"The market acts better when people are in a fair market and can make money."
"They have compromised your systems. The downtick trading is one thing spoofing volume on sell orders and wash trading is another."
"The Wall Street Bets storylines has raised this issue in the USA, and very clearly has evidenced massive naked short selling and the creation of counterfeit shares. It is happening here in Canada."
"The retail investor using his/her online trading quote system doesn’t stand a chance – especially when playing on an exchange with little volume, such as the TSX Venture."
Many thanks to my good Twitter friend, @dhaney23
who was kind enough to share this 2019 interview with Eric Sprott. Don't let the date fool you, the content is perhaps more relevant than ever, and the movement continues. I would like to encourage those that invest in the mining sector, or on the TMX, to add their voices and encourage change.
I have loosely transcribed the interview below, and provided some updated information from the website for the Save Canadian Mining initiative.
Canadian billionaire Eric Sprott is backing Save Canadian Mining, a new advocacy group whose primary aim is to reinstate a securities trading rule known as the "uptick rule" or "tick test."
'I did lots of short-selling in my life but worked under the premise of the uptick rule, it's so easy for predators to create chaos in a stock. With no uptick rule, people can keep selling down at will.
In junior mining, when you see a stock going down 15% in a matter of minutes, that is someone selling who is trying to create the worst price. I would prefer to see the uptick rule reinstated. As an investor in junior mining, I have probably gained by the rule being gone. I want the retail investor to have a fair shot, and it's becoming a game that's very difficult for the average investor to win.
The group that set up this campaign determined that the Venture exchange (TSX-V) when compared to indices that would mirror base metals/gold stocks since 2012, it's underperformed those indices by something like 245%.
We have also seen the number of financings plunging - it's down something like 80% from its peak in 2012. The date points prove the case. Anyone who watches these small cap stocks can see it in the market...just for the sake of starting at a lower level.
Short sellers are very predatory, will put out false information, they will create situations in the market where technically the stock is breaking through a downtrend that they have created. It's easy to create chaos so that's why the uptick rule should be reinstated.
It lets traders come in and overwhelm the market when they choose to do that. I sense now that certain stocks on new releases, when stocks go up 25% in a day, in come the short sellers.
The valuations of the companies - there are so many companies that have no market cap - because they have been ground down.
The market cap of these companies are way less than the value of the guy shorting it. There is more chaos and devastation on the Venture exchange of mining stocks than on the bigger exchanges. If you could reinstate the uptick rule, you won't have these constant smackdowns that we have because the guy has to wait for it to go up to put the short on, so there will be less abuse of the system.
Shorters can sell a stock at will to whatever level they want it to. The whole thing has to stop and I wish they would get rid of front-running as well. The uptick rule is the weakest part of the demise that happens to companies on the Venture because you can just kill the value of a company.
The market acts better when people are in a fair market and can make money. You aren't going to go back to a place where you lose all the time, so the exchanges have to think about what they have allowed to happen here. The activity keeps going down all the time.
Other exchanges are trying to supersede the TMX, by preventing front-running, as an example. If there was an exchange that banished the uptick rule, maybe the TMX might find themselves losing business in which case they would right the ship.
We need to organize groups of mining companies, leaders, brokerages, individuals, etc to suggest to the Venture exchange that this change is long overdue.
We will form a group to solicit those opinions and take them to the Venture exchange and have a resolution of the matter. If we get enough voices, and appropriate voices, that could happen very quickly.'
Sprott concludes by asking supporters to go the website and say so. the problem is getting people to understand the issue, and the more people that come forward to support it will give us more power with the politicians, the regulators, and the exchange.