jdlech

Dark Pools of Liquidity Are Coming Around Again

Perhaps you should complain. Dark pools of liquidity are fine, in and of themselves. They provide a much needed level of safety for the big dogs whose rivals like to screw with them as much as possible. If the big companies got along like civilized people, there would be no need for dark pools. But such is not a part of the real world.
So these pools are tolerated. But as we can plainly see, a hedge fund could naked short a quarter million shares without anyone knowing about it until those shares move out of the pool and into the regular market. All the SEC would see is the shares coming out of the pool; but not know who sold them. Bit when it comes time for the pool owners to report the non delivery of a quarter million shares, the SEC should punish the pool owner. What never enters or leaves the pools will not harm the open market or those trading openly. It's what flows into and out of them that can help or harm the retail investor.

Ultimately, the pool owners should be the ones taking responsibility for all that goes into and comes out of their pools. I just hope the SEC agrees with me.