Subject: File No. S7-08-09
From: desmond j conlan, bse,cqe
Affiliation: IEEE,AAII,ASQC

April 30, 2009

Gentlemen:
The main problems with the short rule is that it was changed at all. It should be restored and "naked shorting" bannned. The markets operated correctly for many years without the modication and they could do so again. Many experienced investors such as Mike Holland were quite surprised to find that naked shorting was being permitted. An old market saying sums it up "he who shorts what isn't his'n will go to prison.
The authorization of double short and triple short ETF's has allowed hedge funds and daytraders to drive stocks down at the end of the trading day and reap large rewards: an example of this is the stock DNDN on4/28/09.
This market will not be safe for individual investors until these double and triple short ETF'S are banned. There are a number of applications for many more such funds and they should be rejected. They only work for the day they are initiated and only professionals can make money using them.
Jim Cramer a former hedge fund manager has spoken out about these abuses and knows them quite well. A telephone call to him at CNBC would yield a knowledgable input to the SEC.
The attempt to set triggers is only a scam. The traders want to avoid margin costs.