In 2007, the SEC got rid of the "uptick rule," which barred investors from betting against a stock until it sells at a higher price than the preceding trade. But with the tumbling bear market, Ben Bernanke is thinking about resurrecting it, Bloomberg reports.

“In the kind of environment we have seen more recently” the so-called uptick rule “might have had some benefit,” Bernanke said in testimony before the House Financial Services Committee today. After all, the Standard & Poor’s 500 Index has tumbled 50 percent since the SEC dropped the uptick rule 16 months ago.

Uptick has a sordid history. The SEC approved the rule in 1938 to prevent bear raids on companies, Bloomberg's Jesse Westbrook recounts. The agency eliminated the regulation after studying its effect on share prices and determining it was no longer relevant in markets dominated by fast-paced electronic trading.

One idea floated by former SEC Chairman Christopher Cox is a modified provision that would allow traders to short a company only at a price that was a few cents higher than the best bid for the stock, according to Bloomberg.

Before rendering a verdict on shorting, consider its tumultuous recent history. Last year, regulators cracked down on short selling, in which traders borrow shares and then sell them in the hope of profiting by buying the stock back later for a lower price. And the SEC temporarily banned all bets that financial stocks would fall and is forcing hedge funds to reveal to the agency stocks they’ve sold short. In London, a Financial Services Authority prohibition on shorting 34 U.K. financial companies lapsed last month. Regardless, executives at UBS AG, Deutsche Bank AG and Knight Capital Group Inc. all said in December that bringing back the rule wouldn’t reduce volatility in stock prices. Interesting.

What are your thoughts on the paradoxical world of short selling? Should there be greater controls? Email with your ideas.