Conditional Capitalism at Heart of SEC 'Naked Shorting' Restrictions

I agree no naked shorts period. Also commodity trading futures for pproducers and users only. How about not being able to sell a stock until you own it. Let us legitimate traders once again flourish. Amen!

Naked Shorts - anyone who has studied the '29 crash found out that they don't work properly - if a company has over 100 percent of its issued stock allocated which is what naked shorts are vs. shorts that are covered by stock bought on margin . . . one can wipe that company out by selling, selling, selling, no consequences . . . those pundits who advocate this naked short positions should check out the 1934 act that was put in place to end this practice . . . We know the original reason for shorting a stock was a buyer would be available when a margin postion long wanted to sell

So it's not ok to hurt these selective 17 companies but rest are fair target..awesome!!

Pardon. What on earth are you saying exactly? I maybe no investor, but I do know most people aren't buying the fact that oil companies and all the other facts aren't consumer caused. They are not stupid. What I'm seeing is a bunch of a facts that do not relate to the causes. We are being duped, period

Putting all sorts of restrictions on shorting hasn't worked out too well for Japan. The Nikkei was near 40,000 in 1990 and in the 13,000 area currently. The big institutions who really move the markets need their shorts and squeezes to create large, sustainable rallies. And Elmer H's comment is crazy. Stick with glue, Elmer!!

Let us get one thing clear Naked Shorting is ILLEGAL and people can and will go to prison. Now if they are talking just regular shorting, then I have no problem with that. Electronic Comments: • Use the Commission’s Internet comment form(http://www.sec.gov/rules/proposed.shtml); or • Send an e-mail to rule-comments@sec.gov. Please include File Number S7-19-07 on the subject line; or • Use the Federal eRulemaking Portal (http://www.regulations.gov). Follow the instructions for submitting comments.

Be very afraid of congress the type of bail outs they are talking about may put the icing on the cake of economic destruction.

blaming short sellers for the fall of a company is like blaming the vultures circling overhead for the carcass on the ground! If these companies weren't so poorly run the vultures would have never shown up!

The Author of this Article needs to do more research into the effects of Naked Short Selling. Naked short selling is illegal, when you short a stock it needs to shorted against a Real cert. It is true that not all Certs can be delivered in a timely manner to the Brokerage house, thats the DTCC fault. Yes, it is also true that the Government does permitt Broker to be Naked, however there is a time frame associated with that namely 3 days. After 3 days the brokerage is required by LAW to produce a Real Cert. Naked Short selling has robbed and destroyed many smaller company seeking to raise capital. This has been a 10 year problem. Now that this Criminal behavior has worked it's way up the food chain to our National Banks it only now recieves the attention of the SEC. SEC has established Regulation ho a couple of years ago, but as everyone know Reg Sho is a JOKE. It has no teeth to force these guys to cover. Shame on the Security and Exchange Commission for not enforceing the law. Shame-john

It's a shame that government gets involved in a "free market".

The Author of this Article needs to do more research into the effects of Naked Short Selling. Naked short selling is illegal, when you short a stock it needs to shorted against a Real cert. It is true that not all Certs can be delivered in a timely manner to the Brokerage house, thats the DTCC fault. Yes, it is also true that the Government does permitt Broker to be Naked, however there is a time frame associated with that namely 3 days. After 3 days the brokerage is required by LAW to produce a Real Cert. Naked Short selling has robbed and destroyed many smaller company seeking to raise capital. This has been a 10 year problem. Now that this Criminal behavior has worked it's way up the food chain to our National Banks it only now recieves the attention of the SEC. SEC has established Regulation ho a couple of years ago, but as everyone know Reg Sho is a JOKE. It has no teeth to force these guys to cover. Shame on the Security and Exchange Commission for not enforceing the law. Shame-john

The Author of this Article needs to do more research into the effects of Naked Short Selling. Naked short selling is illegal, when you short a stock it needs to shorted against a Real cert. It is true that not all Certs can be delivered in a timely manner to the Brokerage house, thats the DTCC fault. Yes, it is also true that the Government does permitt Broker to be Naked, however there is a time frame associated with that namely 3 days. After 3 days the brokerage is required by LAW to produce a Real Cert. Naked Short selling has robbed and destroyed many smaller company seeking to raise capital. This has been a 10 year problem. Now that this Criminal behavior has worked it's way up the food chain to our National Banks it only now recieves the attention of the SEC. SEC has established Regulation ho a couple of years ago, but as everyone know Reg Sho is a JOKE. It has no teeth to force these guys to cover. Shame on the Security and Exchange Commission for not enforceing the law. Shame-john

The Author of this Article needs to do more research into the effects of Naked Short Selling. Naked short selling is illegal, when you short a stock it needs to shorted against a Real cert. It is true that not all Certs can be delivered in a timely manner to the Brokerage house, thats the DTCC fault. Yes, it is also true that the Government does permitt Broker to be Naked, however there is a time frame associated with that namely 3 days. After 3 days the brokerage is required by LAW to produce a Real Cert. Naked Short selling has robbed and destroyed many smaller company seeking to raise capital. This has been a 10 year problem. Now that this Criminal behavior has worked it's way up the food chain to our National Banks it only now recieves the attention of the SEC. SEC has established Regulation ho a couple of years ago, but as everyone know Reg Sho is a JOKE. It has no teeth to force these guys to cover. Shame on the Security and Exchange Commission for not enforceing the law. Shame-john

