Helen Avery is a journalist for Euromoney Magazine heading up global coverage of social and environmental finance. She is the managing editor of their sustainable finance podcast series. Avery also runs Euromoney’s coverage of global wealth management and philanthropy (since 2004). Throughout the years, Avery has written several articles and exposed how naked shorts and “fails to deliver” in the US equity market have been exacerbated and the sharp declines in share prices of financials.
This week, an important online news service released an article that should send shockwaves into our public markets. In very curt form, the article chronicles the many abuses of U.S. public companies by short selling manipulators, particularly through naked short selling and regular and derivative based synthetic shorting. By implication, the article recites the sheer embarrassing ineffectiveness of our regulators, who are engaged in a pattern of systematic conflicts of interest with revolving doors that are a major disgrace to our own government.
The SEC has amended legislation in a belated effort to clamp down on naked short selling. But it remains under pressure from a lobby group that ranges from senators to lawyers, and management to shareholders, who believe the new rules are having little effect
Shareholders and executives in some of the US’s smallest listed companies believe their share prices have been forced down by illegal naked shorting. This has led to a number of lawsuits, claiming unscrupulous behaviour by brokers and market-makers exploiting loopholes in the central clearing system. Those implicated dismiss the allegations as rubbish. What’s going on?