Power Nickel Inc (TSX-V:PNPN) told investors that together with its advisors it has filed an official complaint concerning significant and persistent position imbalances for its stock.
In a statement, the company explained that the imbalance pertains to a broker holding an insufficient number of shares in its depository account compared to the beneficially owned shares for its customers, raising concerns about potential naked short selling and manipulative actions impacting its share price.
By bringing the issue to the attention of investors, Power Nickel said it intended to make them aware of the non-market factors that have led to the terrible performance of the TSX Venture Exchange despite this being "on the whole a robust commodity market."
CEO Terry Lynch, also the Founder of Save Canadian Mining, emphasized the gravity of the issue: "We have been at the forefront of trying to bring industry and investor attention to this problem and to create evidence to compel Regulators, Exchanges, Securities Commissions, and Government to act to prevent the continued destruction of the Canadian capital markets which for a very long time made us the center of the mining world."
Lynch conveyed the company's commitment to addressing the problem, stating: "We have now delivered the complaint and evidence to the regulators; we also are providing it to our industry association, PDAC, as there is widespread unhappiness from many mining companies who are experiencing the same issues Power Nickel has faced."
The evidence presented to regulators reveals a negative imbalance that has grown from 3,000,000 to over 9,000,000 shares on the 80% of Power Nickel's float that information could be obtained on. With its permission, CDS, DTC, Broadridge, the company's transfer agent, and others provided Power Nickel data to ShareIntel-Shareholder Intelligence Services, LLC, to investigate suspicious stock trading activity. Using its DRIL-Down process, the data revealed that over the last 16 weeks alone more than 9,000,000 excess shares of Power Nickel were traded beyond what was likely delivered.
Legal expert Wes Christian highlighted the severity of the issue, emphasizing that the remaining 20% of the float not captured could historically contain even larger imbalances. This persistent gap is not only costing investors but also sabotaging Canada's critical minerals sector, Power Nickel said.
Lynch underscored the urgency for regulatory intervention, pointing to recent legal rulings making banks responsible for oversight of clients engaged in illegal activities. He emphasized that solving this problem could unlock a significant mining boom.
"It boggles the mind to believe that these forces will continue to short these capital markets when liability is now a big issue and evidence is growing," Lynch added
"Far better we think that the regulators choose to fix the problem and restore order and faith in this market."
Power Nickel is a Canadian junior exploration company focusing on high-potential copper, gold and battery metal prospects in Canada and Chile.