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GME NAKED SHORTS
RECENT claim appears to originate from a whistleblower document included in the recently released Epstein files (specifically referenced in DataSet 9, file EFTA00097262.pdf, and related files like EFTA00010819.pdf from DataSet 8). Based on a deep search across web sources, X posts, and Reddit discussions analyzing these documents, the "stock" in question—created with at least 37 billion shares at $0.0001 to allegedly allow firms like Knight Capital (NITE) and UBS Securities (UBSS) to close out massive naked short positions without significant losses—is IMDS (Imaging Diagnostic Systems, Inc.).
### Context from the Files and Analyses:
- IMDS is an over-the-counter (OTC) pink sheet stock, often associated with high-risk, low-value penny stocks prone to manipulation.
- The document describes how the SEC allegedly permitted two barred individuals (serving as CEO and CFO) to conduct an offering that printed 37 billion shares of IMDS from thin air at $0.0001 per share. This was purportedly done to facilitate closing naked shorts in heavily shorted stocks like $GME, without triggering massive price spikes or losses for the short sellers.
- Direct quote from analyses of the file: "In IMDS, the SEC allowed 2 barred individuals (CEO/CFO) to do an offering that created 37 BILLION shares of IMDS at .0001 with Chinese nationals as shareholders so that criminals NITE and UBSS could close out massive naked short positions without incurring massive losses."
- The broader context in the whistleblower tip highlights systemic naked shorting in the OTC market, describing $GME's situation as a "rounding error" compared to OTC abuses. Firms like Virtu, Knight Capital Group (NITE), and Citadel are named as key players in the alleged scheme.
- Community discussions (e.g., on r/Superstonk) emphasize that this ties into larger market manipulation theories, with the Epstein files providing evidence of regulatory complicity in allowing sham companies like IMDS to be used as vehicles for covering illegal shorts.
Note that pink sheet stocks like IMDS are not traded on major exchanges and often lack transparency, making them vulnerable to such practices. The total naked short exposure on $GME is claimed to be at least 37 billion shares based on this mechanism, but this remains unverified by official SEC statements and is part of ongoing conspiracy discussions in meme stock communities. If you're looking for the raw PDF content, access may require age verification on the DOJ site, but excerpts are widely shared on Reddit and X.
How could they close GME shorts with this mechanism:
The alleged mechanism described in the whistleblower document (referenced as a Taxpayer Complaint Referral or TCR in the unsealed Epstein-related files from the DOJ) involves using a manipulated over-the-counter (OTC) penny stock like IMDS (Imaging Diagnostic Systems, Inc.) as a vehicle to synthetically "close" massive naked short positions in stocks like GME without incurring huge losses or driving up the price of the targeted stock. This is part of broader claims of systemic market manipulation, regulatory complicity, and naked short selling abuses in the OTC market, where GME's issues are described as relatively minor in comparison.
Here's a step-by-step breakdown of how this purportedly works, based on analyses from meme stock communities (e.g., r/Superstonk discussions) and excerpts from the document:
### 1. **Naked Short Selling Setup**
- Naked shorting occurs when a seller (e.g., hedge funds or market makers like Knight Capital/NITE or UBS Securities/UBSS) sells shares they don't own or borrow, creating synthetic shares that dilute the stock's supply.
- For GME, this allegedly led to billions of unreported short positions and persistent Failures to Deliver (FTDs), where the seller fails to provide the actual shares to the buyer within the required settlement period (e.g., T+2 days).
- Closing these shorts traditionally requires buying back real shares on the open market, which could cause a massive price squeeze if shorts exceed the float (as seen in the 2021 GME event).
### 2. **Creation of "Trash" Shares in a Shell Stock**
- To avoid buying back expensive GME shares, the scheme allegedly involves engineering a worthless OTC stock (IMDS in this case) to issue an enormous number of new shares— at least 37 billion—at an ultra-low price (e.g., $0.0001 per share).
- The document claims the SEC permitted two barred individuals (acting as CEO and CFO of IMDS) to conduct this offering, despite their disqualifications, creating shares "out of thin air" with minimal cost or oversight.
- These shares are assigned to nominal shareholders (e.g., Chinese nationals in the claim) to give the appearance of legitimacy, but the stock is essentially a sham with no real value or trading volume.
