That's why I'd like to see the rules changed so the buyer can demand compliance. If the stock goes up after the short-seller has sold it, and the seller can't prove when he got it, the buyer gets the stock at the cheapest price the seller could have obtained it. If the stock goes down and the buyer no longer wants it, the seller has to see what he can do with the shares he finally acquired but didn't sell.
I would think letting market participants enforce the rules when they have an incentive to do so would be better than leaving enforcement in the hands of an agency with little such incentive.
Ah, HERE it is. The report I saw that's the genesis of my question. 25min.