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I that is the SEC for you. At one if the firms I worked at we had an algorithmic trader who did hundreds of thousands of naked shorts (selling short a stock he

I that is the SEC for you. At one if the firms I worked at we had an algorithmic trader who did hundreds of thousands of naked shorts (selling short a stock he didn’t own). He always canceled the order, bought shares, or swapped internally but was still a no-no, and he would do this thousands of times a day. He got caught and we put together a report of his activity that required a hand truck to deliver. The SEC took one look at that and made the firm promise to increase their internal oversight and that was it. They didn’t even open any of the boxes.

H8crilA 7y ago
Naked shorts are still legal if you're a market maker, for example. They're not entirely bad, it's sort of like credit - it's only bad when you fail to deliver. If you do deliver then it's great as it lubricates the system. See "Regulation SHO": https://www.sec.gov/investor/pubs/regsho.htm https://www.sec.gov/investor/pubs/regsho.htm Not sure if this was the case at your company, i.e. if they had the permission to do so. If not then I don't know why they didn't prosecute that trader. Most organizations cannot do naked shorts and have to pre-borrow securities.