September 29, 2008
Dear Sir or Madam,
I would like to voice my concerns regarding short selling of company shares and the uptick rule.
If the SEC recognizes that naked short selling or short selling in general has adversely affected financial companies and in some cases destroyed them, then how can the SEC say other companies do not deserve the same protection? It is not fair for the SEC to prohibit short selling in certain financial stocks, while those not on the list suffer: This rule smacks of favoritism.
Furthermore, I do not see why short selling should be allowed at all given the party who short sells a stock has no vested interest in the company's well-being (since the short seller doesn't even own the shares to begin with) other than seeing its share price go down; this encourages rumor mongering and gives a false impression of how those who actually own company shares value those shares.
If the SEC continues to allow short sales, bring back the uptick rule. Why should short sellers get the benefit of shorting a stock when it's on the way down? This reduces their risk in shorting a stock. Why not protect the interests of those who actually own the company shares vs. those who don't?
Thank you for your consideration,
Jenny