empty voting.

Reader comment on: More on Wachtell and the SEC

Submitted by northfork investor (United States), Mar 18, 2011 17:10

there are so many ways to hedge positions (although swaps work best) that reducing naked shorting will do very little to fix this aspect of the problem. the brokers enabling such hedging do not short on a naked basis. they pay what it takes to get the borrow and charge it to the hedger.

Like you I don't think this is a real problem. Whether hedged or not, shareholders often vote in a way that might be deemed by management to be against the stockholders' best interests. So why single out the hedged guys.

One thing I would do to cure the biggest factor in empty voting is to work at the state level to reduce the notice period ie the number of days between a record date and an event or voting date. With current technology it can be much shorter than the 20-30 days it is today. Could be as short as 5 days with the web and electronic communications.

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