Yes, MattyS and I were having a side discussion on this matter and I thought it was relevant enough for the RFMK stock to post publicly so I pasted my thoughts about the massive short sales in recent trading sessions below.
Relevant links:
http://www.finra.org/Industry/Enforcement/Dis...ions/2012/
(just for the Aug report alone Interactive Brokers paid a $550k fine for letting their massive FTD and short position to sit uncovered for years, while still other firms failed to execute a locate before shorting, UBS also had massive unresolved FTDs, etc, etc)
http://regsho.finra.org/regsho-Index.html
http://www.otcbb.com/asp/OTCE_Short_Interest.asp
"Well, the problem with that kind of assumption is that we really have no idea how many of those shorts covered within that week long time frame. Many or all of them could have been covered on the same day or within the three day settlement window or not at all, we just cannot know. Only the DTC and those firms can know what all shorts were actually covered and being a part of the total volume. I think the real issue is no one being able to be certain that the short metrics we see for biweekly short interest and daily short sales are accurate because so many crony firms decide to purposefully fail to properly report their short figures to FINRA; in the current market and regulation envrironment, its more lucrative for firms to gamble on getting caught massively short but never reporting their short position so they never cover and just let the dark shorts sit knowing all the time that they have enough capital to overwhelm all of the buying volume in the stock, so that if it ever goes up too high they could throw even more money to short and keep it down so that their dark short position never threatens their firms solvency. Even if caught by the SEC or FINRA they all get a slap on the wrist, a six month time out where they cannot short and typically a $10k fine or something, just look on the FINRA site at regulatory compliance, it happens monthly multiple times. Its out of control in the marketplace and SRO's are doing next to nothing to stamp it out and meanwhile stocks like RFMK are cellar boxed by large firms and even if the buying pressure became too great for any one firm they would all collude to put more into their shorts collectively to help each other out. Sure they could let it breifly pop to say .005 but do not expect to see it ever break away on this kind of volume. They are leaches and you cannot pull them off, the only way is to burn them off which for the stock means enough shareholders to buy and hold to be equivalent to the money they have allocated to dumping daily on the stock with shorts in an effort to always keep it cellar boxed. They have to feel threatened by the sheer magnitude of the money flowing into the stock, THEN and only then will they cover and flee. At least one good thing we can know is that with the T4T, they cannot just do more illegalities to squirm out of their massive short position by massively naked shorting and selling phantom shares, they must cover those legit shorts at some point but only if the price and volume action threatens their firms and the PPS gets away from them and they see they have no control over it. "
Wake up SEC, FINRA ! Time to smell the coffee and the truth. The truth is that all the crony firms overwhelming the market with their capital to control and manipulate price and volume in order to keep a lid on the stocks so as to not allow them to cause damage to the firms financially because of the threat of having to cover should the prices get too far away from their control, are going to continue to massively short, regardless of T4T or other scenarios, as long as the enforcement of breaking such SEC rules and regulations represent a positive risk vs reward scenario; ie.. massive shorting and never having to cover any of the nonreported shorts nets so much profit that it easily pays for any fines if they get caught and the slap on the wrist allowing them to niether confirm or deny the charges is just a big joke, they get a big laugh from the whole thing while they take a nice money shower in all of their crony profits. The question is, when will the regulatory bodies in the marketplace finally realize that this kind of shady action is going to continue to throw a cold blanket on the American dream for start up companies and any target stocks for the shorts so long as the enforcement is weak and the regs have so many loopholes it makes it all possible in the first place?? Good luck, and keep your eyes open out there.
The dark side clouds everything.
$RFMK!
