Evidence of abuse by short-sellers (Naked Short Selling):

Margin debt is down 55% since 2007:

http://suddendebt.blogspot.com/2009/04/margin-debt-again.html"

YET.. March, 2009 saw the largest increase in short interest in over 9 months!!!

http://zerohedge.blogspot.com/2009/03/early-march-saw-largest-increase-in.html"

Some short sellers claim that short selling enhances "price discovery". But since the only stock that is supposed to be available for shorting is MARGINED STOCK, please tell us again just how is short selling creating “price discovery” in the past 2 years?

This smells like fraud to me, if not outright counterfeiting of stock certificates.

Again, short selling is a legitimate means for countering excessive use of margin. When margin debt decreases, short selling should ALSO decrease to meet the available supply of shortable (margined) stock.

So we're left with only 2 conclusions. Either mmkrs/specialists are loaning out stock held in cash positions, or they are counterfeiting shares and selling them into the market.

Scrutinizer