Since the beginning of modern accounting, a critical process for retailing and/or wholesaling of any product is that there must be a regular inventory taken to determine what products are on hand, and to reconcile this with what has been sold from all goods begun with and taken in during the period.
I have compared the crisis in naked shorting to an inverse taking, said argument which was used by the only Company CEO to get before the SEC with his appeal of a de-registration. I have said, and I stand by the fact that if similar processes, to those ongoing in securities trading permitting sale of something not owned, were applied to real estate, people would die.
One major "discovery" in an important case was that brokers and market makers were marking short sales as long sales, a fraud.
"Title" to property is important enough to be addressed in our Bill of Rights, specifically in the 5th Amendment.
When a listed Company reports its outstanding shares from its reconciliation with its stock transfer register, it does so with the reliance that it is complying with a fiduciary duty to its shareholder owners. If they don't know how many shares are owned in its name, then all fundamental analysis is rendered meaningless versus share price.
If Walmart, Target, Costco, Sears, Safeway and others were to do this on their Inventory, their executives would be facing prison terms of real significance.
How do our regulators permit similar abuses to violation of core GAAP rules pertaining to inventory accounting to be applied by exception to short selling of all securities? They will answer these questions, either now, or later at their trials for treason, fraud and more. I hope I live long enough to see these trials.