May 5, 2009
How do I get some input for the uptick rule? You may remember Florida's largest bank Southeast Bank. Years ago the short sellers pushed the stock down with unmerciful short selling. I talked to the bank's CEO several times and he kept saying that "the short sellers were killing the stock" When the stock got to $2 the Feds came in on a Friday afternoon and took over the bank because, well it must have been bad to sell so cheaply. The bonds and stock went to near zero so the investors lost big. The employees lost big. The short sellers cleaned up. BUT AS THE BANK WAS LIQUIDATED, THE SECURED BONDHOLDERS GOT PAID OFF. THEN, THE UNSECURED BOND HOLDERS GOT PAID OFF Later even the shareholders got some money back THE POINT IS THAT THE BANK NEVER WAS INSOLVENT. It was just a successful bear market raid. Can't we put through a simple rule to keep this from happening again?