Oct. 19, 2022
Lately, it appears that the SEC is either complicit in regards to predatory naked short selling, or incompetent about it. This practice, as you should know, can have detrimental effects on legitimate price discovery, which impacts market integrity. Short positions held by institutional investors while they own, partially own, or have influence over media outlets should be considered a major conflict of interest. There NEEDS to be better regulation in regards to transparency, as well as penalties that are significant enough to deter malicious trading practices as opposed to simply a fine that equates to a fraction of a percent of profits made from these practices. Honest, accurate, and up-to-date short position data from institutions would provide the tools necessary to properly regulate the markets in regards to naked short selling. Otherwise retail gets fucked raw while modern day goliaths hide behind secrecy as they drive the price down selling more securities without acquiring them, routing retail orders off of lit exchanges which essentially kills legitimate price discovery. Now, adding pfof to the equation, it's not hard to see that institutions can see retail orders, while retail traders can not see institutional orders. This creates massive leverage in the favor of the few on top, while crushing the smaller investors and leaving them penniless and in the dark. This must be fixed for true fairness and transparency in our markets. This rule obviously isn't everything that must be addressed to eliminate unnecessary corruption in our markets, but it's a start. We must improve reporting requirements for major institutions when it comes to short selling, otherwise the top few that taxpayers keep bailing out will keep destroying our markets, and when markets crash, everyone suffers. Jobs are lost, companies close doors, strain on social services increases, desperation sets in and desperate acts become common. With proper, effective, and current (think daily) short position reporting from institutions, things like this can be prevented before it becomes a systemic risk. End PFOF End naked short selling End routing of retail trades off exchange. Sincerely, a concerned retail investor.