Letter to the SEC
Address Date
Subject: RE: File No. 57-24-99.
Mr. Jonathan G. Katz
Secretary, Securities and Exchange Commission
450 Fifth Street, N.W.
Washington,. D.C. 20549-0609
RE: Unregulated Short Sales by OTCBB Market Makers
Dear Mr. Katz:
I urge you to consider regulating short sales by OTCBB Market Makers.
At present, OTCBB Market Makers have no reporting requirements whatsoever concerning short sales. Short selling serves many useful purposes in keeping our financial markets in check. However, if it is unregulated it can be subject to massive abuse.
I believe that the values of all OTCBB companies are controlled by the market makers. Because the present rules allow them to naked short a security with no reporting requirement, the market makers can continue to short a security indefinitely, essentially betting that they can outlast private investors. If the market maker succeeds in “beating the will" out of private investors, the market maker never has its short position.
I am an active trader and I have seen countless abuses by the market makers. Activities which should be criminal are commonplace. I have seen companies report blockbuster earnings and news only to have its share price decline. I have reviewed numerous time and sales reports and have seen day after day of investors buying shares of a security and the price of the security drop lower and lower.
There is no justifiable reason to allow OTCBB market makers to continue to short sell without regulation. There should be reporting requirements as to how many shares each market maker is short and limits should be set so that a market maker cannot continue to short millions upon millions of naked shares.
Please keep me informed as to the status of any proposed regulations.
Very truly yours,
Name
Investor
AI
