It’s not about stopping short selling, it is about ensuring that short sellers
1) have a bona-fide borrow
2) have a T+3 settlement (preferably, imho, a pre-borrow/pre-settle)
2) are not re-shorting shares already borrowed and shorted
To allow short sellers to sell into a market without a real and unique borrow is tantamount to market fraud because it increases the supply of “shares” (which they are actually not, they are ‘share entitlements’ which are not registered securities according to the letter of the law). Economics 101 teaches that the result of increased supply of a commondity without a commensurate increase in demand usually results in a declining price. So as long as the shorts do not cover, or settle their borrow, or do not secure bona-fide and unique borrows, they succeed in creating inflation for ‘shares’ in the which in almost every case results in devaluation of the stock price.
Oh, I absolutely agree. Naked shorting is without any question an insider gaming of the system that is destructive to everything it touches except for the perps.