Former SEC Commissioner, OSTK’s president and executives from 11 other companies propose Reg SHO Amendments
Former SEC Commissioner Roel C. Campos, joined by officers of Overstock. Com, AMAG Pharmaceuticals, Inc., ARYx Therapeutics, Colonial Bank, Dionex Corporation, Ditech Networks, Inc., EnerNOC, Inc., Life Partners, Quest Software, Inc., Sangamo BioSciences, Inc., Veraz Networks, Inc. and Web.com Group, Inc. sent the following letter to the SEC March 25th.
Their recommendations include a pre-borrow rule, and end to the ”reasonable belief” rule, ex-clearing disclosures, the marking of all trades and more timely disclosure of FTDs.
Roel C. Campos
(202) 842-7825 rcampos@cooley.com
Admitted to Practice in
California, Texas only
March 25,2009
Ms. Elizabeth M. Murphy
Secretary
Securities and Exchange Commission
100 F. Street, NE Washington, DC 20549-1090
Re:
File No. S7-30-08, Release No. 34-58773, Amendments to Regulation SHO
File No. S7-31-08, Release No. 34-58785.. Disclosure of Short Sales and Short Positions by Institutional Investment Managers
File No. S7-08-08, Release No. 34-58774, "Naked" Short Selling Antifraud Rule
Dear Ms. Murphy:
This letter presents the views of a group of issuers (public companies) regarding naked short selling. As a fundamental matter, this group does not seek to limit or to prohibit legitimate short selling. Short sales are acknowledged as important to the markets in providing price discovery, liquidity, and balance. In contrast, naked short selling is a tool to violate the securities laws and continues to cause damage to issuers and their shareholders (inclUding pension funds, 401 (k) holders, and retail shareholders). In evaluating the need for further changes to Regulation SHO, it is important that the Securities and Exchange Commission (the "Commission") take into account the viewpoint of issuers and their shareholders and not simply those of professional traders and organizations that service the market. In the current climate of financial crisis, naked short selling is the "proverbial fuel on the fire" that can vastly accelerate the downward pressure on share prices. Naked short selling will also impede and thwart the national goals of TARP and the rescue of the U.S. bank system.
The Commission has recently announced its intention to reconsider the appropriateness of restoring the so called "tick test" in which short sales can only be executed when the share price is rising. We have no objection to restoring the tick test. However, the tick test will not by itself solve the problem of naked short selling. As discussed herein, much will remain for the Agency to accomplish to remove the great harm to the markets that is caused by naked short selling.
I. Naked short selling continues to cause great harm to issuers and investors.
Continued at:
sec.gov
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