June 19, 2009
I believe the SEC should enforce the existing 1933 law which requires a short seller to borrow the shares he intends to short before shorting.
To allow even 3 days for a "locate" that ends in a "fail to deliver" gives the manipulator 3 days to manipulate the price. Placing the policing power with the broker encourages mischief or fraud.
The 1933 law worked just fine until the SEC decided to allow locates and then did minimal enforcement, if any, of violations.