Naked Shorts Eye Internet Japan
"In the case of IIJ, it is evident that the stock's own volatility created the naked short position in the first place," says Ronk. "The fact that IIJ is an ADS could make the shares even more difficult to locate since U.S. brokerage firms may have to go overseas to request to borrow shares against short positions on their own books."
So, why is IIJ still on the list despite what appears to be an attempt to close out the position? Stocks routinely stay on the threshold list for five days after delivery failures have been cleared out. Also, new delivery failures may have appeared in the meantime.
Or, it could be that the exchanges are lax in forcing broker-dealers to actually close out the positions. Ronk notes that out of 299 companies on threshold lists, nearly half have been on those lists for more than 13 days.
Short-selling, of course, isn't illegal. And as the SEC points out in its
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