August 3, 2008
I support the Commissions proposed elimination of Regulation SHOs options market maker close out exemption. I also support making elements of the SECs new emergency order permanent to fix Regulation SHO and eliminate naked shorting and settlement failures for all stock transactions.
Former SEC Commissioner Roel Campos provides a solution to the problem of short shares that have failed to be delivered (FTDs) also called phantom shares or Naked Short Selling (NSS). He states very clearly in his 7.31.08 article in Forbes.com, Protection for All, that there are two necessary elements needed to correct the current market situation:
The first fix addresses the pre-borrowing of shares before shorting. The second addresses the need for hard delivery of shares traded short within the three-day settlement period. Both are essential for eliminating FTDs.
I submit that a third component is critical. YOU, the SEC must enforce this regulation for all public companies. It is critical that you do not cave to lobbying pressure as you did in the past, as former SEC Commissioner Roel Campos stated in his article. You must provide this enforceable protection for ALL public companies, large and small.
http://www.forbes.com/opinions/2008/07/31/naked-short-selling-oped-cx_rc_0731regulation.html