May 5, 2009
Re: Response to request for comments regarding the proposed rule SECURITIES AND EXCHANGE COMMISSION 17 CFR Part 242 Release No. 34–59748 File No. S7–08–09 RIN 3235–AK35
Amendments to Regulation SHO.
I believe the Market Makers (MMs) or Specialists work together to manipulate the marker - Richard W. Wendling states: Specialist activities reveals that once he has sold out his investment account and established a short position at his stock's high his long term objective is then to take stock prices down to wholesale price levels in order to cover his short sales and once again to accumulate stock. Once his investment accounts are satisfied, his bias will be biased toward advancing or lowering his stock's price to maximize his personal profits.
If specialists want investors to buy stock, they simply raise stock prices sharply. If they want to cause massive selling, they drop stock prices precipitously. In the course of a rally, therefore, specialists supply public demand by unloading their inventories and then selling short. By precipitating a decline, specialists are able to use the ensuing public selling to cover their short sales and to accumulate stock for their trading and investment accounts.
This, I believe is the real problem.
Thank you,
Bill Johnson
Individual Stock Trader