February 7, 2022
I am a retail investor and I am in favor of this rule, although I am skeptical of any rule such as this actually working/ being enforced.
In the past year, it has become completely obvious that Reg-SHO is largely ignored by broker-dealers and they continue to navigate the market unpunished, or worse yet, punished while not having to admit any fault while the fines associated are small fractions of the total profits created and merely a cost of doing business.
This market is broken. I doubt new rules will create compliance if the enforcement and penalties remain as weak and ineffectual as weve seen. We dont need new rules to go unenforced. We need to see gross abusers go to jail. We need real consequences.
Prior to the intense retail interest of January 2021, I was the only person in my social network who knew anything about the markets. Now the failure of the U.S. markets to regulate themselves is a common topic of conversation around the lunchroom table in my blue collar job, and I dont even live in the United States. These markets have become a global laughing stock.
Due to the lack of consequences on Wall Street crime, gross negligence, and misreporting has become the new standard.
The fact that Kenneth Griffin can go in front of lawmakers and testify under oath while lying through his teeth and then be proven to lie in a series of text messages between Robinhood and Citadel goons defies belief.
The fact that Jim Cramer, an avowed market manipulator (see https://youtu.be/r07Gg92YjOI), can go on television and pump up a stock on behalf of his handlers only for that stock to crash mere days later (see the most recent Netflix earnings report), causing regular dumb money to lose their stake in the game is disgusting.
To have retail literally locked out of the market and forced to only have the option to sell while the whales front run their trades and buy puts all the way down, and then to have none other than Steven Cohen taunt them about it on social media (see https://twitter.com/stevenacohen2/status/1354864321134735360?s=21) demonstrates how comfortable these abusers are in their position. They know they are untouchable, but the general public is starting to take notice and we arent happy.
Trust is easily lost, and very difficult to regain. The markets are losing the faith of investors.
Decisions are made based on incentives, and if greed is incentivized through a lackluster enforcement program within a self regulating system, how can we expect the free market to prevail?
Its time for a change.