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i don't see yet the logical connection between FTD's and naked shorting. I understand the circumstantial evidence, but not the direct link.

the only place I've seen the 2 linked was in Patrick's March explanation, where he tries to link them but it doesn't make much sense to me:

4. Strategic Failures to Deliver -
What is not allowed, however, is for investors to sell and fail-to-deliver purposefully: doing so (through a variety of mechanisms that I will explain below), in an attempt to manipulate the price of a stock, is a “strategic failure-to-deliver." Some folks believe that Strategic FTD's played a role in the 1929 meltdown. In any case, there have been regulations against it since 1933. These regulations provide for civil and criminal penalties (hence I call the miscreants, "criminals"). The slang term for “Strategic Failure to Deliver” is, “naked shorting" (because it is like normal shorting, only one is "going naked" in the sense of not having borrowed shares of stock beforehand).

what??? why is Strategic FTD equal to "naked shorting"? Can't there theoretically be other reasons for those FTD's?

One problem that comes to mind is the lack of broker call-ins. It may be the heart of the issue and we do have proof of irrational group behavior and social proof among brokers. but can't there simply be a lack of call-ins without shorting? let's say you have 2 brokers, and broker1's client wants a huge number of shares from broker2's client. For some reason, there's tons of activity in OSTK. Tons of demand for the stock from every which way. So...brokers need to transfer shares from one to another and the're shy about calling each other in so you get FTD's. What's wrong with that?

Well, if we have evidence that REG-SHO stocks are also heavily shorted we know that it's caused by shorting. (i believe we have statistics for that, right?)

But that still does not prove NAKED shorting. Am I missing additional evidence?

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