Subject: File No. S7-20-08
From: Bob Graham

July 24, 2008

SEC Chairman Cox has often commented on how important "market transparency" is. He has in the past indicated he believed the US market was better than others because of our transparency.

But in reality, illegal naked shorting means there can be little trust in the market transparency for investors. For example, a small company might report great results but the price may be dropping. Is this because of something unknown about the company or some market trend or is it because the company is being illegally naked shorted? On every stock bulletin board the above question will always be asked any time the price drops for seemingly no reason. The fear of naked shorting of stocks and the fear of the inevitable fall in price should a stock be attacked by naked "shorters" means that people will sell stocks immediately as soon as they suspect it might be happening. What good is market transparency when there is such widespread distrust and fear of illegal activity that is never punished?

The widespread fear and distrust of naked shorting is not caused in a vacuum or by media hype. Everyone who invests primarily in small companies or start-up companies has been impacted by naked shorting. Most such investors will have had stock in companies that ended up on the regulation SHO list. They therefore KNOW that they have been impacted by illegal shorting but are powerless to stop it. Anytime such a stock drops in value, the perception is that once more criminals have won and stolen their money.

Naked shorting is reducing the amount of money available to fund new start-up companies that would otherwise help our economy grow and prosper in the future.