Subject: File No. S7-08-08
From: Dr Penn
Affiliation: Out Law naked shorting

March 28, 2008

The SEC has failed to help stop naked shorting. Why?

The answer is simple , its easier to hide and try to create laws and have the wealthy use lawyers to cover up Trillions of naked shorted shares that are in Level 3 derivatives, held by banks and brokerages. The SEC do not use the power that is invested in them to do the correct and ethical thing which is to enfocre the Laws. Instead the SEC has closed meetings to pat each other on the back for job not well done and hide from the public how incompetent they really are.

They are losing Wall Steet BILLIONS from future investors for failing to outlaw naked shorting. Why was Goldman Sachs allowed to hand out Christmass in bonuses exess of 16 Billion Dollars to their employess last few years.? Meanwhile this past month they went running to
the Fed discount window to borrow money in loans? Fraud and naked shorting in derivatives covered up in phoney mortgage scandel news is shamefull ? Well the people are sick of hearing mortgage crisis lies, the whole world did not buy a house.

Another Case in point. CMKX Diamonds. A stock that was naked shorted into the Trillions, and the SEC sat by and only created rules to leave them not liable for damages in the future. Covering up fraud and massive financial crime has no statues of limitation for law suits. Maybe the SEC lawyers didnt read that chapter in the SEC handbook.

Another major problem the DTCC. They claim they are not responsible for failed trades? they cannot force people to cover? Well if you take in over 1 Quadrillion dollars in trades you better get off your rear end and do something about it. Unless the DTCC are in bed with the federal reserve to hurt the United States.
(taken from the DTCC website news)
DTCC's most recent annual report indicated that as of December 31, 2005, NSCC had fails outstanding worth approximately $6 billion. This value is persistently described by third parties as the value of FTDs as of that date. Since it is actually the value of all fails ? i.e., both fails to deliver and fails to receive ? effectively, the $6 billion cited by third parties actually represents $3 billion in fails to deliver, or about 1.1% of the $266.5 billion in trades processed on the average day by NSCC in 2005. Moreover, the $3 billion figure also represents all fails to deliver at NSCC, including fails in fixed income trades (corporate and municipal bonds). While the number of fails and percentage of fails in fixed income trades changes each trading day, on December 31, 2005, fixed income trade fails were equal to approximately 15% of all fails. Importantly, DTCC notes that this FTD total reported is not just for equities on the "threshold list" of companies, but rather reflects fails on all equities and corporate and municipal bonds.
For over one year, DTCC's Web site has reported that the $6 billion as "fails to deliver and receive" thus enabling people interested in the topic to understand that the figure reflects both halves of a transaction. (See Nonetheless, third parties persist in applying the number to fails to deliver only. The DTCC Web site has also made clear that the figure is not a daily amount of fails, but a combined figure that includes both new fails on the reporting day as well as aged fails.
While DTCC does not know the reasons for a fail to deliver (this is only known by the broker-dealer and the marketplace), as the SEC has pointed out, "There are many reasons why NSCC members do not or cannot deliver securities to NSCC on the settlement date. Many times the member will experience a problem that is either unanticipated or is out of its control, such as (1) delays in customer delivery of shares to the broker-dealer (2) an inability to borrow shares in time for settlement (3) delays in obtaining transfer of title (4) an inability to obtain transfer of title and (5) deliberate failure to produce stock at settlement which may result in a broker-dealer not receiving shares it had purchased to fulfill its deliver obligations."
This screams ignorance both from the DTCC and SEC. They allowed this to happen, its looks like they allowed this country to fall and be sold off to foriegn countries by saying its not their job to stop fraud. Well DTCC ,SEC, its every AMERICANS job to stop fraud even if you dont work at these PRIVATE places like the DTCC and The Federal reserve, and as for the SEC beng part of the goverment you have failed america.

Why did the CEO of CITI bank resign without a fight was it CITI tried to buy Knight securites derivative dept with a whole lot of naked shares from CMKX ? imo yes.
Pass the naked shorting rule and resign and hire real americans to save this country.

In closing the SEC must pass the naked shorting rule to stop counterfeiting stock shares and hiding it Level 3 derivatives and hedge funds, and other investment vehicles that rape the american stock trading system. Pass this rule at once and stop standing around looking at each like a bunch of chimps, ready to pass the blame and pat each other on the back.