From: Janice L. Ross
Sent: August 14, 2006
Subject: File No. S7-12-06

It is my opinion the regsho is far more concerned with the well being of hedge funds who have been over-shorting stocks for the purpose of manipulating the prices, and neglecting the average investor to the point they will at this rate be driven from the market. This is not a matter of who is more talented, it is simply a matter of who can drive a stock.

What I would propose rather than trying to decide a time frame, is to simply implement an across the board rule with direct monetary compensation to those who have failed to deliver the promised stocks in a timely fashion. This could be in a non abusive manner which would allow the short interests to decide how long until they covered. My suggestion would be a penalty in the amount of $0.10 or 1% of the stock value PER DAY until the Fail to deliver was taken care of. This could be passed on after deducting administrative costs to the person who had not received the stock that they purchased in good faith.

The market would go on and in fact FLOURISH without naked short sales For any reason other than making market. Even when making market there is no excuse to keep the imbalance for an excessive length of time.

I am a private investor who has watched many of her positions shorted senselessly. I have been lucky, all of the stocks I have had in that position have survived. I can however easily see where some may not.

If a stock is not manipulatively short sold, it can not be manipulatively short squeezed. And the cash penalties I suggest would allow short sellers to decide when, but not if they needed to cover their positions.


Janice L. Ross
Private Investor.