Sen. Ted Kaufman, D-Del., in his first bill proposal since being sworn in to Congress in mid-January, submitted to the Securities and Exchange Commission on Monday a bipartisan legislation that aims to reinstate the so-called “uptick rule” that prohibited short sales from the Depression era until its repeal in mid-2007. “Abusive short selling is tantamount to fraud and market manipulation and must be stopped – now,” Kaufman said on the Senate floor late Monday. “The uptick rule should have never been repealed. To permit people to sell shares they don’t have and won’t be able to deliver turns investment into pure speculation. The time has come for this practice to stop.” He was joined in the effort by  Sen. Johnny Isakson, R-Ga., who announced Tuesday his co-sponsorship of the bill and who said he has since last fall been calling for reinstatement of the rule. “Senator Kaufman has introduced a piece of legislation that is right for America, it is right for America’s investors, and it is right for our stock market as it still languishes today somewhere down near what we hope is the bottom,” Isakson said during a speech on the Senate floor. “One way to ensure that bottom exists is to stop rewarding those who would feed off of it and instead reinstate good discipline that ensures good practices and allows the market to restore itself back to a good equilibrium.” The legislation would “end abusive short selling” by restoring the rule that prohibited short sales of the securities of any financial institution unless the trade occurs at a price at least 5 cents higher than that of the last transaction. The legislation would prevent anyone from selling securities short without proof of a “legally enforceable right” to do so at that time. The restrictions would force short sellers to wait for stock prices to increase before selling and — the Senators hope — encourage a bit of market recovery. “This is bigger than just one rule, however influential that rule is,” Kaufman said. “Markets all over the world continue to tumble because average investors have lost confidence that the markets work for them. Piece by piece, we must restore that faith.  One important step is instituting sensible regulations. In this case – enacting a proven, time-tested rule – it’s an easy call.” The SEC is slated to meet April 8 to vote on proposing a return of the rule. Write to Diana Golobay at diana.golobay@housingwire.com.