EDIT: Specifically, I think the idea that failures to deliver create counterfeit shares is wrong. I'd love to hear from someone with intimate operational knowledge of this process. FYI, SEC SHO FAQ:
* data breaches are very easily hidden: literally anyone can walk out with a usb drive loaded with information, or download the data off an unsecured/unlogged server without a trace
* it's hard to prove: I mean, companies aren't exactly offering their logs up for public inspection
* the system is built for allowing shadiness: not sure how to quantify this one but there's definitely a problem of attribution when it comes to who did it, especially when there's multiple data brokers involved.
You read hearsay saying that company X has suffered a data breach. The company denies this. Do you give them the benefit of the doubt, or do you assume they're guilty?
Is it though? Regulation SHO seems to make it quite hard for brokers to hide it these days. What makes you say it's easily hidden?
Pardon the question - thing is, i don't know if you have expertise in this, or if you're just another random internet guy expressing his biases.