Forget Thanksgiving. The conspiracy theorists are already feasting.
The Securities and Exchange Commission, the stock market’s No. 1 rule enforcer, is three weeks late in publishing fails-to-deliver data for the first half of October. That’s despite the fact that the regulator managed to release the data for the second half of October on time.
The SEC’s late arrival to the data party is stirring up chatter among the naked short-selling truthers. They’re eyeing the SEC with a raised eyebrow, wondering if there’s a secret plot brewing. That shouldn’t come as a surprise. While the claim that the SEC is in on a cover-up of a plot to destroy America through widespread Wall Street naked short-selling is, to put it lightly, a stretch, ever since the meme-stock mania of 2021 the idea of naked short-selling has been an obsession for an increasingly vocal bunch of retail traders.
Fails-to-deliver are pretty much what they sound like: a seller doesn’t get the securities to the buyer within the usual two-day window. Fails can happen for lots of reasons: simple mistakes, technical glitches or the buyer not coughing up the cash for the shares. Retail traders, with their detective hats on, are particularly keen on this data. Why? Because they believe it’s an indication of naked short-selling — the Wall Street no-no of selling shares you never borrowed.
Naked short-selling is like the market’s own urban legend for some, although the bigwigs tend to shrug it off. It involves selling shares that the seller doesn’t actually have, which can lower the stock’s price by, so the theory goes, putting more shares on the market than actually exist.
The SEC didn’t return Forbes’ requests for comment.