August 2, 2006
Reference: File No. S7-12-06
Proposed Amendments to Regulation SHO
I have read all comments provided to date. Appears
consensus is the SEC is considered not much more
than organized crime. I tend to agree but hold more
hope than those who have commented, thus far.
My hope is you are beginning to pay attention to
what American families are expressing to you.
My viewpoint is significantly tainted by the recent
appointment of Christopher Cox to chair the SEC. My
efforts, my months of contacting politicians, state
and federal, contacting news media and such, to lobby
against Cox, proved fruitless. Currently I am directing
efforts at having those politicians who supported Cox
to be voted out of office.
Seemingly unrelated, having Cox chair the SEC is highly
relevant. As readers know, or should know, years back
Cox was indicted for alleged involvement in the worst
Ponzi scheme of history inflicted upon senior citizens
here in our state of California. Cox is also known for
writing, lobbying and pushing through legislation which
enabled Enron and Worldcom.
At fault or not, Cox serves as an icon of this consensus
the SEC is riddled with corruption.
My experience is intensely trading stocks for over two
decades, which is more experience than Cox, himself,
and more experience than most SEC employees.
Regulation SHO, I have written a number of articles
on this, long back, indicating SHO is a slap across
the face of American families. SHO is toothless, lacks
any enforcement ability and is based on a premise of
"criminals policing criminals."
Regulation SHO contains as many loopholes as Swiss cheese.
Net effect of SHO is to better enable financial crime and,
despite the official stance of the SEC, short failures to
deliver and naked shorting have not diminished. SHO is not
more than a public relations stunt.
This "grandfather clause" is the slap across the face
of American families. The SEC sends a message, "We are
aware American families are being victimized by financial
crime but we are giving the criminals a free pass."
Two decades back, a decade back, trading stocks was based
upon research, experience and educated guesses. Today,
my trading is reduced to calculating what financial crimes
are about to be effected or are being effected, then going
along for a ride with hopes of making a profit.
The SEC, NASD, DTCC, Wall Street, politicians, all, this
is what you have made of our stock markets, a con game.
Most insulting of all, Cox serves as an icon of corruption
whether deserved or not.
How are we, American families, to come to trust the SEC
when we are constantly victimized by Wall Street? Is not
the purpose of our government to serve and protect?
Lawful shorting is needed for market liquidity. Brokers
and others should be subjected to the same three day
rule as American families. There exists no need for more
time to make good delivery. Currently, brokers and others
can "reset" the delivery clock, at will. Should one of
us, the American families, fail to deliver within an
allowed time period for a short position, we face severe
penalties. Not so if you are a member of Wall Street.
This hypocrisy of the SEC and Wall Street, simply reeks.
Unlawful naked shorting is just such, unlawful. Nonetheless
the SEC gives those criminals a free pass or turns a blind
eye to this crime. There is another reason why our American
families consider the SEC corrupt, top to bottom. A harsh
zero tolerance policy should be set for naked shorting.
This is a crime and American families are highly insulted
the SEC has a "hands off" policy regarding naked shorting.
The SEC and Christopher Cox can begin to make amends by
exemplifying support for American families, rather than
support for Wall Street criminals. However, decades will
pass before the SEC will be considered reputable.
Lawful shorting should be subject to a three day delivery
period with no exceptions and swift decisive actions should
be taken upon first failure to deliver suspension of a
brokers ability to trade for ninety days.
Unlawful naked shorting is a high crime against all
American families and should be prosecuted vigorously.
Should I pick your pocket, relieve you of your money,
cause harm to your family, cause harm to your children,
you would have me in jail, post haste.
I find your current stance of enabling financial crime
through shorting mechanisms to be abhorrently unethical.
What you, of the SEC, are doing is robbing our American
children of their futures. This is truly the bottom line,
you are causing harm to our children and our futures
through your lack of action against clear crime.