September 17, 2008
It's about time the SEC took some action to prevent naked short selling. I believe that the proposed rule is a move in the right direction, but I fail to see how it affects existing naked short sales where the seller has an open position but has not yet delivered the underlying stock. This condition may exist in many instances for months, where the short-seller just keeps on shorting a stock without the intent of delivering the sold shares, until they can be bought on the open market for pennies on the dollar.
Naked shorting if left unchecked, has the potential to ruin confidence in the stock market and a major sector of the economy as we know it.
I believe that the uptick rule should be reinstated. It worked for years, why was it dropped?
The SEC has the obligation to protect the investor and should even the playing field by restricting the ability of hedge funds, etc. from, in effect, stealing the hard earned monies of the individual. Brokerages that are in cahoots with them should be put in jail, certainly put out of business.
Your rules need "teeth" and should take effect immediately before more investors lose their life's savings.
Just as an aside- I wonder whether the naked short selling is being orchestrated by our"friends" who seek to destroy us economically.
I heard it said that there are companies where the nshort position exceeds the outstandin number of shares, but have no way of checking it out.
The questions I hear raised are whether the SEC has the moxie to act to protect us as opposed to the naked short sellers. Your actions of the next few days will answer the question.