Oct. 09, 2022
October 9, 2022
Hello,
It is my considered opinion that this proposed rule (S7-18-21 Reporting of Securities Loans) has been overdue for years, if not decades.
Although Naked short selling is technically illegal in the US, I suspect that it has been going on for quite a while. And it has been disguised as regular 'innocent' short selling using a variety of tricks Wall Street has learnt/established over the past decades that the SCE has been mute.
I'm a strong supporter of immediate reporting, as and when a transaction is initiated/cancelled/settled. With such a system in place, and more importantly, enforced, bad faith banks or hedge funds or investors won't be able to hide malicious short selling practices within thousands or millions of aggregated transactions. Some of which might even be categorized as simply false reporting. While a transaction-by-transaction reporting is the best case scenario, this 15 minute reporting rule is the best option for now.
Here're the benefits, as I see them:
01. I will have more information on my hands while deciding to invest in the US economy. I can choose wisely, instead of having to listening to some talking head on CNBC.
02. As an extension of the previous item, bad faith actors won't be able to sway my opinion. Lesser instances of pump dump schemes actually succeeding. Which will also make things easier on you folks.
03. A short seller is the very opposite of an investor. If they number large enough, they can be categorized as simple vultures, watching, betting and hoping they can profit off a companys demise. A naked short seller, to be blunt, is a simple parasite. And like all parasites, they need to be exposed to what will destroy their destructive behavior. This 15 minute reporting requirement is the very step in exposing these parasites.
04. We will all benefit from greater transparency. The SEC will have to waste less time chasing after violators, if such violators are identified from a mile away headed off. Retail investors will see such schemes well in advance too, and will not sink money into a shell company somebody is pumping up on social media. Best of all, the company that is the victim of a short attack can actually take steps to protect themselves, instead of waiting helplessly for the SEC to come to their defense.
05. The public will be watchdogs of the market. There used to be a time where journalism meant integrity and bravery in reporting the truth. A Lois Lane in todays world would find herself demoted to reporting yard sales, and never allowed within reporting distance of Wall Street. A watchful public will be able to warn the SEC of suspicious activity by any bad faith actor, or even avoid traps these bad actors setup, will in advance.
On the flip side, the bad faith actors will come up with excuses to avoid this same reporting. Herere some anticipated excuses, and my explanation for why they are self-serving and irrelevant.
01. Privacy, with regards to business practices. No cancer cell would ever advocate from chemotherapy. And no hedge fund would ever allow reporting, of any nature, if it were up to them. There is a very fine line between protecting our interests to protecting our liberty greed while we contaminate the US Securities market as a whole. Any business that doesnt deal in PII should be forced to transact in public, simply so theyre accountable in public, to the public. There is no reason to operate in the dark unless its for nefarious reasons, but there will be plenty of excuses.
02. It would raise the cost of short selling. Thats not a bad thing. No vulture or parasite should find it easy to prey on a healthy company. This is like a cancer cell protesting that the immune system is too strong, and so wants the bone marrow to take a vacation.
03. Disclosing trade secrets. The only thing secret about naked selling is how shady the practice is. I would demand that I see what anyone is investing into short selling at any time. If I had funds with a hedge fund that was going to short a healthy company that is making good moves, Id want to know well in advance so I can get my money out ASAP.
04. Short selling would be less profitable. Good. No parasite should ever grow fat from parasite-ing. If a hedge fund will dissolve because it cant invest healthily, it deserves to shut down. Free market rules, and all that.
I also wished to comment on the troubling fact that I have had to comment on this ruling again, following the suspiciously weak excuse the SEC trotted out about some technical issues deleting comments en masse.
01. Is the SEC so behind the times that a simple routine backup of retail comments was not setup? Of was the backup deleted as well? If so, do you see why this fact would be doubly suspicious?
02. Bad faith actors have taken severe steps to keep retail misinformed uninformed regarding Wall Street behavior. That ranges from lying on TV (talking heads pushing dying companies for a pump dump) to regulatory capture of the SEC and other bodies. Why should I not suspect that something nefarious happened here? Its not like the SEC has made a point of openly and proactively communicating with Retail investors.
03. I watched the ridiculous meme stocks are bad video you put out, in a breath taking display of being out of touch with the rest of the planet. If youre capable of such disconnect, why should have faith in you? Why wouldnt I do my best to keep you in line, like the rest of the corrupt Wall Street?
04. Commissioner Hester Pierce has already demonstrated that she has zero intention of allowing retail to make informed decisions. In fact, she actively voted against providing retail with more information. Thats not her decision to make, but she tried to make it anyway. Why would I not consider her hostile to retails financial interest now? What has she done to show that she is not a plant by bad faith short sellers to effectively knee cap the SECs effectiveness, the few times you do try to be effective?
Please understand that this is not an attack. But these are some very pointed questions. I will be watching you enact this ruling very closely, and will contact you again and on other rulings as necessary.