May 4, 2009
Individual investor
Illinois
Comments:
It is with great appreciation that I welcome reform to the present
laws which allow Market Makers to freely sell shares which do not
exist.
The practice of NSS (naked short shares/selling) should NOT be
tolerated, any more than the FBI tolerates counterfeiting of U.S.
currency.
The effect that NSS has on the investing commuting is equally as
damaging to publicly traded companies, as the effect of counterfeiting
U.S. currency has on our economy.
It is my opinion that the companies that practice this form of
counterfeiting should have all licenses and rights immediately
removed, with severe penalties, as well. Penalties and/or fines alone
are simply not enough, as history shows these companies continue to
practice these activities, regardless. These companies should no
longer be allowed to 'make markets' any sooner than a Felon is allowed
to work in bank.
One particular company that flagrantly practices NSS is Knight
Securities, and should be immediately investigated for such
activities. Though I am sure several other Market Makers engage in
NSS, none more than Knight Securities are more damaging to the
investing community. Knight Securities should come as no surprise if
investigations simply look at how fast the company has grown in the
last 5 years....growth fostered from the wholesale of shares that
never existed prior to NITE 'filling the order', but not delivering
the shares.
Also, it would do well to consider eliminating ALL shorting practices
in ALL exchanges, since the entire basis of shorting is unjustified.
It is plainly obvious that the 'market' is perfectly capable of
'correcting' itself, by simple supply and demand, that the practice of
shorting (even if done legally) is not needed. The practice of
shorting initself, opens 'doors' to criminal trading activity (stock
manipulation, for one), that the market in general, does not need, and
can function quite sufficiently, without.
Since the transfer of company shares (certificates), which bears proof
of purchase, no longer exists in the electronic trading world, until
the Market Maker has been fully removed from the transfer of shares,
it is many people's opinion (not just mine) that greater
accountability NEEDS to be maintained.
I STRONGLY support any actions taken to accomplish this
accountability.
David Shutvet