### 3. **Synthetic Closure via Derivatives or Off-Balance-Sheet Transactions**
- The cheap IMDS shares are not directly used to buy GME but instead integrated into complex financial instruments to "resolve" the naked shorts on paper:
- **Swaps or Total Return Swaps (TRS):** The short sellers allegedly enter into swap agreements with counterparties (e.g., prime brokers or other funds). In a TRS, one party pays the return on GME (including covering shorts) while receiving returns on the IMDS shares. This transfers the economic exposure without actual share purchases, allowing the short to be "closed" synthetically at near-zero cost due to IMDS's negligible price.
- **Options Chains or Married Puts/Calls:** IMDS shares could be used as collateral or "locates" for options contracts tied to GME. For example, deep in-the-money puts on IMDS (bought cheaply) could be paired with calls on GME to create synthetic longs, resetting FTD timers under Reg SHO rules without real delivery.
- **Ex-Clearing or Bilateral Agreements:** Trades happen off-exchange (outside DTCC clearing), where IMDS shares are "delivered" to balance books. This avoids public reporting and price impact on GME, effectively laundering the naked shorts through the worthless stock.
- The low creation cost ($0.0001/share) means closing billions of shorts incurs trivial expenses (e.g., 37 billion shares at that price = ~$3.7 million total), compared to billions in losses if forced to cover GME at market prices.
### 4. **Regulatory Loopholes and Complicity**
- The whistleblower alleges SEC obstruction, allowing this in the opaque OTC market (pink sheets) where reporting is lax. IMDS, as a non-reporting entity, faces little scrutiny.
- Firms like NITE (Knight Capital) and UBSS (UBS Securities) are named as beneficiaries, using their market maker status to exploit "bona fide" exemptions for naked shorting.
- This doesn't eliminate the short exposure but hides it, perpetuating dilution and suppressing GME's price while avoiding squeezes.
This is all based on unverified claims from the document and community interpretations—it's not confirmed by the SEC or courts, and mainstream sources dismiss it as conspiracy theory. The Epstein connection stems from the files being unsealed in related datasets, but the content focuses on financial crimes rather than Epstein's personal activities. For raw details, the PDF (EFTA00010819.pdf from DOJ DataSet 8) requires age verification, but excerpts circulate on forums like Reddit. If true, it highlights potential abuses in U.S. markets, but engaging in such practices is illegal under securities laws.
So is the game over for shorts?
No, the alleged mechanism from the Epstein files whistleblower document (involving IMDS and 37 billion synthetic shares) **does not mean** there are no significant short positions on **$GME** (GameStop), nor that previous shorts have been fully closed in a way that eliminates future price impact.
Here's a clear breakdown based on current data and the nature of these claims:
### Reported Short Interest on GME (Official/Public Data)
As of the most recent bi-monthly reporting (settlement date January 15, 2026):
- Short interest stands at approximately **65.75 million shares**.
- This represents about **16.1% of the public float** (around 408–409 million shares in the float, out of ~448 million total outstanding).
- Days to cover: Roughly **12–13 days** based on average daily volume (around 6–8 million shares recently).
- This is a slight decrease from prior periods (e.g., ~68 million in mid-December 2025), but it's still meaningfully elevated compared to many stocks (typical short interest is under 5–10%).
This level is **significant**—it's not negligible, and it could still contribute to volatility if buying pressure increases (e.g., from retail interest, news, or catalysts). It's far lower than the extreme levels during the 2021 squeeze (over 100–140% of float), but shorts remain active.
### The Epstein Files Claim and "Synthetic Closure"
The document (from DOJ datasets like EFTA00010819.pdf or related TCR/whistleblower tips) describes a purported scheme where massive naked shorts (including on GME) were allegedly "resolved" or hidden by creating billions of worthless shares in OTC pink sheet stocks like IMDS at $0.0001 each. This was claimed to allow firms (e.g., NITE/Knight, UBSS/UBS) to:
- Synthetically close or transfer exposure via swaps, options, ex-clearing, or other off-balance-sheet tricks.
- Avoid real buybacks that would spike GME's price.
If accurate (and it's unverified/alleged, with no official SEC confirmation—mainstream views treat it as conspiracy-level), it would imply:
- Some naked/excess shorts were "closed" on paper without market impact.
- **But it doesn't eliminate the positions**—it potentially hides or perpetuates them through derivatives or hidden ledgers.
- Naked shorting (if real and ongoing) creates synthetic shares beyond reported short interest, meaning **true economic short exposure could be higher** than the official 65.75 million.
