Editing Short (finance) (section)

== Dividends and voting rights ==
Where shares have been shorted and the company that issues the shares distributes a dividend, the question arises as to who receives the dividend. The new buyer of the shares, who is the ''holder of record'' and holds the shares outright, receives the dividend from the company. However, the lender, who may hold its shares in a [[margin account]] with a [[Prime brokerage|prime broker]] and is unlikely to be aware that these particular shares are being lent out for shorting, also expects to receive a dividend.  The short seller therefore pays the lender an amount equal to the dividend to compensate—though technically, as this payment does not come from the company, it is not a dividend. The short seller is therefore said to be ''short the dividend''.

A similar issue comes up with the voting rights attached to the shorted shares.  Unlike a dividend, voting rights cannot legally be synthesized and so the buyer of the shorted share, as the holder of record, controls the voting rights. The owner of a margin account from which the shares were lent agreed in advance to relinquish voting rights to shares during the period of any short sale.{{citation needed|date=February 2018}}

As noted earlier, victims of naked shorting sometimes report that the number of votes cast is greater than the number of shares issued by the company.<ref>{{cite web|url=https://www.law.com/almID/1202430726911/?slreturn=20180410051827|title=Over-voting at Taser in 2005|author=Greg Land|date=15 May 2009|publisher=Law.com|access-date=10 May 2018|archive-date=10 May 2018|archive-url=https://web.archive.org/web/20180510185918/https://www.law.com/almID/1202430726911/?slreturn=20180410051827|url-status=live}}</ref>