May 5, 2009
Naked shorting needs to be stopped and those who are using this tactic to profit from the losses of others without owning the shares are just as bad as home owners who bought homes with no money down as they had no skin in the game. We know how no money down and loose lending policies worked out for the economy. Naked shorts also played a large role in the downfall in the economy and removal of convidence in the markets. The lack of confidence snow balled into our current recession.
Additonally the uptick rule needs to be reinstated. The rule was in place for 70 years and worked just fine. It was removed less than 2 years ago and the markets were more than cut in half. Yes the markets have come back but it is partially fueled by the fear of the short sellers that this rule will be put in place. The SEC needs to own up to their errors in policy and correct their mistakes. Now is not the time to be hard headed. The uptick rule needs to be percentage of the stocks price so that is can float based on the stocks share price. Putting the uptick rule at 1 cent will not work. Maybe putting the uptick rule at 1/8th of a percent or 1/16th of a percent of the stock price so that it floats as we have the Citibanks ($3) and Berkshire Hathaways($94,500) of the stock market and a accross the board 5 cent uptick rule will not work.
Thank you for the opportunity to voice my opinion.
Jeff Fennell, CPA