Yes sure there are examples. I admit I haven’t paid attention to this subject for many years but I remember Mike Snyder doing a devastating special report (video) on naked shorting where he produced examples of companies that at the end of the day had more shorted shares outstanding than existed.
Give me some time to see if I can dig that report up.
But the real nail in the coffin for defenders/deniers of naked shorting was when Mike interviewed an investor that had bought every share of a small publicly traded company. He owned 100% of the stock and had no agreement with any brokerage to lend the shares, no hypothecation agreement.
And he showed how this company was shorted to 130% or so even though every share was owned by one individual who had never given permission to anyone to borrow his shares for shorting.
Can’t remember the name of the company but will try to find it. It’s been 4 or 5 years that I was in the market.
Also I spelled Mike's name wrong, it's Schneider not Snyder.
The company was Global Links.
Here's the relevant part of the transcript:
SCHNEIDER: In March 2005, the Senate Banking Committee confronted then-SEC Chairman William Donaldson with a story about Frank Dobrucki's company, the Nevada-based real estate holding company, Global Links. An investor named Robert Simpson had set out to prove that small companies were indeed frequent targets of abusive naked short sellers.
Simpson placed an order for $5,000 worth of stock in Global Links. That got Simpson ownership of all 1.1 million Global Link shares in the market. Not some of them, all of them.
UNIDENTIFIED: There were no shares available to be borrowed, and yet in two days, there were over 50 million shares traded. That's clearly something that needs work.
SIMPSON: I was absolutely blown away when I bought 1,282,050 shares, which equated to 111 percent of the issued and outstanding. I just couldn't even fathom that. So, it wasn't just crooked, it was Wild West times 10.
SCHNEIDER: The day all this started, trading in Global Links opened at 10 cents a share. Within a second, the price dropped to a penny. An hour and 16 minutes later, Global Links stock was trading at eight one-hundredths of a penny. Prices dropped 99 percent in less than two hours.
At various times over the past 3 years, the shares of Sirius, the satellite radio company, have shown more "short" shares than ever were issued by the company. The recent run-up over $2/share chased a lot of these away, but the naked shorters may be coming back now. They WILL be coming back w/o more money printing by Helicopter Bennie and the Inkjets, aka QE or Twist.
You'll need to go to the pinks to find most of the companies in this situation. Not surprisingly, excessive naked shorting also has the undesirable side effect of driving the share price to pennies, quite artificially.
See Bloomberg: `Phantom Shares,' Failed Trades and Naked Shorts. Scroll down to the example of a company named Global Links. An investor set out to prove naked shorting. He had bought ALL 1.1 million of the shares of Global Links. Yet there was subsequently 50 million shares worth of trading activity. He wound up owning 111% of the company.