January 24, 2009
dear Ms. Shapiro, I have sent over 500 emails to the SEC over the past year and a half since Chairman Cox changed the socalled Uptick rule--calling his and others attention to specfic manipulative sequences in the trading of the stock of On2 Technology as they were happening. Many others did the same. We were ignored, as is obvious by the absence of any actions taken by the SEC to enforce the rules governing naked shorts, fails to deliver, and the rapid destruction of the value of many companies during that period. JOnly when the big financial firms went down, was anything done, and that was too little, too late for too few.
Even many professionals in the finance world have called for the roll back of the action of Chairman Cox re: the Uptick rule. To those of us who are simply investors, the whole universe of shortselling has hurt us unjustifiably and gives the lie to the proposition that the Stock Market is, as advertised, "fair, honest and open" so long as a favored few are granted permission to trade short shares and most investors are not.
Why can't there be a market, in which, only those legitimate shares issued by a company can be exchanged between actual owners and actual buyers with actual shares, only, not promises to deliver shares, are exchanged between the two and both parties can be sure that what they are exchanging is the actual, real, genuine thing it purports to be ? Please read below what was sent to Chairman Cox during the past year. thank you. George C. Vlahos, Byfield, Ma. 01922---gcvlahos@comcast.net
Short selling---i.e. selling a stock which you do not own to someone who doesn't know that, is in fact dishonest and fraud----how many different ways do you want us to say that-----it is a fact----short selling was invented by individuals who saw a way to make money by not actually investing any in what they sold. Theoretically, they would have the stock after the price went down and they could buy it at a lower price than they sold it for. Guess what their next thought was---gee, if I do something to get the price to go down faster and deeper, I can make even more money. Guess what they are doing right now by paying shills to post messages on message boards devoted to those stocks that shout all day long that the company whose stocks are in play is going down the tubes.
Greed and fear, they say, are the two prime movers of the market and in the case of shorts, both are present, the greed of the short sellers is what motivates them to spread fear among investors so they will sell their stocks at a loss. That is all we need to know and all that is needed to tell any honest man in the street to elicit the judgement that the practice is fraught with ethical and moral problems of the lowest type. Anyone who sells something that is owned by someone else, to someone who hasn't been informed by the seller of that fact is violating more than one rule governing honest dealings between two or more parties. In this instance there are actually four parties---the unknowng owner whose stock is being sold; the seller who does not own the stock he is selling; the buyer who does not know that the seller does not own the share of stock he is paying for;and the lender, if there is one, who is lending a share of stock which he does not own to the seller. How can anyone justify this as a legitimate transaction that is fair, honest and open as the stock market is touted to be by SEC directors?
As for the claim that shorts are needed to provide liquidity in the market----who said? I have watched one stock for over a year, daily, and if anything, the frantic, persistent activity of the short sellers has been to stifle every effort of investors to buy and the sell the stock by immediately following every sale at the ask with ridiculous 100 share lots at the bid--- all day long, as needed to prevent any trades at the ask---ultimately, resulting in an almost total freeze of normal trade in the stock----investors are effectively shut out of trading their real shares as the shorts manipulate and cortrol the price, driving it down all day long. Get those jackasses touting short selling as a good thing for the market off the tube and get some real investors to tell you what they think based on actual experience on the receiving end of short seller predation in the "market for stocks".