You are making a big deal out of this 10B line item of the old Refco, saying it is proof of equities sold short and not delievered.  You NEGLECT to point out that that even Phil the bunny rejected this hypothesis the next day, after a review of Refcos filings. From Phil's blog http://bobosrevenge.blogspot.com/2005/10/refco-smoking-gun_26.html

 

Upon reviewing the prior filings, it became obvious that it was neither mostly FTD's, nor mostly legitimate short sales - both takes were incorrect. The prior filings articulate much of it as Treasuries, which to his credit, Alan Newman caught early on, or rather hypothesized early on, and the next day's digging confirmed it.