March 31, 2008
This proposed regulation does not go far enough. Investors are being hurt by abusive short selling. I have been damaged by abusive short selling in BIDZ.com (NASDAQ:BIDZ).
The SEC should take further measures, as follows:
(1) Reinstate the up-tic rule for short sales.
(2) Require all purchase money to be held in an intermediate "escrow" account until actual shares are delivered. The seller's account should not be credited with the proceeds until the shares are delivered. If the shares are not delivered in 3 days, the buyer should be given the option to unwind the purchase with a complete refund of all purchase money and commissions paid.
(3) The selling broker should not receive any sales commisions until the shares are delivered.