Ban the Bots: Canadian Small Caps Unite in Billion-Dollar Battle Against Naked Short Selling
Terry Lynch Uncovers potential $1 Trillion Market Manipulation: Small Cap Companies Rally for Justice
Naked short selling is a predatory practice where individuals sell shares they have not borrowed or do not possess, artificially inflating the supply of shares and illegally depressing stock prices.
Unlike legitimate short selling, which can provide market liquidity and price discovery, naked short selling is often used as a tool for unfair market manipulation.
The Devastating Impact of Naked Short Selling
Terry Lynch, co-founder of Save Canadian Mining (SCM), has uncovered alarming evidence of widespread naked short selling in the Canadian small cap market. His research suggests that this practice has cost Canadian junior mining companies a staggering $40 billion, with potential losses ballooning to over $500 billion or even $1 trillion when considering all Canadian small cap companies.
The consequences of this predatory practice are far-reaching. It undermines the value of shares, erodes investor confidence, and severely impacts companies' ability to attract and maintain investment. This, in turn, hampers growth and innovation in the small cap sector, a crucial engine of economic development.
A Call to Action
The time has come for decisive action against naked short selling. SCM's two-part plan offers a promising path forward:
An immediate ban on Short Exempt Status for market makers not employed by the company, with limited exceptions.
Filing a billion-dollar plus class action lawsuit against those responsible for the damages caused by predatory short selling.
A recent federal court ruling has significantly strengthened the legal position against naked short selling. In September 2023, the Federal District Court of the Southern District of New York ruled that broker-dealers can be held primarily liable for failing to monitor their clients' trading actions.
This landmark decision opens the door for holding financial institutions accountable for their role in facilitating naked short selling.
The Path Forward
To combat this threat to market integrity, we must unite. Companies, investors, and regulators must work together to support initiatives like SCM's "Ban the Bots" campaign and potential legal action. By raising awareness, advocating for stricter regulations, and holding bad actors accountable, we can restore fairness and stability to the small cap market.
The fight against naked short selling is not just about protecting individual companies or investors. It's about safeguarding the integrity of our financial markets, ensuring fair opportunities for growth and innovation, and ultimately, securing that the market rewards investors and protects this critical part of our economy and quality of life.
The time to act is now.
