April 7, 2009
I'm surprised that the SEC is having such difficulty reinstating the uptick rule on short sales. It seems that somehow this must accomodate the shorts -- yet we are told that the uptick rule was ineffective when it existed. What harm can come from instituting an ineffective rule -- since the shorts are so smart that they can work around it.
The key in my opinion is to enforce delivery -- and fine significantly those who sell and can't procure the share delivery. Like many instances, the problem is not with the rules -- but the lack of enforcement by our government.
It is hard to have small investors, like me, get confidence in the system -- when the SEC allows many shorts to do as they wish -- without requiring delivery. I believe that double profits from shorts related to securities undelivered should be confiscated by the SEC. Maybe the shorts will be more prudent in arranging "real" sources if that is the case.