April 29, 2007
I apploud the move to further reduce the abuses of NAKED short selling by removing the grandfather clause and other actions of the proposal. It has been noted that Short Selling is a valid market strategy, one which I have no issue with. However there is nothing valid about selling shares of which you have no intention of ever delivering. This is fruad if I did it in any other business practice, from selling cars, corn, steel, or any other business sector. Why this is still tolerated in the market does not say a lot for our values. This practice has harmed many investors, as hedge funds and others create shares where non exist solely to MANIPULATE a security. How is it we have the SEC to regulate the companies that create thier stock, but allow others to generate shares for naked shorting at will? There have been many statements about needing luiqidity and meeting the market efficiancy, but these are just OLD arguments to cover the same abuses. In this electronic trading world they are hollow statements made by a few you profit from the abuse of these loopholes. All shares need to be accounted for DAILY, we already allow 3 days to settle, creating chance for abuse.
Please remove these loopholes to the original SHO regulation. Require all investors, large and small, to play by the same set of rules. This gives assurances to the small investor we can participate in the great promise that the market holds without continued abuse of a small but greedy few.