May 5, 2009
Put aside the obvious manipulative nature of naked shorting. (Ironic that the main vehicle left for "Fail To Deliver" is called the "Madoff Exemption".)
Why is one share allowed to be borrowed again and again. Even without "naked shorting", two or more entities can keep borrowing and selling the same share over and over between themselves.
If shorting is allowed, each share should be electronically coded so it can only be borrowed only once.
If this slows down the computer trading that gives us "liquidity", so be it.
If there are 100 million shares of a company, buy them or don't. It is not acceptable to dilute the # of shares in the float. Without question that dilutes the market value of the company, destroying wealth used for investment.
Our markets are a casino rigged for the wealthy and the greedy.
We need markets rigged for investment, supportive of the future.
For the good of the country, DO SOMETHING GOOD for the country.
At the bare minimum, stop naked shorting, remove the market maker exemption and reinstall the uptick rule. A real plus would be to ensure that each share can only be borrowed once.
Thank you