Subject: File No. S7-08-09
From: Reiner Karlsberg

May 8, 2009

Unfortunately, you are far too late. The damage already happened. And, probably some of initiators of the financial crisis even made a good profit out of it.
The scenario was very simple:
- Some financial institutions knew about the upcoming serious credit problems already a year ago. So, what did they have to do: Short, short, short the stock market.

- release some bad facts about the upcoming problems. Stock market tanked, cover the shorts.
And do the same game a few times more.

And, even better,
- Ask for removal of the uptick rule. To help even more in serious shorting. The timely coincidence of the first signs of the financial crisis and the removal of uptick rule: Really a coincidence ?

Besides a serious investigation regarding this "coincidence in timing" a general stop of shorting is necessary, not only installation of the uptick rule again. Because the real problem is, that quite a few "innocent small investors" do not know about the fact, that their own shares might be sold against their own position, in case these "innocent small investors" have a margin account.
Or, at least an explicit permission of the owners of the shares ragrding availability of the shares for shorting has to be a MUST. The complete shorting process is not transparent to the open public, regarding all the hidden implications. Only to the benefit of a few "in the know".