caseyc:

I have trouble understanding the example you have given about a seller pocketing $300K by selling stock the seller doesn't have and will never be forced to produce. Who would be the buyer that came up with the $300K but has no stock, and never will have, to show for the transaction? I deal with a large Canadian broker and my account statement would show immediately that I owned the shares even if the short seller had somehow not produced them. Somewhere in all of this there must be some individual or institution that has spent $300K but has nothing to show for it, never will, and won't complain or take somebody to court over the matter. I just don't understand.