Subject: File No. S7-08-08
From: Harry J. Livingston, Jr.
Affiliation: CEO, Rockland Gait International, CMKX investor

April 3, 2008

I believe that the case of CMKX is a perfect example of why effective naked-short selling laws are necessary. To tell the truth, I don't think the current proposal goes far enough. I would like to think that, when I buy a company's shares from any exchange, particularly one in my own country (the U.S.), I am the only owner, and I am a full, 100% owner of what those shares represent.

Apparently, people buying shares on U.S. exchanges are receiving electronic markers. These markers may or may not reflect actual shares. With the share-borrowing program used in the U.S. system, the underlying shares might be held by any number of people.

Is there something wrong with this? When you buy a house, do you have to stop and wonder if there might be hundreds of other people also buying the same house, but being prevented from living there by some ridiculous trading system?

CMKX was literally traded in the billions per day on many days. I understand it was the most traded stock in U.S. history. Word is that trillions of naked-shorted sales are included in those sales. And all this time, the SEC sat by smiling. Eventually, the SEC did step in. But they apparently stepped in on the side of the criminals by doing everything possible to revoke the CMKM Diamonds ability to trade. Great job The naked-short sellers were undoubtedly laughing all the way to the bank. (Please note that CMKM Diamonds actually decided to accept the revocation in the end, but I'm sure they didn't have much choice.)

As part of the revocation hearing, an attorney for the shareholders did everything he could to get naked-short selling information incorporated into the hearing -- but the SEC judge failed to see the importance, or relevance, of the fact that the company had been naked shorted almost out of existence.

And all of this is happening in what's supposed to be the most advanced society in the world.

OK, let's do this. Let's call naked short selling "counterfeiting securities" because that's exactly what it is. Then, let's treat it like we do counterfeiting money. Because again, that's what it is. Let's try to protect the innocent public against it, and put the crooks in jail.

There are somewhere between 40,000 and 60,000 CMKX shareholders still waiting to be compensated for the crime committed against them. None of us plans to stop pressing for this. So I guess I'd suggest that you add something about compensating victims (with provisions for RICO damages and whatever else is available) to your proposal.

And then I'd suggest that you actually start moving, protecting investors like your creed says. Until you do this, nobody is going to take your rules seriously anyway.

Thanks for letting me express my views.