May 29, 2009
I urge the SEC to reinstate the original uptick rule without modification. This rule has served investors well by limiting the bear raids that led to the destruction of viable financial institutions. The lessons learned in the Great Depression led to this important rule by recognizing that fear in a difficult market can create panic selling. A few large scale investors can then use short selling to reinforce these fears and drive values of target fims beyond what a fundamental analysis of the enterprise would warrant.
Reinstating the original up-tick rule would limit the tendency toward panic while promoting thoughtful decisions based on the actual value of the enterprise.