Dear CIGAs,

If real action is taken covering all industry shares against the prolific naked short selling via the Canadian Exchanges who demand only that the broker ask the client if they plan (someday) to borrow the shares and never ask again, the pressure on junior mineral companies will come to an end.

The legal shorts can be handled by success on the ground, creative dividends, and in time splitting the companies into various companies assuming they have varied mineral interests. My counsel to this industry is if you are able, do it ALL.

If the TSX and Canadian regulators do not take these actions, I assume that any company capable of listing on another international exchange will have to de-list in Canada and list elsewhere where naked shorts are identified with teeth to protect the interest of their shareholders - the first duty of any management.

Contrary to the statement made here that naked short selling is illegal in Canada, the only control is that the broker must ask the clients if they intend to make delivery one time. The clients say yes and there is no follow up. Sure it is illegal however Canada is the powerhouse of naked short selling.

Wake up, Jean!

"I don't think it (short-selling) is prevalent to the same degree in Canada, by any stretch of the imagination," said Caldwell.

"We still have the uptick rule on the Toronto Stock Exchange, and you notice it hasn't happened to the same degree."

With all respect Mr. Cadwell, your nose grows, your nose grows as everyone knows.

Canadian regulators reviewing whether to ban short-selling of stocks
Ross, THE CANADIAN PRESS
September 19, 2008

MONTREAL - Canadian regulators are considering whether to ban short-selling of stocks in light of similar moves in other countries aimed at calming financial markets.

The head of Quebec's securities regulator said Friday a decision will be made relatively quickly but declined to provide a time frame. The United States and United Kingdom acted Friday morning to suspend short-selling of financial stocks.
Short-selling is a form of trading that makes money for an investor when a stock's price goes down, rather than up. Market observers say it is not as widespread in Canada as on Wall Street.

Quebec's Jean St-Gelais said at a financial markets conference in Montreal that regulators in this country are attempting to determine if there is a problem with short-selling.

He noted that some of short-selling techniques that have been occurring in the United States are banned in Canada.

The U.S. Securities and Exchange Commission took the unprecedented move to temporarily ban short-selling of 799 financial stocks. The rule took effect immediately and extends through Oct. 2.

Short-selling involves borrowing a company's shares, selling them at a lower price, and pocketing the difference.

It is a legitimate method of trading - it can make markets more efficient and bring in more capital. But amid the recent meltdown of some American financial stocks there have been allegations of abuse, such as spreading false rumours or manipulating debt derivatives to drag down share prices.

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