July 19, 2008
If Reg SHO was intended to put a stop to naked shorting then it has been an abject failure. Bear Stearns was forced out of business by hedge funds who naked shorted the stock while spreading malicious lies about the solvency of the company. They did the same thing with Lehman, Freddie and Fannie while the SEC looked the other way, putting the American financial system in jeopardy. Now, finally, 19 financial institutions are being protected against these illegal practices by the SEC. Why aren't all American corporations being similarly protected?? Is crime against some companies OK, but not OK against others?
Also, why did the SEC eliminate the Uptick rule? It almost looks like the SEC has told the hedge fund managers that "we have declared open season on corporate America. Short the stocks without bothering to borrow the shares and spread malicious lies about the companies. We'll just look the other way. Besides, we have given you a rule change to make your job easier" What the SEC has allowed to happen is incomprehensible.
I have no problem with hedge funds making money as long as they do it legally. Good for them and God bless them. That is what America is all about. I have a huge problem with hedge funds, however, that obtain their profits fraudulently to the detriment of American corporations and their individual investors, not to say the financial health of the country. In my humble opinion, these funds need to be put out of business and their managers put in jail. Please work diligently, gathering the requisite evidence, to make it possible. There is simply no excuse to do otherwise. It just makes no sense to allow Wall Street to continue, in Ben Stein's words, to be manipulated by the financial equivalent of the Crips and the Bloods.