ALL FOR “SHO”
By: Phil West
I am writing this article in hopes that the SEC might take some friendly advice. You see, I have been watching the corruption of the Counterfeit Stock Conspiracy play out in front of me, and it got me to thinking: There is nothing wrong with what the SEC is letting take place, they just got the name wrong.
Back on Jan. 3rd of this year, the SEC rolled out their heavily touted “Regulation SHO”. Sure, there have been laws on the books since 1934 to keep this counterfeiting out of the marketplace, but this new law would be the cure all. This was to be the enforcement arm that was to put all Market Makers, Brokerage Houses, and Hedge Funds on notice that play time was over.
After months and months of warnings and delays, Regulation SHO did indeed come to fruition on Jan. 3rd, and the “FIX” was underway. It appears however, that somebody forgot to inform the SEC that they were actually expected to follow through on the consequences outlined in the regulation. It certainly appears that this Shark has no teeth. Oh sure it looks scary enough, but when the rules get broken, don’t expect the SEC to put in their dentures and bite anybody.
Which brings me to my advice. Why don’t you change the name?? This is a much easier fix then actually enforcing the rules. I mean - yes your supposed to be all about protecting the shareholders, and keeping the floor of the markets level and fair for everyone, but its painfully obvious that this is not the direction things are headed. Hmmmm – What could we change the name to… I know!! Let’s call it “ALL FOR SHO”. Now this sounds much more like the friendly tap on the shoulder you are ruling with. Regulation is much too harsh a word to tout around when there are no consequences for failure to obey the law. Lets just urge everybody that is breaking the law, and making pockets full of OUR cash, to simply straighten up and fly right. Perhaps everyone will want to follow all the rules on their own. YES, Let’s disarm our Military and Law Enforcement Officers while we’re at it. C’mon SEC - L@@k where it has got us… Lets review.
Regulation Sho: Creates a threshold security list for those stocks that have failed settlements exceeding 10,000 shares or ½ % of the total outstanding share structure for 5 consecutive trading days. After this time, these stocks on the list are no longer allowed to be shorted, and failed deliveries are to begin taking place immediately through forced buy-ins. Problem solved…..YEAH!!!! Oops, that may be a little premature.
Real World: Many companies do make the list, but the list itself is in question. In December of 2004, the NYSE, NASDQ, and AMEX, were submitting practice lists to the SEC in preparation for the real deal in January 2005. Yet somehow, hundreds of companies mysteriously dropped off the list after the beginning of the year. Did all of these companies failed deliveries get fixed? Not that I can find. It appears that most of these companies share prices either stay stagnated or continue to drop. What happened to the 5 day rule and the forced buy-ins? That’s a great question, to which I am still praying for the answer.
Simple summary: If market makers and brokerage houses never have to deliver on the stocks that they are selling, then there becomes an infinite supply for everyone to buy. If there is an infinite supply, then the shares are worthless, and the markers you see in your account, are COUNTERFEIT. They do not exist. You were sold air, and charged a transaction fee for the trouble. There is no such thing as buying pressure to raise the price of a stock, if you can keep pulling shares out of thin air.
SEC – Please change the name so that it does not mislead us any further, or lull us into a false sense of security. Simply change the name to “ALL FOR SHO”, or you could consider actually enforcing the rules you wrote. Nah – Now that’s too simple. All for show seems to be your rule of thumb, because you can continue pointing to this new law, and say: Look what we are doing to protect the shareholders and small business. OOOH – I feel safer already. Gimme A Break!!!
Everything written here is in my opinion only, and you are encouraged to research this matter for yourself. I only want people to educate themselves, and hold the regulatory bodies to the high standard they are supposed to represent.
One United Voice can be heard…
Copyright "Foundation of the Heart", 2004.
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Last updated: 04/30/05.
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ps. Shorting is the scam.