March 18, 2008
Naked Short Selling (NSS) is fraud and thievery of the highest and worst order. It is disappointing to see the SEC taking more than 4 years to put an end to NSS, the very thing that made the 1929 stock market crash possible.
This Naked Short Selling (NSS) continues to and has ruined retirements for people focusing on income and innovative product stocks especially. NSS will even contribute to ending aged lives prematurely due to the loss of retirement funds to afford their medical care. It is happening now as we consider these tortuously slow comments periods to fix NSS, and this change is not enough.
In light of this harm the penalties for NSS need to be much greater than the 3 times (3X) the gain suggested by others. Please consider:
1. The harmed share buyer, pay him the difference from the price of the NSS to a forced repurchase by the violator, plus interest, comparable to what the IRS charges. Back out of those precise trades using brokerage records of the effected parties.
2. Recover the SEC cost of the investigations and the prosecution and conviction man time cost. Make the fine include 3X those expenses. Use the extra 2X going back into the enforcement division for additional funding.
3. For the trading perpetrator jail time for 3X the illegal shorting period plus the investigation and judgment duration, with no grandfathering of any duration.
4. Remove the securities license of the perpetrator permanently and the perpetrator's immediate supervisor for 2 two years.
5. These Perpetrators are ruining retirement lives, ban the perpetrator for life from working in the securities industry so he cannot do it again,
6. Then ban the perpetrator's supervisor from the securities industry for the jail time duration described above.
7. If the perpetrators resides offshore, enact these penalties for those state side brokers who accepted the sell side transaction of the NSS trade.
8. For the buy side of the transaction representatives that accepted the trade and did not settle a trade properly, impose all but item 3.
If the SEC enacted these penalties this market would be whip sawed by the constructive change that would result, and NSS retirement funds theft will largely cease.