If an investor (by your leave there is no sharp line between investor and speculator) wishes to expose his own portfolio to unlimited losses, that is his own business. If a banker or manager decides to expose others' portfolios to unlimited losses, that is an abrogation of fiduciary responsibility and probably should be subject to prosecution.
My problem with Naked Shorts is that the investor doesn’t OWN them. If he owned them that’s different, but he doesn’t. Naked Shorts can and definitely do lead into major stack manipulation.
In most ways this a moral thing for me. Naked shorts are just like a stranger coming into my yard and borrowing my tools and my lawn mower and using them irresponsibly and then returning them either damaged or broken.
I lost my value and usability of my tools and he got everything out of them with little or no consequences since I didn’t know he was doing it in the first place and now its too late to stop him.