Author: bojan@6ix.com

Naked Short Sellers Beware! Brokers Now Responsible For Clients’ Illegal Actions

bojan@6ix.com
Hello Everyone,

It’s been a while since our last post, but we’ve never forgotten the cause or stopped working on solutions to the crime of predatory naked short-selling. In this post, we want to share some encouraging news that could mark a turning point in the fight against this harmful practice.

Power Nickel’s Innovative Efforts
Before we dive into the exciting development, we’d like to mention our ongoing journey at Power Nickel and our flagship Nisk Nickel PGM deposit in Quebec. Like many junior mining companies, we’ve faced significant challenges due to predatory short sellers. We’ll share more about Power Nickel’s innovative efforts to combat naked shorts in a future article.

A Ray of Hope
In today’s challenging capital markets, hope can be scarcer than capital itself. However, we’ve come across a significant development that should give us all a reason to be hopeful. The USA brokers are now being held responsible for the actions of their clients. If clients engage in illegal naked short selling or spoofing and cause damage to the companies being targeted, brokers can be held liable.

You can read the full article here. This ruling has the potential to send shockwaves through brokers in the USA who have been linked to illegal naked short-selling schemes. It should also serve as a wake-up call to Canadian regulators who have allowed similar activities to persist.

The Road Ahead
We believe that litigation against brokers by affected companies will increase, and US brokers may become increasingly cautious about exposing themselves to such risks. While it’s still early days, and the naked short-selling industry is well-funded and influential, this ruling is a significant step in the right direction.

Judgment day just got a lot closer for those complicit in naked short-selling. The big question now is, what will Canada do?

Time for Canadian Regulators to Act
It’s high time for IIROC and the Securities Commission to wake up and do their job. An article by NIALL MCGEE highlights the challenges faced by the Canadian mining sector (Read Here). We are in a top-quartile commodity price market, and the world needs Canadian minerals. The capital markets need fixing, and we can no longer accept excuses from regulators who claim not to see anything wrong.

If regulators continue to refuse to act, then it’s time for a change. Perhaps the entire self-regulatory system should be reconsidered. It’s time for governments, both provincially and federally, to demand changes from our regulators or impose a new regulatory regime. The Canadian capital markets are broken and are failing to serve the needs of the majority of Canadians.

In closing, let’s take this recent positive ruling in the USA as a sign of hope. We are moving one step closer to eradicating the damages caused by predatory naked short-selling and ushering in the greatest commodities-driven boom in history.

Stay tuned for more updates on this important issue. Together, we can make a difference and ensure fair and transparent financial markets for all.

Sincerely,

Terry Lynch
Founder, Save Canadian Mining

Save Canadian Mining – Submission to the Capital Markets Modernization Taskforce

bojan@6ix.com

Dear members of the Capital Markets Modernization Taskforce (the Taskforce) –
On behalf of Save Canadian Mining (SCM) and its founding partners, I want to thank you for the work you have been doing over the past several months. It was a pleasure meeting with you and presenting to you our opinions on which regulations in Ontario’s capital markets should be targeted as part of your review of Ontario’s Securities Act. We were encouraged by your initial report, particularly your recommendations targeting predatory short-selling and those that supported small businesses. As an advocacy group representing issuers in the junior mining sector, please know that we view your work as a very important exercise and we thank you for the attention you have paid to our concerns.

As a reminder, SCM was launched in September 2019, and has since secured the support of industry associations such as the Ontario Mining Association (OMA), the Ontario Prospectors Association (OPA), as well as notable industry investors like Eric Sprott (Sprott Mining Inc.), Rob McEwen (McEwen Mining Inc.), Keith Neumeyer (First Majestic Silver Corp.) and Sean Roosen (Osisko Mining Inc.). Many junior mining companies have lent their support to this effort and SCM has collected the “signatures” of over 2,000 supporters from across the industry who recognize short-selling is an issue holding back the industry.
This submission contains three sections. The first outlines our feedback on several key recommendations made in your initial consultation report.

The second makes a case for reinstatement of the “tick test.” We have conveyed to you in our earlier meetings and correspondence why SCM considers the tick test to be an important regulation for the junior mining sector and properly functioning capital markets, and the second section elaborates on this. The second section will also provide comments on recent meetings that SCM has had with IIROC, the body that repealed the tick test in 2012. The third represents observations and recommendations about Failed Trades and research on short selling from McMillan LLP that we received that we felt important enough to forward for further consideration. Due to the size and scope of our organization we did not have the ability to provide an in depth review. We hope the Task Force or the Ministry of Finance can devote resources to examine these issues.
Ultimately, we continue to encourage the Taskforce to revisit our recommendation that it recommend to the provincial government that the tick test should be reinstated.

Read a whole release below

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