Oct. 08, 2022
October 8, 2022
I explicitly support transaction-by-transaction reporting because it eliminates the ability to \"hide within the aggregate\". Aggregates are not transparent. Short selling in the dark, as done currently, dissuades actual investment as funds attempt to harvest profit off the backs of true investors.
I explicit support the 15-minute reporting requirement because it prevents fraud and prevents hiding in loopholes. Sadly many short selling funds can't be trusted to work autonomously with integrity and requiring frequent reporting is needed to ensure that integrity in the financial system.
Victimized companies need a greater ability to defend themselves against predators, and that \"short selling in the dark\" harms true competition and price discovery. The idea that a small number of short-selling funds \"know best\" and can hammer unsuspecting companies in the dark is shameful. Secret short selling hurts individual investors in the name of greater profits for hedge funds. Short hedge funds being allowed to collude in the dark has been going on for far too long and is about time the SEC rectified the situation. Establishing this rule is only part of the solution. If this rule is implemented, the SEC needs to enforce it with harsh penalties to dissuade future abuses/fraud. The penalties dealt by the SEC currently are not significant enough to dissuade abusive/illegal practices.
A short seller is not an investor, but the opposite. The SEC seems to be prioritizing hedge fund comfort and profiteering over investor protection and market transparency. From where I sit it seems the SEC and wall street work in tandem. Former wall street executives often join the SEC or vice versa like a revolving door which appears to be a major conflict of interest. These revolving door practices make it seem that wall street and the SEC are in bed together which is very disconcerting for me and many others. If the SEC establishes this rule it would help quell such unsettling feelings.
Retail will benefit from increased transparency. We have a much better idea of the risks of our decisions and transactions if we can see who is targeting which companies. If funds are allowed to short in the dark, retail investors remain dangerously unaware of the risks they take on when purchasing securities. More timely reporting allows for more timely reactions slower reporting prevents retail investors and working families from protecting themselves from abusive and predatory short selling practices. Working families and the individual investors need to be able to look both ways before they cross Wall Street. No one wants working families to get run over in the name of superior returns for hedge funds. Many rules currently (or the lack there of) are quite antiquated. The SEC, whether purposefully or not, like to drag their feet acknowledging problems/abuses in the markets, let alone establish rules which would help retail investors and working families. This again leads me to b
elieve that the SEC cares more about wall street than average Americans trying to better themselves by legal means.
This proposal would help retail continue to be the first line of defense and help the SEC shed light on dark abuses by short selling fraudsters and ensure stability in financial markets. This rule would help level the playing field by giving retail investors crucial data on predetory/abusive short selling actions which in turn would also allow more individual investors to protect themselves and share information/analytics.
There are inherent dangers in long, untracked lending chains,that can lead to economic fragility. Securities lending activity can hide massively destructive chains of obligation that can even be a threat to national security, and so transparency in this area is more important than it has ever been. The risks associated with reckless securities lending and short selling - highlighted with terrifying clarity following the events of Jan 28 2021, go far beyond any theoretical benefits of secret short selling for superior returns. Investor protection comes first.
I find it very concerning that this proposal is not already an established rule. Making security loans reporting mandatory would protect working families and individual investors from short sellers preying in the dark. I encourage the SEC to be more proactive in order to change hard working American's and investor's negative perceptions of the organization by establishing this rule.