May 19, 2009
Because of this one paragraph alone, I'm inclined to sign the Petition that Jim Cramer is promoting to reinstate the "Uptick Rule". (See comment below my signature) However, having said this, the SEC absolutely cannot tolerate Naked Short Selling what so ever.
In my opinion, Short Sellers should be forced to secure the rights to borrow a stock before they are allowed to execute a short sale. Failure to do so should result in a forced cover at T+3, plus requirement to pay a significant fine — equal to a set percentage of the sales transaction.
Repeated failures to deliver should result in the loss of a broker's license... and even the possibility of jail time. There should be no wiggle room in these rules, and they should be equally applied to all individuals and firms.
Copyrighted material redacted. Author cites "Uptick Rule Petition Nears 3,000 Signatures", May 14, 2009, at http://www.thestreet.com/story/10497904/2/uptick-rule-petition-nears-3000-signatures.html