Short-selling made Joseph Kennedy's fortune before he became head of FDR's new Securities and Exchange Commission in 1934.

The practice of selling stocks short is legal, but there is a reason for its roguish reputation. Speculative short-selling may not cause fundamental economic problems, but it can exploit, worsen, and amplify them perniciously as Mr. Kennedy knew from firsthand experience. That's what is happening again today after the current SEC dropped Kennedy's essential "uptick rule" last year.

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