August 8, 2008
First, I would like to thank the SEC for their diligence and hard work in trying to stabilize our economy. What you are doing is of the utmost importance to the financial well being of our nation. I would like to take this opportunity to comment on the SEC's latest efforts to stabilize the financial market.
From my daily observations of FNM and FRE, two of the stocks covered under this Naked Short Sale rule and the new 2008 Housing legislation, I do not think that this rule is very effective when Market Makers are exempt. Even if Market Makers sell puts and calls, they should do so at the same risks as individual investors instead of being exempted to drive prices down by naked short selling to make money by fulfulling orders. It doesn't make sense While these Market Makers are freely playing with our portfolios and making money, the individual investors who can't do a thing, can only sit by and watch their portfolios dwindle. For those that are using margins, they are experiencing margin calls because this rule allows Market Makers to keep naked shorting a stock down. Who's to say that the hedge funds that used to naked short sell illegally cannot go through the Market Makers to do the same things that they did before?
I urge the SEC to carefully look into this and to also place the "Uptick" rule back into effect for ALL stocks. By doing this, the SEC can bring more confidence back into the market and thereby stabilizing the financial sector as a whole.
Again, thank you for your continued hard work and for giving us individual investors a chance to voice our opinions.