July 27, 2009
Dear Chairman Mary Schapiro and the SEC:
Please restore a Depression-era rule that prohibits short sellers from making their trades until a stock ticks at least one penny above its previous trading price. This so-called uptick rule is to prevent selling sprees that feed upon themselves - actions that battered the stocks of banks and other companies over the last year. Was it greedy politics that made this rule go away?
One of the biggest errors in judgment of the last Administration was the withdrawal of the Depression-era uptick rule. It has led to unnecessary ravages in the financial markets. Sound stocks have been damaged. Pension Funds, personal savings and much more have been decimated. The question is to whose gain? It is time to create rules to protect the average American and their savings. Please reinstate the uptick rule.
Also, in regards to the Glass-Steagall Act. This established the Federal Deposit Insurance Corporation (FDIC) in the United States and included banking reforms, some of which were designed to control speculation. Some provisions such as Regulation Q, which allowed the Federal Reserve to regulate interest rates in savings accounts, were repealed by the Depository Institutions Deregulation and Monetary Control Act of 1980. Provisions that prohibit a bank holding company from owning other financial companies were repealed on November 12, 1999, by the Gramm-Leach-Bliley Act. Was this 1999 repeal another political sham? Please get this back on the books as well.
This country cannot stand to take any other financial catastrophes. It's sad that actions of the government may have added fuel to the fire.
Brandon M Dahlstrom