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One of the following generally happens:

- Mr. A intentionally lent out the stock (not fraud - there's no reason to lend out the stock other than to enable this kind of scheme AFAIK, Mr. A will generally not be an ignorant and deceived party here)

- Mr. A signed some fine print allowing his stock to be lent out for such schemes (not fraud)

- Mr. A signed some fine print saying some proxy (his broker?) technically owns the stock and they can lend it out for such schemes (not fraud)

- Mr. A owns his stock outright, and signed nothing allowing it to be lent out (step #2 isn't called "borrowing" in this case, it's called "theft")




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