May 16, 2009
I am a relatively new investor in the stock market and have been attentive to economics and finance for years. As I am approaching retirement age, I began seeking an investment in stocks and bonds around September, 2008 at a time when the market was dropping. I considered it to be an advantagious entry point to grow additional retirement income. In doing this, I saw the values of some descent companies get crushed without understanding how this could happen. After substantial losses, I then began following various web sites and TV programming and came to understand how intensified short selling in the hands of a group of high dollar investors could make this happen. I saw it first hand. I came to understand that there was once an uptick rule in place that was created during the Great Depression to level the playing field and to restore confidence in the markets. I came to understand that this rule was subsequently suspended, and I saw first hand what the results were.
I came to see that rumors and inuendo coupled by intensified short selling, including naked short selling and leveraged ETF's create panic That panic causes those who are trying to hold a position in any company to believe in to liquidate or face dire consequences.
We live in a country made up of laws. Most laws were put in place for a reason. Laws, however, are only as good as the enforcement behind them. Without the enforcement that the SEC is charged with providing, the markets can become a lawless place where only the most fit can prevail. The actual fabric of our financial system is at risk of collapse if that risk can no longer be spread over a majority of people without the concentrated efforts of a few powerful ones gaming the system.
I saw this first hand and came to understand why this was happening after following Jim Cramer on his "Mad Money" program. What he says makes sense. Please do not give a few powerful interests advantage over many smaller individuals by allowing them to create undue panic.
Please reinstate the uptick rule in full force, and please severely fine and prosecute those entities that were responsible for illegal naked short selling. Let the fines be tripple damages of the profits made from naked short selling. Also, please address the propriety of leveraged ETFs.
Walter P. Zebrowski