The problem is the real owner of the shares is not in the loop... The house has a waver on most clients that allows their shares to be shorted without their knowledge.... Thus the brokerage makes money on his own clients stock . They do this via block certificate issue.. therebuy cercumventing individual ownership.... RRSP are designated funds... Trading accounts are fair game.

I have never been asked for a borrow of shares ... now that is strange when I have had large positions in some stocks that have eneded up with huge shorts in place..... One would think that at some time a borrow would be offered/ requested .... but that never happens

There is no transperancy in the markets, and frequently your own brokerage house is the one shorting it.

In responce to:

"But the stock owner should have bought puts to hedge the drop in price, if he didn't want to own the stock. However, he's unable to unwind the stock, until the short seller gives back his stock. The reason why the stock owner gets involved in this deal is the short term fees he gets when loaning out the stock that he had no intention of selling."