April 20, 2022
I appreciate that the SEC has a vehicle for comments from retail participants in our free market. That being said, I find it reprehensible that I need to make such a comment about a rule that has been proposed twice already and failed.
As a retail investor, I rely on the SEC to protect our market from manipulation. This protection comes in many forms. Not the least of which is shielding the investor from predatory naked shorting practices. Naked shorting results in losses for retail investors on a surface level, but also much deeper when it forces small cap companies to close their doors. This results in the loss of jobs and the cycle continues.
This proposed rule is quite clearly skewed against retail. Providing an avenue to continually fail to deliver shorted stocks is a tool that will undoubtedly be used to short companies into bankruptcy and result in huge profits for hedge funds at the cost of retail investors. This rule will provide no protection to the retail investor. What our market needs now is more transparency and accountability, not a blank check for hedge funds to cash.
This rule cannot stand. This rule would set the market back. Investing in a market requires faith in that market. This rule provides only doubt in a flawed system that is already skewed against the retail investor.