Subject: File No. 4-581
From: Christopher M. Meissner, Esq.
Affiliation: Federal Government attorney and retail investor

May 14, 2009

I strongly oppose reinstating the uptick rule or any additional restrictions on short selling. Government intervention beyond that absolutely necessary to protect the public has been repeatedly shown to do more harm than good.

I sympathize with my fellow commenters' frustrations with their recent losses. My own brokerage account was down over 40% at the nadir of this market. But, sensing the opportunity that came along with The Plunge, I decided to do something about it and figure out how I could best position myself for the inevitable recovery. "Hope," after all, is never a viable investing strategy.

Over the past several months, I have dedicated much of my free time -- literally hundreds of hours -- to educating myself on how the stock market actually functions, investing psychology, and various strategies for investing and trading. Unfortunately, this stuff isn't taught in schools -- it's up to the individual to learn, and those that do are rewarded accordingly. Last November, I thanked my financial advisor for his service over the years, then bid him farewell. I now invest the time and effort required to thoroughly research and make deliberate, informed trades. In short, I made the conscious decision to take responsibility for my own financial destiny in the markets.

And therein, I believe, lies the problem with much of the retail investing public. One of the primary themes I repeatedly encountered throughout my self-taught (and permanently continuing) education is that an individual must accept responsibility for all of his trading decisions, as well as the results that flow from those decisions.

Many retail investors are understandably frustrated or scared. They want to blame somebody for their losses. Individuals and institutions that engage in short selling present a very attractive target. I read somewhere that less than 1% of the investing public will ever short a stock. Most probably don't understand the concept. Those same people probably subscribe to the idea of a "Wall Street vs. Main Street" fight -- where no such conflict actually exists. Short selling already suffers from a negative connotation, and several media talking heads have further flamed those fires. "It's unethical Hell, it's un-American"

It's a myth. The only person responsible for my portfolio's huge losses... was me. Not short-sellers. Not banks that took unjustifiable risks. Not people who couldn't buy homes they couldn't afford. No one else is to blame but myself. I was ignorant, and I suffered the consequences because of that ignorance.

Had I possessed the knowledge back in mid-2008 that I do today, I would have known enough to sell well before the decline had gotten too severe. A simple MACD or ADX technical indicator would have alerted me to bail (I now employ a personally developed, sophisticated mix of fundamental and technical principles and indicators in my trading). In fact, I'm actually very grateful for what happened -- it spurred me to actually LEARN as much as I could about trading and investing at the relatively young age of 28. Had the crisis not occurred, I would've continued on for years as a passive, uninformed investor (the kind most advisors love). But now I'm unquestionably more intelligent and better informed -- and, I'm proud to say, much more profitable

Perceptions of short sellers are unwarranted. The truth remains that short sellers serve a very important function in the market. They add liquidity. They frequently serve as an advance warning to regulators when a company is engaging in corporate malpractice or outright fraud. They assist in providing critical information to the market -- prices are more informative and reliable because of shorts. There are myriad other arguments available out there with a simple web search, and I won't waste the Commission's time by recounting them all here. You're well acquainted with them, and you know their merit.

Furthermore, reinstating the uptick rule and adding additional shorting restrictions may very well have unintended adverse consequences. For example, the likelihood of mis-pricing is increased -- after all, optimists should not be the ONLY players setting prices. Nor should longs have an advantage, however slight, in doing so. Worse, there will be less of an incentive for shorts to examine questionable corporate accounting practices.

For a little while after Enron, the public finally understood that shorts serve a useful purpose. We seem to have forgotten that lesson. Many of my fellow commenters calling for stricter shorting regulations surely profess a belief in free market principles -- that is, when the market's going their way. When it doesn't, it's usually someone else's fault. Very few people have the maturity to accept that, ultimately, only the person in the mirror is to blame when their brokerage account balance heads south. Risk is inherent in this game, and the attendant rewards are why people play. There will always be bulls and bears in every market, and neither side should benefit from an unfair advantage.

Reinstating the uptick rule and adding further shorting restrictions may placate a certain segement of the investing public, but it is not the just or fair thing to do. A lack of short selling restrictions did not cause or contribute to this financial crisis. The Commission had good reasons for repealing the uptick rule years ago, and those reasons remain valid. The name of the game should be PARITY. If a rule isn't required on the long side, it shouldn't be on the short side, either. Ensuring fairness this way keeps the stock market what it should be -- a truly free marketplace where pure supply meets pure demand.