February 28, 2009
Esteemed SEC Staffperson,
Though employed as a Civil Servant, I have two requests of the SEC as a private citizen, one of many small time investors who are suffering from the recent collapse in the prices of stocks and other securities.
1) Please ban the egregious and destructive practice of naked short selling, and enforce this ban rigorously with fines equal to the value of the banned trade. Our Treasury and our SEC could use the revenue.
2) Please restore the uptick rule. This can be done in a way that copes with the switch to penny-pricing of stocks by suitably defining the required up-tick. For example, the tick could be either $0.10 (close to 1/8), or perhaps something like the larger of (a) 0.1% of the most recent trade price (with the tick rounded to the nearest penny) or (b) one cent (a $0.01 tick for penny stocks like FRE and dollar stocks like GE, AA, C, BAC and far, far too many more icons of a previously well regulated market).
Our forebears wisely instituted the up-tick rule after the Great Crash of 1929. Fools removed it and, sure enough, the market suffered the Great Crash of 2008. (Mary should ask ask Ben Bernanke).
C. V. Voorhies, Ph.D.