Subject: File No. S7-08-08
From: Frank McMorrow

May 20, 2008

File Number S7-08-08

The Failure of the SEC to enforce the SHO Regulation has caused very negative thoughts in the minds of the individual investor. Is the SEC is intentionally avoiding the task of enforcement, because it too is part of the fraud. This leaves the American public victim of the Wall Street manipulators and their unpunished crimes.

What else must we think?

Many retail investors have watched their life savings invested in stocks decline by anywhere from 50% to 60%. Others have lost their retirement investment altogether.

Almost every stock in our portfolio over the past 6 months has ended up on the Naked Short List according to www.buyins.net. Some are shorted up to 50% of the available float.

That is simply wrong, wrong, wrong !.

An example of this is seen with a new solar company called LDK. Just look at what occurred on the 12th May 2008.

The stock closed at 37.48 at 4pm EST. The company reported after hours.

As a former business manager and MBA graduate I would say the report was great! In after hours the stock price was driven to a low of $33.86 by naked shorting, and then allowed to find its way back up to the mid $35’s. The big question is why it would even go down. Recently a major competing company reporting similar earnings only went up!

I have now seen this three times in the past nine months with several of the stocks we own.

It is always noticeable how the price of this stock regardless of a good contract, excellent earning and timely delivery of what the company promised always ends up at a price below the “MAX PAIN” for coming options expirations.

The answer is those who stand to profit most on options are those who NAKED SHORT. Why not – you can make lots of money and nobody will stop you. Just look at LDK and YGE as the options were expiring on 17 May 2008 and it obvious!

Please make some examples – large fines, major jail time, and the closing of brokerage houses that do not enforce the 3 day rule on shorting. Please stop the coordinated negative articles containing half truths in the WSJ and Barons in particular. Prosecute those that start false rumors. Reinstate the uptik rule.

If you do not act soon, Naked Shorting is going to spiral so far out of control that America’s retirement plans, whether individual or group, will be in serious danger.

Frank McMorrow
San Juan Capistrano