May 7, 2009
I strongly believe that the practice of "naked shorting" of securities poses a significant and unacceptable risk to the health of the U.S. capital markets. This dangerous practice also places U.S. traded companies at a significant disadvantage in relation to other world markets.
The ability to conduct short sales is, in my humble opinion, critically important for the health and well being of the equity markets. However, when the up-tick rule was dropped in 2007, far too much power to directly control the markets and the fates of any publiclly traded company was made available. The natural consequence of this newly granted omnipotence over the markets combined with a minor sector-wide negative movement, xirectly led to an all but completely crippling downward spiral in many market sectors and at such a breakneck pace, that there was no stopping the trainwreak that followed. In this particular case, the trainwreak that first occured had the effect of nearly wiping out the credit markets, thus nearly destroying most companies' ability to coduct day-to-day operations. This impact was felt the world over.
I urge the SEC commissionors to eliminate the practice of "naked short sales" and to reinstate a strong up-tick rule (like 10a-1) with as few exceptions and loop-holes as possible. Greater responsibility must be had in the markets. You have the opportunity to weild that responsibility for the betterment of all.
I an not concerned with beating dead horses. I am not interrested in placing blame nor in burning anyone at the stake for past mistakes. Mistakes were made. Let us move on and do the right thing.