriously distort the normal economic operations of U.S. equity markets.

PDF (2 pages): Boni Analysis of Failures-to-Deliver