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