cdu likelyup soon in senate inquiry into asic, page-82

Max,

We are witnessing more and more support for action to be taken against high frequency trading and the Federal Government must surely act.

That will be the first step in what needs to be done to bring about a level playing field on our stock exchanges.

Of more concern to me is shorting. It would appear that there is no logical explanation that anyone would lend their shares for shorting knowing that the value of their investment would go down.

There is however a logical explanation. The lender is not disadvantaged. The shares are considered as a long term valuable investment and more shares can be acquired at prices not obtainable had the shares not been shorted. They get the shorted shares back anyway and have received payment for the lent shares.

There is no consideration by the lender to the damage shorting does to ordinary shareholder wealth or to the ability of a company to raise capital.

Submissions have been made from various sources to the Senate Inquiry on the subject of shorting .