Community discussions (e.g., on r/Superstonk) often argue official short interest understates reality due to these mechanisms, FTDs (failures to deliver), ETF arbitrage loopholes, or dark pool activity. The files are cited as "evidence" of systemic abuse, but they don't prove shorts on GME are gone—they suggest the opposite: hidden dilution persists.
### Potential for Future Price Impact
Even if some old naked shorts were "closed" synthetically:
- **Reported shorts** (65M+) still exist and could fuel squeezes if covered en masse.
- Any hidden/naked exposure (per the claims) could resurface via forced buys, margin calls, or regulatory action.
- GME's price remains volatile due to factors like retail sentiment, Ryan Cohen's moves, cash pile (~billions on balance sheet), and meme stock dynamics—not just shorts.
- No evidence suggests all previous shorts are fully resolved without risk; borrow fees, availability, and volume patterns indicate ongoing short activity.
In short: **Official data shows meaningful shorts remain**, and the Epstein files allegation (if true) points to deeper, hidden issues rather than resolution. It doesn't support the idea that GME is now "short-free" or immune to upward pressure from covering. Always verify with sources like FINRA/NYSE reports or Fintel/Ortex for the latest—markets change fast. This isn't financial advice; do your own research.

While reviewing the DOJ’s newly released **Epstein Library**, I searched for “GameStop” and found **multiple documents referencing GME, fails‑to‑deliver, and the January 2021 market event**.
[Department of Justice | Epstein Library | United States Department of Justice](https://www.justice.gov/epstein)
Most of the substantive material appears in **DataSet 9**.
This post documents **what is actually in those files**, with a clear separation between:
* **Whistleblower‑style submissions** (detailed below)
* **Other GME‑related documents** (summarized briefly)
Important clarification up front:
* These documents are **not DOJ findings**
* They are **not conclusions or enforcement actions**
* They appear to be **archived submissions and records**
* The DOJ has not endorsed the claims inside them
The purpose here is documentation, not proof.
# 🧨 PART 1 — Whistleblower‑Style Documents (DataSet 9)
**Files involved:**
* EFTA00071487.pdf
* EFTA00083150.pdf
* EFTA00083157.pdf
* EFTA00088144.pdf
These files share **identical phrasing, repeated excerpts, and overlapping claims**, strongly indicating they originate from **one whistleblower submitting the same core allegations multiple times** to regulators.
The DOJ preview text for each file repeatedly shows the same language, allowing the whistleblower’s thesis to be reconstructed with consistency.
# 🔥 1. Core Claim: Knight / KCG / Virtu (NITE) Is Structurally Insolvent
Across all whistleblower‑style documents, the same statement appears verbatim:
>
The whistleblower’s argument is not that insolvency occurred once, but that it is **persistent and structural**.
The implied reasoning throughout the submissions:
* Market‑maker balance sheets are allegedly padded with “receivables”
* Those receivables are implied to be **fails‑to‑deliver**, not cash‑settled assets
* This creates the appearance of liquidity while masking settlement failure
This claim is repeated across multiple submissions, suggesting it is the **central pillar** of the whistleblower’s case.
# 🔥 2. Explicit Reference to GME Fails‑to‑Deliver (Bloomberg Citation)
All whistleblower‑style files reference the same Bloomberg article:
>
They also include the same contextual line:
>
This establishes that:
* The whistleblower explicitly tied their broader claims to **GME’s January 2021 FTD spike**
* The data source cited is **public SEC data**
* GME is framed as a **stress event revealing deeper market‑structure issues**
GME is not presented as the sole target, but as a **moment where settlement stress became visible**.
# 🔥 3. GME Framed as a Symptom, Not the Root Cause
The structure of the documents suggests the whistleblower viewed:
* GME as a **stress fracture**
* Not the origin of the alleged abuse
The repeated emphasis on:
* Market makers
* Settlement failure
* Insolvency
* Volume exceeding plausible share supply
…implies GME was used as **evidence** of a broader system under strain.
# 🔥 4. Off‑Exchange / OTC Activity as the Mechanism
While the DOJ preview does not show full OTC passages, the repeated pairing of:
* NITE
* Insolvency
* Massive FTDs
* January 2021 volume stress
…strongly implies the whistleblower was pointing to **off‑exchange and OTC activity** as the mechanism enabling synthetic supply.
