April 25, 2009
The best thing the SEC could do would be to require that stock for short sales be borrowed prior to the sale. This would do away with so-called "naked" short selling, which has had a significantly negative impact on the way our capital markets have functioned. The uptick rule changes do not go far enough in preventing short sellers from manipulating stock prices through influence with the media, and by artificially increasing the supply of companies' stock relative to the demand for it. Naked shorting is real and a threat to our democracy.