January 9, 2009
It is admirable that, at last, the SEC is seeking to force some transparency to the short-selling practices of investment managers. While short sales play a useful role in financial markets, for too long naked short sellers have been allowed to run wild in our markets, to the detriment of honest corporations and long investors.
The proposed rule is meaningless unless the SEC begins to vigorously enforce previously existing rules and laws concerning short-selling. It is time to level the playing field and to stop hedge funds and others from illegally plundering the honest. The reporting threshold under this rule should be maintained at $1 million, not raised to $10 million. Transparency for short sellers needs to be increased, not watered down.
Faith in our markets has been severely compromised because the SEC sat on its hands and allowed the financial industry to write its own menu of abuses. Short selling should be a publicly viewable activity, not a trade secret. Let the SEC do its job and protect investors the viability of our markets before it is too late. Tighten the rules on short sellers, don't ease them. For once, the SEC should do its job, not rubber stamp the wants of those it is supposed to regulate.