April 26, 2007
I ask that the grandfathering and market maker exceptions under Reg SHO be eliminated or drastically changed. They have not accomplished their original intention and are being abused by market makers and large market players. FTDs are a threat to every American who participates in the stock market and possibly to others who may be affected by its ultimate effect on our economy. How can any government agency justify a rule that permits the manufacture of phantom (unregistered) securities. There are situations in the stock market today where companies have more than 150 - 200 percent of their issued stock trading in the market. How can that be permitted. That is not liquidity, it is fraud and it is being condoned by the United States government. Do what is right for all the average investors and stop tilting the playing field to the big players. You are bankrupting companies and individuals for the sake of liquidity. The market would run just as efficiently without market makers naked shorting to cover their writing puts. They could either raise the premiums or limit the puts. At what price do you stop providing liquidity - when the market has been ruined by lack of public trust in the securities being purchased. That day is coming, unless you take action and act responsibly to protect everyone who participates in the market.