May 5, 2009
The removal of the uptick rule and the failure to enforce the rule against naked shorting, both proved essential to rational markets for seventy years, has led to a drastic market decline and the ability of hedge funds and other predatory traders to drive stocks down precipitously.
This has put the retail investor and all long term investors such as pension plans and mutual funds in an unfair-even impossible position and has exacerbated the unsettling chaotic decline of 401k plans and all stock market holdings associasted with saving for retirement. The future looks grim for future retirees and these failures-especially if not corrected immediately-can lead to destabilizing income shortfalls for future retirees and the nation that would end up having to subsidize them.
This disastrous policy of naked shorting and no uptick rule has amplified the effects of a failure to regulate the banks and Wall Street. It was bad enough that irresponsible financial and insurance products were sold and outrageous leverage of 30 times capital input were allowed but the recklessness continues even now after these abuses have come to light in the media and are openly discussed on a daily basis. The SEC owes its allegiance to the American people, not to the greedy interests that have endangered the world's capitalist system.
Please reinstate the uptick rule and enforce the prohibition of naked shorting as applied from the Roosevelt Administration through the Clinton Administration.