From June 2017 to the present, ACS Execution Services effected at least 10 million short sales to facilitate net trading by its broker-dealer clients without locating shares available for borrowing.

ACS failed to obtain locates for short sale orders as required by Rule 203(b)(J) of Regulation SHO:

As a result, ACS effected at least 10 million sho1t sales for its own account to facilitate short sale orders on a net basis without borrowing the securities, entering into a bona fide arrangement to borrow the securities, or having reasonable grounds to believe the securities could be borrowed so that they could be delivered on the date delive1y was due.

Penalty?

How could this impact GameStop?

• Executing short sales without properly locating shares artificially increases the supply of shares available for shorting.

TLDRS:

• From June 2017 to the present, ACS Execution Services effected at least 10 million short sales to facilitate net trading by its broker-dealer clients without locating shares available for borrowing.
• ACS effected at least 10 million short sales for its own account to facilitate short sale orders on a net basis without borrowing the securities or having reasonable grounds to believe the securities could be borrowed for timely delivery.
• ACS did not enter into bona fide arrangements to borrow the securities involved in these short sales.
• Penalty? Censure and a $250,000 fine...
• Executing short sales without properly locating shares artificially increases the supply of shares available for shorting.