May 4, 2009
Madam Chairwoman,
The SEC commentary on short selling suggests that the market conditions have changed since the elimination of the uptick rule in 2007. I believe that the elimination of the uptick rule along with allowing naked short selling without the requirement to borrow stock have created the changes in the market. the changes have created an environment where the big money managers have the power to trample the small investor such as myself. These market controls need to be reinstated in order to level the playing field for all investors. As to exactly how to implement a new uptick rule I would only favor a rule that treats all stocks the same as far as implementation is concerned. I don't see how circuit breakers can be implemented without massive confusion in the market. The rule needs to be clear and simple.
Detractors say it will be impossible to implement in this day and age with high speed computerized trading. I say we had computers in 2007, too. The technology exists to keep control of the process and if it doesn't then short selling should be banned completely. Short selling is not a necessary process to a free market. It is just a way to feed off of fear, rumors and hysteria.
Please reimplement the uptick rule and naked short selling rules that were in effect prior to 2007 so that everyone can feel as though they won't be abused by the big money managers. Remember these rules don't prevent the stock from going down in value the only slow the process.