Is stopping shorts like stopping freedom of speech of those with bad news?

My ultimate belief is getting rid of shorts temporarily goes against freedom of speech. The shorts are like messengers informing people bad things about companies. Without them you create a bubble of only hearing good news about companies (the longs)… Oct 2nd it will be a bursting bubble.

of course, we all agree, if we didnt, I doubt we would be in the CFA program. Read the NYT article today on shorting. without shorting, we let the bad weeds grow. dont forget shorting is about limited upside but UNLIMITED downside, so it is almost as if you have to do better research if you are going to short a stock. do i agree with spreading rumors to take down names? no, of course not. should the uptick rule come back? I think it may have to after what we saw last week

Remember that freedom of speech does not protect you against slander or libelous speaking. If you say things about a person or organization that are demonstrably untrue and damaging, freedom of speech doesn’t protect you. If you incite a crowd to riot, freedom of speech does not protect you. Actions also do not normally count as speech. Artistic expression is a grey area where the line is constantly tested. But I can’t kill someone or beat them up an say that that was me exercising my constitutional right to say I don’t like them. I think the courts would probably not uphold the idea that entering a short position is equivalent to protected speech. And starting false rumors could be sued under slander/libel laws.

shorting is fine with some restrictions on it (uptick, flat tick, something like that). but is there any doubt that certain individuals are out there all the time spreading false rumours?.. and basically the SEC can’t stop that, so do the next best thing. i think the actions have been a good thing.

Cliff Asness summarizes it nicely here: http://executivesuite.blogs.nytimes.com/2008/09/21/cliff-asness-is-mad-as-hell/ The first comment is interesting as well

I’m impartial to alot of this, but here is my thought. If the rumors truely are rumors, would it really make a difference in the long run? I don’t understand why the shorts are being blamed for ‘shorting BSC/LEH/FRE/FNM/etc to the ground.’ At some point the rumor would have to be overturned.