February 2, 2009
Dear Chairwoman Schapiro,
I am writing to you as a concerned citizen,equity shareholder and a securities professional with 15 years of experience with a major international investment bank with extensive knowledge of equity trading. I am asking you to reinstate the Uptick Rule immediately.
We are on the brink of utter disaster in the equity markets and the single greatest structural change that you could make to avoid total collapse would be to reestablish this rule that was brought into being after the Great Depression. It should never have been abolished. Your predecessor had no knowledge of financial markets from an operational standpoint . It would be easy for a layman to be swayed by the special interests groups that wanted to do away with it. However, your knowledge of the inticacies of equity execution is substantial. I know you have the courage to do what is right. You have exhibited this trait in the past and it is, no doubt, why you were selected for this post. Tough decisions have to be made and made quickly. You don't have 6 months or even 30 days to study the affect of this rule. There simply is no time if confidence is to be restored.
Books will be written about this period for the next 50 years. You are now a central character in this drama. History will smile upon you if you make this change your first major regulatory mandate. I personally believe that the reinstatement of the Uptick Rule will be a more powerful tool to restoring order than all of the liquidity that is being flooded into the banking system and it costs nothing to implement. I am not alone in my thinking on this. Some of the brightest minds in the investment world believe that the removal of this mechanism was largely to blame for the severity of the downdraft in the fall of 2008.
Congratulations on your appointment. The nation is counting on you to help restore confidence in our markets. Please act swiftly and decisively to reinstate the Uptick Rule. Best regards,