August 18, 2009
August 18, 2009
RE: Amendment to REG SHO - Alternative Uptick Rule
To Whom It May Concern:
"An "alternative uptick rule" now under consideration would "allow short selling only at a price above the current national best bid such that short selling would occur only at a higher price than the current national best bid," the agency said in a Federal Register notice."
Again, as I have commented before the only way to end naked shorting and clean up the stock market, thereby ensuring CONFIDENCE IN THE MARKET PLACE AS A LEGITIMATE TRADING PLATFORM the short sale rule must be eliminated all together.
Never in the history of my country could anyone sell something they did not first own. Borrowing stock without paying for it to sell those shares short is simply fraud.
If the SEC truly wants to protect investors and prevent fraud then the short sale rule MUST BE ELIMATED. No alternative rule will get the job done returning confidence to the market.
Online trading makes it too easy for market makers to get around any form of an "uptick" rule.
The only perfect solution for the SEC to ensure legitimacy of a trade is to not allow/authorize any rule/regulation giving a trader, market maker, etc, the opportunity to abuse the system. The Short Sale Rule is a bad rule it encourages fraud. A trader, market maker, etc, should have to buy the stocks before they can sell a stock just like all investors have to do.
Online trading is so very fast, an orderly market will always naturally occur electronically. Therefore, there is no VALID reason for a short sale rule. I repeat allowing any entity to sell shares they do not own first invites fraud. Greed rules so many folks thinking it's an addiction, and this strong emotion creates monsters out of folks, example: Mr. Madoff. Therefore, avoid the problem, eliminate any form of a short sale rule otherwise it won't be long we'll be right back to another crisis day, September 16, 2008, naked shorting, counterfeiting securities caused 644 counterfeit derivatives, our economy is choking on.
The SEC doesn't have the budget nor the manpower to police every trade therefore, the best solution is to not allow any borrowing of stock to sell short.
The SEC needs to ensure the market place is a legitimate trading platform we all should play by the same rules in trading. Level the playing field SEC, eliminate the short sale rule all together.
Very truly yours,
Janet Douglass