Subject: File No. S7-19-07
From: Name Withheld

September 12, 2008

To me, it seems simple. The reason for the interminable delay in implementing the proposals is the damage such action will perpetrate upon the owners of the DTCC. The flouting of existing rules, which cannot be enforced anyway because of the need to prove scienter, has allowed the owners and major, unregulated, hedge-fund customers, with collusion of the DTCC, to illegally capture (steal) wealth from shareholders of targeted companies for the benefit of those involved in the collusion. The perps, however, are already suffering from the deleveraging going on in the markets that was brought about by other extreme lapses in judgment and the moral hazard that were previously permitted by the SEC. The SEC is between a rock and a hard place. Enforcement of these regulations (i.e., forcing partial restitution) can push more of the same perps in the direction of BSC, LEH, and AIG, a frightening possibility to those who fear even more catastrophic implications for the entire financial system, under their negligent watch, no less.

The implicit message to the individual investor has been very clear for some time: DO NOT INVEST IN U.S. SECURITIES MARKETS. You are viewed as easy pickings better to go to a casino. Even though you will know the house always wins, at least you can have fun while feeding the machine.

The message to small, innovative companies is: expect your shares to be manipulated and secondary financings to be extremely expensive if not impossible. You have one shot and one shot only to attain success.