April 22, 2009
I strongly support SEC rules limiting short sales of stocks. The measures proposed are a good start, but do not go nearly far enough. We need strict prohibitions on "naked" short sales--where the seller does not have full ownership and possession of the stock being sold short. The SEC should add measures to be sure short sellers own and have full legal possession of the stock before being sold short. There should be severe penalties for naked short selling.
I believe that short sales have little value to the country. Most of the legitimate purpose of short-sales could be better accomplished and monitored with the purchase or sale of listed stock options.
Short sales cause damage to our markets, economy and companies by exacerbating market volatility and potentially pushing companies to collapse based on rumors, whether those rumors are true or not. I believe that short sales made the current credit crisis much worse than it had to be, by hastening the demise of several financial institutions.