Oct. 29, 2022
SEC: The stockmarket was established in order to allow individual investors to invest in companies that they support. This allowed their interests (money) to be aligned with the interests of the company. As the company became successful so did the investor, creating a symbiotic relationship. If however, the company was performing poorly or leadership was making poor decisions, the stock holders could vote to change leadership or divest from the company. This is because each share that an investor held in the company corresponded to a vote that could be used to allow the democratic process to drive the direction of the business. These are the checks and balances that promoted equity within the market and what the founding principles of our country were built upon that many americans have died to protect. Short selling within the market violates these fundamental principles. Borrowing shares with the intention of shorting by a few groups of participants with disproportional market strength drives prices down on stocks not based upon population sentiment but to purposefully ensure short term profit of the few at the expense of the many. Shorting distorts economic principles by artificially increasing supply thereby driving down demand and the price. This creates panic among ordinary investors who do not understand the underlying mechanics of price thus creating a negative feedback loop. This not only hurts investors who have invested their money believing in the sanctity and honesty of the market but also the companies who are adversely affected by this tactic. This limits cash raising opportunities, and makes it more difficult for companies to borrow money from banks to further their business. Ultimately many of these companies are forced into unfair financial arrangements or are forced to file for bankruptcy which results in job losses, reduced innovation, and wealth income disparity. This process is made worse by naked short selling where institutions are able to borrow shares without a locate and face little to no repercussions in short selling. This results in massive failure to delivers accumulating which places other brokers/institutions and the NSCC and DTCC at risk as they are often forced to share the burden of this naked position. Reg-Sho was supposed to have prevented this from occurring but looking at the record number of failure to delivers (significantly elevated from before Reg-Sho was introduced) proving that this law has failed to meet its goal. Although I do believe that short selling as a market technique should be banned altogether. I know that that is not realistic. However, I do believe that in a free market capitalistic society the free flow of information is mandatory. All participants in the market place should have access to the same information so that they can make an informed decision on whether or not to buy a stock. Since we know that brokers/institutions have disproportional financial power in the market that may affect the price of a stock, they should be forced to declare that position so that other investors can make an informed decision on their own investments. If these institutions want to hold a short position because they believe that a company is overvalued they should be allowed to do that but other's in the market should be able to see that position. If this makes short selling unattractive to large institutions they have many ways to make money in the market. Please do not allow institutions and brokers to obfuscate the free transfer of information in the market (particularly when they are allowed to trade upon our information). Do the right thing and make all trading data (short and otherwise) available and free for all of society. A retail investor