Today's humor column from Jack Burney of OTCNN. No liquids in the mouth while reading, please.
Make It Illegal to Sell Stock You Don’t Own
By Jack Burney
Published by OTCNN.com
08/16/2000 09:06 AM CST
(Investor Forum is a platform for the free expression of investor opinion, open to everyone. OTC News Network provides background and comments, but the opinions expressed by investors in their letters to Investor Forum are their own and not necessarily those of OTC News Network. Send your comments to jburney@otcnn.com)
Background: The calm, logical approach, focused on seeking solutions to Market Maker Manipulation, is the new direction this movement is taking. It is evident in the comments by Investor Don E. Sprague, who points out that it is illegal to sell something you don’t own in every other industry, except the stock market.
Don E. Sprague writes that “Market Makers are very articulate in explaining why they should be allowed to continue short selling. Investors and companies continue to explain the truth of how they suffer.
“An orderly run market is one where people sell what they own to people who want to own it and the agent in the middle takes a published transaction fee.
“Market Makers claim that they can best set the price for stock. We are supposed to have a free market with price set by investor supply and demand.
“Market Makers have enjoyed too much control for too long and they do not want to give it up. Their short selling is nothing less than selling something that does not exist. That type of action is illegal in all other matters, except the stock market.
“When shorts are sold, does the purchaser of this nonexistent stock have the right to vote? The obvious answer is NO. Owners of nothing do not have voting rights.
“Logically we know that over the years, some of the owners of nonexistent short sold stock have been voting. This brings into question all the stockholder votes since short selling began.
“As long as short selling continues, the SEC should post rules covering voting rights of only real stock share owners. Short sellers must be required to inform the purchasers of nonexistent or copy stock that they can not vote since they do not own anything until the seller of the short has covered the short.
“The solution is simple, if you do not own it, you can not sell it. If you sell something you do not own, you should go to jail and pay a big fine. We need to get real and stop the criminal activity that for some reason has been legal up to now.
“The Internet has expanded public awareness of the truth about stock market manipulation. The public will continue to demand honesty in stock market activity. It is not a question of if short selling will be stopped. It is only a matter of when this corruption will be ended.
Comment: The logic is inescapable. The question of the misapplication of voting rights could create a legal nightmare. Selling stock you don’t own is, indeed, corruption, and the MM argument that “we’re just making an orderly market” falls flat. Public pressure continues to build, and the serene, intellectual tone of today’s critics may be more effective that the earlier anger-driven tirades. Will some major MM step forward soon and side with the small investor? It’s not impossible, but we’ll have to wait and see.. |
