Apperantly, it was SEC that saw the results of its own pilot program as favorable – and proceeded by officially approving the elimination of the ‘uptick’ rule as of July ’07.

Yet, the very essence of the ‘uptick’ rule was to prevent powerful financial entities and the rest of the investing crowd , from artificially driving stocks down and then buying them back at bottom prices. Coincidentally, both ETF’s… SPY and Q’s have never been subject to the uptick rule. Clearly, there is some confusion here in SEC’s way of thinking and the moral stance it has taken in relation to this important issue, since its implications are rather vast. Additionally, a look at the VIX index as of July of fiscal ’07 – coincided with a high level of volatility – proving rule’s negative effects. Yet, nothing was done to reverse it.

I think , we can’t categorically deny uptick’s rule effect or better the manipulation of solid companies, getting punished for simply standing on solid fundamentals while those with negative returns and bound for pink status , have remained almost intact since last november when the decline started.

Perhaps, we’ll never know for sure, since we don’t have the real data – if the elimination of the uptick rule is the direct cause the markets have gained an ability to move down faster. One thing is for sure however, at least partially, that the elimination of the rule has contributed in diminishing markets ability to resist manipulation.

By way of background:

The Uptick rule is a former financial regulations rule, relating to the trading of securities in the United States. The rule was eliminated by the SEC, effective July 6, 2007. ‘Uptick’ is the name generally given to Rule 10a-1, under the Securities Exchange Act of 1934, which states that short selling is only permitted following a trade where the traded price was higher than the previously traded price (uptick).

On the March 20, 2008 episode of Mad Money, Jim Cramer launched his campaign to reinstate the Uptick Rule. Citing the wild swings of the market since its elimination, Cramer pointed out that the SEC eliminated the rule during a bull market, when liquidity was not a problem. Cramer believes that, without the Uptick Rule in place, short sellers are devaluing perfectly solid stocks. As a former hedge fund manager, Cramer admitted to making millions short selling with the Uptick Rule in place. Without an impediment such as the Uptick Rule to slow down the pace of short sellers, Cramer believes it puts the market at risk for the very problems that lead to the Great Depression.

Let me give you a brief overview to help understand who I am and why I view this act inappropriate at the least.

Back in the day I had a friend that I considered a great American he was a congressman that was the head of the “Ways & Means Committee” for “Rochester New York” I believe around 1968, anyway a long time ago – his name is Barber B. Conable Jr. and he went on to fill a void in the “World Bank”. His ethical boundarys and values were those which I tried to model my own after, and I am still trying to live by those standards. I currently am retired and reside in Canada with my family although I still conduct business in the U.S.

I spent a great deal of my adult life living, working, and paying taxes in the U.S.A. and there is nothing I would deny her for the life she provided me, so you will have to forgive me if I am so angered by this scurrilous act against the ordinary middle class investor who’s only goal is to try and raise his/her standard of living and family’s security level. Somewhere in this scenario there are officials that must answer for thier actions in this matter. Everyone can help by simply contacting their congressman & asking for an honest, relevant explanation as to why the uptick rule was removed?

I know this site is meant for things other than what I have put forward here, but I hope my efforts will benefit the investor on main street God bless America and keep safe all of her people.

Joseph E. Intine