Subject: File No. 4-520
From: Kiralynne Schilitubi, Ph.D.
Affiliation: Professor Of English

August 2, 2006

Reference: File Number 4-520 - Shorting, Naked Shorting

Having intensely traded stocks for over two decades,
since nineteen-eighty at age twenty, I am in a position
of knowledge greater than many of your SEC employees,
possibly more learned in stock trading than your
chair, Christopher Cox, whom I have met personally
many years back and am well aware of his past history
which lends to credibility issues.

Your SEC claims a reduction in short sales failed deliveries
and a reduction in naked short sales. This is less than
a true picture of our stock markets.

Prior to two-thousand-four year, shorts, either failure
to deliver or outright criminal naked short selling, both
reached historical highs, abhorrently so. This new SHO
pilot and related NASD rulings have effected no real change
in the degree of shorting related rule violation, but rather
have only leveled out this problem at an unacceptable level,
a level which is currently rising as new methods of effecting
financial crimes are discovered.

My viewpoint, based on extensive experience and direct
observation of this shorting problem, is your SHO pilot
program and NASD rulings lack teeth no enforcement is
effected by the SEC nor NASD. Your basic premise relies
on self-reporting which never works. This premise of your
shorting regulations is "criminals policing criminals."

All seasoned traders know your regulations and rulings are
riddled with loopholes Swiss cheese for financial criminals.
We know the "clock" for delivery can be reset through many
different mechanisms, a single example of many loopholes,
just as we know those involved in short delivery failures
and those involved in criminal naked shorting, we know those
involved in those activities have no fear of sanctions nor
of prosecution no deterrent, no fear.

You dare to consider creating more loopholes?

Currently, you are indicating a softer stance on this
shorting problem, which is very severe. This causes me
great concern and causes me to further question your
credibility as an enforcement agency. Being sincere,
my notion is the SEC is not working for the benefit of
nor protection of the investing public, as it should be
financial crime is widespread and causing great harm
to our American families.

I routinely check your SHO list during research. I have
found your SHO list only represents approximately twenty
to thirty percent of actual unlawful shorting. This is
no surprise with your official stance being short delivery
failures and naked shorting are "not a problem." This
suggests to me your data is being downplayed in keeping
with your official stance.

What is not acceptable to me is you, the SEC, do publicly
display data indicative of criminal naked short selling,
yet no investigations, no prosecutions. You also display
data indicative of shorting delivery failures, yet no
investigations, no prosecutions.

I will close with, "Why is this?"


Kiralynne Schilitubi