They will usually cover right away especially when you see it drop quickly than bounce back, but they may not cover till a 2nd dip or end of the day.. Who knows, its illegal and unless there is an investigation no one will know what happen. SEC does nothing about it, game has been rigged for years, good luck finding any legit lawsuits on naked shorting stocks. There was alot of talk about how could GME have 140% short interest, how could it not be more obvious there was some naked shorting on that stock. Sure some hedgefunds lost some money, but I'm sure the made plenty of it back taking up new short positions when they restricted buying.