April 16, 2007
"The grandfather provision of Regulation SHO was adopted because the Commission was concerned about creating volatility from short squeezes where there were large pre-existing fail to deliver positions. The Commission intended to monitor whether grandfathered fail to deliver positions are being cleaned up to determine whether the grandfather provision should be amended to either eliminate the provision or limit the duration of grandfathered fail positions. Is the elimination of the grandfather provision from the close-out requirement in Rule 203(b)(3) appropriate? Should we consider instead providing a longer period of time to close out fails that occurred before January 3, 2005 (the effective date of Regulation SHO),22 or fails that occur before a security becomes a threshold security, or both? (e.g., 20 days)? Please explain in detail why a longer period should be allowed."
This paragraph is a prime example of why millions of investors now spell “fraud” as “SEC”. Well over 90% of comments received by SEC on this issue have explained in detail why a shorter period (like “now”) must be immediately instituted. The retail investing public is convinced that no one could really be as obtuse as top SEC officials appear on the FTD issue. Even we who were not created equal to Wall Street mavens and bureaucratic paper shufflers know the difference between liquidity and diarrhea. That is why demands are increasing for a Justice Department investigation into SEC’s criminal collusion with Wall Street market makers, hedge fund managers, prime brokerages and major investment banks to defraud retail investors, in direct violation of Federal securities laws enacted 70 years ago.
Should the sun rise in the east? Should summer be abolished? Should earthquakes be prohibited by law? Let’s decide these very difficult issues sometime before the year 2100, shall we?
Stephen Woods