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Ignoring the SEC for a moment, I don’t follow your reasoning. Why couldn’t buying shares require you to sign a contract that you’re not going to engage in various activities such as shorting? That would preempt any private arrangement you attempt to make. You of course could make an illicit secret agreement but you’d still be breaking and invalidating the contract you bought your shares under exposing yourself to various risks and penalties


How would you detect that, though?


Exercise to be left to the reader. How is collusion and conspiracy detected now?


I suppose, mostly by chance, or by technical mistakes if the perpetrators?


I believe that's the SEC's job.


Presumably by auditing all the prime brokers.




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