Subject: File No. S7-08-09
From: J B

May 30, 2009

A permanent uptick rule is needed to prevent short sellers from swamping targeted companies by inducing panic selling. The market has changed since online brokers have made it possible for almost anyone to trade stocks. The internet makes market information and stock prices readily available.

Insider trading by well known people have made investors leery of rapid price movements. Naked short selling has not helped matters either. When stock prices move drastically for no apparent reason, investors are prone to sell first and ask questions later. Even the prudent use of stop orders by retail investors increases the downward momentum potential of uncontrolled short selling. The bear markets of 2001 and 2008 have convinced some investors to avoid the downside of market trends at any cost.

A permanent uptick rule makes sense. We can not falsely yell "Fire" in crowded theaters. It should not be OK to profit from the panic caused by doing the equivalent of shouting "financial company 'C' is insolvent" just after Bear Stearns and Lehman Brothers faltered.