Subject: File No. S7-08-08
From: Keith Kottwitz

August 1, 2008

REGSHO has shown us all that self regulation is not going to work. The only way to clean up this market is to require the preborrowing of stock to short it.
If the short seller is correct there will be no notable difference in a couple of days to short sell a bad company because it will still be bad.
However, if the intention is to just flood the buy side to panic investors into selling while distorting the market, the pre borrow requirement would impede this manipulation from impacting the markets and will preserve capital and keep an orderly market.
Liquidity at the expense of investor confidence is not an option and will not lead to a more orderly market but just a more chaotic one.