April 9, 2009
Mary L Shapiro Chair & other Commissioners
Honorable Commissioners;
I read in USA Today, April 9th that the SEC opened public debate on short selling rules. I would like to see that you consider establishing rules that level the playing field and increase investors confidence in the stock prices established in the market place. What follows are my recommendations:
Short selling rules;
To make stock trading a level playing field is simple. Make naked short sales illegal and send crooks who violate the rule to jail. Naked short selling creates phantom stock with out regulatory approval for new shares. It puts undue pressure on a given stock that increases volatility. This only helps hedge funds and their like who are predatory and in my opinion and fraudulent their actions, without regard to the importance of integrity of the market place. Such actions significantly reduce investor trust in the market to establish fair value of a given security.
Second; re-establish the rule that worked well for over thirty years, permitting short sales only on an uptick. This would reduce speculators ability to drive stock prices down without fundamental reasons.
I have worked and invested in the securities industry since 1968. There is no justification for not regulating the Stock market to insure integrity of the pricing mechanism, except to allow for actions greed and deceit by those who have lobbyed for freedom from regulations for unethical trading practices that take advantage of Investors.
Please advise me by email if there is any other way to bring my views to the attention of the Commissioners.
Thanks sincerely,
James M Bird