The Author of this Article needs to do more research into the effects of Naked Short Selling. Naked short selling is illegal, when you short a stock it needs to shorted against a Real cert. It is true that not all Certs can be delivered in a timely manner to the Brokerage house, thats the DTCC fault. Yes, it is also true that the Government does permitt Broker to be Naked, however there is a time frame associated with that namely 3 days. After 3 days the brokerage is required by LAW to produce a Real Cert. Naked Short selling has robbed and destroyed many smaller company seeking to raise capital. This has been a 10 year problem. Now that this Criminal behavior has worked it's way up the food chain to our National Banks it only now recieves the attention of the SEC. SEC has established Regulation ho a couple of years ago, but as everyone know Reg Sho is a JOKE. It has no teeth to force these guys to cover. Shame on the Security and Exchange Commission for not enforceing the law. Shame-john

The Author of this Article needs to do more research into the effects of Naked Short Selling. Naked short selling is illegal, when you short a stock it needs to shorted against a Real cert. It is true that not all Certs can be delivered in a timely manner to the Brokerage house, thats the DTCC fault. Yes, it is also true that the Government does permitt Broker to be Naked, however there is a time frame associated with that namely 3 days. After 3 days the brokerage is required by LAW to produce a Real Cert. Naked Short selling has robbed and destroyed many smaller company seeking to raise capital. This has been a 10 year problem. Now that this Criminal behavior has worked it's way up the food chain to our National Banks it only now recieves the attention of the SEC. SEC has established Regulation ho a couple of years ago, but as everyone know Reg Sho is a JOKE. It has no teeth to force these guys to cover. Shame on the Security and Exchange Commission for not enforceing the law. Shame-john

The Author of this Article needs to do more research into the effects of Naked Short Selling. Naked short selling is illegal, when you short a stock it needs to shorted against a Real cert. It is true that not all Certs can be delivered in a timely manner to the Brokerage house, thats the DTCC fault. Yes, it is also true that the Government does permitt Broker to be Naked, however there is a time frame associated with that namely 3 days. After 3 days the brokerage is required by LAW to produce a Real Cert. SEC has established Regulation ho a couple of years ago, but as to cover. Naked Short selling has robbed and destroyed many smaller company seeking to raise capital. This has been a 10 year problem. Now that this Criminal behavior has worked it's way up the food chain to our National Banks it only now recieves the attention of the SEC. Shame on the Security and Exchaneveryone know Reg Sho is a JOKE. It has no teeth to force these guys ge Commission for not enforceing the law. Shame-john

They will not outlaw naked shorts outright because this is how hedge funds are making most of their profits. Once a hedge fund identifis a troubled company they will sell its stock short thus further depriving the company from a chance to obtain funding (stock is worthless and keeps falling). Then they ride it down all the way to bankruptcy and at the end do not even have do deliver any stock, period. This one practice where none of fundamentals or market research or product quality matters. The only thing that does is the size of a hedge fund. Where else can you find a guaranteed 300% return on your invesment? The only way to withstand this is to pay cash dividend that only most stellar companies can afford. No surprise then that ever since 2000, scores of decent small-to-medium companies are taken back private... and what's left is just more fodder for hedge funds to feast on.

To Elmer: Are you the one who will decide who's a "legitimate" trader and who's not? And what about put call buyers? They will be outlawed too? What the SEC has done is a shame in itself and a terrible precedent for the future. Rolling down this road will bring us to Chaves style socialism.

johnc222: I think we got the point on your first post! ;-) I'm not in favor of illegal naked shorting, but am against regulations against standard shorting. Like I said, Japan and now China have tried that and it backfired. I fear further attacks on "shorting," "unbridled speculation" etc. could come next...especially during a bear market and election year (prime time for politicians to "save" us from something).

Obviously a much needed change, as the markets have been destroying companies due to trading based on emotions and speculation rather than fundamentals. It's the same thing as the tech boom but in reverse. In the tech boom, companies became way overvalued and investors got stung for poor investment decision - tough break for the investors, that's life. When shorting, however, good companies with solid fundamentals are being driven into desperation by emotional bets against them. In the latter model, which we are in today, there is no opportunity for the company to recover. You could argue that that is the risk of selling your company to the public, but that argument wouldn't hold water with me. And to the idiots that say "the government shouldn't interfere in a free market" what do you say about all of the other SEC regulations? My only issue - this gives an unfair advantage to the short list of companies that are protected from short selling. In other words, Wachovia and JPM can still be killed by shorts while Citi and BofA are protected. Either disallow short selling across the board or allow it across the board - the government shouldn't pick and choose which individual companies are subject to regulation.