May 8, 2009
Issuing play shares to market manipulators who then sell them short while investors have to use real stock backed by real entries on the registrar's books destroys the very basis of a free market. In a meltdown these imaginary shares are added to the actual supply at times when supply already dwarfs demand, crushing any possibility that a fair market value can be established. Prices crash for no other reason, as we see by the equally preposterous recovery spike once the dust has settled.
If the SEC was doing its job to protect markets and investors, short-selling would have been abolished decades ago, but the revolving door between your agency and the Wall Street Crime families has perpetuated the kind of egregious white collar crime like this that destroys generations of family savings.
Start by acknowledging that "borrowed shares" are not what short sellers use, but only represent the result of a hapless mathematical exercise, a flagrantly misguided attempt to cap the number of imaginary shares granted to these swindlers because you know damn well that there is absolutely no way of controlling this crime other than banning it.