Apr. 20, 2022
With all due respect, I must ask: who wrote this rule proposal, and on whose dime? Because it's worthless. In fact less than worthless, it's a backslide for market integrity: the proposed rule would make it even easier for manipulative market-makers to Cellar Box innocent companies and get away with it. [Some context: CELLAR BOXING, for the uninitiated, is the practice of market makers abusing their privelages to naked short a company with no intention of ever closing their short positions, while simultaneously routing positive transactions to dark pools and negative transactions to lit exchanges in order to control the price, before finally infiltrating the board of directors with co-conspiring consultants to poison the victim from within. The company dies by the market maker's hand, and the shorts are never closed, thereby leaving the market maker with their gains.] Naked shorting is unethical because not only is it betting on a company's failure, it is ACTIVELY CAUSING THAT FAILURE through its impact on stock price, and thereby sentiment and the company's ability to raise capital. To protect this obviously immoral and abusive act is a step backward in the integrity of our markets. The argument that it uncovers weak companies is absurd, and self fulfilling: yes it picks off weak companies, precisely because you abused your position as a market maker to destroy them. Each company shorted stands for an erosion of good faith in our markets. Therefore, as a retail investor, whose direct monetary interest lies in trusting that the markets remain fair, I am quite frankly disgusted by the content of this proposal. If market faith cannot be maintained, investors like me will flee with our capital, first from the DTCC and broker dealers through direct registration, and then to the blockchain. Do not turn a blind eye to this future: should it come to pass, you will be left with nothing. You must remember that the capital you have been entrusted with belongs IN PRINCIPLE AND IN REALITY (though not in name) to the common people who participate in our markets. Should the institutions break their side of this contract by violating the public's trust, then there will quite simply be no more market. This is why it's in YOUR interest to maintain retail's good faith in the centralized market - because you are swiftly losing it. Naked shorting is a plague upon our markets, for which there is no justification (besides the enrichment of a select few institutions). Naked shorting is MARKET MANIPULATION plain and simple, and it should be treated as such. And if nothing else, it should DEFINITELY NOT be made easier. Signed, Theodore Sutherland Macphail