Subject: File No. 4-627
From: Donald L Eddy
Affiliation: Retired Aerospace Engineer

May 28, 2011

Legitimate and naked shorting should be abolished in at least small cap stocks because hedge funds and market makers can easily manipulate these stocks with a few million dollars. It takes a lot more money to manipulate large cap stocks and profits are not as great for them and therefore the shorts prey on small cap stocks. Shorts have completely stopped american investors from investing in chinese small cap companies (examples ccme, newn, sbay, gfre, yong, tstc) with over 50% of the short shares being naked shorts. The SEC has not inforced the rule against naked shorting and FTD's. Companies such as Muddy Waters and Seeking Alpha publish negative articles with unsubstantiated facts to back up their allegations causing panic with stock investors. These small cap chinese companies are slowly being delisting from the US stock exchanges and going back to foreign exchanges of which some do not allow shorting of stocks. The public has lost complete confidence in the US stock markets and until something is done to stop this abuse in our markets more and more people will find ways to invest in foreign markets.