March 9, 2009
Dear Ms. Shipiro,
When is your office going to recognize the error made by the previous administration and reverse the elimination of the uptick rule that occurred in July, 2007. Since that time, which was near the high of the market (coincidence?), the markets have fallen precipitously as short sellers attack companies with the ultimate goal to get them to bankrupcy (Bear Streans, Lehman, AIG) or get them delisted (list too long the NYSE had to suspend normal rules for delisting) so they can buy back shares for pennies as institutional/mutual funds sell due to their rules. This change in the uptick rule destroyed many hard-working American's retirement accounts that have been in 401K/IRA which are invested in the market. If you recall your history, the uptick rule was put into place over 70 years ago after the Great Depression to eliminate short sellers running company's stock to zero. History is repeating itself and your SEC is standing by and doing "Nothing" as the market falls day after day. I thought Mr.Obama was about change and that is why I voted for him. This is an easy change which could be implemented quickly and restore faith back into the capital markets.
I know the critics will say that with electronic trading, an uptick rule does not work because the speed that the markets move at, except we have had electronic trading for how many decades. OK, change the rule to have a short seller put in a price 5 cents above the current price so speed of the transaction does not matter. Or put a lower limit on where short sales can only be executed, say $5 or above. Then the true market will decide which companies fail and which survive, not short sellers. Heck, do both.
Remember short sellers do not own the shares of our companies, we do, average Americans. They are essentially betting against the Unitied States by trying to ruin our companies and our economy by instilling fear in the market and investors (did a great job, didn't they). If you make it unfair for the hedge funds by quickly reversing the uptick rule, so be it. They are smart people and will find another way to make their money.
Please get to work and reinstate the uptick rule ASAP. No excuses. At the current rate of decline for the capital markets during the Obama adminstration tenure, we will not have capital market left by Christmas.
David G. Barrett
St. Louis, MO