Petition to Address Market Manipulation and Force Settlement of Fails-to-Deliver (FTDs) for GameStop (GME)

To: The Securities and Exchange Commission (SEC) and Relevant Regulatory Authorities

Subject: Immediate Action Needed to Combat Market Manipulation and Enforce Settlement of Fails-to-Deliver (FTDs) in Securities Trading, Specifically for GameStop (GME)

Background: We, the undersigned, are retail investors and concerned stakeholders in the financial markets, particularly in relation to GameStop Corp. (NYSE: GME). We are deeply troubled by the persistent and widespread failures-to-deliver (FTDs) in the trading of GME shares, indicating potential market manipulation primarily through abusive naked short-selling practices. Despite existing regulations, the volume of FTDs for GME remains alarmingly high, undermining market integrity and investor confidence.

Key Issues:

Abusive Naked Short Selling: Naked short selling, where shares are sold without being borrowed first, has led to significant FTDs in GME, creating artificial supply and downward pressure on its stock price.

Market Manipulation: Persistent FTDs suggest manipulation by market participants, including certain market makers, which distort the true market value of affected stocks. In addition to FTDs relating directly to GME, we are also concerned about the use of ETFs such as XRT to create synthetic shares. These synthetic shares are used to hide FTDs and facilitate further naked short-selling practices, exacerbating market manipulation. This tactic involves creating and selling ETF shares that include GME, thereby masking the true extent of naked short positions and FTDs. The current short-interest on XRT is 443.05%. 

Regulatory Inefficiencies: Current regulations and enforcement measures are insufficient to effectively curb these practices, allowing manipulative behaviors to persist. 

Our Demands:

Enhanced Regulatory Oversight: We urge the SEC and other regulatory bodies to intensify their oversight and enforcement of existing regulations, specifically targeting naked short selling and persistent FTDs in GME.

Transparency and Reporting: Implement stricter reporting requirements for FTDs, making data more transparent and accessible to the public to foster accountability.

Prompt Settlement Enforcement: Enforce stricter penalties for failure to settle trades within the required timeframe, ensuring that market participants adhere to settlement obligations.

Support for Direct Registration: Encourage and facilitate the direct registration of GME shares by retail investors to reduce the pool of shares available for short selling and enhance market transparency. 

Our Proposal: To ensure the enforcement of these demands, we propose the following actions:

Immediate Investigation: Conduct thorough investigations into market makers such as Citadel Securities and other entities with high FTD volumes in GME to identify and address manipulative practices.

Public Hearings: Hold public hearings to discuss the impact of FTDs and naked short selling on the integrity of GME trading and investor confidence.

Policy Reforms: Introduce policy reforms that close loopholes in existing regulations, making it harder for abusive practices to continue.

Education Campaigns: Launch educational campaigns to inform retail investors about their rights and the importance of direct registration of GME shares.

Conclusion: We believe that addressing these issues is crucial for maintaining the integrity of our financial markets and protecting the interests of all investors. We call on the SEC and relevant authorities to take immediate and decisive action to combat market manipulation and enforce the settlement of FTDs in GME.