July 17, 2008
Please take appropriate action to curtail the rampant shorting of some smaller companies. The shorts so overwhelm available buyers that it leads to a downward spiral in share price. In many cases the shorts seem to be divorced from company fundamentals and simply use their huge funds to smash the prices and reap benefits by scalping along the way down.
The change in "up-tic" rules seemed to have unleashed the dogs. Please address this issue. Permission to borrow shares seems like such a logical action I find it hard to believe we have not moved in this direction. Sure, I have hold my shares in a margin account. Why does that make all my shares fair game for someone to simply borrow for their own use. I am paying dearly in interest and risk to "own" those shares and to assume they are co-owned by the broker is an insult. Where is the broker sharing my risk and/or paying part of my interest? I am fully responsible for making good my loan..no one else shares this responsibility that I know.
Naked shorts are a whole different story. They are illegal and need to be stopped...right now! Not just for the hot button sectors but for all companies. Selective enforcement of laws is a sad commentary for a nation that is built on adherence to law. Thank you for your consideration of my views. Anything you can do to allow the market to work like it is suppose to with companies valued according to their true worth will be greatly appreciated.
Sincerely,
L.N. Peterson