Subject: File No. S7-12-06
From: David E Ott
Affiliation: None

September 15, 2006

I have been a market investor for many, many years and have found the idea of short selling to be a valuable tool to keep market prices in check. I have never liked the abusive nature that the practice has had, but there is a place for the checking ability it affords against the abusive buying that also can take place in the market.
I have NEVER liked the idea of naked short selling and the FTD problem that is present in its wake. It is truly a breeding ground for corruption and unscrupulous manipulation that is, in fact, what still goes on today. It is amazing to me that the officials of our government who are supposed to protect its citizens not only allow the stealing of our securities in counterfeit shares, but seem to foster the practice. I am absolutely in favor of putting some teeth on SHO to rein in this abuse and punish the perpetrators of this fraud against our financial system.
I understand the market makers have risks that are associated with making markets for trading, but those risks should be weighed in their back offices and borne by their companies. If you cannot borrow the share anywhere, don't sell them. Pretty simple solution, let market forces do their job.
I do not even like SHO, but if that is the solution that is to be used, it should at least be as effective as possible.