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Superstonk DD Summary: A House of Cards Part 1



As investors and market enthusiasts, it’s important that we stay informed about the inner workings of the financial world. And the recent events surrounding GameStop and the DTCC, or Depository Trust & Clearing Corporation, have shed light on some disturbing practices taking place within the industry.
First, a little background on the DTCC. This organization is made up of several subsidiaries, including the Depository Trust Company (DTC), the National Securities Clearing Corporation (NSCC), and the Fixed Income Clearing Corporation (FICC). The DTC, in particular, plays a crucial role in the clearing and settlement of securities transactions. It was created in 1973 to streamline the process and reduce the risk of errors, and in the 1980s, it adopted a computerized ledger system known as the Book-Entry Only (BEO) system. This system allowed for the virtual tracking of securities and paved the way for the growth of mutual funds and government securities.
However, this system also made it easier to engage in a type of securities fraud called naked short selling. In 2003, several issuers with the DTC wanted to remove their securities from the DTC’s deposit account due to concerns about naked short selling by the DTC’s participants. It turns out, they were right. The DTC and its participants have created a market-sized naked short selling scheme, enabled by the DTC’s enrollee, Cede & Co.
These revelations are concerning, to say the least. It’s clear that the DTC has been taken over by big money and is engaging in unethical practices. And the events we’re seeing now, including the proposal of rule changes by the DTCC, are the 50-year ripple effects of this history. It’s time for change and for more transparency in the financial industry. We can’t continue to make the same mistakes and turn a blind eye to wrongdoing. It’s time to hold these organizations accountable and ensure that the market serves the interests of all investors, not just the wealthy elite.



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