Shareholders Have Rights, Too

Unfortunately, uptick-rule-less short-selling serves one purpose: to drive down the stock of a company and seek financial gain, without regard to the rights of shareholders.

What are these rights? Below is my Shareholders' Bill of Rights, which I originally arranged for my blog.

Shareholders' Bill of Rights

1. Shareholders have the right to vote their shares in accordance with corporate by-laws.
2. Shareholders have a claim to the net assets of the company.
3. Shareholders have a right to receive dividends distributed by the company.
4. Shareholders have the right to sue the company or its management as an individual or as part of a class.
5. Shareholders are entitled to receive an annual set of financial statements audited by an independent public accountant.
6. Shareholders have the right to create and destroy capital.
7. Shareholders can pledge or assign their stock.
8. Shareholders can elect to lend or withhold the lending of their stock.
9. Shareholders right to sell stock shall not be subordinated to any individual or entity.
10. Shareholders ownership shall not be nationalized by any government.

Short-sellers do not share these rights. They do have a right to make money, but not if that action conflicts with or impinges upon shareholders' rights. I would take it even one step further and say that short-sellers, regulators, legislators and courts have an obligation to protect the rights of shareholders in the course of their business as a matter of public policy.

Click here to sign TheStreet.com's petition to reinstate the uptick rule.

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