Article: ‘Naked’ short selling is center of looming legal battle

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‘Naked’ short selling is center of looming legal battle

Companies on the defensive seize upon an aggressive form of shorting

Alistair Barr

MarketWatch, 14 June 2006

By one contentious estimate, it’s a big problem plaguing more than 10% of stocks on the New York Stock Exchange and Nasdaq. An NYSE probe into whether naked shorting was used to force down shares of Vonage Holdings Corp. VG, +3.53% lower during the Internet phone company’s May initial public offering has added fuel to the fire. See full story.

“There are a group of bad guys rigging the market by selling tens of millions of shares everyday that they don’t own and never deliver.”

— Wes Christian, securities lawyer

Read full article.

Comment: The naked short selling appears to be closer to 50% of the market. The amount stolen is now documented at no less than $100 trillion, with $180 trillion in additional collateral damage (the outright destruction of value).