September 13, 2007
My recommendations are that shorting should be prohibited altogether because of the abuses. The ability to sell short options contracts benefit the owner of equity shares, but shorting with borrowed shares do not. Brokerage firms make commission and benefit, but I certainly don't want my equity shares being borrowed to sell on the market and drive my investment down.
My second recommendation is that, if this activity is still allowed, I want the right to disallow my broker to lend out my shares for shorting. I believe that brokers should have to get CONSENT to lend a shareholder's shares to another party, which would be SEPARATE and INDEPENDENT from the brokerage agreement which is signed when I open my account. Having such a requirement to get consent will give control to the rightful owner of equity shares and prevent naked shorting and other abuses of short trading.
Thank-you for your consideration of my recommendations.