July 20, 2006
I strongly recommend the following amendments to Reg SHO
1. Make it mandatory for all short sales to first borrow (not just locate) real shares prior to executing a short sale.
2. No naked short sales or counterfieting of shares
3. Eliminate any and all possibility that the same shares are available for borrowing to more than one broker/dealer, or short seller. Eliminate multiple sources for the same borrowed shares. Insure there can never be more shares in the system than the issuing company has issued.
4. Make FTD data for all stocks on an individual basis available to the public.
5. Enforce the rules rigorously with stiff fines and lifetime disbarment from the securities business for those who break the rules
6. Omit the grandfather provision completely
I agree with these comments and would add:
7. Get rid of the current commissioners who have allowed this farce to continue under their watch and especially the one who made the comments "naked shorting doesn't exist, it's only that people are upset because their stocks aren't going up." That mentality can't be washed away over a few proposed changes to Regulation SHO. In fact I demand a change of commissioners, I pay your salaries.