RE: Bashing schemeIf the shares are not delivered in time while the trade settles, a "failure to deliver" (FTD) is put into the system. This is a kind of IOU, which will be replaced by the actual shares. However, rogue
traders can swamp the market with these FTDs... and voila, naked shorts apppear.
The problem is the delay in settling the trades. This gives some
crooks the opportunity to cheat the system. I saw a presentation a while back, but don't remember the link. Pretty disturbing stuff though...