Naked shorting has been illegal since forever, but Chris Cox has never enforced existing regs. It is a way for hedge funds to basically counterfeit shares of stock. These phantom shares are laundered between hedge funds and the system is now awash in these bogus “shares.” The problem is so bad that the IRS suddenly rescinded its directive of a few weeks ago that all hedge funds' short positions be made public — the problem is now so bad that it threatens to collapse the system. This is where the Bush no-regulation policies have led.