Subject: File No. S7-19-07
From: Jack M. Wedam

October 16, 2007

Dear Chairman Cox,

Ms. Nancy M. Morris, Secretary
Securities and Exchange Commission
100 F. Street, NE
Washington, DC 20549-1090

Re: Comments on Proposed Amendments to Regulation SHO
File No S7-19-07

October 16, 2007

Dear Secretary Morris:

I appreciate the opportunity to provide comments on the Commissions proposed amendments to Regulation SHO.

I support the Commissions proposed elimination of Regulation SHOs options market maker exception and encourage the Commission to complete the administrative steps to accomplish this change by the end of calendar year 2007.

Market makers and broker dealers claim this regulation is necessary to ensure liquidity. Indeed that may indeed be the case in some situations. However, as this regulation is currently interpreted and implemented is has become a well known tool of manipulation and must be modified or eliminated promptly to ensure a level playing field for public companies and shareholders.

I commend the Commissions recent action to strengthen Regulation SHO through the elimination of Regulation SHOs grandfather provision. I am also pleased that over the past several months that Chairman Cox has personally spoken about the abuses of naked short selling and the need to end this manipulative practice. However, I remain concerned that, despite the Commissions recent efforts and Chairman Coxs public comments, these abuses continue.

While the elimination of the options market maker exception and the grandfather provision will significantly strengthen Regulation SHO, these changes alone will not adequately solve the problem that results in continued naked short selling and failures-to-deliver. I request that the Commission

(1) Impose in Regulation SHO a requirement of a firm location of shares to be borrowed before a short sale can be executed.

(2) Enable transparency by requiring timely disclosure of the volume of failures-to-deliver shares of companies on the Regulation SHO threshold list.

(3) Require the broker-dealers are not able to receive commission for any Fail-to-Deliver shares until that Fail-to-Deliver is in fact delivered.

(4) Define failure-to-deliver as a cumulative number of days within a larger time span with respect to the issuing corporations entire float. For example, if Corporation XYZs total float was 100 million shares, then total amount of outstanding stock (both bona fid and Fail-to-Deliver shares) for Corporation XYZ can not exceed 100 million shares for more than 20 total settlement days (but not necessarily sequential or consecutive settlement days) within a period consisting of the preceding 100 settlement days. If the total of bona fid shares and fail-to-deliver shares exceeded the corporations entire float for a total of 20 settlement days of the proceeding 100 settlement days, then no more naked shorts would be allowed to be sold or accepted for sell by any broker-dealer.

The Commission should issue and complete promptly a notice of proposed rulemaking to implement these first three critical components of effective Regulation SHO reform. If the first three are not implemented than, the Commission should implement the fourth component to allow some liquidity in market but set means to make it harder for broker dealer to ping-pong Fail-to-Deliver shares back and forth in order to restart the regulatory countdown.

Jack M. Wedam
San Antonio, Texas