December 17, 2021
The SEC and other federal entities should investigate systemic failures to regulate duplicate share lending and naked share creation by market makers. Our financial system is at risk because no current regulatory framework exists to contain illegal and inappropriate naked short selling or duplication of borrowed shares. Designated market makers and prime brokers determine much of the liquidity of stocks on the public market, and can independently deploy numerous quasi-illegal measures to control prices based upon naked short selling and share lending despite rules aimed at combating possible predatory short selling. A viable framework for capturing such practices, and forcing compliance with established financial regulation, is greatly needed. I implore your institution to fix these issues and prevent illegal activities in our markets.