Info on shorting.

If I've posted this previously,I apologise.But it's worth reading/re-reading.Shorting on the ASX is rife.It makes a mockery of the notion the stock market as a source of price discovery.Shorting in this context is theft.

For anyone that hasmade a complaint to ASIC you may find you are one of thousands andwill never be heard.As perour experience four times previously with ARUFURA, DISORDERLY MARKETSand SCHEME OF SHORT INDEXING, I have prepared several papers topresent to the regulators. Please note, we are not isolated, andthere are many other companies that are experiencing this. Pleaseforward my note onto these other companies outlined.

Thisis not for everyone, but definitely would go a long way in raisingthese serious concerns where retail investors are losing hundreds ofmillions of dollars every year. Havea look at all the drop in shorts on the last day of rebalancing aftereach of these companies was manipulated out of the ASX index. Noticethe steep decline in shorts for every company. That is nocoincidence. Its a scheme!

Theletter below for your use;

[Your Name]
[YourAddress]
[City, State, Postcode]
[Email Address]
[PhoneNumber]

[Date]

CommonwealthOmbudsman
Level 4, 55 Goulburn Street
Sydney, NSW2000
Australia

Dear Sir/Madam,

Subject: ConcernsRegarding Market Manipulation andUnfair Short Selling Practices inthe S&P/ASX and MSCI Index Rebalancing-Known as ‘Scheme ofShort Indexing’

I am writing to formallyraise concerns regarding what appears to be a coordinated andsystematic effort to manipulate the market through short selling,particularly in relation to companies that were removed from theS&P/ASX indices following the March 2025 quarterly rebalance, aswell as previous index removals, specifically in November 2023. Ibelieve that these actions are detrimental to retail investors andare not consistent with the spirit of market fairness, and I amseeking an investigation into these practices.

Background

The quarterly rebalancingof the S&P/ASX indices, which took effect on March 24, 2025, ledto the removal of several companies from the indices. Specifically,the following companies were removed from the S&P/ASX 300 Indexand S&P/ASX 200 Index: Notably, all had a significant drop inshort sales on the exact same day.

S&P/ASX 300 Index:

• ARU (Arafura Rare Earths Limited)

• IMU (Imugene Limited)

• MEI (Meteoric Resources NL)

• SYA (Sayona Mining Limited)

• SYR (Syrah Resources Limited)

• WC8 (Wildcat Resources Limited)

  WJL (Webjet Group Limited)

• AD8 (Audinate Group Limited)

• CKF (Collins Foods Limited)

• CQE (Charter Hall Social Infrastructure REIT)

• CRN (Coronado Global Resources Inc.)

• JLG (Johns Lyng Group Limited)

  SGR (The Star Entertainment Group Limited)

1. Short Selling Scheme: It is apparent that the companies removed from the indices were subject to excessive short selling, which was strategically timed to coincide with the rebalancing event. Once these companies were removed from the indices, short sellers profited by buying back shares at a much lower price after driving the market down. This created a scenario in which short sellers were able to repeatedly take advantage of the situation.

2. Impact on Retail Investors: Retail investors, who typically hold these stocks either directly or through index funds, suffered the consequences. Not only were they subjected to the volatility of a sudden price drop, but they also faced the psychological and financial effects of seeing their investments decline in value due to these artificial price movements. This cycle of shorting and index removal appears to disproportionately harm retail investors, who often lack the resources and expertise to react to such market manipulation.

3. Market Manipulation: The aggressive shorting of stocks, particularly when it exceeds 20% or more of daily trading volume, creates a market environment that can be classified as disorderly. The rapid buying back of shares after the index removal also suggests a form of manipulation where certain parties are profiting at the expense of the broader market, especially retail investors.

Evidence of the Schemeof Short Indexing

For example, Arafura RareEarths Limited (ARU) has been shorted on four separate occasions,with short sellers being afforded the opportunity to exit profitablyafter each event. This ongoing cycle does not provide true marketliquidity, as required by law, but rather represents an opportunityfor speculators to exploit a predictable pattern of behaviourassociated with index changes.

Examples of dates ofdisorderly shorting shown below; this is a regular occurrence and notisolated to these days.

14/11/23 – 1.1M sharesof 3.3M shares were short sold on the ASX representing 33% of allshares sold.

15/11/23 – 5.3M sharesof 8.6M shares were short sold on the ASX representing 62% of allshares sold.

16/11/23 – 1M shares of4.2M shares were short sold on the ASX representing 24% of all sharessold.

17/11/23 – 1.6M sharesof 2.7M shares were short sold on the ASX representing 59% of allshares sold.

