I am writing to request that FINRA reform their short-sale and FTD reporting to the highest enforcement standards possible. Specifically, I am concerned that FINRA's current blindness with regard to alternate formations of short interest through "married puts" and arranged financing leads to unquantifiable systemic risk which can then be rolled over indefinitely with low borrow rates until one (or many) grossly overexposed broker's default becomes everyone's problem. To clarify my position, I think brokers should be able to maintain legal short positions, but as you've acknowledged there are several ways that they skirt regulation and dilute securities with counterfeit shares, which siphons money from retail investors, prevents companies from raising capital, and costs thousands of jobs as these targeted companies are shorted (and then shuttered) into oblivion via cellar boxing. FINRA should not be soft on brokers and simply requesting they self report their short position is naive and ineffective. FINRA should seek to enforce daily reporting on all short positions, synthetic and otherwise, at the account-level basis. This is so FINRA can more readily identify bad actors and be proactive in their enforcement, rather than relying on brokers to submit information that may present a conflict of interest. I apologize for not being able to answer more of the well-thought out questions presented in this notice. I am a regular, retail investor who until this year would never have been involved in something like this, but I worry for the health of our markets should no action be taken. I worry for the wealth I am trying to build for me and my family, and I worry for the pensions and retirement funds of my grandparents and friends. Naked shorting is illegal and destroys livelihoods. It has been a tool for SHF's, MM's, and large brokers to rig the market and transfer wealth to themselves. Please do something big about it. Something small is not enough.
For the Public
FINRA DATA
FINRA Data provides non-commercial use of data, specifically the ability to save data views and create and manage a Bond Watchlist.
For Industry Professionals
FINPRO
Registered representatives can fulfill Continuing Education requirements, view their industry CRD record and perform other compliance tasks.
For Member Firms
FINRA GATEWAY
Firm compliance professionals can access filings and requests, run reports and submit support tickets.
For Case Participants
DR PORTAL
Arbitration and mediation case participants and FINRA neutrals can view case information and submit documents through this Dispute Resolution Portal.
Need Help? | Check System Status
Log In to other FINRA systems
Anonymous-BJ Comment On Regulatory Notice 21-19
I am writing to request that FINRA reform their short-sale and FTD reporting to the highest enforcement standards possible. Specifically, I am concerned that FINRA's current blindness with regard to alternate formations of short interest through "married puts" and arranged financing leads to unquantifiable systemic risk which can then be rolled over indefinitely with low borrow rates until one (or many) grossly overexposed broker's default becomes everyone's problem. To clarify my position, I think brokers should be able to maintain legal short positions, but as you've acknowledged there are several ways that they skirt regulation and dilute securities with counterfeit shares, which siphons money from retail investors, prevents companies from raising capital, and costs thousands of jobs as these targeted companies are shorted (and then shuttered) into oblivion via cellar boxing. FINRA should not be soft on brokers and simply requesting they self report their short position is naive and ineffective. FINRA should seek to enforce daily reporting on all short positions, synthetic and otherwise, at the account-level basis. This is so FINRA can more readily identify bad actors and be proactive in their enforcement, rather than relying on brokers to submit information that may present a conflict of interest. I apologize for not being able to answer more of the well-thought out questions presented in this notice. I am a regular, retail investor who until this year would never have been involved in something like this, but I worry for the health of our markets should no action be taken. I worry for the wealth I am trying to build for me and my family, and I worry for the pensions and retirement funds of my grandparents and friends. Naked shorting is illegal and destroys livelihoods. It has been a tool for SHF's, MM's, and large brokers to rig the market and transfer wealth to themselves. Please do something big about it. Something small is not enough.