Subject: File No. S7-08-09
From: Reed B Haslam
Affiliation: Individual Investor

May 8, 2009

The recent market meltdown was heightened by the ability for large institutions to short stock relentlessly and drive down prices by huge amounts for their own profit. The down moves in many stocks particularly those of financial institutions were magnified by the ability to short constantly without an intervening up-tick. This needs to be rectified for the benefit of sane markets and individual investors.

(1) Sharp down moves together with rampant rumors (some of which are unfounded) wrecked havoc with the markets in the fall of 2008. The ease with which large institutions could repeatedly sell short was destructive to market psychology and perceptions of reality.

(2) Most individual investors do not have the capital to short significant amounts of stock and are thus locked out from participation to the downside.