“I think your next guest ought to be somebody from the SEC to explain why they have sat back calmly, quietly, without saying anything and allowing these algorithmic, trend-following models to wreak havoc with what has, up to now, been the best capital market in the world,” Cooperman said in a CNBC interview.
He and others have called for the reinstatement of the uptick rule, which restricted short selling to stocks that traded higher at least once between short orders. The rule was repealed in 2007, just in time for the financial crisis. Since then, during times of sharp distress, market commentators have wondered aloud why the rule went away.
John Nester, a spokesman for the SEC, declined to respond to Cooperman’s comments.
“Uncertainty is here, and that means deleveraging into a market with reduced liquidity,” Connors said. “Expect more of these exacerbated moves.”