Before hyperventilating, don't accept everything the media hypes as fact. is there any evidence that nakes shorting is widespread? NYSE seems to indicate it isn't. As far as I know, 99% of trades settle on time, and 90% that don't, settle within 3 weeks.
Of course it is widespread. At any given time there are a hundred or more NASD stocks on shorting restriction because a threshold level of the trading remains unsettled (read short sales that were supposedly legit turned out not to be).
And the threshold calculation is obscenely generous in the first place.