Subject: File No. S7-08-08
From: Henry Mortimer
Affiliation: Financial Consultant- Retired

March 25, 2008

Re: Proposed SHO Rule Changes

Naked short selling is and has been one of the most destructive elements in the smooth operations of capital markets that I have witnessed in my 40 years as a Financial Consultant. The ability to sell shares short and not deliver shares for settlement in a reasonable amount of time is abusive to free market activity and fraudulent.

There are always unusual situations where shares may not be immediatley available for "regular way" delivery, but these should be reviewed by someone to determine the intent of the seller when the order was placed. Handing out "I owe You's" in a clearing agent's operation needs to be better monitored and limited. Whatever happened to Fed Regulations to cover fails?

My experience is that hedge funds prey on smaller, lessor known and less liquid stocks to overwhelm the ligitimate market makers. The violent swings in price and volume allows the naked short sellers to litterally scare away ligitimate interest.

I believe those who sell short with no intent or ability to deliver the shares in a reasonable time should be held accountable with hefty fines and sanctions. This should include the selling party and the broker(s) who executed the orders. The broker should be doing "due diligence" to determine the availablility of shares for delivery by the seller. Until this due diligence is enforced, naked short sellers will continue to manipulate the capital markets and undermine investors confidence in the integrity of our capital markets system.

I am astonished that the SEC has not fully dealt with what I consider a gross abuse of our market system by the naked short sellers.

Henry L. Mortimer
Box 744A
Sherwood Forest, MD 21405