Kaufman Statement on SEC roundtable
September 30, 2009
WASHINGTON, D.C. - Sens. Ted Kaufman (D-DE) released the following statement after this morning's Securities and Exchange Commission (SEC) roundtable on short selling.
"Today's panel - even though heavily stacked in favor of industry - almost without exception admitted there are bad actors who engage in naked short selling and that the current locate system is not being complied with. It is obvious the status quo is unacceptable, and that industry has failed to deal with the problem.
Indeed, Chairman Schapiro herself asked why an industry so adept at technological innovations to make profits still has not come up with a technical solution for naked short selling. Chairman Schapiro and Commissioner Walters also stated pointedly that the current locate system has serious deficiencies and that challenges confront the Commission in enforcing the current ineffectual rule.
Now, as International Bank of Commerce Chairman Dennis Nixon, the one banker on the panel who has been targeted by aggressive short selling asked: the question is whether the Commission will side with the interests of short-term speculators on Wall Street or long-term investors on Main Street.
I believe it's time for the Commission to impose a solution on the industry that serves the interests of long-term investors, the substance of the prior uptick rule and either a pre-borrow or hard locate requirement. Half-measures that rely on industry compliance are proven failures that I will not support."
Sen. Kaufman first notified the SEC on March 3 that it should move to curb abusive short selling, followed by legislation directing the Commission to reinstate some form of the uptick rule as well as numerous floor statements and letters from Sen. Kaufman and several colleagues to SEC Chairman Mary Schapiro encouraging the SEC to take urgent action that's meaningful and vigorously enforced.
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