Additionally, the actionsthat occurred in November 2023—when companies were removed from theMSCI Global Small Cap Indexes—further illustrate a broader trend ofmarket manipulation. The timing of these removals and the shortselling that followed suggests a deliberate strategy to profit fromthese index changes, which negatively impacted retail investors.

Economic Impact toRetail Investors

Given the companies inquestion (ARU, IMU, MEI, SYR, WC8, WJL, CKF, CQE, CRN, JLG, KLS,SGR), this could imply a combined retail loss in the range ofhundreds of millions of dollars, depending on how much stock retailinvestors hold. The exact number will depend on the marketcapitalisation, investor distribution, and how much short selling andforced sales contributed to the price drop. Importantly, it was onlythe actions of the shorters that have manipulated the market as shownby my four dates supplied that forced these companies from the indexto serve the purpose of them buying back these shares. The said‘Scheme of Short Indexing’.

The economic cost toretail investors from these manipulative short-selling practicescould range from tens of millions to hundreds of millions of dollars,with the impact potentially being felt across superannuation funds,direct retail stockholders, and even through the broader loss ofconfidence in the market. This widespread loss underscores themagnitude of the problem, affecting both individual retail investorsand institutional investors with significant retail exposure.Importantly, retail investors are victimised twice in this process ifinvesting directly in these companies and have superannuation fundsthat invest in index’s.

Request forInvestigation

Given the clearindications of market manipulation and the negative impact on retailinvestors, I respectfully request that the Commonwealth Ombudsmaninvestigates the following:

1. The role of short selling in creating artificial downward pressure on the prices of stocks removed from the S&P/ASX indices and the MSCI Global Small Cap Indexes.

2. Whether such actions constitute market manipulation or unfair practices, particularly when short-selling activity exceeds reasonable thresholds.

3. The broader impact on retail investors who are disproportionately harmed by these activities, especially when they hold these stocks through index funds or superannuation.

4. The idea that short sellers are than allowed to line up and buy these shares back during the index rebalance

5. Whether the relevant regulatory bodies, including the Australian Securities and Investments Commission (ASIC), are adequately monitoring and responding to such practices. I have approached them on no less than 3 occasions with no response.

6. The top 20 shareholders are on public record, why could this not be the case for the top 10 shorters to determine the identity of these players that are manipulating?

Conclusion

This situation raisesserious concerns about the fairness of the Australian financialmarkets, particularly for retail investors who seem to be exploitedby a system that allows for such coordinated short-selling schemes. Iam asking for your office’s assistance in investigating thesepractices and ensuring that appropriate actions are taken to protectretail investors and maintain market integrity.

Thank you for yourattention to this matter. I look forward to your response and to anyguidance you can provide regarding the next steps.

Yourssincerely,
[NAME]

Appendix:Evidence below showing everycompany removed from the index S&P200, and 300 where shares have beenexited showing a significantdecline on the day of the market close forrebalance.

S&P Dow JonesIndices Announces March 2025 QuarterlyRebalance of the S&P/ASXIndices SYDNEY, MARCH 7, 2025:

S&P Dow Jones Indicesannounced today the changes in the S&P/ASX Indices, effectiveprior to the open of trading on Monday, March 24, 2025, as a resultof the March quarterly review.

S&P/ASX 300 Index– Effective Prior to the Open onMarch 24, 2025

Removal ARU Arafura RareEarths Limited Removal, IMU Imugene Limited Removal, MEI MeteoricResources NL Removal, SYA Sayona Mining Limited Removal, SYR SyrahResources Limited Removal, WC8 Wildcat Resources Limited Removal, WJLWebjet Group Limited

S&P/ASX 200 Index– Effective Prior to the Open onMarch 24, 2025

Removal AD8 AudinateGroup Limited Removal, CKF Collins Foods Limited Removal, CQE CharterHall Social Infrastructure REIT Removal, CRN Coronado GlobalResources Inc. Removal, JLG Johns Lyng Group Limited Removal, KLSKelsian Group Limited Removal, SGR The Star Entertainment GroupLimited

Shows how ARUFURA havebeen shorted with x4occasions whereby shorters have been afforded theopportunity to exit. Thisdoes not provide liquidity as allowed bylaw, but a means to profiteer.

Mycomments are for general discussion only, you should never use mycomments to subsititute personal financial advice.

ARUPrice at posting: 19.0¢ Sentiment: Buy Disclosure: Held

We should not be blase about the shorting our stock is experiencing.It is part of an overall broadly based attack on market integrity.

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