The very page you describe specifically states that you can't infer when failures to deliver occurred because the data is reported in aggregate with no age statistics. [1]
Moreover failures to deliver can occur on both the long and short side, and do not necessarily represent that a naked short sale occurred. [2] And when they are associated with a naked short sale, it may still be legitimate. Market makers are legally allowed to engage in naked short sales to facilitate liquidity, and if they can't fulfill the borrow in time (which would itself happen for legitimate reasons), that failure to deliver would also be reported.
Finally - reporting an increase in apparent naked sales to the SEC by gesturing towards data on the SEC website doesn't make sense. The SEC is definitionally aware of it. There may not be an active investigation, but these kinds of datapulls are pretty manual and staffed by people familiar with the data.
If what’s going on is naked short selling by those who are not market makers then it’s illegal and those who are doing it need to be prosecuted.
If what’s going on is due to a lack of liquidity then it suggest that price manipulation could be occurring in the form of excessive coordinated short selling.
Finally - why assume a government agency is competent and has the means and resources required to act in a timely manner? The issue was reported though. [0]
[0] https://www.reddit.com/r/wallstreetbets/comments/kr98ym/gme_...
That's not the assumption.
The assumption is that facts manually assembled and reported by a government agency are already within the knowledge of that agency, so even if they don't have “the means and resources required to act in a timely manner”, you aren't helping by reporting those facts back to them.
(This may also be an unwarranted assumption , but it's a different assumption than you describe. I've definitely in the past—on behalf of a different government agency—frequently been involved in reporting facts assembled by one office of a government agency to the parties responsible for acting on that information in another office of the same agency who hadn't been informed of it.)
> since 1992, there had been six investigations of Madoff by the SEC, which were botched either through incompetent staff work or by neglecting allegations of financial experts and whistle-blowers
Now there are obvious reasons as to why this isn't a smart thing to do as recent events with GME show but it's not necessarily illegal (as far as I know). If this is actually not true or it's illegal somebody please correct me.
It's entirely possible for me to borrow a share from you, (short) sell it back to you, and then for us to repeat that process an unlimited number of times, thereby shorting an unlimited amount of stock. This would be stupid since I'd owe you more stock than exists and you could set any price you wanted for them.
> In this case, they retain a fraction or none of their voting rights, I presume?
If you have a margin account and want to vote with your shares, you need to let your broker know prior to the vote, so they can be sure and not have your shares loaned out when they're figuring out everyone's voting shares.
Some time prior to 2010, I heard some heads rolled at my firm because such a request was screwed up for a major client, and they had fewer votes than expected for some important vote.
Individuals do not loan stock for shorting, generally. But they do sometimes have margin accounts (for unrelated reasons), and this allows the broker to loan their shares out without their knowledge. In this case, they retain a fraction or none of their voting rights, I presume?
Or must you manually opt in, to allow it to be loaned out for shorting?
Bona fide market makers have an exception, because their business is to always be being buying and selling around market prices, and in a market with lots of buy interest and less sell interest, they may need to sell more shares than they normally hold. Market makers still need to have the shares in time for settlement, which may require borrowing if they have net sales more than holdings in a given day, but they don't need to locate shares to borrow before selling. Market makers are given an exception, because liquidity is valued, and they need to be registered and have specific capital requirements etc.
TL;DR, naked short selling isn't a thing anymore. There's been no reports of Gamestop shorts being naked shorts, and no reports of shares failing to deliver on time. Naked shorting isn't required for short interest to be over 100%.