June 5, 2009
Dear SEC Chairman Mary Schapiro,
Many critics, like Rep. Gary Aackerman of New York, attribute the markes recent downward spiral, in part, to the absence of the uptick rule, which was in place for nearly 70 years before the Securities and Exchange Commission repealed it in July 2007.
Rep. Ackerman recently wrote youOne of the simplest but most important and effective initiatives that the SEC could undertake immediately to combat market volatility is the reinstatement of a so-called uptick rule. For more than 70 years, the uptick rule curbed short- selling runs until, short-sightedly, the Commission revoked it in 2007. The lack of a price test in our exchanges created an environment that provided short sellers with the ability to both exploit and accelerate the failures of a number of companies, including Bear Stearns and Lehman Brothers, the collapse of which had a devastating effect on confidence in the U.S. financial markets
I strongly agree with the Congressman and urge you to begin your Chairmanship by taking prompt action.
Respectfully,
James Cordray
Concord, California