Subject: File No. S7-08-08
From: Karl Schreiber

March 17, 2008


I just finished reading all 35 pages of Proposed Rule 10b-21. As with all previous rules it has NO TEETH.

None of these rules have a cause and effect relationship. If I ask my child not to do something with out explaining to him the consequences of his actions, I will likely have little success in changing his behavior. These rules without clear penalties will not change the behavior of those intent on cheating the small investors and attempting to destroy Companies. If you do not have the authority to spell out unacceptable behavior and mandatory fines, please ask Congress for that authority.

I believe that no rule, or law, should exceed one page in length. If you can not say it in one page you need to fine someone that can.

For instance this rule should read something like:

1-Shorting will only be allowed with a pre borrow. This would, of course, require that all shares be serially numbered by the Company when issued and followed through all transactions. Without a means to clearly identify each and every share at all times you are kidding yourselves about cleaning up this mess.

2-Any fail to deliver for any reason shall be bought in on T+3, no exceptions.

3-Anyone not abiding by the above shall be fined 3 times the market value of the offence. The third such offence shall result in the guilty party being banned from the market for life.

On page 27 you ask about liquidity again. I believe that you are overly concerned with liquidity. We do not need the artificial liquidity we now have with the option maker exemption. Let the markets work naturally and liquidity takes care of itself.

In summary:

1-Identifiy and track all shares issued with a serial number.
2-Require a pre borrow before a short.
3-Spell out the required corrective action for failing to follow the rules.
4-Discribe the mandatory penalty for unacceptable behavior.

I believe that these actions will clean up the NSS problems in a hurry by changing behavior, or permanently banning the crooks from our markets.

Thank you,

Karl Schreiber