Short-selling of stocks should be abolished. The practice is damaging because it artificially lowers stock prices. The practice of profiting from a company's failures is immoral. By selling shares that they do not possess, short-sellers temporarily reduce stock prices, because if those transactions had not occurred, fewer shares would be available for buyers to purchase. Short-sellers disrupt the normal bid/ask process. Short-sellers have been known to collude and sully the reputations of the companies that they short, by spreading bad news. Such behavior does occur, and it is unsavory. If short sellers lie about a company, for personal benefit, they should be held liable for their words--just as company managements commit securities fraud for such behavior. Also, if short sellers conspire to reduce a stock’s price by making their trades in unison, they are guilty of market manipulation, and should be treated as such. Short sales contribute to market instability. The stock market doesn’t need short sellers to police the actions of long investors.
Dawn Monroe Comment On Regulatory Notice 21-19
Short-selling of stocks should be abolished. The practice is damaging because it artificially lowers stock prices. The practice of profiting from a company's failures is immoral. By selling shares that they do not possess, short-sellers temporarily reduce stock prices, because if those transactions had not occurred, fewer shares would be available for buyers to purchase. Short-sellers disrupt the normal bid/ask process. Short-sellers have been known to collude and sully the reputations of the companies that they short, by spreading bad news. Such behavior does occur, and it is unsavory. If short sellers lie about a company, for personal benefit, they should be held liable for their words--just as company managements commit securities fraud for such behavior. Also, if short sellers conspire to reduce a stock’s price by making their trades in unison, they are guilty of market manipulation, and should be treated as such. Short sales contribute to market instability. The stock market doesn’t need short sellers to police the actions of long investors.