May 5, 2009
Dear SEC Please restore the uptick rule and outlaw the double and triple short ETFs. The uptick rule prevented major market crashes from the 1930's to 2008. It was not a coincidence that when the rule was removed in 2007, we had in 2008 our worst market crash since the great depression. When the so-called test of the effect of the rule was performed, it was during a bull market and was not a valid test. It has been widely reported that big short selling hedge funds knew in advance which stocks not to short to make the test appear that the uptick rule did not make a differance. Short selling benefits mostly the big hedge funds. Most small investors and people with stock funds in their 401ks do not short. Most don't even know that shorting exists. Short selling does not prevent bubbles. Did it prevent Enron from going up or stop the tech bubble? Shorting is only used to pile on companies or industries in distress. It has destroyed the savings plans of millions of small investors. Short selling should be restricted as much as possible, if not banned completely.