Big banks and hedge funds have found that short selling stocks creates an opportunity for the concealment of the creation of counterfeit stocks. The counterfeit shares drive down the stock price.

A short sell in the stock market is a bet that a stock will go down in value. It's a three party sale where stocks are temporarily borrowed for a fee, bought for a lower price elsewhere, then returned to the original owner.

A copy of the computerized stock to be shorted is temporarily created to complete the short. The duplicate stock should be deleted after the trade has gone through but due to high frequency, volume, and lack of transparency in trading, some people figured out that they could just not delete the temporary stocks and sell them and nobody at the SEC or the DTCC would do anything about it.

A short seller's goal is to take the stock price as close to zero as possible to maximize their profits. They may also bankrupt the company and sell off it's real assets to competitors to make even more profit. Billions of dollars, companies gone, all from a small initial investment that used counterfeit assets to make sure it worked in their favor. It's been going on for decades.

These people rack up billions of dollars at this computer game and crush real world small companies when they do it.

At one point there was a 3 day window that these counterfeits could exist in. If the counterfeits are moved around they can seemingly exist indefinitely. It's like a multi-billion dollar version of hot potato. Nobody wants to get stuck with them, and nobody is willing to go in and hold the counterfeiters accountable either.

People are buying GameStop stock to try to force these counterfeit shares into the light. The bankers are in retaliation literally stealing real shares of GameStop from individual traders' accounts to cover up their fraud. There are about 70 million real GameStop stocks and an estimated 30 million counterfeits.

Abusive shorting is coordinated and carried out through collusion between hedge funds and prime brokers, with help from the DTCC and major clearinghouses.

All the information for the counterfeit stocks including who made them and who has them now is in the DTCC database. The DTCC won't let anyone in to inspect the system to see what is real or fake. A few well constructed database queries would tell you who the culprits are.

The counterfeits and the profits they have brought are spread all through financial markets; index funds, mutual funds, 401k's etc. If you've invested in the stock market at all you probably have some. Trying to pull these things out now would be a nightmare. Stopping the creation of new counterfeits however is probably relatively trivial, but the SEC doesn't have the integrity or balls to deal with it.

A number of lawsuits that involve naked shorting have named about ten of the prime brokers as defendants, including Goldman Sachs, Bear Stearns, Citigroup, Merrill Lynch; UBS; Morgan Stanley and others. The DTCC has also been named in a number of lawsuits that allege stock counterfeiting.

At any given point in time more than 100 emerging companies are under attack

The success rate for short attacks is over ninety percent—a success being defined as putting the company into bankruptcy or driving the stock price to pennies. It is estimated that 1000 small companies have been put out of business by the shorts.

The secrecy that surrounds the shorts, the prime brokers, the DTC and the regulatory agencies makes it impossible to accurately estimate how much money has been stolen from the investing public by these predators, but the total is measured in billions of dollars. The problem is also international in scope.