Documents Show How Goldman et al Engaged in 'Naked Short Selling' 14 years ago
It's actually quite clear. Much like printing money takes value away from savers, naked short selling takes value from existing stock holders.
The lawsuit between Overstock and the banks concerned a phenomenon called
naked short-selling, a kind of high-finance counterfeiting that, especially
prior to the introduction of new regulations in 2008, short-sellers could
use to artificially depress the value of the stocks they’ve bet against.