[Trad-Fi] Interactive Brokers LLC violations prompt short selling investigation

[ameilius]

This situation reflects ongoing scrutiny of financial practices within major brokerage firms. In the financial sector, short selling involves borrowing securities, selling them, and then buying them back at a lower price to return to the lender, profiting from the price difference. However, when this practice veers into illegal territory, often termed "naked short selling," it involves selling short without first borrowing the securities. This can lead to an increase in the securities' deficits, where the number of shares sold short exceeds the number available for borrowing.