Naked Shorted Stocks

by: Bespoke Investment Group posted on: July 15, 2008 | about stocks: ACAS / ARTC / CACB / CMG / CORS / CREE / DSL / FED / FTBK / GHL / HOV / JOSB / LZB / MTH / NFLX / NILE / NTRI / PALM / PII / PRAA / SHLD / UA / UCBI / WABC / WGO    

With all this talk today about limiting "naked short selling" for FNM, FRE, and primary dealers (dismiss the fact that it is already illegal to do for all stocks, making it ironic that the SEC is only now going to focus on a few), below we highlight S&P 1500 stocks that have been on the "Threshold Securities" list for the most consecutive days. 

These stocks have ongoing failure to deliver problems, meaning short sellers are most likely not officially borrowing (naked shorting) them before going short.  As shown, Chipotle (CMG) has been on the list the most consecutive days at 457.  CMG is followed by Corus Bankshares (CORS), Cree (CREE), La-Z-Boy (LZB) and and Meritage Homes (MTH). 

If the focus on naked shorting continues to pick up steam, these stocks could see some serious short covering action (many are already doing very well today). 

Thresholdlist

This article has 10 comments! Add yours below...

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This article has 10 comments:

  •  
    fatcat
    Jul 15 08:37 PM
    I watched a stock that should have had a short cover rally a couple of months ago.I had no position(thank God),but it was a perfect example of market manipulation I've ever seen in many years...In case you are wondering..CALM...chec... the charts..
  •  
    rookie101
    Jul 15 09:54 PM
    If I short a stock how do I know my broker has borrowed the stock before I sell it?

  •  
    lavalyn
    Jul 15 11:56 PM
    That's your broker's problem, not yours. They're supposed to do the locate for you, as your agent.
  •  
    rookie101
    Jul 16 12:19 AM
    so how is it possible to naked short?
  •  
    fxtrader07
    Jul 16 03:46 AM
    this is frickin' unbelievable!
    The sec bans already forbidden (but still growing!) naked shorting just for a handful of selected darling stocks. what about the others? Don't other companies have the smae right to be protected against such illegal bear attacks?
    So in essence, naked shorts on Goldman Sucks are bann3ed - but naked shorts BY Goldman are not? That's really weird. Unbelievable.
  •  
    dadodge2
    Jul 16 04:31 AM
    You guys are the most dollar-short, day-late self-appointed experts here.

    Somebody actually pays for your advice and existence? LOL.

    And change your picture. It sucks.
  •  
    adan
    Jul 16 09:23 AM
    My Website
    the selection of just a few stocks to enforce already existent naked shorting rules, is what is making the market negative - the sense of fairness, no matter now tenuous in reality anyway, has been ruptured
  •  
    tom_mullen77
    7
    Jul 16 01:47 PM
    Incredible - the SEC is only going to enforce the law for certain stocks.
  •  
    jjason
    Jul 17 09:27 AM
    Thank you for the article, Bespoke. Do you know a law firm that has the experience to investigate who is responsible for the naked short selling?

    Can the firms and individuals that are involved in naked short selling be sued by shareholders who have lost money because of the naked short selling?
  •  
    DeAnne
    Aug 05 08:50 PM
    My Website
    Can you recommend some reading material so I can better wrap my head around the whole "shorting" and "naked shorting" concepts?

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