Subject: File No. DF Title IX - Short Sale Disclosure
From: Lee R Donais
Affiliation: President C.E.O, L.R. Donais Company Inc.

April 27, 2014

Based on the stated intent of "Dodd Frank", it seems clear to investors as well as advisors that Short Sale reporting and Short Sale holdings should be treated with as much diligence as the reporting of Long Sales and Long holdings.
At the current time long sales of substantial size are required to be reported on the SEC form 13 but there is no identical requirement for short sales.
I have submitted comments in the past referring to the lack of transparency in short sales as well as the rampant practice of "naked short sales" Regulation S.H.O. has been somewhat successful in dealing with "fail to delivers" but, as evidenced by the daily threshold list, is still far away from being termed as successful.
The period for delivering shorted shares should be identical to the time period requirement for long sales and there should be no exemptions. If the Commission is truly interested in accomplishing the transparency stated in Dodd Frank, regulations should be put in place that eliminate the advantages that short sellers have over long investors.
As the Commission is well aware of, many so-called "investment B.L.O.G.S" have been used by known short sellers to manipulate prices resulting in illegal and unfair profits to short sellers. A perfect example of this is the current controversy between NQ Mobile (symbol NQ) and Carson Block of "Muddy Waters Research". Mr. Block has made unsubstantiated, false and defamatory comments about the company resulting in a severe drop in the stock price as well as 2.4 million dollars in costs to the company for defense of their business. Mr. Block is known for taking short position in companies and subsequently publishing articles designed to drive stock prices down resulting in substantial profits for himself as well as others short sellers which he has enlisted in his efforts. When companies attempt to file litigation against him, it's found that he has no address for service and no listed home address. These practices clearly fall under the category of illegal manipulation of stock prices and should be dealt with on an immediate basis. The damage to investors is quite clear and to date, it appears that the commission has not had the ability to remedy the situation. It is well known that the Commission is laboring under budgetary as well as staffing limitations and a re-prioritizing should be considered to deal with these types of behaviors that consistently damage the investing public. Changes in the Short Sale reporting requirements would begin to deal with these problems.
It is my feeling that if the Commission addressed the reporting requirements for short sales and made them as stringent as the current requirements for long reporting, many of the inequities would gradually disappear and the playing field would be far more level. At the same time, the intent of "Dodd Frank" would be far better served than in the current reporting regulations.