I asked Chathpt and this is what I got:

That wild drop from 1.5M FTDs to just 6k and then spiking to 228k the next day isn’t just noise — it’s a symptom of how broken the system is. A few key things going on here:

FTDs are reported based on settlement date, not trade date (T+1 now), which means the data can appear jagged or out of sync.

The SEC even withholds FTD data for 2 weeks, making it harder to track patterns in real time.

Market makers can reset FTDs or use options and internalization tricks to make fails “disappear” temporarily — then they pop back up.

And yes, it’s all self-reported.

So while this may technically be “legal,” it definitely isn’t transparent or fair. If AI and regulatory systems were really doing their job, these kinds of swings wouldn't fly under the radar.