Chance Robert Furgerson Comment On Regulatory Notice 21-19
Chance Robert Furgerson
N/A
Addressed to Yvonne Huber & Racquel Russel. Thank you both for requesting comment on Short Interest Position Reporting. I find it hopeful and positive that FINRA has acknowledged a gap in their ability to oversee Short Interest and Fail-To-Deliver Positions. In order to protect American investors (many of whom rely on equity positions ins 401Ks and IRAs to have a hope of retirement) FINRA must execute on the idea to publicize short positions, synthetic short positions, and cumulative FTD positions. The SEC requires shareholders holding over 5% of equity shares complete a Schedule 13D to disclose their identity and purposes. Why are hedge funds and market makers allowed to take a nearly limitless short position without disclosing their identities and intentions? In our financial system, market makers working in conjunction with brokers and investment banks have an inordinate amount of control over the price of our publicly traded companies. With nearly 50% of stock trades executed in dark pools, investors have little information on pricing to base their investment decisions. It is demonstrated and acknowledged that “naked short selling” can be used to unnaturally depress a stock price — ex. Volkswagen squeeze of 2008, Overstock lawsuit against Goldman Sachs. Allowing this abuse to continue does not benefit individual American investors and this does not benefit American companies that keep our economy moving. I would also like to call out the effect on innovation, which has long been the only reason that the United States has continued to improve and grow while competing nations have entered long periods of stagnation. When large institutions are able to take a nearly infinite short positions, they make a quick buck and good ideas and technologies are lost. I would like to close with a note on FINRA violation fines, which are woefully low and infinitesimal compared to the value of the violation. For example, violations of Rule 5320 are measured in the tens or hundreds of thousands or dollars. For example, Citadel Securities settled with FINRA for $700,000 USD for 5320 violations that spanned at a minimum of 2 years. The benefit of violating these rules so far outweighs the cost of the fine that institutions like Citadel Securities see it as a simple administration fee - the cost of doing business. Thank you for reading my comments. I hope that you will spearhead a movement to make our equity markets fully transparent to allow Americans to invest hard earned dollars in good companies and good ideas for the greater benefit of the American people. The wealth of our nation is at stake. Best, Chance Furgerson
Chance Robert Furgerson Comment On Regulatory Notice 21-19
Addressed to Yvonne Huber & Racquel Russel. Thank you both for requesting comment on Short Interest Position Reporting. I find it hopeful and positive that FINRA has acknowledged a gap in their ability to oversee Short Interest and Fail-To-Deliver Positions. In order to protect American investors (many of whom rely on equity positions ins 401Ks and IRAs to have a hope of retirement) FINRA must execute on the idea to publicize short positions, synthetic short positions, and cumulative FTD positions. The SEC requires shareholders holding over 5% of equity shares complete a Schedule 13D to disclose their identity and purposes. Why are hedge funds and market makers allowed to take a nearly limitless short position without disclosing their identities and intentions? In our financial system, market makers working in conjunction with brokers and investment banks have an inordinate amount of control over the price of our publicly traded companies. With nearly 50% of stock trades executed in dark pools, investors have little information on pricing to base their investment decisions. It is demonstrated and acknowledged that “naked short selling” can be used to unnaturally depress a stock price — ex. Volkswagen squeeze of 2008, Overstock lawsuit against Goldman Sachs. Allowing this abuse to continue does not benefit individual American investors and this does not benefit American companies that keep our economy moving. I would also like to call out the effect on innovation, which has long been the only reason that the United States has continued to improve and grow while competing nations have entered long periods of stagnation. When large institutions are able to take a nearly infinite short positions, they make a quick buck and good ideas and technologies are lost. I would like to close with a note on FINRA violation fines, which are woefully low and infinitesimal compared to the value of the violation. For example, violations of Rule 5320 are measured in the tens or hundreds of thousands or dollars. For example, Citadel Securities settled with FINRA for $700,000 USD for 5320 violations that spanned at a minimum of 2 years. The benefit of violating these rules so far outweighs the cost of the fine that institutions like Citadel Securities see it as a simple administration fee - the cost of doing business. Thank you for reading my comments. I hope that you will spearhead a movement to make our equity markets fully transparent to allow Americans to invest hard earned dollars in good companies and good ideas for the greater benefit of the American people. The wealth of our nation is at stake. Best, Chance Furgerson