Tax Hedge Fund and Short Sales at 90% for the prevention of the abuse of 401k participants during market downturns.

Hedge funds and short sellers make money by selling a stock at a higher price than when they buy it. Sounds great except for one thing. The selling happens before the buying. A large amount of shares of a certain stock can be sold by a firm or individual when they don't actually own any shares. This can overwhelm the stock price to the downside, harming the 401k holder. When the Short Seller buys back the shares at a lower price, the difference is his profit. Brokerage firms lend the shares necessary for this transaction to the Short Seller. When the shares are bought back, the Short Seller does not actually own the shares, they revert back to the brokerage firm. I feel this harms retirees.