The focus is consistently on:
* Settlement mechanics
* Market‑maker behavior
* Balance‑sheet construction
—not issuer fundamentals or retail trading alone.
# 🔥 5. Knight / KCG / Virtu Merger Chain as Liability Management
The whistleblower explicitly ties **corporate events** to the alleged insolvency.
# 2012 — Knight Capital “Glitch”
* Knight is implied to have been under stress *before* the glitch
* The glitch forced emergency capital raising
* The whistleblower frames this as a **liquidity exposure event**, not a random error
# 2013 — Knight + Getco → KCG
* The merger is framed as a **stabilization maneuver**
* Allegedly allowed liabilities to be absorbed and restructured
* Approved by regulators despite underlying balance‑sheet issues
# 2017 — Virtu + KCG
* Framed as the **final consolidation**
* Allegedly allowed remaining liabilities to be buried inside a larger market‑maker structure
* Reinforces the claim that insolvency was managed through restructuring rather than resolution
This merger chain is central to the whistleblower’s thesis that **systemic risk was rolled forward**, not eliminated.
# 🔥 6. Pattern of Repeated Submissions to Regulators
The presence of **multiple near‑identical PDFs** in the same dataset implies:
* The whistleblower submitted the same core allegations repeatedly
* Possibly to different agencies or at different times
* With no visible enforcement outcome
The DOJ archived these submissions **as‑received**, without consolidation or redaction.
That alone is unusual.
# 🔥 7. What These Documents Are — and Are Not
**They are:**
* Whistleblower‑style submissions
* Accusatory and specific
* Explicitly naming firms, events, and data points
* Preserved in a DOJ transparency archive
**They are not:**
* DOJ findings
* DOJ conclusions
* Proof of wrongdoing
* Evidence of enforcement action
Their significance lies in **existence and preservation**, not validation.
# 🟦 PART 2 — Other GME‑Related Documents (Brief Summary)
# ⚡ Congressional Hearing Summaries
**Files:**
* EFTA00149800.pdf
* EFTA00135911.pdf
* EFTA00137484.pdf
* EFTA01659188.pdf
These summarize **House Financial Services Committee hearings** following January 2021.
They cover:
* GME short squeeze timeline
* Reddit retail involvement
* Clearinghouse margin stress
* Payment for order flow
* Testimony from market participants
They introduce **no new allegations**.
# 🟡 Miscellaneous References
* **EFTA00124912.pdf** — bank transaction including a GameStop purchase
* **EFTA00018541.pdf** — Bloomberg article referencing GameStop in a social context
* **EFTA01385439.pdf** — retail store list including GameStop
These are incidental mentions with no market‑structure relevance.
# 🧠 Final Takeaway
The key point for r/GME / r/Superstonk readers is not proof — it’s documentation:
* Multiple whistleblower‑style submissions explicitly referencing **GME FTDs**
* Repeated claims of **market‑maker insolvency**
* A narrative tying **corporate mergers** to unresolved settlement stress
* All preserved in a DOJ transparency archive
That’s the factual boundary — and it stands on its own.
While reviewing the DOJ’s newly released Epstein Library, I searched for “GameStop” and found multiple documents referencing GME, fails‑to‑deliver, and the January 2021 market event.
Most of the substantive material appears in DataSet 9.
This post documents what is actually in those files, with a clear separation between:
* Whistleblower‑style submissions (detailed below)
* Other GME‑related documents (summarized briefly)
Important clarification up front:
* These documents are not DOJ findings
* They are not conclusions or enforcement actions
* They appear to be archived submissions and records
* The DOJ has not endorsed the claims inside them
The purpose here is documentation, not proof.
# 🧨 PART 1 — Whistleblower‑Style Documents (DataSet 9)
Files involved:
* EFTA00071487.pdf
* EFTA00083150.pdf
* EFTA00083157.pdf
* EFTA00088144.pdf
These files share identical phrasing, repeated excerpts, and overlapping claims, strongly indicating they originate from one whistleblower submitting the same core allegations multiple times to regulators.
# 🔥 1. Core Claim: Knight / KCG / Virtu (NITE) Is Structurally Insolvent
Across all whistleblower‑style documents, the same statement appears verbatim:
>
The whistleblower’s argument is not that insolvency occurred once, but that it is persistent and structural.
