Naked Shorting and Cede and Co, A repost of my old post from 2 months ago that was removed from Stocks
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| Author      | Source | 
|  :----:     |    :----:   |        
| [u/Tepllhcgftwhdg](https://www.reddit.com/user/Tepllhcgftwhdg/) | [Reddit](https://www.reddit.com/r/Superstonk/comments/mvmd4t/naked_shorting_and_cede_and_co_a_repost_of_my_old/) |

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[DD 👨‍🔬](https://www.reddit.com/r/Superstonk/search?q=flair_name%3A%22DD%20%F0%9F%91%A8%E2%80%8D%F0%9F%94%AC%22&restrict_sr=1)

Preface/Repost edit: Doubt everything, Do not trust this or any other post made by anyone as is without doing your own research. Do not think this is the whole picture, it's not. I am not a financial advisor and I could just be insane.

Since I saw [u/atobitt](https://www.reddit.com/u/atobitt/) referencing Cede and Co in his current DD I wanted to just put this back out into the world as this post never took off in [r/GME](https://www.reddit.com/r/GME/) or [r/wallstreetbets](https://www.reddit.com/r/wallstreetbets/) (a couple hundred upvotes) like it did in [r/stocks](https://www.reddit.com/r/stocks/) (5k+ upvotes + all the awards which is basically all my accounts karma) and I feel like the info could be useful for people who want a bit more background on Atobitts post.

I dont know why it got removed about a week ago as it only happened after the main post took off and had already garnered much attention, so make of that what you will.

**Original Post**

Get your tinfoil hat out, its time to see what you think you want to see but don't really want to. This is perfect for any newbie trying to understand what is going on and how the system has ended up the way it has.

Tl;Dr at end.

There are many great DD's that clearly explain Naked Shorting in 3-4 sentences that we can all agree are great. However while looking around for DTCC ownership and after having found [The Oil Drum](http://theoildrum.com/special/archives) (a great archive and now finished website of oil related information/discussion btw), Cede and co which was brought to my attention a month ago. I dismissed it as a conspiracy theory until I saw the post a couple days ago (credit: [u/bEAc0n](https://www.reddit.com/u/bEAc0n/)) bringing them up again and I took it seriously for once, which then led me to try and find a website like The Oil Drum but for Shorting.

This website is run by a dude called Larry with 40 years of WS experience, HF EVP, Board Member, Director of Equities+Income and so on, he clearly brings up and explains the implications of everything to do with Naked Shorting and how it plays out in the market. You can look around his website but all he really talks about other than the Shorting is Pharmaceuticals/Bio-tech.

I sent him an email and this was his response

> Thanks for the kind words.
>
> No problem with your request. Here is the link you should give them.
>
> <https://smithonstocks.com/?s=illegal+naked+shorting> (This is the compilation page of his blog)
>
> If there is any movement formed to take on illegal naked shorting, I would be happy to contribute. I have been consistently frustrated in trying to get media or politicians interested.

Read part 8 if you want to hear about CEDE and how once a counterfeit share is created it is forever viewed as a legitimate share unless if the company bring all shares back into itself to verify them (basically once counterfeited it exists forever, as a shareholder meet only verifies the shares owned by the ppl who will vote iirc)

