An Unacceptable Practice


By October 2009, the Senate had not yet acted on S.605, legislation that would require the SEC to reinstate the uptick rule and regulate abusive short selling practices. In a "Dear Colleague" letter urging other Senators to cosponsor the legislation, Kaufman noted that the SEC’s inability to stop manipulative short selling was “unacceptable.” S.605 was never signed into law. Almost a year after Senator Kaufman originally urged the SEC to adopt an uptick rule, the SEC put in place a “circuit breaker uptick rule,” which would take effect if a company’s shares fell 10 percent in one day.  Kaufman and Senator Isakson issued a joint statement, and though they were “encouraged” by the rule, they believed the SEC could have done more to protect investors.