Michael Hernandez Comment On Regulatory Notice 21-19
Short interest and FTD anomalies need to be have the greatest level of transparency and strictest guidance available to the entire breadth of market participants. We should not a have a market system where by large powerful institutions can dominate trading with a flood of short sales for the purpose of extinguishing any particular company's stock and eventually forcing it in to bankruptcy. Short selling in this manner is being abused, and it's normal exercise is no longer a tool for simply making money in down turns, it is being used as a sledge hammer to take out companies to the benefit of a very few and very select market participants. Take AMC for example- Wall Street has decided that they would like to reform the nature of how media is consumed by forcing the largest theater chain the USA into bankruptcy. They actually want to change the social habits of many Americans who enjoy going to the movies as a night out. So why should a select few people, .01%, enjoy this level of power to shape the landscape of this type of commerce for everyone else, in the 99%? And while they destroy this pastime- their longer term financial outlook is to go long on streaming providers. Win win for them on the down and upside. What a lot of Americans do not understand, and are waking up to, is how dangerous it is to have to obey the whims of very concentrated power such as this- who care neither for movies, nor our pastimes or American Traditions, and is perfectly happy to try and convince us that movies on the big screen is a "dying industry". We simply cannot afford to have the Wall Street Cudgel shaping commerce for the rest us with this type of hidden and secretive power. People who do not understand markets, or how the stock price affects a company will easily capitulate to the narrative that AMC went bankrupt because it's a "dying industry" without ever really understanding that it was Wall Street hobbling the industry the whole time, all for Wall Streets bottom line, not Main Street's. Most importantly- FTD's are creating an alternative and artificial credit pool, where there is no real accountability and gives a great amount of flexibility to further destroy legitimate companies, by an unfair advantage. Just imagine for a second, the ability to artificially create float with a whole bunch of IOUs, and having this huge settlement window in which to satisfy the fraud before it becomes punishable! Absolutely no one else enjoys this alternative credit pool accept those who wield this Wall Street Cudgel. FTD"s need to be treated with the same seriousness as blatant financial fraud is, carrying a penalty of billions fines, permanent disbarment of market participation, limited not only the institutions that sponsor them, but also a permanent ban of the individual or individuals who perpetuate this type of market distortion. Therefore limits on short selling need to be incredibly strict for large market players, and become as transparent, and up to date as possible. FTD's need to be punished with harsh criminal penalties and exorbitant fines, where in a 3rd strike is a financial extinction level event for the offender/s involved. We cannot have unbridled short selling and rampant FTD's for those who enjoy an inordinate concentration of power on Wall Street. It's as simple as that.