May 4, 2009
Trust that the markets are an equal playing field is a minimum requirement that needs to be fulfilled before we can expect any serious investment from Main Street. This trust will not return until the SEC fundamentally alters its enforcement of laws currently on its books. Along with that, the SEC needs to enforce laws that worked for years.
One important step the SEC should take now is to reinstate the substance of its former uptick rule. The uptick rule served us well for 70 years until the SEC rescinded it in July 2007.
It required short sellers to take a breath and wait for a sale at a higher price before continuing to sell short in declining markets. Fed Chairman Ben Bernanke, bipartisan members of Congress and former regulators favor reinstating it.
To alter fundamentally the way stocks trade today, the SEC must also require — and enforce — short sellers to possess at the time of the sale a demonstrable legally enforceable right to deliver the shares — a so-called pre-borrow requirement.
We simply cant tolerate a market that permits short sellers to create phantom shares that dilute a companys value, erode the value of citizens stockholdings and manipulate share prices downward.
And finally put some teeth into your Enforcement of Rules and Regulations. Fine the Buying Broker when Failure of Delivery occurs if that Broker does not Buy-in the Selling Broker @ T+4,no exceptions.
Do you job: Level the playing field and make the stock markets about investing and funding public companies, not gambling.