I have a few questions.
1. If an entity selling naked can't settle, what happens to the buyer of the shorted stocks? They paid for some shares, and the seller can't deliver. Surely the buyer has a case for some serious litigation? Do the naked short sellers just buy shares at that point and transfer them over at the settlement date?
2. Can funds naked short in Australia? Or only covered shorts?
I'm not interested in doing naked shorts, if anyone has that idea. I'm just trying to figure out how naked shorts haven't ended up in endless lawsuits.