August 23, 2009
Dear SEC,
It troubles me greatly that your office is succumbing to political pressure to reinstate stock shorting restrictions that will have absolutely NO beneficial affect on the efficient functioning of the market. The newly proposed SHO rules create a lopsided market that favors the creation of bubbles through the artificial suppression of selling when stocks reach over valued levels.
Your actions will once again sow the seeds for a stock market bubble that will further degrade the confidence of investors when it pops. As an American I am shamed that a US agency which is supposed to ensure the integrity of our markets doesn't take the higher moral ground and point out to misinformed politicians and laymen that there is no conclusive evidence to blame short sellers for the recent market declines. I propose a halt of all new restrictions on shorting until the agency can prove empirically without a doubt that 1)Restricted shorting will not cause stock over valuation and 2) Shorting was the cause of the general market decline in 2008.
It is my sincere belief that the path the SEC is taking with these new rules is the wrong one. It is time for the agency to take a stand and provide the American people with clear headed and objective rulings based on market evidence, not the wishful thinking of persons who are influenced by political ambitions or naive investors who don't understand that markets can become over valued and decline in value.
Sincerely
Marc McFarley