[PapaBear3625]

Multiply this transaction by, say, 1000 and you end up with more naked short 'shares' than actually exist in the world. Ridiculous, you say -- can't happen? Sorry, this is the exact state of affairs in AT LEAST 209 listed companies' shares in the US, as of May 1, 2012. And the authorities do nothing whatever about it.

If regulators wanted to actually do something about it, it would be easy. Impose a fine for "fail to deliver" at an amount equal to the highest trade price for the affected stock between the naked short sale and the delivery date -- on top of actually having to deliver the shares (buying on the open market at whatever price necessary). Naked shorts would immediately stop.

[SAJ]

Agreed and spot on, PapaBear.

However, the operative word there is "if". Regulators don't seem to be in ANY sort of hurry to correct these abuses, now do they?

;^)