[Part 1](https://smithonstocks.com/part-1-in-a-series-of-reports-on-blatant-widespread-stock-manipulation-that-is-enabled-by-illegal-naked-shorting/), [Part 2](https://smithonstocks.com/part-2-in-series-on-illegal-naked-shortings-role-in-stock-manipulation-conventional-wisdom-on-how-illegal-short-sales-are-executed/), [Part 3](https://smithonstocks.com/part-3-in-series-on-illegal-naked-shortings-role-in-stock-manipulation-prime-brokers-and-the-dtcc-have-a-troubling-monopoly-on-clearing-and-settling-stock-trades/), [Part 4](https://smithonstocks.com/part-4-in-series-on-illegal-naked-shortings-role-in-stock-manipulation-who-are-the-key-players/), [Part 5](https://smithonstocks.com/part-5-in-series-on-illegal-naked-shortings-role-in-stock-manipulation-traditional-shorting-compared-to-naked-shorting-both-legal-and-illegal/), [Part 6](https://smithonstocks.com/part-6-illegal-naked-shorting-the-secs-regulation-sho-is-intended-to-prevent-illegal-naked-shorting-but-is-ineffective/), [Part 7](https://smithonstocks.com/part-7-illegal-naked-shorting-dtcc-continuous-net-settlement-and-stock-borrowing-programs-have-loopholes-that-facilitate-illegal-naked-shorting/), [Part 8](https://smithonstocks.com/part-8-illegal-naked-shorting-series-who-or-what-is-cede-and-what-role-does-cede-play-in-the-trading-of-stocks/), [Part 9](https://smithonstocks.com/part-10-of-illegal-naked-shorting-series-the-risk-reward-of-shorting-versus-buying-stocks-is-extremely-unfavorable/), [Part 10](https://smithonstocks.com/part-10-of-illegal-naked-shorting-series-legal-shorting-of-stocks-is-a-losers-game-but-illegal-naked-shorting-transforms-it-into-a-winners-game/)

This is the important part: a quote from Part 8 if you dont want to read the whole series

> While you may think you are buying registered stock, you are actually buying a financial derivative related to that stock. Effectively, you are buying a financial derivative from brokers of a financial derivative they hold from Cede that is just a digital entry in your DTC account.
>
> Cede is at the center of the current, paperless electronic trading system that enables lightning fast trading of large blocks of stock by institutional investors and computers. Unfortunately, the intention  in designing it was to provide liquidity and reduce settlement risk. There is virtually no transparency in the system. Disturbingly, there are loopholes which allow for the counterfeiting of shares by market makers on a massive scale through illegal naked shorting and other measures. At present, there is no way for an outsider or even the securities industry's regulator, the SEC, to meaningfully detect and track these counterfeit shares. Once created counterfeit shares go on to be treated the same as legitimate street name shares

TL;DR: until the people at the top (aka CEDE and co) are brought into court/subpoenad we will never ever have a truly free financial system, they control everything and it is up to them to decide how and where the stock market goes. Their company assets are somewhere in the region of $34T as of 2019 IIRC yet it is a private firm? This means some very big people and organisations are playing a very big game that we are not a part of.

Supporting links:

<https://en.wikipedia.org/wiki/Cede_and_Company>

<https://www.nasdaq.com/glossary/c/cede>

<https://www.ilf-frankfurt.de/fileadmin/_migrated/content_uploads/ILF_WP_068.pdf> use reference 157 to get to the next link via google

<https://www.dtcc.com/~/media/Files/Downloads/legal/rules/dtc_rules.pdf>

A 3 part video series by a youtube channel by the name of Attar, all credit goes to him for the 3 video links below (these may come accross as opinionated and doesn't have sources directly linked to the youtube vid, however I have checked his patreon where his addendum is for these videos and I can at least say the content seems sound, just remember to take it with a grain of salt. It just seems to fit too perfectly with everything else coming out in our DD's to not include it here)

[American Lies | Banks, Corruption, and the Federal Reserve -- Part 1: Banks](https://www.youtube.com/watch?v=wdLRoIXpFKU)

[American Lies | Banks, Corruption, and the Federal Reserve -- Part 2: Corruption](https://www.youtube.com/watch?v=AK8v8McIC50)

[American Lies | Banks, Corruption, and the Federal Reserve -- Part 3: The FED](https://www.youtube.com/watch?v=kFDPkn_VUWY)

Interesting archived article too:

<https://web.archive.org/web/20090302054831/http://www.dtcc.com/news/press/releases/2007/wsj_response.php?lpos=3&lid=3>

Official paper detailing the ceding of control of our shares

<https://www.ilf-frankfurt.de/fileadmin/_migrated/content_uploads/ILF_WP_068.pdf>

Gary Gensler talking about crypto and the potential overhaul for the current stock market.

<https://www.youtube.com/watch?app=desktop&v=EH6vE97qIP4>
