June 24, 2009
My name is Chris Tambos, i am a full time trader, both long and short. Short selling is a legitimate part of trading and should not be restricted any further. In fact, naked shorting should be re-instated as it provides liquidty and helps prevent many stocks from getting ahead of themselves. Short sellers offer an opposing view from an otherwise overly bullish market, with all the buy-side analyst.
Rule http://sec.gov/rules/final/2008/34-58773fr.pdf is unfair and should be abolished.
Short sellers expose frauds, over-valued companies and offer constructive critisims to off-set inflated stock prices. Short sellers have exposed many frauds including Enron, Lehman Brothers and most recently Madoff. If it weren't for short sellers, many of these frauds would go un-detected, as the SEC has a full plate and cannot monitor every publically traded company in the market.
If short selling is abolised or restricted even further, there will be no incentive for short sellers to expose any of these criminals.
A perfect example is my recent buyins with MXFD. (Maxlife).
I was short the stock in the $10.00 range (with a borrow) and they (imo, insiders) quickly ran the stock up to near $30.00 and bought me in. I lost over $200,000 and will never re-coup the losses. This is a result of market manipulation by a small group of insiders. If shorts were able to sell the stock, MXFD would have never gotten that high, and i would not have lost so much money.
This is just one example, there are many.
If short selling is restricted further, you are giving the criminals a free ticket to do what-ever they please.
Why listen to the masses when study after study has been writen that supports short selling as a legitimate form of trading that helps to stabilize the markets.
Thank you for you time and consideration,