RE:Much of this type of "shorting" is legal Well, looks like something or someone stimulated a bit of short covering, today. Wonder where that came from?)
In reply to a number of posters who are not clear about the nature of this US short position on the OTC market, I can only add a few clarifications. I am not an expert, and I await investigations and decisions regarding these transactions from IIROC, OSC, and FINRA.
It would seem to me that if a legitimate US client wants to own TOS they can simply do so using the TSTIF security symbol and the OTC market, just as we in Canada use the TOS symbol. The OTC market has, as one of its functions, to act to purchase foreign stocks for US participants. Then, any short position taken in the OTC market would be covered as per the rules and regulations (preventing naked short selling in that same OTC market). If a US client wishes to purchase TOS, he can simply do this using a broker dealer who is registered in both Canada and the US, but the trade will be in Canada and subject to Canadian regulation, which again prohibits naked short selling.
If, however, as GoPats has correctly stated, a US client is limited by their 'charter' from owning Canadian stocks, the process is that a Canadian broker with a US arm, such as TD, will, for a fee and/or a % of the profit, agree to hold TOS shares for the US entity and (to reduce TD's their risk??) the Canadian broker will as part of the deal short a similar number of shares on the OTC and sell these shares short to the US interested party. But, why is there no share sale transaction to reflect this on the OTC market??
Also, what none of this explains is the more than coincidental rise of US OTC short interest in nearly identical numbers to the decline in shorts listed on the Canadian market (and visa versa) that has occurred over the past year, and, I predict, has occurred again during this recent bear raid.
This activity is questionable if it relates to indirect market manipulation to facitiliate repeated bear raids such as we have just experienced in TOS.
This is being looked into by IIROC and FINRA. The fact that TOS has traded in this huge volume on a day of no news, except what an interested party has posted here on this silly site, suggests that some are running for cover. While the US transactions look like naked shorts with no possibility to cover in the OTC market, they may not be, though the transactions are unusual, but the sales on the OTC market must be reported or the brokers will be in violation of SEC rules.
My broker has described that such a transaction could certainly occur, as OTC and TSX securities are interchangable by a broker that is listed in both the US and Canada, but no one, not FINRA or IIROC can explain why there are no sales of shares transactions on the OTC to coincide with the short position trades.
These shenanagans do, however, raise the issue GoPats has noted in the past, namely, that TSO3 should asap obtain a US listing, possibly on NASDAQ, to increase liquidity and allow obviously interested US clients to take a positive position in the company. This would obviously benefit the share price and increase liquidity substantially.
I wrote this this morning: "BTW, I strongly suspect the most recent bear raid is peetering out, with the shorts now starting to cover. The volume is huge today on no news. Again, with the relative news vacuum over the next month, they will take their sweet time covering and avoiding putting any upward pressure on the share price in order to maximize profits. Unless, of course, positive news comes out unexpectedly, or a new broker steps out with positive coverage, with both of these events causing the shorts to have to cover more quickly and be squeezed. But, I am amazed how willing some are to sell into these shorts at these ridiculous valuations."
A close around 2.80 on no news? "Come on Man?!"
The shorts are eating their trade!
Wait until we have some news, and they will be throwing up all over the floor. "Bless their little pointed heads!"
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