August 13, 2006
I have a suggestion for solving the problem of Failure to Deliver, caused by Naked Short Selling, (AKA, selling what you dont have and what you never plan on having). You dont have to change Regulation SHO at all. In fact you could eliminate Regulation SHO quite easily with no complaints from small investors, like me.
Allow small US investors, (no offshore accounts, hedge funds, brokers or mutual funds or any other investment houses), to Naked purchase stocks. We could buy all the shares we wanted and not pay for them. We would just have to know that margin loans and other loans are available, before we buy. Sound fair?
Imagine the possibilities. There would be no need for Social Security, (another problem solved), because retirees would just need to Naked purchase high dividend paying stocks and never pay for them.
Absurd? Yes, but so is allowing Naked Short Selling and Failure to Deliver. You know how to solve the problem. Please do.