pavlov

Dendreon: The Short Story

Fantastic article!
I'm not much into subscribing to newsletters but your insightful, reviting, and thought provoking article made me do it.
Now...for my 2 bits...
I was a broker for 12 years and the last 4 years I was a broker specializing in shorting.
Since I was based in Canada I was able to get away with a lot more than a US broker could.
I handled accounts for some hedge funds physically- based in the US but legally based in tha VVI's.
I ALWAYS had to check if the stock was available for shorting and was always told that it was a go.
When I started getting pressure from my compliance officer as to the legality of such, I called NASDAQ's law department and spoke to their senior lawyer who told me ( in writing) that the onus was on the US brokerage firm, which took the order, to deliver.
I and my firm were off the hook...
However...
there were times when we WERE bought in.
At which point does the trade become naked shorting?
I remember doing some trades where I would buy the convertible debenture and freely short the stock and this was not declared as a short position...legally.
Is it the same when dealing with options?
Your article seems to suggest that.
I certainly hope not!
I am not against shorting stocks.
I see it as a necessary function from keeping scams and manipulations within a limit...but there should also be a limit to the amount of shares you should be able to short of any given company.
I am currently short INSW and haven't been bought in despite the fact that there are no shares in the float. I imagine that I can continue to short it ( I'm not since it has become extremely obvious to me that it is being manipulated).
The option scenario though would allow be to buy calls to cover a never ending amount of shorting?
Please clarify for me if you can.
I DO look forward to reading your future articles since it is hard to find so much insight in such few words.

Not your brother but a new fan,

Dr. MEM (Pavlov)