Subject: market rules

February 3, 2009

Chairwoman Shapiro,
First, congratulations on your appointment and good luck in this difficult time for our country. I am writing to urge you to take a firm hand in enforcing the rules of the market, and I have some specific recommendations in that regard. First, the "uptick rule," that was removed at the height of the market by your prededessor, Chairman Cox, needs to be reinstated. The timing of the removal of this rule is highly suspect given that it is a protection that has served us well since the Great Depression and was removed just in time to allow another massive selloff as in 1929. Second, and perhaps more important, the rules against "naked shorting" need to be strongly enforced and violations prosecuted. The people who bought insurance in the form of cds's, then literally caused the demise of (by naked shorting) the institution they purchased insurance against, need to be prosecuted. I cannot imagine that this was legal EVEN under the lassez faire Bush Administration. Now that the taxpayer has been stuck with the losses of all these scandalous transactions, I cannot imagine that an Obama SEC will not do everything in their power to recoup these losses as much as possible, prosecute the guilty, and restore confidence in the marketplace. I do believe that confidence will not return unless very public steps along these lines are taken. I appreciate your time and wish us all the best of luck in the future. Sincerely,
Lynette Forbes