Subject: File No. S7-19-07
From: Gary Rupp

July 13, 2008

Recent estimates put Fails to Deliver (FTD) as exceeding $13.5 Billion per day and, some analysts believe there are more uncovered shares in the market than Outstanding Shares. Bluntly, the enactment of the electronic settlement process enabled large scale counterfeiting of shares. Electronic counterfeiting of shares even has a formal name now... Dematerialization. The name says it all.

This is a very big problem, and the SEC has been negligent, in my opinion, by NOT reining this illegal activity in. There is obvious wide scale corruption. Jim Cramer can even talk blatantly on his television shows about his own activities to manipulate the market, and use of the press to serve his own personal interests... and then laughs in the SECs face as he tears up their Subpoena on National TV. All this, and yet the SEC seeks another Comment period on Reg SHO. Unbelievable

Frankly, large Hedge Funds and Brokers have known for some time that they can manipulate the price of a stock, driving its price down, by naked shorting the stock. By taking their activities off-shore, through Ex Clearing, they have avoided US Settlement rules. Moreover, they know that if they can drive the targeted company out of business, or at least to the point of having to delist the stock, then they dont have to cover their short. They get to keep all the money they earned from naked shorting the stock, and they dont even have to pay the IRS.

Reg SHO was put in place to protect large Hedge Funds, Market Makers, and Brokers who held large uncovered positions. How did these folks repay the SEC? They accelerated their practices, and have now grown their Fails to Deliver (FTD) from a daily average value of $6 Billion to now more than $13.5 Billion today. This practice has destroyed the ability of small companies, and now even large companies, to use the capital markets to fund their growth. Worse, thousands of American companies have been forced to delist, if not driven completely out of business... and American jobs have been lost in the process.

How big of a problem is this? Lets do the math. According to recent statistics, $13.5 billion is stolen from investors every day through Naked Short Selling (NSS). According to the Social Security Administration, the national average wage index for CY 2006 was $38,651.41. Not accounting for inflation, this means enough money is stolen every day to employ 349,276 people for a year. Extrapolating through the year, this amounts to enough money to pay the annual wages for 91,061,176 Americans.

Enough with the Comment periods. Please put some real teeth into the laws so that all settlements must occur within three days. No Excuses. No delays. Period.

Thank you,