The implied reasoning throughout the submissions:
* Market‑maker balance sheets are allegedly padded with “receivables”
* Those receivables are implied to be fails‑to‑deliver, not cash‑settled assets
* This creates the appearance of liquidity while masking settlement failure
GME / Superstonk perspective:
This mirrors long‑standing DD arguing that FTDs are treated as assets instead of liabilities, allowing market makers to appear solvent while rolling settlement failures indefinitely.
# 🔥 2. Explicit Reference to GME Fails‑to‑Deliver (Bloomberg Citation)
All whistleblower‑style files reference the same Bloomberg article:
>
They also include:
>
This establishes that:
* The whistleblower explicitly tied their broader claims to GME’s January 2021 FTD spike
* The data source cited is public SEC data
* GME is framed as a stress event revealing deeper market‑structure issues
GME / Superstonk perspective:
This aligns with the idea that January 2021 wasn’t just a squeeze, but a settlement‑system stress test that briefly exposed how fragile the plumbing really is.
# 🔥 3. GME Framed as a Symptom, Not the Root Cause
The structure of the documents suggests the whistleblower viewed:
* GME as a stress fracture
* Not the origin of the alleged abuse
The repeated emphasis on:
* Market makers
* Settlement failure
* Insolvency
* Volume exceeding plausible share supply
…implies GME was used as evidence, not the main crime.
GME / Superstonk perspective:
This matches the common view that GME didn’t create the problem — it revealed it. The system was already broken; GME just forced it into the open.
# 🔥 4. Off‑Exchange / OTC Activity as the Mechanism
While the DOJ preview does not show full OTC passages, the repeated pairing of:
* NITE
* Insolvency
* Massive FTDs
* January 2021 volume stress
…strongly implies the whistleblower was pointing to off‑exchange and OTC activity as the mechanism enabling synthetic supply.
GME / Superstonk perspective:
This lines up with years of discussion around dark pools, internalization, and off‑exchange volume being used to suppress price discovery while settlement risk accumulates elsewhere.
# 🔥 5. Knight / KCG / Virtu Merger Chain as Liability Management
The whistleblower ties corporate events to the alleged insolvency.
# 2012 — Knight Capital “Glitch”
* Knight is implied to have been under stress before the glitch
* The glitch forced emergency capital raising
* Framed as a liquidity exposure event, not a random error
# 2013 — Knight + Getco → KCG
* Framed as a stabilization maneuver
* Allegedly allowed liabilities to be absorbed and restructured
* Approved despite underlying balance‑sheet issues
# 2017 — Virtu + KCG
* Framed as final consolidation
* Allegedly allowed remaining liabilities to be buried inside a larger market‑maker structure
GME / Superstonk perspective:
This resembles the idea that systemic risk isn’t resolved — it’s merged, netted, and rolled forward until it’s too big to fail or too complex to unwind.
# 🔥 6. Pattern of Repeated Submissions to Regulators
The presence of multiple near‑identical PDFs implies:
* The whistleblower submitted the same allegations repeatedly
* Possibly to different agencies or at different times
* With no visible enforcement outcome
The DOJ archived these submissions as‑received.
GME / Superstonk perspective:
This echoes the frustration many retail investors feel: detailed complaints exist, data exists, but accountability never seems to follow.
# 🔥 7. What These Documents Are — and Are Not
They are:
* Whistleblower‑style submissions
* Accusatory and specific
* Explicitly naming firms, events, and data points
* Preserved in a DOJ transparency archive
They are not:
* DOJ findings
* DOJ conclusions
* Proof of wrongdoing
* Evidence of enforcement action
GME / Superstonk perspective:
The value here isn’t validation — it’s confirmation that these concerns were formally raised, documented, and preserved.
# 🟦 PART 2 — Other GME‑Related Documents (Brief Summary)
# ⚡ Congressional Hearing Summaries
Files summarizing House Financial Services Committee hearings after January 2021.
GME / Superstonk perspective:
Nothing new, but confirms GME was treated as a systemic event at the highest levels.
# 🟡 Miscellaneous References
Bank transaction, news clipping, retail store list.
GME / Superstonk perspective:
Noise, not signal.
# 🧠 Final Takeaway
From a GME / Superstonk lens, the significance isn’t proof — it’s documentation:
* Repeated whistleblower submissions referencing GME FTDs
* Persistent claims of market‑maker insolvency
* A narrative tying mergers and consolidation to unresolved settlement stress
* All preserved in a DOJ transparency archive
That’s the boundary of what can be responsibly said — and it’s still worth paying attention to.

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