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Naked Short Sellers = Criminals

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I would not be surprised if Anonymous Traders are doing this. The Masked Bandit's 

Canadian Banks Make $Billions off Naked Short Sales

Below is part of an article from the Small Cap Advocacy Group, explaining that Canadian Banks are making Big profits off of Naked Short Selling and currently trying to stop the practice that is costing Canadian Small Cap Companies and Investors many $Billions. They have gone public with their findings and asking for support to make the changes needed to stop this predatory practice. A link to their website is in the paragraph below.

"Terry Lynch is the CEO of Power Nickel and the co-Founder of “Save Canadian Mining”,  Save Canadian Mining  the small cap stock advocacy group backed by industry giants such as Eric Sprott, Keith Neumayer, Robert McEwen and multiple sponsors who have worked tirelessly and given generously over the last 4 years to conduct research, create reports and meet with key government officials & regulatory bodies … for the singular purpose of putting an end to the devastating practice of illegal short selling in the Canadian small cap market"



"In Canada’s stock markets naked short selling goes on unabated every single day, and the public is largely unaware that banks generate significant revenue and profits from this activity. Every time you buy or sell shares you are subject to this risk.

The 6 chartered banks are the largest and most active hedge funds in Canada. They are regulated by the Canadian Investment Regulatory Organization (“CIRO”), a self-regulatory body that is funded by the banks and other industry participants, so they are resistant to reform that would hinder their own profitability. In other words, CIRO is conflicted. US and international hedge funds have learned that Canada does not regulate short selling like other nations do so we attract inordinate inflows of hedge funds seeking to profit from the loopholes and lack of oversight and enforcement arising from our self-regulated securities industry.

Our banks do not break out short trading or stock lending revenues in their financial statements. However, we can arrive at a reasonable proxy by looking closely at their 2023 annual reports. Our estimates show that collectively the 6 chartered banks may have generated ‘short’ revenues of as much as $12.5 billion and profits of $4.2 billion last year. Using their current P/E multiples that implies their ‘shorting’ business could be worth upwards of $48 billion.

In 2021 Finder.com, reported that 1 in 3 Canadians bought or sold shares on Canadian stock markets, which means they may have unknowingly paid our chartered banks $12.5 billion. When we include US and international hedge funds, a study conducted by CIRO in December 2022 reported “failed” trade volume, which can also be labeled “counterfeit” trade volume, ranged from approximately 3% to 19%, depending on the exchange. Therefore, based on trade volumes in 2023, counterfeit short selling totaled $121.9 billion which translates to an average cost of $9,800 per retail investor. In reality, it would be a fraction of this amount for smaller investors and a multiple of this amount for active traders and high net worth bank clients.

Counterfeit short selling has been facilitated by CIRO’s decision to rescind the ‘tick test’ in 2012 and their lack of oversight and enforcement of the existing rules plus their unwillingness to institute new rules to prevent manipulation and malfeasance. Conclusion - Canadians are unknowingly burdened with a significant cost arising from loopholes and non-existent enforcement in our self-regulated structure which CIRO is doing nothing to prevent because they are conflicted.

Recommendations:
Impose a temporary ban on all naked short selling activity to determine the scope and scale of the overall problem.
Appoint a national securities regulator that is not conflicted to oversee the damage assessment from the loopholes, lax enforcement and naked counterfeit short selling, with powers both to compel and enforce.