The first article attacking Atlantic Wind & Solar Inc. (
While short sales are legal if you first borrow the underlying shares before entering the sale, thus ensuring the true balance of supply and demand remains in tact. Meaning you can't sell more shares then actually exists. The share borrower, if they do it legally, would also pay a small fee to the lender of the shares.
This in contrast was a 'naked short'. This is not legal. In fact what they are doing is selling shares that do not exist, taking money from some legitimate investor and not delivering any shares to the investor. Selling '
Not only is this illegal but is very risky financially if you cannot buy the shares back or borrow them in time. As they can be forced to repurchase them at even higher prices. They are required to deliver the shares within 3 days. As reported by FINRA (Financial Industry National Regulation Association) the 'phantom shares were undeliverable for months. Meaning day after day they continued to sell shares they did not own dumping more '
While these short sellers were continuing their illegal practice a very dramatic change was about to appear in the public perception of Atlantic Wind & Solar and its management including Chairman, Gilles Trahan. Up until this point they were the darlings of the internet chat rooms and forums and seemingly every news letter writer were talking favorably about them and their future.
The Dramatic Change
The night before the first article by Davis of
Every deal was attacked stating they were fictional. The; what I would call; negative bashers would say they have contacted the companies mentioned in all the press releases and that they were told they have never heard of Atlantic. Every single positive post was overwhelmingly attacked as a scam. Posters would post contact information and links to the S.E.C. and F.B.I. to report this fraud. People...