FFGO - Not surprised that Admins deleted this on t

7 Transactions may be reported through the Alternative Display Facility (“ADF”), a Trade Reporting Facility (“TRF”), or through the OTC Reporting Facility (“ORF”). The ADF, TRFs and ORF are collectively referred to herein as the “FINRA Facilities.”  Trades in certain classes of securities, such as Rule 144A securities, are reported to the ORF, but not disseminated. Non-disseminated securities will not be included in either the daily short sale volume file or the monthly short sale transaction file.

8 Certain OTC transactions (e.g., riskless principal and agency transactions where one member is acting on behalf of another member) are reported to FINRA in related tape and non-tape reports. Tape reports are submitted to FINRA for public dissemination by the appropriate exclusive Securities Information Processor (“SIP”),  while non-tape reports are submitted to FINRA, but are not submitted to the SIP for public dissemination. FINRA will not be including non-tape reports in either the daily short sale volume file or the monthly short sale transaction file.  Accordingly, in those instances where the short sale indicator is only included in the related non-tape report, the short sale data published in the daily and monthly files may be under-inclusive. Similarly, the published figures will not include odd lots since these transactions are not disseminated to the consolidated tape. 


11 While members generally are required to report trades in equity securities to FINRA within 90 seconds,  a firm could improperly delay reporting of short sales until well after the close,  which would result in the under-reporting of over-the-counter short sale volume. Delaying the reporting of trades for such a purpose would be considered a violation of the applicable trade reporting rules and Rule 2010 (Standards of Commercial Honor and Principles of Trade) .

Please take a moment to read the filing FINRA submitted to the SEC, which explains in detail what the short sale numbers include/exclude. You may find the document, filing SR-2009-064, at this link:  http://www.sec.gov/rules/sro/finra/2009/34-60807.pdf . In particular, please read footnote 8 for additional detail on of what is included/excluded in the reports. - FINRA

D. Reasons Why A Security With a Large Short Position May Not Appear on a Threshold List

There are various reasons why an equity security with a large short position may not appear on an SRO's threshold securities list, for example:

the aggregate delivery failures do not meet the definition of a threshold security in Regulation SHO;

the security's issuer is not registered or required to file reports with the Commission. For instance,  the majority of issuers quoted on the Pink Sheets do not file reports or register with the Commission, and so would not appear on threshold lists.

Is naked short selling the reason my stock has lost value?

Investors should always use caution before investing in high-risk, speculative stocks, especially with regard to their retirement portfolios, because all stocks may decline in value. There are many reasons why a stock may decline in value. The value of a stock is determined by the basic relationship between supply and demand. If many people want a stock (demand is high), then the price will rise. If a few people want a stock (demand is low), then the price will fall. The main factor determining the demand for a stock is the quality of the company itself. If the company is fundamentally strong, that is, if it is generating positive income, its stock is less likely to lose value.

Speculative stocks, such as microcap stocks, often have a high probability of declining in value and a low probability of experiencing above average gains. For example, investors should take extra care to thoroughly research any company quoted exclusively in the Pink Sheets. With the exception of a few foreign issuers, the companies quoted in the Pink Sheets tend to be closely held, extremely small or thinly traded. Most do not meet the minimum listing requirements for trading on a national securities exchange, such as the New York Stock Exchange or the Nasdaq Stock Market. Many of these companies do not file periodic reports or audited financial statements with the SEC, making it very difficult for investors to find reliable, unbiased information about those companies. 

There also may be instances where a company insider or paid promoter provides false and misleading excuses for why a company's stock price has recently decreased. For instance, these individuals may claim that the price decrease is a temporary condition resulting from the activities of naked short sellers. The insiders or promoters may hope to use this misinformation to move the price back up so they can dump their own stock at higher prices. Often, the price decrease is a result of the company's poor financial situation rather than the reasons provided by the insiders or promoters.

Naked short selling, however, can have negative effects on the market.  Fraudsters may use naked short selling as a tool to manipulate the market. Market manipulation is illegal. The SEC has toughened its rules and is vigilant about taking actions against wrongdoers. Fails to deliver that persist for an extended period of time may result in a significantly large unfulfilled delivery obligation at the clearing agency where trades are settled. Regulation SHO is intended to address these effects by reducing the number of potential failures to deliver, and by limiting the time in which a broker can permit a fail to deliver to persist. For instance, as explained above, Regulation SHO requires brokers and dealers to close-out the open fail-to-deliver positions in "threshold securities" (i.e., securities that have experienced a substantial number of extended delivery failures) that have persisted for 13 consecutive settlement days.