Subject: File No. S7-12-06
From: US Citizen

April 2, 2007

Dear Sirs:

Correct me if I am wrong, but wasnt the Securities and Exchange Act of 1933-34 put into effect to STOP the counterfeiting of shares? Please explain why it is necessary to adopt another regulation (Reg SHO), when the existing laws were designed to address and stop the counterfeiting of shares. And then to compound the problem, the infamous Grandfather Clause was inserted, which in essence told everyone that what they had done prior to Jan, 2005 was forgiven. How, in good conscience could anyone design such a ruling, which gave the counterfeiters a get out of jail free card?

They not only would not be prosecuted, but they do not have to return the money they stole from an unsuspecting public.It has been over 2 years since Reg Sho was put into effect and it was on the drawing board for at least a year prior to the effective date.

Reg Sho was supposed to curtail Fails to Deliver or Naked Short Selling, but it has not, even by the admission of Chairman Cox. In fact, why dont we call this practice by the name that really applies, CONTERFEITING of shares, that is the sale of shares of a company that are not authorized by the issuing company. And this is what has been happening at an ever increasing rate in all the exchanges. Not only that, but Reg SHO did nothing to curtail the counterfeiting of shares in 2005, 2006, and 2007 with an estimated $6,000,000,000 (Billion) of shares failing to deliver (counterfeit) every day.

Can you imagine the chaos that would happen if a Real Estate Transaction took as long to settle as it does for stocks to settle? Or if cash was put up for a Real Estate purchase and the authorized property was not delivered, but instead a fake deed provided.

There is another aspect to this practice that most investors are not aware of, and Wall Street hides, and that is the forced borrowing of shares. Can you see banks operating this way? This is a practice that must stop. No one should be able to borrow someone elses stock. This is what has led to the massive shorting that is occurring today, and this is what the Securities and Exchange Act was designed to stop 74 years ago.

This insidious practice is allowed to continue, based on a few comments that were for the continuation of the Grandfather Clause, while ignoring the overwhelming number of comments that are against it. I do not understand how a Government Agency entrusted with the responsibility of protecting the marketplace and its investors could even think up a pardon for criminal activity, and not prosecute the perpetrators.

If there is any moral integrity left in the SEC, do the right thing and please stop this activity and restore the markets now.