By OBBM Network Editorial Staff

Derived from an episode of Going Rogue With Lara Logan.

What happens when a company’s own stock is weaponized against it?

From Reverse Merger to Restricted Shares

Greg McCabe, the longtime oil‑and‑gas veteran who has led Nexbridge Hydrocarbons for more than four decades, explained the origins of the dispute. Nexbridge’s shareholders were originally part of a group called MMTLP, a ticker symbol assigned by FINRA after a reverse merger between Canada‑based Metamaterials and the NASDAQ‑listed Torchlight. The merger produced preferred A shares that were restricted, unregistered, and explicitly intended not to be traded.

“We were told from the beginning these would not be traded because these were unregistered, restricted,” McCabe said. Yet, just months after the merger, trading of those shares began without the company’s permission, violating the registration statement approved by the SEC.

The Alleged Naked‑Shorting Attack

McCabe described a two‑step assault. First, short sellers borrowed shares of the restricted class, sold them, and hoped the price would fall. Then, he alleged a more insidious practice: naked shorting, where traders sell shares that don’t actually exist. “Fake shares, yes. And if anybody tells you there’s no such thing as naked shorting, they’re either ill‑informed or complicit,” he asserted.

The impact was swift. The price plummeted, eroding shareholder value and threatening Nexbridge’s viability. McCabe likened the perpetrators to a “pack of wolves” hired to torment the company, its board, and its investors.

Regulatory Response and the Rare U3 Halt

FINRA’s intervention came on December 9, 2022, when it issued an extremely rare U3 trading halt—a measure reserved for extraordinary events. McCabe argued that this action, while dramatic, highlighted the regulator’s failure to prevent the initial unauthorized trading.

“If FINRA’s job is to protect retail investors, they have failed miserably,” McCabe warned, suggesting that the agency’s oversight mechanisms are inadequate against coordinated market manipulation.

Broader Implications for Investors

The case raises concerns far beyond a single oil firm. McCabe emphasized that any shareholder could become a target if similar tactics are employed. “When you’re in the stock market, this will impact you at some point,” he cautioned.

Experts have noted that naked shorting can distort market prices, undermine confidence, and ultimately harm ordinary investors who lack the resources to fight back. The episode underscores a growing call for stronger enforcement and transparency in the securities industry.

Looking Ahead: Calls for Reform

McCabe’s revelations add to a chorus of voices demanding tighter regulation of short‑selling practices. While the SEC and FINRA have pledged to review the allegations, concrete policy changes remain uncertain.

For investors and entrepreneurs alike, the story serves as a reminder that vigilance and robust legal safeguards are essential in a market where “business as usual” can sometimes mask outright theft.

The full episode of Going Rogue With Lara Logan is available on OBBM Network TV.