July 24, 2008
As regards the emergency order: While I find much fault with it, it is a good first step and I am not here to criticize.
Going forward, we need to protect all companies on American exchanges from this practice (naked shorting). It is clear that NSS and FTDs are closely linked and taken together amount to Fraud. It is deliberate and pervasive, and if it wasn't, you would not have an emergency rule against it.
The practice of NSS needs to be legally defined, and outlawed. The Market Makers exemption needs to be rescinded. The uptick rule (at a level of $.125) needs to be reinstated.
If in fact it is just too difficult for the Commission to regulate the practice of NSS, I have a solution for you: Outlaw short-selling altogether. This solution is easy, clean and clear and easy to enforce.
Best to you all.