While I was watching a very informative video about naked short selling on Bloomberg TV, I noticed that Advanced Cell Technology (ACTC) was listed at the top of a threshold list shown and visible for just barely a second at roughly 19 minutes and 15 seconds in.
The video, titled “Phantom Shares”, came out on March 17, 2007 and provides an in-depth analysis on the damage caused by naked short selling.
Naked short selling , or naked shorting, is the practice of selling a financial instrument short without first borrowing the security or ensuring that the security can be borrowed as is done in a conventional short sale. When the seller does not obtain the shares within the required time frame, the result is known as a "fail to deliver". The transaction generally remains open until the shares are acquired by the seller or the seller's broker, allowing the trade to be settled. Naked short selling can be used to manipulate the price of securities by driving their price down, and its use in this way is illegal.
While this information may seem useless to some, ACTC investors might find it to be cause for concern, especially since Advanced Cell Technology was just delisted and labeled "Caveat Emptor" (Buyer Beware) on the Pinksheets.
Moving up to a credible exchange like AMEX or NASDAQ could help thwart any potential abuse of ACTC stock because of stricter guidelines that call for accountability.
Either way, you will not regret watching the entire video:
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