July 26, 2008
SEC I am appalled that you still represented to Jonathan Johnson of Overstock.com on their recent meeting with you that 'SHARES ARE ALWAYS DELIVERED'( read comments by Jonathan Johnson here)which is 'UNTRUE'. Explain why stocks make the Reg.show list? Your comment to Jonathan gives a clue which way you are leaning. Are regular honest small investors not human beings? Why is it you seem to maintain the position that naked short shares are always delivered? That position only EMBOLDENS naked shorts.
In the meeting you explained to Jonathan that Options market maker exemption is granted to enable them construct 'Delta neutral' positions on options and the corresponding stocks. The options market maker is using this exemption to GUARANTEE PROFITS on BOTH OPTIONS THAT HE SELLS AND THE CORRESPONDING STOCKS THAT HE SHORTS. Do you think the options market maker with the delta neutral trades he plays looses on either leg (options sold or stock shares shorted)? Let us not even think that because on options expiration day he probably determines from Excel WHERE TO PARK THE STOCK PRICE AT EXPIRATION THAT GUARANTEES MAXIMUM PROFITS FOR HIS OPTIONS BY GOING LONG OR SHORT ON THE STOCK. And with the next month option he is now ready to repeat the exercise because he DOES NOT HAVE TO DELIVER SHARES HE NAKED SHORTED. He is PRINTING MONEY with your exemption. No wonder they are fighting tooth and nail to maintain status quo on this exemption
Jonathan Johnson and your team at OSTK are doing a commendable job. Keep up the good work by making representations to
1. GARY ACKERMAN THE SENATOR
2. BEN BERNANKE and
3. HENRY PAULSON
on the failures of SEC on OPTIONS MARKET MAKER EXEMPTION, FRAUD COMMITTED WITH NAKED SHORTING AND FAILS TO DELIVER and the new no UPTICK RULE for shorting stocks.
Commenter DR. Jim Decosta here is very knowledgeable on these matters. You may want to coordinate with him if you decide to make representations to the above personnel. Also you may want to form a club of CEO's of the REG.sho list stocks to organise a 'MILLION MAN ANTI NAKED SHORTS MARCH'. We will rally behind you and participate with NAKED
SHORTS(naked in the back)