May 1, 2007
Why new ammendments if the SEC can't govern the existing laws? This should not be a hard decision to make as the general public and honest businesses have had fraud commited against them and the government is well aware of it. Naked shorting is compiled and reported by those who are to enforce the law and thus have themselves broken the law. Where now can victoms turn as their government blindly turns against them? It is obvious, firms and individuals have paid their way to be above the law and it is time to balance the scales and disallow naked shorting.
In any industry or life in general, borrowing is a norm, but how can you borrow something that does not exist? How can you sell something that does not exist without breaking the law and commiting fraud? How can this be an oversite by anyone with common sense?
Naked shorting is available to those that have methods available to them to deceive and tools to hide the practice. Individuals as myself who honestly trade with risk does not have the same luxary to escape the law. If I want to short a stock, I am at the mercy of share availabilty, so how and why can these law breakers have access to shares that do not exist?
I feel I have disclosed the obvious, but it is apparent that those we trust to uphold the law and what is right, are as guilty as those who have been breaking it.
There should be severe penalty's for naked shorting. Licenses should be revolked, fines imposed and jail time for any infraction what-so-ever.
No grandfathering for current naked short shares, it's time to balance the books and treat those who have honestly invested, based on whats legally documented to be actual shares available, as the victom.
Take a look at HSOA if you need a good example, 35% of the float is short and has been on the naked short list for about a year now. With a little investigation, I think you will find how organized a naked short strategy can be.
It would not surprise me, should any foreign country or terrorist group with the right financing and will to create financial havock to hundreds of smallcap businesses in the United States, could easily naked short right under the SEC's nose. And the unforgiving part is, the SEC would be aware of what but not who, because it's not practical to seek those who are ripping off the American public at this time.
Please, do not turn a blind eye any further. Plainly stated, naked shorting is wrong and creates a vulnerable avenue for criminal activity.