U.S. Securities and Exchange Commission Chairman Christopher Cox did the right thing when he took a stand against “naked short selling,” Cramer said during Monday’s Mad Money. But that’s not enough. There’s still more Cox could do to ensure we never again suffer through a similar banking depression.

Before Cox stepped up last week and issued his emergency ruling, traders were able to hammer down stocks virtually unchecked. And they seemed to favor the banks. In fact, it was the fear that such bear raids would drive Fannie Mae

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[FRE  Loading...      ()   ] out of business that prompted Cox to act. Once Wall Street realized there are now consequences for not following the rules, it finally put a floor under these much-hated names.

Of course, Cox shouldn’t have had to issue an “emergency” ruling at all. Naked short selling, which is short selling a stock with first borrowing it, has been illegal since the 1930s. Cramer has explained this before. So if the chairman enforced that rule across the board, all stocks – not just the banks – would be spared the (sometimes irreversible) damage that bear raids cause.

But Chairman Cox needs to take his increased enforcement even further, Cramer said. The SEC needs to bring back the uptick rule.

The uptick rule prevents a stock from being sold short until another buyer takes the share price up first. The SEC claims they fully researched the regulation before it was repealed, but Cramer said the research took place during one of the biggest bull markets in history. Studying the effects of such a rule during a bear market makes more sense.

The SEC has also said that waiting for an uptick means nothing in a world where the difference between a bid and an ask price is mere pennies. And exchange-traded funds have made the rule irrelevant. But even if the SEC required an uptick of a dime, just 10 cents, even for the ETFs, Cramer said, the move would be enough to put a stop to the bear raids. One or two prosecutions and the message would be sent.

The rules – naked short selling, the uptick – all worked, and Cramer’s firm in his belief that enforcing them will restore order in the markets. At least in terms to keeping the bears and their tactics from instilling so much fear in investors. So why not hold all naked shorting accountable and bring back the uptick rule?

“Only then will the shorts lose the upper hand,” Cramer said, “and the market will become a safer, fairer place for you to invest.”

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