July 26, 2008
The SEC needs to reinstate the UPTICK rule and stop NAKED short selling for all publicly traded companies - not just for a few financial sector favorites. The abuse of naked short selling allows influential hedge funds to flood the market with cheaper and cheaper counterfeit share. They don't even bother trying to locate the shares because they know the SEC doesn't care. These funds drive one company after another into bankruptcy or into desparate "bailout" situations. How can any company expect to raise funds in such an environment?
If the SEC prosecuted just ONE hedge fund for these abuses, it would send a message to the others. Until this problem is addressed, the US markets have totally lost my respect and the respect of the rest of the world (for anything other than short selling).
Ask congress to reinstate the UPTICK rule and get off your duffs and enforce that laws that already exist.