The mainstream financial media often downplays naked short selling or denies the existence entirely. Most of the time, this simply entails never mentioning naked short selling. If you never talk about it, it doesn't exist.
Here is a video clip of Melissa Lee from CNBC accidentally blurting out "naked shorts, yeah", in a conversation regarding GME and other 'meme stocks' on June 4, 2021, followed by an awkward reaction that can be seen in the expression on her face. 
For a few seconds afterwards, Melissa Lee was receiving direction through her earpiece, and what she did next was pivot away from the term naked short selling and talked vaguely about short selling. If you weren't paying close attention, you might not even have realized that Melissa Lee just made a big mistake that caused CNBC to go in to damage control.
When CNBC uploaded this segment on their official YouTube channel, they titled the segment 'Yields tank and market rallies to close out the week following May jobs report', and the part about naked short selling and GameStop has been removed entirely.
On June 9th, several days after Melissa Lee's accident, reacting to conversations online about the original incident, CNBC releases a segment specifically about naked short selling.
In this segment, they confirm that naked short selling does happen, but that it is difficult to prove and the SEC has brought very few cases because it is time-consuming, unglamorous, and requires detailed trade records and cooperation from insiders.
While they acknowledge the general existence of naked short selling, and briefly mentioned GameStop in the discussion, at no point in the segment did they directly address any notion of naked short selling of GME stock.
- Certain Short-Sellers: Hedge funds or traders that engage in (or benefit from) naked short selling have an incentive to deny or downplay its existence. If the practice is acknowledged and regulated, their trading strategies could be curtailed.
- Market Makers: In some cases, market makers (who are allowed certain exemptions to facilitate liquidity) might not want extra scrutiny. If regulators clamp down on naked short selling, it could limit the flexibility they claim is needed to keep markets liquid.
- Broker-Dealers Under the Spotlight: Brokerage firms that fail to diligently locate shares (or turn a blind eye to naked short activities) can profit from the additional trading volume or fees. Denying the problem reduces legal and regulatory pressure on them.
- Regulators Avoiding Embarrassment: If widespread naked short selling is real, it suggests gaps in regulation or enforcement. By minimizing its prevalence, regulators can sidestep questions about why those gaps haven’t been fixed.
- Maintaining Public Confidence: Acknowledging rampant naked short selling can erode trust in the stock market. By downplaying it, industry players and some commentators try to preserve the image of a fair and orderly market.
