July 16, 2008
Dear SEC official:
Thank you for providing an opportunity for comments on the short selling rules. My points are simply as follows:
1. Don't allow anyone, not even brokers, to sell short a stock they have not borrowed properly. To properly borrow shares, I believe a person should obtain the shares from someone who bought them in such a way that they know those shares are available for shorting. Typically that means those shares bought and held in a margin account, NOT a cash account. Stated another way, don't allow naked shorting. Enforce the rules already in place and strengthen them to button-up the loopholes brokers (foreign and domestic) have found to get around them.
2. Bring back the up-tick rule. It was instituted to discourage manipulation of stocks. Its repeal has visibly struck low-volume stocks in a downward fashion.
3. Fight to prevent the Federal Reserve and the Treasury from buying and selling securities to prop up markets. Fight to keep the principles of Capitalism in all of our doings. The SEC is in a unique position to help in this regard. Any kind of manipulation is socialism. That is not what America is about. The "system-men" count on their risk taking to have limited downsides by knowing the largest financiers in the world are preventing even the slightest melt-down of a failed entity. The FED can easily print whatever money is necessary to have the desired effect. That is just not right. That dilutes the value of all of our dollars while rewarding the risk-takers-become-losers.
Thank you again,