Naked Shorting-Hedge Fund & Market Maker manipulation? Message Board

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Microcap & Penny Stocks : Naked Shorting-Hedge Fund & Market Maker manipulation?

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From: basserdan	1/11/2009 6:33:35 PM
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Bill to reinstate the uptick rule deepcapture.com WASHINGTON, Jan 9 (Reuters) - A member of a key U.S. Congressional panel introduced a bill on Friday to reinstate a Depression-era rule aimed at regulating a type of trading blamed for contributing to Wall Street’s meltdown. Democratic Rep Gary Ackerman introduced legislation to reinstate the so-called uptick rule and won the backing of U.S. discount brokerage Charles Schwab Corp’s (SCHW.O) chairman. The uptick rule, which only allowed short sales when the last sale price was higher than the previous price, was repealed by the Securities and Exchange Commission in 2007 because the SEC found that changes in trading strategies rendered it ineffective. Short selling is a legitimate investment strategy where investors borrow stock they expect to fall in price in the hope of repaying the loans for less and profiting from the difference. That type of investing was heavily criticized by corporate America when the markets were dropping precipitously in 2008 and some said the repeal of the rule contributed to market volatility and downward pressure. “In the wake of the elimination of the uptick rule, the value of many volatile stocks have plummeted due to an onslaught manipulative short sale practices,” said Ackerman, who sits on the House Financial Services Committee. The panel will be instrumental in reshaping the structure of the country’s financial regulatory system. Charles Schwab, the chairman of his eponymous brokerage, has written a letter to members of Congress saying the rule is critical and necessary step to reduce volatility and restore investor confidence. Ackerman said he is circulating Schwab’s letter. (Reporting by Rachelle Younglai; Editing by Andre Grenon)

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