July 22, 2006
My letter to my state Senators:
Would I be allowed to print my own $100 dollar bills? What if I "promised" to replace them with real money at a later time when I could afford to?
Of course not But that is exactly what the Securities Exchange Commission is letting Hedge Funds and many, if not all, the major brokers do.
The practice is called "naked short selling". These unscrupulous dealers are allowed to sell shares of a company that they don't own and in fact do not even exist These counterfeit shares are used to drive down a company's stock price and the sellers then buy back the shares at a discount or not at all if the company goes into bankruptcy.
This practice is illegal. But there is no enforcement. That why I am contacting you. I would like Congress to oversee the SEC and adopt laws to eliminate the practice altogether. It provides absolutely no benefit to the investor to allow naked short sellers at all
The SEC has rules in place that are not enforced. They recently announced "tougher" rules against naked short selling, but they do not go nearly far enough. Please help eliminate the practice of naked short selling altogether
Thank you,
Thomas Paull
200 Spring Oak Lane
North Augusta, SC 29841
cc: Lindsey Graham, Senator SC
Jim DeMint, Senator SC
Gresham Barrett, SC Representative District 3