Uptick Rule Short on Logic

The SEC is convinced that some version of the Uptick Rule should be reinstated in the equities markets.  The claim is that short-sellers can intentionally drive a company's stock price down and destroy an otherwise sound company.  This does not make sense.  If the fundamentals of a company are sound, then short-sellers pose no threat to its long-term viability.  On the other hand,  if a company is "cooking the books" and is trying to "fake it to make it," then the short-sellers pose a grave threat and rightly so!

Currently, the real problem, and one that is not being fully addressed, is the lack of transparency concerning the valuation of a company's assets.  With respect to the Wall Street investment banks, it is difficult to know which ones are even currently really solvent.  Short-sellers have been charged with driving investment bank share prices well below what they are really worth.  Really?  Some of these banks' stocks are worthless...and when they actually have to write-down the value of their "toxic assets" ...who are we going to blame?  The short-sellers? 

On the contrary, short-sellers play a vital role in the equities market, namely decreasing market volatility, as Sal Khan explains: