The SEC has just announced that as of one minute past midnight tonight, ALL naked short selling is no longer allowed on US stock markets. This measure will help to prevent speculators from driving prices downwards so quickly.
Anyone who is going to short a security must deliver the borrowed security within three days of the trade date, and this also applies to market makers.
For more information:
SEC bans naked short selling article on TheStreet.com
SEC puts naked short sellers on notice article on CNNMoney